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U.S. Securities and Exchange Commission


Litigation Release No. 22950 / March 25, 2014

Securities and Exchange Commission v. Imaging Diagnostic Systems, Inc., Linda Grable, and Allan Schwartz, Civil Action No. 13-cv-62025 (S.D. FL.)

District Court Enters Final Judgments of Permanent Injunction Against All Defendants and Orders Penny Stock and Officer and Director Bars Against Linda Grable and Allan Schwartz

The Securities and Exchange Commission announced that on March 17, 2014, U.S. District Court Judge Robin S. Rosenbaum entered final judgments of permanent injunction by consent against Imaging Diagnostic Systems, Inc., a Florida medical technology company, Linda Grable, its CEO, and Allan Schwartz, its CFO. The final judgments permanently enjoin:

  • Imaging Diagnostic, Grable and Schwartz from violating Section 17(a)(2) 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(b);
  • Imaging Diagnostic from violating Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13;
  • Imaging Diagnostic and Grable from violating Section 14(a) of the Exchange Act and Rule 14a-9;
  • Grable and Schwartz from violating Section 16(a) of the Exchange Act and Rules 13a-14, 13b2-1, and 16a-3, and from aiding and abetting Imaging Diagnostic's violations of Sections 10(b), 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act and Rules 10b-5(b), 12b-20, 13a-1 and 13a-13.

The final judgments also order Grable and Schwartz to pay civil penalties in the amount of $150,000 each, and permanently bar them from participating in an offering of a penny stock and from acting as officers or directors of any public company. The Commission's claim for a civil penalty against Imaging Diagnostic was dismissed.

The Commission filed its complaint against Imaging Diagnostic, Grable, and Schwartz on September 18, 2013. The complaint alleged that the defendants made material misstatements and omissions in Imaging Diagnostic's public filings about the timing of the company's Food and Drug Administration application and its failure to remit payroll taxes to the Internal Revenue Service. In addition, the complaint alleged that Grable and Schwartz failed to file beneficial ownership reports in 2009, 2010, and 2011, despite having received stock or options.

For more information on earlier actions in this case, see LR-22801 (Sept. 18, 2013).



Modified: 03/25/2014