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UNITED STATES DISTRICT COURT
Plaintiff Securities and Exchange Commission ("SEC" or "Commission") alleges as follows: INTRODUCTION 1. The Commission brings this action to restrain and enjoin Jeffrey R. Senger ("Senger"), Brad M. Nirenberg ("Nirenberg") and Norman F. Piatti ("Piatti") (collectively "Defendants") from violating the antifraud provisions of the federal securities laws. From approximately November 1999 through February 2000, Defendants participated in a classic pump-and-dump scheme in the securities of Lifekeepers International, Inc. ("Lifekeepers" or "the Company"), a developmental stage, medical diagnostic company headquartered in West Palm Beach, Florida. Defendants disseminated false and misleading information to the investing public about Lifekeepers' assets, projected revenues, profits, and anticipated stock price through Lifekeepers' press releases, website, and in a massive, fraudulent e-mail campaign. When the price of Lifekeepers' stock was artificially inflated as a result of Defendants' touting campaign, Defendants Senger and Nirenberg sold approximately 150,000 shares of their Lifekeepers stock and reaped approximately $260,000 in illegal profits. In addition to a permanent injunction against Defendants the Commission seeks the imposition of civil money penalties against Defendants, and an order requiring Defendants Senger and Nirenberg to disgorge their ill-gotten gains, plus prejudgment interest thereon. DEFENDANTS 2. Defendant Senger, age 36, resides in West Palm Beach, Florida. At various times between April 1989 and March 1999, Senger was employed as a registered representative associated with various broker-dealers. 3. Defendant Nirenberg, age 38, resides in Coral Springs, Florida. At various times between June 1986 and May 1987, Nirenberg was employed as a registered representative associated with various broker-dealers. 4. Defendant Piatti, age 48, resides in West Palm Beach, Florida. At all relevant times, Piatti was the president and chief executive officer of Lifekeepers. JURISDICTION AND VENUE 5. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 22(a) of the Securities Act of 1933 ("Securities Act"), 15 U.S.C. §§ 77t(b), 77t(d) and 77v(a), and Sections 21(d), 21(e), and 27 of the Securities Exchange Act of 1934 ("Exchange Act"), 15 U.S.C. §§ 78u(d), 78u(e) and 78aa. 6. Certain of the acts and transactions constituting violations of the Securities Act and the Exchange Act have occurred within the Southern District of Florida. At all relevant times, all Defendants resided in the Southern District of Florida. 7. Defendants, directly and indirectly, have made use of the means and instrumentalities of interstate commerce, the means and instruments of transportation and communication in interstate commerce, and the mails, in connection with the acts, practices, and courses of business complained of herein. THE FRAUDULENT SCHEME 8. At various times between November 1999 and February 2000, Defendants Senger, Nirenberg and Piatti participated in a classic "pump-and-dump" penny stock scheme involving the securities of Lifekeepers. 9. At various times during 1999, Senger and Niernberg acquired substantial blocks of Lifekeepers stock and placed it in accounts at certain broker-dealers. Together, with the assistance of Piatti, Senger and Nirenberg proceeded to pump-up the demand and price for Lifekeepers' stock through a series of manipulative activities while dumping their own shares into the market at a substantial profit. 10. During January and February 2000, Nirenberg sold over 120,000 shares of Lifekeepers' stock through an account he controlled in the name of Investor Contact Services Corp. and received $193,652. 11. During January and February 2000, Senger sold 29,200 shares of Lifekeepers' stock through an account he controlled in the name of C&S Capital and received $66,894. False and Misleading Press Releases 12. From approximately November 1999 through February 2000, Defendants Senger, Nirenberg and Piatti caused Lifekeepers to issue a series of false and misleading press releases touting Lifekeepers' acquisition of a 20% interest in a healthcare web site called MyMedic.com ("MyMedic"). MyMedic was owned and controlled by Senger and occupied offices across the hall from Lifekeepers. 13. The press releases falsely represented that Lifekeepers' stake in MyMedic was worth between $80 and $500 million, when in fact MyMedic had no revenues and was not fully operational. In fact, according to a corporate resolution signed by Piatti, Lifekeepers had purchased its stake in MyMedic (7.2 million shares) for $50 after loaning MyMedic $120,000. 14. From November 1999 through February 2000, Defendant Piatti caused Lifekeepers to issue press releases that falsely represented that the Company anticipated "outstanding growth" during the current year (2000) in the diagnostic testing division and that "[b]ased on current estimates, this division will generate well over $1 million in revenue this year at an expected 20% - 30% profit to the bottom-line..." 15. These press releases, referenced in paragraph 14 above, were false and misleading because, during this period, Lifekeepers was operating at a significant loss and lacked the necessary cash flow and capital to increase operations to the level of profitability. At the time of these press releases, Lifekeepers' revenues were less than $10,000 per month and the Company had only one operational diagnostic vehicle. Misrepresentations on Lifekeepers' Website 16. From at least November 1999 through January 2000, Defendant Piatti caused Lifekeepers to maintain a website that included false and misleading information about the Company. 17. Lifekeepers' website included a corporate profile that falsely represented that the Company "has commenced" filing an SB-1 registration statement with the Commission when, in fact, no such registration statement has ever been filed with the Commission on behalf of Lifekeepers. 18. Lifekeepers' website falsely claimed that "[t]he Company is contracted to offer its testing products and services at fixed locations nationwide..." This claim was false and misleading as Lifekeepers had only operated in limited regions of Florida and Virginia and did not have contracts to provide services in other states. 19. Lifekeepers' website also falsely represented that the Company was a "well-managed and profitable leader in the Healthcare Industry" when, in fact, Lifekeepers was never profitable and had never been a leader in the Healthcare Industry. False and Misleading E-Mail Campaign 20. During January and February 2000, Defendant Niernberg arranged for Lifekeepers and its stock to be touted over the internet through a series of false and misleading "spam" e-mails designed to boost demand for Lifekeepers' stock. 21. The unsolicited e-mails bore the caption "OTC Stock Picks" ("OTC") and recommended Lifekeepers' stock as a "STRONG BUY/AGGRESSIVE ACCUMULATION." The e-mails restated most of the misrepresentations included in the press releases and on the website. The e-mails projected a six-month target price of between $7 and $8 per share for Lifekeepers' stock. In addition, the e-mails claimed that OTC had added Lifekeepers to its "portfolio" which had purportedly gained "589%" on the past year (1999). 22. Nirenberg disseminated the false and misleading e-mails to stimulate demand for Lifekeepers's stock, with the knowledge and approval of Senger, while Senger and Nirenberg sold their own shares into the market at a substantial profit. COUNT I FRAUD IN VIOLATION OF
23. The Commission repeats and realleges paragraphs 1 through 22 of the Complaint. 24. From approximately November 1999 through February 2000, Defendants Senger, Nirenberg and Piatti, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by use of the mails, in the offer or sale of securities, as described herein, have, knowingly, willfully or recklessly employed devices, schemes or artifices to defraud. 25. By reason of the foregoing, Defendants Senger, Nirenberg and Piatti, directly and indirectly, have violated and, unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a)(1). COUNT II FRAUD IN VIOLATION OF
26. The Commission repeats and realleges paragraphs 1 through 22 of its Complaint. 27. At various times between November 1999 and February 2000, Defendants Senger, Nirenberg and Piatti, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by the use of the mails, in the offer or sale of securities, as described herein, have (a) obtained money or property by means of untrue statements of material facts and omissions to state material facts necessary to make the statements made, in the light of the circumstances under which they were made, not misleading; and/or (b) engaged in transactions, practices and courses of business which operated as a fraud or deceit upon purchasers and prospective purchasers of such securities. 28. By reason of the foregoing, Defendants Senger, Nirenberg and Piatti, directly and indirectly, have violated and, unless enjoined, will again violate Sections 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77(q)(a)(2) and 77(q)(a)(3). COUNT III FRAUD IN VIOLATION OF SECTION 10(b)
29. The Commission repeats and realleges paragraphs 1 through 22 of its Complaint. 30. From approximately November 1999 through February 2000, Defendants Senger, Nirenberg and Piatti, directly and indirectly, by use of the means and instrumentality of interstate commerce, and of the mails, and of any facility of any national securities exchange, in connection with the purchase or sale of the securities, as described herein, knowingly, willfully or recklessly: (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and/or (c) engaged in acts, practices and courses of business which operated, or would have operated as a fraud or deceit upon the purchasers of such securities. 31. By reason of the foregoing, Defendants Senger, Nirenberg and Piatti, directly or indirectly, violated and, unless enjoined, will again violate Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240. 10b-5, thereunder. RELIEF REQUESTED WHEREFORE, the Commission respectfully requests that the Court: I. Declaratory Relief Declare, determine and find that Defendants Senger, Nirenberg and Piatti committed the violations of the federal securities laws alleged herein. II. Permanent Injunctive Relief Issue Permanent Injunctions, restraining and enjoining Defendants Senger, Nirenberg and Piatti, their officers, agents, servants, employees, attorneys, and all persons in active concert or participation with them, and each of them, from violating: (i) Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a); (ii) Sections 17(a)(2) and 17(a)(3) of the Securities Act, 15 U.S.C. §§ 77(q)(a)(2) and (a)(3); and (iii) Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, thereunder. III. Disgorgement Issue an Order requiring Defendants Senger and Nirenberg to disgorge all ill-gotten profits or proceeds that they have received as a result of the acts and/or courses of conduct complained of herein, with prejudgment interest. IV. Penalties Issue an Order directing Senger, Nirenberg and Piatti to pay civil money penalties pursuant to Section 20(d) of the Securities Act, 15 U.S.C. § 77t(d), and Section 21(d) of the Exchange Act, 15 U.S.C. § 78(d)(3). V. Further Relief Grant such other and further relief as may be necessary and appropriate. Further, the Commission respectfully requests that the Court retain jurisdiction over this action in order to implement and carry out the terms of all orders and decrees that may hereby be entered, or to entertain any suitable application or motion by the Commission for additional relief within the jurisdiction of this Court. Respectfully submitted, August ____, 2002 By: __________________________ http://www.sec.gov/litigation/complaints/comp17685d.htm
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