U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19901 / November 7, 2006
Accounting and Auditing Enforcement
Release No. 2511 / November 7, 2006
Securities and Exchange Commission v. Stansbury Holdings, et al., Civil Action No. 06-cv-00088-REB-BNB
The Commission announced that on October 12, 2006, the United States District Court for the District of Colorado entered a default judgment against Defendant Stansbury Holdings Corporation.
In its complaint, the Commission alleged that Stansbury Holdings defrauded investors by materially overstating its assets in annual and quarterly reports filed with the Commission and in a private placement memorandum. Stansbury fraudulently overvalued two if its mining properties known as Hamilton and Dillon despite numerous events demonstrating they were worth far less, including foreclosure actions on the properties. Stansbury also failed to adjust the value of these assets even after Stansbury changed its business plan and decided not to mine vermiculite, the activity for which it had purchased the two mining claims. Stansbury failed to create and maintain required books, records and accounts and to devise and maintain a required system of internal accounting controls. It failed to obtain quarterly reviews of its financial statements for several quarters and it failed to file two mandatory periodic reports with the Commission.
By order of the court, Stansbury Holdings is permanently restrained and enjoined from violating, directly or indirectly, Section 17(a) of the Securities Act of 1933 ("Securities Act"), Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-2 and 13b2-1 thereunder.