UNITED STATES SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
ADMINISTRATIVE PROCEEDING INSTITUTED AGAINST LAMBERT D. VANDER TUIG
The Securities and Exchange Commission ("Commission") announced that on June 13, 2000, it issued an Order Instituting Public Administrative Proceeding (Order) against Lambert D. Vander Tuig (Vander Tuig). The Commission's Order alleges that Vander Tuig was enjoined by a United States District Court from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that the court also ordered Vander Tuig to pay $61,305 in disgorgement and imposed $61,305 in civil penalties against Vander Tuig.
In its complaint in the District Court action, the Commission alleged that between December 1995 and September 1996, Vander Tuig engaged in an unregistered offering of the stock of Fastlane Footwear, Inc. (Fastlane), a manufacturer of casual footwear based in Jackson, Michigan. The Commission's complaint also alleges that between June 26, 1996 and July 8, 1996, Vander Tuig manipulated Fastlane's stock, artificially raising the price of the security 56% from its initial sale price of $3.12 per share to $4.88 per share by controlling the supply for the security and creating artificial demand. According to the complaint, Vander Tuig accounted for over 96% of the shares of Fastlane stock sold during the relevant period. To create artificial demand, the complaint alleged that Vander Tuig falsely represented to investors that they were purchasing stock in the aftermarket of an initial public offering. Furthermore, the complaint alleges that to inflate the price of the stock and create artificial volume, Vander Tuig used nominee accounts to engage in fraudulent wash sale transactions. Finally, after inflating the price of Fastlane stock, the complaint alleges that Vander Tuig dumped the stock, causing his nominees to sell the bulk of their shares to retail investors after which the price of the security plummeted, reaching its 52-week low of $1.25 per share on October 30, 1996.
A hearing will be scheduled before an administrative law judge to take evidence on the staff's allegations and to afford the Respondent an opportunity to present any defense thereto. The purpose of the hearing is to determine whether the allegations are true and, if so, whether any remedial action should be ordered by the Commission.