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U.S. Securities and Exchange Commission


Litigation Release No. 20101 / May 3, 2007

SEC v. Vencent A. Donlan, Defendant, and Robin D. Colls Donlan, Relief Defendant, Civil Action No. 07 CV 793 JAH (LSP) (S.D. Cal.)

SEC Obtains Emergency Asset Freeze Against Former Stock Options Administrator in Connection With Theft of Stock Options

The Securities and Exchange Commission today announced that it obtained an emergency asset freeze against the former stock options administrator of San Diego-based Wireless Facilities, Inc. (WFI), who was charged with defrauding the company and its shareholders by causing the unauthorized issuance and transfer of over 700,000 shares of WFI stock and stock options to himself and his wife.

On May 2, 2007, the Honorable John A. Houston, United States District Judge for the Southern District of California, entered a temporary restraining order freezing the assets of Vencent A. Donlan (Donlan), age 44, and his wife, Robin D. Colls Donlan (Colls), age 44, both of San Diego, California. The Commission's complaint alleges that Donlan defrauded WFI and its shareholders by abusing his position as WFI's stock options administrator to fraudulently issue and transfer WFI's stock and stock options to an account in his name, in violation of the antifraud provisions of the federal securities laws. The complaint charges Donlan with securities fraud and names Colls as a relief defendant because she received proceeds from the fraud.

The Commission's complaint alleges that between November 2002 and November 2003, Donlan abused his position as WFI's stock options administrator to issue and transfer over 700,000 shares of WFI stock and stock options to a brokerage account that he held jointly with his wife, Colls. According to the complaint, Donlan caused these transfers by making false entries in WFI's stock options software to create and then hide the unauthorized stock options grants to Colls and by providing false information to WFI's brokerage firm and transfer agent. Over the thirteen month period of the fraud, Donlan initiated twenty-seven unauthorized transfers of WFI stock and stock options to his and Colls' brokerage account.

The complaint further alleges that Donlan and/or Colls exercised the options and sold the stock on the open market, realizing net proceeds of at least $7.7 million. All of these proceeds, according to the complaint, were then transferred or paid to other accounts. Some of the proceeds may also have been used to purchase real estate, including a home in San Diego for $942,000 in cash and property in Julian, Calif., for $655,000 in cash.

In addition to freezing several million dollars in personal and real property, the court's order requires an accounting of Donlan's and Colls' assets, provides for expedited discovery, and prohibits them from destroying evidence. The Commission alleges that Donlan's fraudulent scheme violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission is seeking against Donlan permanent injunctive relief, disgorgement of the ill-gotten gains with prejudgment interest thereon, and civil monetary penalties. The complaint names Colls as a relief defendant and seeks against her disgorgement with prejudgment interest.

SEC Complaint in this matter



Modified: 05/03/2007