U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19937 / December 6, 2006
SEC v. Lindsey P. Vinson and Clyde R. Parks, Civil Action No. 3:06CV2240-D. (JSF), U.S.D.C./Northern District of Texas (Dallas Division)
In the Matter of Utilitynetcom, Inc., Exchange Act Rel. No. 34-54878, (December 6, 2006)
SEC Files Securities Fraud Action against Recidivist Lindsey P. Vinson and Nominal Executive Officer Clyde R. Parks in Stock Scheme; Vinson Consents to Full Relief
On December 6, 2006, the Securities and Exchange Commission filed a civil complaint in the United States District Court for the Northern District of Texas against Lindsey P. Vinson, a Fort Worth attorney, and Clyde R. Parks, a Dallas attorney, for their roles in a fraudulent scheme involving the common stock of Moliris Corp. (Moliris), now known as Digifonica International, Corp. Vinson, who was enjoined in a previous SEC action (See L.R. 17011, May 21, 2001), has consented to full relief.
According to the SEC's complaint, after Vinson and Parks gained control of Moliris in October 2003, then a dormant public shell, Vinson embarked upon a scheme to enrich himself at the expense of Moliris's shareholders. The SEC alleges in its complaint that Vinson publicly represented, and fostered the impression, that he had transferred his ownership in Moliris to Parks - Vinson's personal lawyer and periodic business partner - resigned as president and a director of Moliris, and installed Parks as Moliris's chief executive officer, when, in fact, neither Vinson nor Parks had carried through on any of these actions. According to the complaint, Vinson's aim in orchestrating the scheme was to benefit from an artificially inflated price for Moliris stock, and that to secure that benefit, Vinson concealed his continuing control of Moliris, his SEC disciplinary background and his prior bankruptcies. Specifically, the SEC alleges that Vinson was responsible for Moliris's filing Commission reports and issuing press releases that fraudulently concealed his control of the company and fraudulently inflated Moliris's business prospects, and that Vinson provided false and misleading information to market makers to induce them to quote Moliris's stock on the OTC Bulletin Board.
According to the complaint, Parks, in contrast, had little or no involvement with Moliris other than his signing and certifying, through August 2005, each of Moliris's Commission filings. The SEC alleges that the scheme enabled Vinson to misappropriate funds from Moliris's bank accounts, and facilitated Vinson's and Parks's unjust enrichment upon sales of their Moliris stock.
Without admitting or denying the allegations in the complaint, Vinson consented to a final judgment permanently enjoining him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and from aiding or abetting violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13, imposing on him an officer-and-director bar and a penny stock bar, and directing him to pay disgorgement of $200,597, plus $29,321 in prejudgment interest, and a civil penalty of $200,000. Vinson also consented to the issuance of a Commission order pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending Vinson from appearing or practicing before the Commission.
The SEC alleges in its complaint that Parks violated Sections 10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13a-14, 13b2-1 and 13b2-2 thereunder, and aided and abetted violations of Sections 13(a), 13(b)(2)(A), and 13(b)(2)(B) of the Exchange Act, and Rules 12b-20, 13a-1 and 13a-13 thereunder. The SEC seeks a judgment against Parks: (i) enjoining him from violating or aiding and abetting violations of the above-referenced provisions; (ii) imposing on him officer-and-director and penny stock bars; (iii) ordering him to pay disgorgement, plus prejudgment interest; and (iv)ordering him to pay a civil penalty.
In a related action, on December 6, 2006, Vinson consented, on behalf of Utilitynetcom, Inc., a company he controls, to an order issued pursuant to Section 12(j) of the Exchange Act, revoking the Commission registration of the company's securities for failure to file with the Commission required periodic reports in violation of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.
Administrative Proceeding No. 34-54878