U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20246 / August 16, 2007
SEC v. Marc T. Duchesne, Jeffrey A. Hayden, Gregory A. Moffitt, Robert S. Parsley, and Nationwide Capital Corporation, Civil Action No. 07-CV-01475 (JDB) (D.D.C. filed August 16, 2007)
SEC Charges Marc Duchesne, Jeffrey Hayden, Gregory Moffitt, and Robert Parsley with Market Manipulation
The Securities and Exchange Commission today filed a civil action in the United States District Court for the District of Columbia against Marc T. Duchesne, Jeffrey A. Hayden, Gregory A. Moffitt, Robert S. Parsley, and Nationwide Capital Corporation ("Nationwide") for participating in a fraudulent scheme concerning Nationwide.
The complaint alleges that, in August and September 2002, defendants Duchesne, Hayden, Moffitt, and Parsley carried out a scheme to manipulate the price of Nationwide's stock. The scheme was orchestrated by Duchesne, and began with a matched trade between Duchesne and Hayden that inflated Nationwide's stock price from pennies to $9.35 per share. The Complaint alleges that, thereafter, Duchesne, Hayden, and Parsley bought or sold Nationwide shares at inflated prices to increase the price of Nationwide stock, to generate volume, and to prime the market for the manipulated shares. The Complaint further alleges that Nationwide, Duchesne, and Moffitt disseminated false and misleading information regarding Nationwide's financial condition and business prospects, as part of the manipulative scheme. This information included a false press release, false public filings, and a website that falsely portrayed Nationwide and its business prospects. According to the Complaint, the object of the scheme was to artificially inflate the price of Nationwide stock, to induce public investors to purchase Nationwide stock, to support Nationwide's attempt to acquire other companies, and to enable certain of the defendants to profit from selling Nationwide stock at artificially-inflated prices. The scheme collapsed on October 1, 2002, when the Commission suspended trading in Nationwide securities.
The Complaint charges each of the defendants with violating the antifraud provisions of the federal securities laws, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Duchesne and Hayden are also charged with violating Section 17(a) of the Securities Act of 1933 ("Securities Act"), which is also an antifraud provision. Nationwide is also charged with violating the issuer reporting provisions, Section 15(d) of the Exchange Act and Rules 15d-11 and 15d-13 thereunder, and Duchesne and Moffitt are charged with aiding and abetting those violations. Nationwide, Moffitt and Parsley have consented to the entry of judgments against them, without admitting or denying the allegations in the SEC's Complaint. Specifically, Nationwide has consented to the entry of an injunction against future violations of Sections 10(b) and 15(d) of the Exchange Act and Rules 15d-11, 15d-13, and 10b-5 thereunder. Moffitt has consented to the entry of an injunction against future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and from aiding and abetting violations of Section 15(d) of the Exchange Act and Rules 15d-11 and 15d-13. Moffitt has also consented to the entry of an order barring him from participating in offerings of penny stocks and barring him from serving as an officer or director of a public company. Parsley has consented to the entry of an injunction against future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and has consented to the entry of an order requiring him to pay a $75,000 civil penalty, and barring him from participating in offerings of penny stocks. The requested relief is subject to court approval.