Litigation Release No. 19910 / November 15, 2006

SEC v. World Information Technology, Inc., et al., Civil Action No. 06-CV-13181 (VM) (S.D.N.Y.)

SEC Charges World Information Technology, Inc., Its Former Chairman and CEO, and Others With a "Pump-And-Dump" Scheme

The Securities and Exchange Commission announced that on November 14, 2006, it filed a complaint in the United States District Court for the Southern District of New York against World Information Technology, Inc., its former Chairman and CEO, Gary Morgan, a stock promoter, Ira Dicapua, and a registered stockbroker, Steven Sirianni, with a "pump-and-dump" scheme involving World Information stock.

The Commission's complaint alleges that, in early 2003, Morgan and others working with him ("Morgan's Group") purchased a publicly-traded shell company and merged it with a Taiwanese-based company controlled by a member of Morgan's Group. Shortly thereafter, the shell company changed its name to World Information Technology, Inc., issued more than 13.8 million shares to entities controlled by Morgan's Group, and appointed Morgan as its CEO and Chairman. In order to increase the price of World Information stock, Morgan made false and misleading statements in public filings and press releases about World Information. For example, Morgan falsely stated that World Information had received a "firm commitment" for $20 million in funding. Morgan's false and misleading statements significantly increased World Information's stock price. For example, World Information's stock price increased from an average price of $2.245 to $4.527 per share following Morgan's interview with an on-line marketing firm in which he made false statements about World Information's funding. Morgan also failed to disclose his beneficial ownership and control of World Information stock. In order to create demand for World Information stock, Morgan arranged to pay brokers kickbacks to sell World Information stock to customers. Morgan paid Dicapua, a consultant engaged to promote securities among brokers, approximately $117,500. Dicapua then paid Sirianni, a stock broker for a registered broker-dealer, approximately $75,800 to solicit purchases of World Information stock from his customers and to purchase shares in his own account. While engaged in the pump-and-dump scheme, Morgan sold approximately 300,000 shares of World Information and received approximately $866,000 in illicit trading profits.

The complaint charges all defendants with violating Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and World Information with violating Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. The complaint also charges Morgan with violating Sections 5(a) and 5(c) of the Securities Act and Sections 13(d) and 16(a) of the Exchange Act and Rules 12b-20, 13d-1, 13d-2, 13a-14, and 16a-3 and aiding and abetting World Information's violations of Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-13 thereunder pursuant to Section 20(e) of the Exchange Act. The complaint further charges Sirianni with violating Section 15(a)(1) of the Exchange Act. In its action, the Commission is seeking permanent injunctions prohibiting defendants from committing future violations of the foregoing federal securities laws, disgorgement of ill-gotten gains plus pre-judgment interest thereon, civil penalties, and an officer and director bar against Morgan.