Exotics.com, Inc., et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21028 / May 7, 2009

Securities and Exchange Commission v. Exotics.com, Inc., et al., Civil Action No. 2:05-CV-00531-PMP-GWF, United States District Court, District of Nevada

FINAL JUDGMENT ENTERED AGAINST FORMER REGISTERED REPRESENTATIVE EDWARD JAMES WEXLER IN MARKET MANIPULATION AND FINANCIAL FRAUD CASE

The Securities and Exchange Commission announced that, on May 7, 2009, the federal district court in Nevada entered a final judgment, by consent, against Edward James Wexler, of Scottsdale, Arizona, in connection with an enforcement action filed in 2005 concerning a stock manipulation and accounting fraud scheme. The judgment permanently enjoins Wexler from violating the antifraud provisions of the federal securities laws and orders him to pay disgorgement and prejudgment interest totaling $249,095.61, but waives payment of all but $20,000 of that amount and does not impose a civil monetary penalty based on his financial condition. The judgment also bars Wexler from participating in any offering of a penny stock.

The Commission's action in this case was filed on April 21, 2005 against Exotics.com, Inc., a Nevada corporation based in Vancouver, British Columbia, and 12 other principal defendants and one relief defendant. The complaint alleged that, between at least 1999 and 2002, Exotics.com, which was then an Over-the-Counter Bulletin Board company in the business of operating adult Web sites, was the subject of a manipulation and accounting fraud perpetrated by, among others, its officers, attorneys and outside auditors. The complaint alleged that Wexler, a former registered representative of a broker-dealer, played a role in the scheme by engaging in manipulative trading of Exotics.com stock.

Without admitting or denying the allegations in the Commission's complaint, Wexler consented to the entry of the final judgment against him. The final judgment enjoins Wexler from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder and bars him from participating in any penny stock offering. The judgment also orders that Wexler is liable for disgorgement of $156,870.92, representing the ill-gotten gains from his manipulative trading, plus prejudgment interest of $92,224.69, but waives payment of all but $20,000 of that amount and does not impose a civil monetary penalty based on his financial condition.

The Commission previously obtained default judgments against two defendants and settled its action against one other defendant. The action remains pending against the remaining nine defendants and one relief defendant.

For further information, see Litigation Release Nos. 19207 (April 28, 2005), 19645 (April 7, 2006), 19699 (May 15, 2006), and 19957 (January 4, 2007), and Exchange Act Release No. 59766 (April 14, 2009).