U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19817 / August 31, 2006

SEC v. John W. Surgent, et al., Civil Action No. 04-60493-CIV (S.D. Fla.) (JIC)

SEC Obtains Final Judgment Against Former President of Orex Gold Mines Corporation and Two Former Boiler Room Operators

Court Also Grants Commission's Motion for Summary Judgment Against Primary Architect of the Orex Manipulation Scheme, Finds Him Liable for Securities Fraud

The Commission announced today that on August 15, 2006, the Honorable James I. Cohn, United States District Judge for the Southern District of Florida, entered a final judgment by consent against the former president of Orex Gold Mines Corporation, Warren Heminger (formerly known as Warren Hemedinger), and two former boiler-room operators, Robert Vitale and Sal Puccio, in SEC v. John Surgent, et al., Civil Action No. 04-60493-CIV (S.D. Fla.) (JIC). All three defendants settled the charges without admitting or denying the allegations in the Commission's complaint.

The Commission also announced today that on July 24, 2006, the Commission prevailed in its motion for summary judgment against John Surgent, the primary architect of the Orex manipulation scheme. The Court found Surgent liable for securities fraud and violations of the registration provisions of the Securities Act of 1933. The Court enjoined him from future violations of the antifraud and registration provisions of the federal securities laws, permanently barred him from participating in the offering of any penny stock and permanently barred him from acting as an officer or director of any public company. The Court reserved for a later hearing a determination of the monetary sanctions to be imposed against Surgent. Previously, Surgent was convicted in a related criminal proceeding (U.S. v. Surgent, # 04-cr-0364 (JG) (EDNY)) for securities fraud and money laundering, sentenced to a term of fourteen years incarceration, and ordered to pay $1.7 million in victim restitution.

The Commission's complaint in this matter, filed on April 16, 2004, alleged that from March through July 1999, the defendants used false promotional materials and classic "boiler-room" tactics to sell approximately $6 million of Surgent's unregistered securities. The complaint alleged that Surgent, a recidivist securities law violator and disbarred attorney, controlled the majority of Orex stock and - together with Heminger, the company's nominal president - created and distributed promotional materials that falsely portrayed Orex as an active, established mining company with mines and a revolutionary gold extraction process. In truth, the complaint alleged, Orex neither owned any mines nor possessed any mining equipment. The complaint also alleged that the gold extraction process that formed the cornerstone of the Orex promotional campaign had never been tested or implemented on a commercial basis.

The complaint further alleged that Vitale and Puccio - working as brokers at a "boiler room" operating out of the Pompano Beach, Florida office of Preferred Securities Group, Inc. - engaged in various sales practice abuses while selling Orex stock, made false and misleading statements about Orex, failed to make the required penny stock disclosures to customers concerning Orex, and otherwise engaged in a variety of fraudulent and deceptive conduct.

The final judgment against Heminger permanently enjoins him from future violations of the antifraud and registration provisions of the federal securities laws, permanently bars him from participating in any penny stock offering, and bars him, for a period of ten years, from acting as an officer or director of any public company. The judgment further orders Heminger to disgorge $18,000, an amount representing his ill-gotten gains and pre-judgment interest thereon, as well as $7,000 in civil penalties. The judgment did not impose a penalty in excess of $7,000 based on Heminger's sworn financial statement and other information submitted to the Commission.

The final judgments against Vitale and Puccio permanently enjoin each of them from future violations of the antifraud, registration, and penny stock disclosure provisions of the federal securities laws, permanently bar each of them from participating in any penny stock offerings, and order each of them to pay $40,025 in disgorgement plus pre-judgment interest and $60,000 in civil penalties. In addition, without admitting or denying the Commission's findings, Vitale and Puccio have agreed to Commission administrative orders, instituted today, that permanently bar each of them from association with any registered broker or dealer, based on the federal District Court's entry of injunctions against them.

See Litigation Release No. 18669 (April 19, 2004), Litigation Release No. 19006 (December 20, 2004), and Litigation Release No. 19390 (September 23, 2005).