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Litigation Release No. 20514 / April 2, 2008

Securities and Exchange Commission v. Jeffrey B. Schmidt, et al., United States District Court for the Northern District of California, Civil Action No. C 05-05171 MHP

On March 27, 2008, United States District Judge Marilyn Hall Patel signed the Orders of Final Judgment against Defendants Jeffrey B. Schmidt and Gary L. Gelnette ("Final Judgments"), in which the Court issued permanent injunctions against future violations by Schmidt and Gelnette of Section 5 and Section 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and rule 10b-5 promulgated thereunder, and Section 15(a) of the Exchange Act (against Schmidt only). The Court ordered Schmidt and Gelnette to pay within 10 days disgorgement plus prejudgment interest of $11,061,855. The Court also ordered Schmidt to pay $1,000,000 and Gelnette to pay $500,000 in civil penalties. The Court's Final Judgments follow its Order entered on July 16, 2007, granting the Securities and Exchange Commission's motion for summary judgment against Schmidt and Gelnette.

Related Litigation Releases No. 19493



Modified: 04/02/2008