UNITED STATES OF AMERICA
In the Matter of
|ORDER MAKING FINDINGS AND IMPOSING REMEDIAL SANCTIONS PURSUANT TO SECTION 15(b) OF THE SECURITIES EXCHANGE ACT OF 1934|
The Securities and Exchange Commission ("Commission") deems it appropriate and in the public interest to accept the Offer of Settlement ("Offer") submitted by Richard Mann ("Mann") pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Exchange Act").
In response to the entry of an Order Instituting Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Mann 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 any findings contained herein, except as to the jurisdiction of the Commission over him and the subject matter of these proceedings and except for the findings contained in paragraphs III. A, III. C and III. E below, which are admitted, Mann consents to the entry of this Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order") as set forth below.
On the basis of this Order and Mann's Offer, the Commission finds that:
A. From about July 1988 through November 1996, Mann was associated with six different registered broker-dealers. He was last associated with Global Financial Group from February 1996 to November 1996. Mann acted as a broker-dealer from 1996 to 1999 in connection with the offer and sale of World Vision Entertainment, Inc. ("World Vision") promissory notes. He is not currently registered with the Commission in any capacity.
B. Mann acted as an unregistered broker-dealer in connection with the World Vision promissory note scheme, by, among other things: devising the promissory note program for World Vision in or about June 1996; introducing the company's officers to sales contacts, aiding in the preparation of offering materials; recruiting note marketers; distributing offering materials to the note sales force; processing note applications and interest checks for the notes; and receiving transaction-based compensation for marketing and selling World Vision securities. From his role in the World Vision Ponzi scheme, Mann earned $1,587,353.84.
C. On June 1, 2000, the Commission filed a civil action against Mann in the United States District Court for the Southern District of Ohio, SEC v. Piromalli, et al., Case No. 2-00-622. On April 8, 2002, in SEC v. Piromalli, et al., Case No. 2-00-622, the Honorable James L. Graham, United States District Court Judge for the Southern District of Ohio, entered a Final Amended Order of Permanent Injunction and Other Relief by Default Against Mann ("April 8, 2002 Order"). The April 8, 2002 Order enjoined Mann from violating Sections 5(a), 5(c), 17(a)(1), 17(a)(2) and 17(a)(3) of the Securities Act of 1933, Sections 10(b), 15(a), and 15(c) of the Exchange Act and Rules 10b-5 and 15c1-2 thereunder. The April 8, 2002 Order also required Mann to pay disgorgement of $1,587,353.84, plus $529,517 in prejudgment interest as well as a civil penalty of $110,000.
D. The Complaint in SEC v. Piromalli, et al. alleged that Mann, among others, orchestrated a massive Ponzi scheme through the offer and sale of nine-month promissory notes in World Vision, a Florida corporation. The Complaint alleged that after helping World Vision's principals prepare fraudulent offering materials, Mann distributed these fraudulent offering materials at road shows and otherwise promoted World Vision notes to an extensive sales network. This sales network was recruited primarily by Mann. Among other things, Mann distributed the fraudulent offering materials to the sales network for use in the solicitation of investors, processed note transactions and was paid a commission on each note sold or renewed by the sales network.
E. On September 5, 2001, in U.S. v. Mann, Case No. 8:01-Cr-279-T-26EAJ, in the United States District Court for the Middle District of Florida, Mann pled guilty to conspiracy to commit securities fraud in offering and selling promissory notes for Lifeblood Biomedical, Inc. On November 30, 2001, he was sentenced to 18 months in federal prison.
F. Mann's indictment in the criminal case against him charged him with conspiracy to commit securities fraud in connection with the sale and purchase of nine-month promissory notes issued by Lifeblood Biomedical, Inc. The indictment alleged that Mann: conspired to commit securities fraud through the offer and sale of promissory notes for Lifeblood Biomedical, Inc.; that he made material false and fraudulent representations with respect to the promissory notes; and that he failed to disclose to investors that investor proceeds would be used to pay promissory note interest to other investors.
In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions specified in Mann's Offer.
ACCORDINGLY, IT IS ORDERED:
Pursuant to Section 15(b)(6) of the Exchange Act, Richard Mann be, and hereby is, barred from association with any broker or dealer.
For the Commission, by its Secretary, pursuant to delegated authority.
Jonathan G. Katz
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