U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21453 / March 16, 2010
PROMOTER JONATHAN CURSHEN ORDERED TO PAY PRE-JUDGMENT INTEREST AND A CIVIL PENALTY
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 11, 2010, the United States District Court for the District of Colorado ordered Jonathan Curshen to pay pre-judgment interest of $50,718.48 and a $66,235 civil money penalty for his participation as a promoter in a "pump and dump" scheme involving Freedom Golf Corporation's common stock.
On March 6, 2009, following a bench trial Curshen was found liable for securities fraud. 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, a now-defunct 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 while 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. 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 final judgment enjoined Curshen from violations of 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 barred him from participating in any penny stock offering. The final judgment also ordered Curshen to pay disgorgement of $66,235, representing profits gained from his participation in the illegal scheme.
For more information on earlier actions in this case, see LR-18092 (April 16, 2003), LR-19612 (March 16, 2006) and LR-20940 (March 10, 2009)