U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23644 / September 12, 2016
Securities and Exchange Commission v. Thomas J. Connerton, et al., Civil Action No. 3:16-cv-00882 (D. Conn.)
SEC Obtains Preliminary Injunction Against Connecticut-Based Individual and His Company for Scheme to Defraud Investors in Unregistered Securities Offering
On September 12, 2016, the Honorable Alvin W. Thompson, a federal judge in the U.S. District Court for the District of Connecticut, entered a preliminary injunction and continued asset freeze by consent against Thomas J. Connerton and his company, Safety Technologies LLC.
The preliminary injunction restrains Connerton and Safety Technologies from violating certain antifraud provisions of the federal securities laws and orders the defendants' assets to remain frozen until further notice. The preliminary injunction order continues the relief originally obtained on June 9, 2016, in response to the Commission's emergency civil injunctive action.
The SEC's complaint, filed on June 8, 2016, alleges that Connerton told investors that Safety Technologies was developing a material to make surgical gloves better resistant to cuts or punctures. The SEC alleges that he claimed that several major glove manufacturers wanted the technology and Safety Technologies was on the brink of deals that would result in large payouts for investors. But, the complaint alleges, no deals have ever been anywhere close to materializing, and Connerton has emptied the company's bank account by writing a series of checks to himself and using investor funds for his own expenses.
The SEC's complaint charges Connerton and Safety Technologies with violating Sections 5(a), 5(c), and 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 SEC is seeking permanent injunctions, disgorgement of ill-gotten gains with interest, and financial penalties.
For further information, see Litigation Release No. 23565.