Securities Exchange Act of 1934
Release No. 47934 / May 28, 2003
Administrative Proceeding
File No. 3-11137
SEC INSTITUTES ADMINISTRATIVE PROCEEDINGS AGAINST KEITH G. GREENBERG BASED ON ENTRY OF INJUNCTION
The Securities and Exchange Commission today instituted an administrative proceeding against Keith G. Greenberg ("Greenberg"), co-founder of U.S. Diagnostic, Inc. ("USDL"), based on the entry of an injunction against him in Securities and Exchange Commission v. Keith Greenberg, et al. ( 00-9109-CIV) (S.D. Fla.). In the Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 15(b) of the Securities Exchange Act of 1934 ("Order"), the Division of Enforcement alleges that on April 4, 2002, the U.S. District Court for the Southern District of Florida entered a final judgment of permanent injunction by default against Greenberg and Coyote Consulting and Financial Services, LLP ("Coyote"), a private Florida company controlled by Greenberg, permanently enjoining Greenberg from violating the antifraud, periodic reporting, and broker dealer registration provisions of the federal securities laws, and permanently enjoining Coyote from violations of the broker dealer registration provisions. The final judgment also barred Greenberg from acting as an officer or director of any public company. The District Court also held Greenberg and Coyote liable for civil penalties and jointly and severally liable for disgorgement. In August 2002, following an evidentiary hearing, U.S. Magistrate Judge Frank J. Lynch, Jr. filed a report recommending that Greenberg and Coyote be held jointly and severally liable for $3,828,000 in disgorgement and $1,987,346 in prejudgment interest, that a maximum third-tier civil penalty of $100,000 be imposed on Greenberg, and that a maximum third-tier civil penalty of $500,000 be imposed on Coyote. U.S. District Judge Hurley adopted the recommending report in its entirety.
According to the Order, the Commission filed a civil injunctive action in December 2000 against Greenberg and Coyote, alleging that Greenberg prepared or directed the preparation of numerous public statements by USDL which identified him as an officer of the company, but which fraudulently failed to disclose his criminal conviction and his injunction in previous litigation with the Commission. The Commission's complaint additionally alleged that Coyote, through Greenberg, acted as a broker without registering with the Commission.
A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Greenberg an opportunity to dispute the allegations, and to determine what sanctions, if any, are in the public interest.