U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23206 / February 24, 2015
Securities and Exchange Commission v. Mark A. Lefkowitz, et al., Civil Action No. 8:12-CV-1210
SEC Settles Civil Action Against Penny Stock Company, Its Former Chief Executive Officer, and Two Penny Stock Financiers for Their Roles in Illegal Unregistered Stock Distributions and Will Continue to Litigate with a Third Penny Stock Financier
The Securities and Exchange Commission announced today that on February 10, 2015, the Honorable Mary S. Scriven of the United States District Court for the Middle District of Florida entered final judgments against Unico, Inc., Mark A. Lopez, Steven R. Peacock, and Shane H. Traveller (the "Settling Defendants"), arising from their respective roles in the illegal unregistered distribution of billions of shares of penny stocks, imposing permanent injunctions and, variously, penny stock bars, orders of disgorgement, and civil penalties. The Settling Defendants consented to the entry of the final judgments without admitting or denying the allegations in the Commission's Complaint. Defendant Mark A. Lefkowitz consented to the entry of a partial judgment, described below, which was entered by the Court on February 18, 2015.
The Commission's Complaint, filed on May 30, 2012, alleged that seven defendants, including Unico, a penny stock company with headquarters in New Orleans, Louisiana, Lopez, Unico's former chief executive officer, and Peacock, Traveller, and Lefkowitz, three penny stock financiers, violated the federal securities laws by engaging or providing substantial assistance in the illegal unregistered distribution of billions of shares of penny stocks through the repeated misuse of the exemption from registration contained in Section 3(a)(10) of the Securities Act of 1933 ("Securities Act"). Section 3(a)(10) permits a public company to issue common stock to public investors other than pursuant to an effective registration statement to settle bona fide debts and other claims. The Section 3(a)(10) exemption may not be relied upon for capital formation by issuers, and the Commission alleged in its Complaint that it was improperly used for that purpose by the Settling Defendants in these transactions.
According to the Complaint, as a result of their involvement in the unregistered distributions, each Settling Defendant violated Section 5 of the Securities Act, which requires public distributions of securities to be conducted pursuant to an effective registration statement filed with the Commission or pursuant to a valid and properly invoked exemption from registration. The Complaint also alleges that Unico filed false and misleading disclosures with the Commission concerning the monies it received from the Financiers and failed to timely disclose the settlement agreements and issuance of over nine billion unregistered shares of its common stocks in connection with the Section 3(a)(10) settlements. In addition, the Complaint further alleges that Peacock, aided and abetted by Traveller, failed to report his beneficial ownership of more than five percent of the outstanding shares of Unico common stock in December 2006.
Without admitting or denying the allegations in the Complaint, Unico, Lopez, Peacock, Traveller and Lefkowitz have reached settlements with the SEC, as described below.
The SEC's litigation has been led by Suzanne J. Romajas, Assistant Chief Litigation Counsel, and Drew M. Dorman, Senior Counsel.