U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23205 / February 23, 2015
Securities and Exchange Commission v. Heart Tronics, Inc., et al., Civil Action No. SACV 11- 1962-JVS (ANX)
SEC Wins Summary Judgment Against Mitchell J. Stein for Heart Tronics, Inc. Fraud Scheme.
The Securities and Exchange Commission today announced that on February 18, 2015, the U.S. District Court for the Central District of California awarded partial summary judgment in the Commission's favor against Mitchell J. Stein for his role in a wide-ranging fraud scheme while he was attorney for Heart Tronics, Inc. (formerly known as Signalife, Inc.). In December 2014, Stein was sentenced to a 17-year term of imprisonment based on his conviction in a parallel criminal prosecution for 14 counts of conspiracy to commit mail fraud and wire fraud, mail fraud, wire fraud, securities fraud, money laundering and conspiracy to obstruct justice.
Based on Stein's criminal conviction, the Court awarded summary judgment in the Commission's favor on the Commission's claims that Stein violated Section 17(a) of the Securities Act of 1933, violated and aided and abetted the violation of Sections 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5, violated Sections 13(b)(5) and Rule 13b2-1 of the Exchange Act, and aided and abetted the violation of Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Exchange Act Rules 13a-1, 13a-11, 13a-13 and 12b-20. The Court imposed permanent injunctions, officer and director bars, a penny stock bar, a civil penalty of $5,378,581.61, and disgorgement and prejudgment interest of $6,076,415.52 against Stein.
The Commission's litigation against former Heart Tronics co-CEO for Operations, President and Chief Operating Officer, Willie Gault, continues, with trial to begin on March 3, 2015.
For further information, see Litigation Release No. 22204 (Dec. 20, 2011).