U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21105 / June 25, 2009
Securities and Exchange Commission v. Prime Time Group, Inc., Case No. 09-80952-CIV-COHN (S.D. Fla.)
The Securities and Exchange Commission today charged Prime Time Group, Inc. (now known as Hunt Gold Corporation), its former chief executive officers, Johnny Ray Arnold and Dallas L. Robinson, and its former chief operating officer, Troy K. Metz, with securities fraud for their participation in the dissemination of materially false and misleading press releases. The Commission also charged Prime Time, Arnold, and one of Prime Time’s largest shareholders, John A. Mattera, with securities antifraud and registration violations for their participation in a fraudulent scheme to evade the registration requirements.
The Commission’s complaint, filed in the United States District Court for the Southern District of Florida, alleges that from February 2006 through November 2007, defendants Prime Time, Arnold, Robinson, and Metz participated in the dissemination of false and misleading press releases to the public concerning, among other things, Prime Time’s acquisition and ownership interest in a Puerto Rico convenience store franchise, agreements the Company claimed to have with other wireless businesses, and its purported acquisitions of other companies.
The complaint also alleges that during the same period, Prime Time, Arnold, and Mattera made false statements to the Company’s transfer agent in connection with a fraudulent scheme involving the issuance of bogus promissory notes. This scheme allowed Mattera to obtain millions of unlegended shares of Prime Time stock, most of which he later sold in the open market in November 2007.
The complaint further alleges that Prime Time, Arnold, and Mattera violated the securities registration provisions by engaging in unregistered distributions of Prime Time stock. For instance, the Commission alleges that Prime Time, Arnold, and Mattera engaged in an improper “gypsy swap” transaction in which Mattera agreed to transfer his unlegended shares to various stock promoters on behalf of Prime Time. In return, Mattera received restricted stock from the Company. This scheme was designed to circumvent the securities registration requirements because Prime Time could not legally issue unrestricted shares to the stock promoters without filing a registration statement.
The Commission’s complaint charges: Prime Time, Arnold, and Mattera with violating Sections 5(a) and 5(c) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and Robinson and Metz with violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. In its complaint, the Commission seeks permanent injunctions and civil penalties against all the defendants, disgorgement plus prejudgment interest against Mattera, and penny stock bars against Arnold, Robinson, Metz, and Mattera.
On June 15, 2009, the Commission temporarily suspended trading in the securities of Hunt Gold Corporation (Prime Time’s new name) because of questions raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, Hunt Gold’s gold mining exploration business. The Commission staff acknowledges the assistance of the British Columbia Securities Commission in its investigation.
For further information, see Exchange Act Release No. 60109 (June 15, 2009).