U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20007 / February 16, 2007
Securities and Exchange Commission v. Leslie Mersky, et al., Civil Action No. 93-CV-5200 (E.D. Pa.)
CIVIL AND ADMINISTRATIVE PROCEEDINGS RESOLVED AS TO WILLIAM MUEGER IN CONNECTION WITH A SCHEME TO SELL WORTHLESS SECURITIES
Mueger Enjoined from Violations of the Securities Laws and Barred from Association with any Broker or Dealer
The Securities and Exchange Commission ("Commission") announced today that it has resolved certain administrative and district court proceedings with William J. Mueger ("Mueger"). On February 2, 2007, the Honorable Berle M. Schiller, United States District Court Judge, signed a Final Judgment permanently enjoining Mueger from, among other things, violations of antifraud and registration provisions of the federal securities laws ("Final Judgment"). Securities and Exchange Commission v. Mueger, et al., Civil Action No. 93-5200 (E.D. Pa.). Mueger consented to the entry of the Final Judgment, without admitting or denying the allegations of the Commission's complaint, except as to jurisdiction.
In the civil injunctive action filed by the Commission in 1993, the Commission's Complaint alleged that, from January 1988 through June 1989, Mueger participated in an ongoing scheme to sell the worthless securities of Amglo Industries, Inc. ("Amglo") and Amglobal Corporation ("Amglobal") through manipulative activities, and through false and misleading representations about the companies. The Complaint further alleged that many of the securities were not registered with the Commission and originated from stock certificates that were either fabricated or improperly issued by the companies or their transfer agents. According to the Complaint, Mueger and others utilized a fraudulent broker-dealer network to distribute more than $3.4 million in these worthless securities in the over-the-counter market, and that this fraudulent network channeled the securities from undisclosed brokerage accounts controlled by Mueger and/or others to bona fide public investors. The Commission's Complaint alleged that, ultimately, the scheme to defraud collapsed in the summer of 1989, after the distribution of approximately $3.4 million of worthless securities to unwitting investors through the over-the-counter market. In January 1994, the Commission's civil action was stayed upon the request of the office of the United States Attorney for the Eastern District of Pennsylvania.
The Final Judgment permanently enjoins Mueger from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and Rules 101 and 102 of Regulation M of the Exchange Act. The Final Judgment orders Mueger to pay disgorgement together with prejudgment interest in the amount of $1,057,543, but waives payment of the same based on Mueger's inability to pay. The Commission did not seek a civil penalty from Mueger because the alleged wrongdoing preceded the effective date of the Securities Enforcement Remedies and Penny Stock Reform Act of 1990. (Pub. L. No. 101-429, 104 Stat. 931 (1990)).
The Commission also announced today that it issued an Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934, Making Findings, and Imposing Remedial Sanctions barring Mueger from association with any broker or dealer (the "Order"). The Order is based on the permanent injunction contained in the Final Judgment and its entry completes the Commission's litigation in connection with the described scheme to defraud.