U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission


Litigation Release No. 20940 / March 10, 2009

Securities and Exchange Commission v. C. Jones & Company, Carter Allen Jones, Timothy J. Miles, Gaylen P. Johnson, and Jonathan Curshen, Civil Action No. 03-CV-00636-WDM-PAC (D. Colo.)


The Securities and Exchange Commission announced that on March 6, 2009, the United States District Court for the District of Colorado, entered a final judgment against Jonathan Curshen, finding him liable for securities fraud for acting as a promoter in an internet "pump and dump" scheme. Based on the Commission's evidence at the bench trial held on April 30 and May 1, 2007, the Court concluded that in early 2000, Curshen knowingly or recklessly posted on various Internet sites baseless projections and other financial information about Freedom Golf Corporation, a now-defunct Denver-based golf club manufacturer. The Court further found that Curshen knowingly failed to disclose that he was being paid to promote Freedom Golf and was selling the company's stock at the same time he was touting the company.

According to the Court's findings, Timothy Miles, a principal shareholder of Freedom Golf, arranged for the company to hire Carter Allen Jones and Curshen to promote Freedom Golf. Jones prepared an "investor report" touting Freedom Golf based on information provided by the company's president. The report contained factually baseless profit and revenue projections for Freedom Golf, which was in dire financial condition at the time. Curshen posted a link to the report on Internet websites, despite knowing of the company's poor financial condition. Furthermore, the Court found Curshen posted numerous messages touting Freedom Golf on various Internet web sites without disclosing his receipt and sale of Freedom Golf stock in exchange for promoting the company.

The Court's final judgment enjoins Curshen from violating Sections 17(a) and 17(b) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5, and bars him from participating in any penny stock offering. The final judgment also orders Curshen to pay disgorgement of $66,235, representing profits gained from his participation in the illegal scheme. The Court reserved jurisdiction as to prejudgment interest and a civil penalty.

On March 2, in a separate order, the Court entered an amended judgment dismissing the complaint against Miles, finding him not liable for securities fraud after a bench trial held on June 20 and 21, 2005. The Court dismissed the complaint against Miles with prejudice after concluding the Commission failed to prove that false statements Miles made were material to investors.

According to the Court's findings concerning Miles, Miles arranged to have false information submitted on a Form 211 to the NASD (now FINRA) to arrange for Freedom Golf's predecessor, Auric Enterprises, quoted on the Over-The-Counter Bulletin Board. The false information concerned Miles' relationships to many of Auric's shareholders, among other things. The Judge, however, rejected the Commission's argument that the false information would have been material to a reasonable investor.

Previously, Carter Allen Jones, another promoter, and his company, C. Jones & Co. were permanently enjoined by default against future violations of Sections 17(a) and 17(b) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Jones was ordered to pay disgorgement and a civil penalty. Based on the Commission's motion, the Court dismissed its claims of disgorgement and penalties against C. Jones & Co., because it was defunct. In addition, Freedom Golf's president, Gaylen Johnson, previously consented to a permanent injunction against future violations of Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 13a-1 and 13a-13. Johnson was also barred from participating in any offering of a penny stock. Based on his financial condition, the Commission did not seek a civil penalty.

For more information on earlier actions in this case, see LR-18092 (April 16, 2003) and LR-19612 (March 16, 2006).



Modified: 03/10/2009