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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23267 / May 20, 2015

Securities and Exchange Commission v. Wwebnet, Inc. and Robert L. Kelly, Civil Action No. 12-CV-6581 (AT) (S.D.N.Y.)

The Securities and Exchange Commission announced today that on May 19, 2015, the Honorable Analisa Torres of the United States District Court for the Southern District of New York entered a final default judgment against defendant Wwebnet, Inc., a Nevada corporation. The final judgment imposes on Wwebnet a permanent injunction against future violations of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The final judgment also orders that Wwebnet is liable for disgorgement of $5,579,127, including prejudgment interest, and must pay a civil penalty in the amount of $9,880,000.

In its August 28, 2012 Complaint, the Commission alleged that, between 2005 and 2008, Wwebnet, a video software company, and its chief executive officer Robert L. Kelly made false and misleading statements and omissions to investors, including: (1) failing to disclose and misrepresentations concerning the existence of a related-party transaction, which enabled Kelly to funnel at least $2.1 million of investor funds to himself, including approximately $2 million which was sent to his personal options trading account in the Cayman Islands; and (2) misrepresentations that Wwebnet had been generating revenue pursuant to contracts with entertainment companies when Wwebnet had never generated any such revenue. On January 15, 2015, the district court entered a final judgment by consent against defendant Robert L. Kelly.

On October 3, 2012, Kelly was criminally charged in connection with similar conduct and pled guilty to securities and wire fraud charges on March 14, 2014. United States v. Kelly, 12-CR-0888 (PAC) (S.D.N.Y.) On September 18, 2014, the District Court for the Southern District of New York sentenced Kelly to 27 months imprisonment and ordered payment of $2,111,600 in restitution.

For further information about the case, please see Litigation Release No. 22461 (August 29, 2012) and Litigation Release No. 23177 (January 22, 2015).

The Commission acknowledges the assistance of the U.S. Attorney's Office for the Southern District of New York and the Federal Bureau of Investigation.

 

http://www.sec.gov/litigation/litreleases/2015/lr23267.htm


Modified: 05/20/2015