SECURITIES AND EXCHANGE COMMISSION Washington, D.C. LITIGATION RELEASE NO. 15949/October 27, 1998 SECURITIES AND EXCHANGE COMMISSION v. ANITA CARLISLE d/b/a CARLISLE COMMUNICATIONS, J. SCOTT SITRA, SITRA ENTERPRISES, INC.,JAFLC CAPITAL MANAGEMENT and JEFFREY BROMMER d/b/a INVESTMENTS 101 Ltd. ET AL. Civil Action No. W98CA352(W.D. Tx. Waco Division) SEC CHARGES INTERNET STOCK TOUTERS WITH SECURITIES FRAUD The Securities and Exchange Commission (Commission) announced today that it filed a Complaint in the United States District Court in Waco, Texas, against Anita Carlisle d/b/a Carlisle Communications (Carlisle), Scott Sitra (Sitra), Sitra Enterprises, Inc. (Sitra Enterprises), JAFLC Capital Management Ltd. (JAFLC) and Jeffrey Brommer d/b/a Investments 101 Ltd. (Brommer) (collectively, the defendants). Carlisle and Sitra run self-described investor relations services from their homes. Brommer is an investment adviser registered with the Commission. The Commission's Complaint charges the defendants with illegally "touting" and "scalping" securities in violation of the federal securities laws. In particular, the Complaint alleges the following: - Carlisle, Sitra, Sitra Enterprises, JAFLC and Brommer each had an agreement with Great White Marine and Recreation, Inc. ("Great White" or "the company"), a company whose stock is quoted on the OTC Bulletin Board Service, to provide "investor relations" and other promotional services. Under these agreements, each defendant published and circulated favorable promotional information about Great White in exchange for Great White stock and/or money. - From approximately February 1998 through September 1998, all three defendants prepared reports and news releases that spoke glowingly about Great White and encouraged investors to purchase the company's stock, without disclosing their compensation arrangement with Great White. - The defendants published this information on the Internet and in newsletters and circulated it in glossy folders sent to investors who responded to telephone numbers listed on the company's Internet website or in promotional materials. - All three defendants also took advantage of the market interest their promotional efforts created by selling Great White stock into the market contrary to their recommendations to buy the same stock. This fraudulent practice is known as scalping. Carlisle, Sitra and Brommer received stock proceeds totaling approximately $573,896, $66,416 and $42,650, respectively. - Carlisle shared her proceeds with Great White and also deposited shares in Canadian brokerage accounts. - Each defendant failed to disclose their receipt of stock from Great White and their intention to sell the stock contrary to their buy recommendations/favorable press releases. The Complaint charges that the defendants' practice of scalping violates the antifraud provisions found in Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities and Exchange Act of 1934, and Rule 10b-5 thereunder. The Complaint also charges Brommer with antifraud violations found in Sections 206(1) and 206(2) of the Investment Advisers Act of 1940, based upon these same activities. Finally, the Complaint also charges that each defendant violated the anti-touting provisions contained in Section 17(b) of the Securities Act. The Complaint seeks a permanent injunction against each defendant, as well as an accounting, disgorgement and civil penalties.