LITIGATION RELEASE NO. 16329 / October 5, 1999

Securities and Exchange Commission v. Capital Acquisitions, Inc, et al., Civil Action No. 2:97-0977S (D. Utah)

On October 4, 1999, the Commission filed a motion seeking a contempt citation against a defendant in a pending civil action for violating a federal court asset freeze. The motion alleges that defendant Clealon Mann violated the asset freeze order by attempting to sell stock owned by a company that he controls. The asset freeze is part of a preliminary injunction that the Commission obtained on January 13, 1998, freezing Mann's assets for anticipated disgorgement of ill-gotten gains should the Commission ultimately prevail on the merits of its case against Mann. The motion seeks a finding that Mann violated the preliminary injunction, an order to show cause why Mann should not be held in civil or criminal contempt, and an order compelling Mann to file an accounting of his living expenses and transactions in a foreign trust.

Mann allegedly violated the asset freeze by ordering sales of stock owned by Genie Total Products, Inc. Mann allegedly controls Genie Total Products, which is also a relief defendant in this case. Assets controlled by Mann and Genie Total Products are also subjects of an order of attachment obtained by the court-appointed receiver Robert Wing. Mann ordered the sales, worth more than $77,000, through the account of a Bahamas trust that he allegedly controls at a registered broker-dealer.

The asset freeze allows Mann to use assets for his personal living expenses subject to an accounting before the Court. As part of its motion, the Commission asked the Court to order Mann to produce such an accounting, and in particular to account for all transactions handled through the Bahamas trust since the entry of the asset freeze.

For further information on this case, please see Litigation releases 16083 (March 9, 1999), 15868 (September 2, 1998), 15670 (March 13, 1998), and 15601 (December 23, 1997).