UNITED STATES OF AMERICA
In the Matter of
Martin P. Joswick,
ORDER INSTITUTING CEASE-AND-DESIST|
PROCEEDINGS, MAKING FINDINGS, AND
IMPOSING REMEDIAL SANCTIONS
PURSUANT TO SECTION 8A OF THE
SECURITIES ACT OF 1933 AS TO
MARTIN P. JOSWICK
The Securities and Exchange Commission ("Commission") deems it appropriate that public cease-and-desist proceedings be, and hereby are, instituted pursuant to Section 8A of the Securities Act of 1933 ("Securities Act") against Martin P. Joswick ("Joswick" or "Respondent").
In anticipation of the institution of these proceedings, Joswick has submitted an Offer of Settlement (the "Offer"), which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party, and without admitting or denying the findings herein, except as to the Commission's jurisdiction over him and the subject matter of these proceedings, which are admitted, Joswick consents to the entry of this Order Instituting Cease-and-Desist Proceedings, Making Findings, and Imposing Remedial Sanctions Pursuant to Section 8A of the Securities Act of 1933 as to Martin P. Joswick ("Order"), as set forth below.
On the basis of this Order and Joswick's Offer, the Commission finds1 that:
1. Joswick was a Vice-President and one-third owner of CyberStreet Capital.com ("CyberStreet"), an Internet public relations firm based in Rochester, New York. Joswick, 30 years old, is a resident of Palmetto, Florida.
Other Relevant Entity
2. Asthma Disease Management, Inc. ("ADMI") is a public company, organized under the laws of the state of Delaware, which, during the relevant time period, had its principal place of business in Berlin, New Jersey. ADMI stock is traded on the OTC Bulletin Board pink sheets under the ticker symbol "ADMI".
3. ADMI hired CyberStreet in January 2000 to provide various marketing and public relations services, including communicating with a broker network, drafting and distributing press releases, arranging for various web sites to include profiles of ADMI and contacting current shareholders and prospective investors through various means, including on-line media. Pursuant to a written agreement, CyberStreet was to receive compensation for these services in the form of ADMI stock with the number of shares dependent upon increases in the market price of ADMI stock. The contract provided for a base fee of 150,000 restricted and 300,000 unrestricted shares of ADMI stock, plus nine different incentive levels ranging from $0.425 to $3.00, rewarding CyberStreet with additional restricted and unrestricted shares if the price of ADMI stock rose to each level and remained at that level for at least five consecutive trading days. For example, if the price of ADMI stock increased to $1.20 per share, which was the fifth incentive level, CyberStreet was entitled to receive additional compensation totaling 950,000 restricted shares and 700,000 unrestricted shares.
4. Between January and May 2000, Joswick, along with other CyberStreet employees, performed numerous public relations services for ADMI, including reviewing and distributing ADMI press releases, preparing a draft ADMI website, arranging internet and radio interviews and communicating with investors. During that period, ADMI issued CyberStreet 850,000 restricted and 1,850,000 unrestricted shares. Because ADMI was CyberStreet's only client at that time, CyberStreet sold ADMI stock in order to pay operating expenses, including Joswick's salary, which totaled approximately $10,000.
5. Between January and May 2000, Joswick also posted at least 53 messages on the Raging Bull Message Board under the moniker of "1profitmaker" recommending the purchase of ADMI stock as a "Strong Buy". On numerous occasions, Joswick posted messages that news about ADMI would be coming soon and encouraged investors to buy more stock before the anticipated announcement. Joswick did not disclose in any of these messages that he was receiving compensation from ADMI through CyberStreet for providing public relations services to ADMI or that his compensation from ADMI through CyberStreet would increase if the price of ADMI stock increased.
6. As a result of the conduct described above, Joswick committed violations of Section 17(b) of the Securities Act. Section 17(b) of the Securities Act makes it unlawful for any person to tout a stock for any consideration received, or to be received, directly or indirectly, from an issuer, underwriter or dealer, without fully disclosing the receipt, whether past or prospective, and the amount of such consideration. See e.g., Delores Easthom, Securities Act Release No. 8086, 2002 SEC LEXIS 913 (Apr. 11, 2002) (respondent violated Section 17(b) by touting issuer's securities in 140 postings on Raging Bull and other Internet bulletin boards without disclosing that she was compensated by issuer); Dennis M. Wilson, Securities Act Release No. 8042, 2001 SEC LEXIS 2627 (Dec 19, 2001) (respondent violated Section 17(b) by touting issuer's securities in 37 postings on Raging Bull Message Board under alias "Majorbuyer" without disclosing compensation arrangement with issuer); John Black, Securities Act Release No. 7885, 2000 SEC LEXIS 1840 (Sept. 6, 2000) (respondent violated Section 17(b) by touting issuer's securities on Raging Bull Message Board without disclosing he was promised compensation for such activities); Eugene B. Martineau, Securities Act Release No. 7599, 1998 SEC LEXIS 2312 (Oct. 27, 1998) (respondent violated Section 17(b) by touting issuer's stock in more than 60 messages on Silicon Investor Message Board suggesting that he was simply an investor without disclosing promised compensation from issuer). Joswick committed violations of Section 17(b) by touting ADMI securities on the Raging Bull Message Board without disclosing that he was receiving compensation from ADMI through CyberStreet or that his compensation from ADMI through CyberStreet would increase if the price of ADMI stock increased.
In view of the foregoing, the Commission deems it appropriate to impose the sanctions specified in Respondent Joswick's Offer.
ACCORDINGLY, IT IS ORDERED that:
Pursuant to Section 8A of the Securities Act, Respondent Joswick shall cease and desist from committing or causing any violations and any future violations of Section 17(b) of the Securities Act.
By the Commission.
Jonathan G. Katz
1 The findings herein are made pursuant to Joswick's Offer of Settlement and are not binding on any other person or entity in this or other proceeding.
|Home | Previous Page||