U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23160 / December 17, 2014
Securities and Exchange Commission v. Christopher Plummer, et al.,, Civil Action No. 14-CV-5441 (LTS)
The Securities and Exchange Commission today announced that on December 17, 2014, the Honorable Laura Taylor Swain of the United States District Court for the Southern District of New York entered a final judgment against Lex M. Cowsert in SEC v. Christopher Plummer, et al., 14-CV-5441. The SEC's complaint, filed in July 2014, alleges that Cowsert, the former CEO of microcap company CytoGenix, Inc., and Christopher Plummer teamed up to defraud investors with extravagant claims about CytoGenix's revenue and other benefits flowing from a "shared revenue agreement" with an electricity provider supposedly operated by Plummer. The complaint alleges that Cowsert prepared and authorized CytoGenix to issue various press releases with materially false and misleading information that Plummer supplied concerning his purported electricity provider even though Cowsert had no basis for believing that Plummer's company had the means to generate the revenue needed to fund energy production technologies.
The complaint further alleges that other CytoGenix press releases unrelated to the partnership with Plummer touted outdated test results and a non-existent new laboratory for testing the vaccine products that CytoGenix claimed to be developing, when in fact CytoGenix had lost its assets in litigation with two former employees, including the rights to various vaccine patents and other intellectual property featured in press releases. Finally, the complaint alleges Cowsert further defrauded CytoGenix shareholders by misappropriating approximately $91,000 in the proceeds of a purported private offering. Cowsert consented to the entry of the final judgment without admitting or denying the allegations.
The final judgment permanently enjoins Cowsert from violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder; prohibits Cowsert from acting as an officer or director of any public company; bars Cowsert from participating in an offering of penny stock; orders that he is liable for disgorgement of $91,000, representing ill-gotten gains, plus prejudgment interest of $11,725.56, for a total of $102,725.56; and imposes a civil monetary penalty of $191,000.
For information about earlier developments in this matter, see Litigation Release No. 23047 (July 18, 2014).