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U.S. Securities and Exchange Commission

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

SECURITIES EXCHANGE ACT OF 1934
Release No. 41765 / August 19, 1999

ADMINISTRATIVE PROCEEDING
File No. 3-9982

The U.S. Securities and Exchange Commission ("Commission") announced today that it instituted public administrative proceedings pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Exchange Act") against Ronnie R. Neihart ("Neihart") of Weldon, North Carolina to determine whether Neihart should be barred from participating in penny stock offerings.

The Order Instituting Public Administrative Proceedings Pursuant to Section 15(b)(6) of the Securities Exchange Act of 1934 ("Order") is based upon a permanent injunction which the Commission obtained against Neihart on January 20, 1999 in United States District Court for the Northern District of Georgia, SEC v. Ronnie R. Neihart and Synvion Corporation, Civil Action No. 1:98-cv-3341-WBH. The injunction permanently enjoined Neihart from further violations of the registration, antifraud and reporting provisions of the federal securities laws, barred Neihart from acting as an officer or director of any company that has a class of securities registered with the Commission pursuant to Section 12 of the Exchange Act or that is required to file periodic reports with the Commission pursuant to Section 15(d) of the Exchange Act, ordered Neihart to disgorge $961,000 in ill-gotten gains, and ordered Neihart to pay civil penalties. The Court subsequently set the amount of civil penalties at $110,000.

The Order alleges that the complaint in the injunctive action alleged that Neihart, while acting as Synvion Corporation's president and CEO, made material misrepresentations and omissions in connection with the purchase or sale, and in the offer or sale of unregistered Synvion stock. The complaint further alleged that Neihart misrepresented, among other things, (1) that Synvion would be quoted on NASDAQ at a price of up to $64 per share, when, in fact, Synvion had never even filed an application to be quoted on NASDAQ with the National Association of Securities Dealers, Inc., (2) the commercial viability of ETA10 supercomputers worth $20 million which Synvion allegedly owned, when, in fact, the supercomputers were worthless, (3) the existence of contracts with several large, publicly-traded corporations, including NCR Corporation, AT&T Corp. and Lucent Technologies, Inc., when, in fact, these contracts did not exist, (4) the existence of a lucrative stock lease agreement with Prudential Securities, Inc., when, in fact, there was no such stock lease agreement; and (5) that a cease-and-desist order issued against Neihart on December 6, 1996 by the Securities Division of the State of North Carolina had been "cleared up", when, in fact, the cease-and-desist order was in full force and effect.

A hearing will be held before an administrative law judge to determine whether the staff's allegations are true, and if so, what sanctions, if any, are appropriate.

http://www.sec.gov/litigation/admin/34-41765.htm


Modified:08/20/1999