U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21474 / April 2, 2010
Securities and Exchange Commission v. Daniel O'Riordan, 1:10-CV-10550 (D. Mass. April 2, 2010)
SEC Files Securities Fraud and Registration Charges Against Former President of Paradigm Tactical Products, Inc.
The Securities and Exchange Commission today filed a settled civil injunctive action against Daniel O'Riordan of Providence Village, Texas, the former president of Paradigm Tactical Products, Inc. ("Paradigm"), formerly based in Georgetown, Massachusetts, alleging violations of the anti-fraud and registration provisions of the federal securities laws. O'Riordan consented to the entry of a judgment that, among other things, bars him from serving as an officer or director of a public company and from participating in any offering of a penny stock. In a related federal criminal matter, O'Riordan today was also charged with securities fraud by the United States Attorney's Office for the District of Massachusetts. If convicted, O'Riordan faces up to 20 years imprisonment to be followed by up to 5 years of supervised release, and a $5 million fine.
The Commission's Complaint, filed in federal district court in Massachusetts, alleges that O'Riordan, then the president of Paradigm, signed a false Form D filed with the Commission in 2005 reporting that a private placement of Paradigm stock had occurred, when in fact the private placement never happened. Instead, according to the Complaint, Paradigm's founder controlled the vast majority of the stock, and later sold it into the market without registering it with the Commission and after the stock price had been pumped by false and misleading statements. The Complaint alleges, among other things, that O'Riordan helped to perpetrate the scheme to avoid registration by signing backdated stock certificates and assisted in preparing a list of purported accredited investors who, in fact, were nominee shareholders who had never paid for or received Paradigm stock and were under the control of Paradigm's founder. In fact, according to the Complaint, the list of purported investors included the name of a deceased person. The Complaint alleges that Paradigm's stock price increased from $2.85 per share to $3.15 per share over the two day period following an August 18, 2005 press release issued by Paradigm in which O'Riordan made false and misleading positive statements concerning Paradigm's sales revenues. The Complaint further alleges that O'Riordan received shares from Paradigm which he sold between 2007 and 2009, after he had left the company, in unregistered transactions.
O'Riordan has agreed to settle this matter without admitting or denying the allegations in the Commission's Complaint. O'Riordan has consented to the entry of a permanent injunction prohibiting him from violating Sections 5 and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. O'Riordan will also be barred from serving as an officer or director of a public company and permanently barred from participating in any offering of a penny stock.
The United States Attorney's Office for the District of Massachusetts today also charged O'Riordan with criminal securities fraud. The criminal Information charging O'Riordan alleges that O'Riordan made false statements to the public and to the Commission in connection with the sale of Paradigm stock. If convicted on the securities fraud charge, O'Riordan faces up to 20 years imprisonment to be followed by up to 5 years of supervised release, and a $5 million fine.
The Commission acknowledges the assistance of the U.S. Attorney's Office for the District of Massachusetts, the New England Field Division of the Federal Bureau of Investigation, the Boston Field Division of the Internal Revenue Service and the Massachusetts Securities Division.
See Also: SEC Complaint