OSF, Inc. et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19971 / January 17, 2007

SEC v. OSF, Inc. et al., No. H-04-4291 (USDC S.D. TEX.)

The Securities and Exchange Commission ("Commission") announced the issuance of a Final Decree after a trial against Lloyd P. Broussard, the former CEO of OSF, Inc. ("OSF"). Broussard was found to have violated Section 5 and Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition, the Court imposed a five-year officer and director bar against Broussard, imposed a ban on Broussard's participation in the offering of any stock priced below $5 per share and ordered $32,169 in disgorgement.

Previously settlements had been reached and the Court had entered Final Judgments against OSF, Winfred Fields, Monyette Preciado, Raven Interests, Inc. and Tenn-Stone, Inc. OSF was enjoined from further violations of Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. OSF was also ordered to pay disgorgement of $471,576 plus $89,010 in prejudgment interest. Fields was enjoined from further violations of Sections 5 and 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The Court also imposed a five-year penny stock bar against Fields and he was barred from serving as an officer or director of a public company for five years. Preciado was enjoined from further violations of Section 5 of the Securities Act, ordered to pay disgorgement of $23,344 plus $4,406 in prejudgment interest, and received a five-year penny stock bar. Raven and Tenn-Stone were both enjoined from further violations of Section 5 of the Securities Act. The disgorgement against OSF and Preciado was waived based on their sworn financial statements and other documents submitted to the Commission. Penalties against OSF, Fields, Preciado, Raven and Tenn-Stone were also waived based on their sworn financial statements and other documents submitted to the Commission.

The Commission's complaint, filed on November 9, 2004, alleged that between August 2003 and June 2004 Broussard and Fields, with the assistance of their nominee, Preciado, orchestrated an illegal distribution of approximately 22.2 million shares of OSF stock to the public obtaining total proceeds in excess of $500,000. According to the complaint, Broussard and Fields effected the distribution both personally and through Raven and Tenn-Stone, which they secretly controlled. The complaint further alleged that in order to facilitate the distribution, Broussard and Fields issued a series of false or misleading OSF press releases from June 2003 to September 2003 concerning business relationships with third parties, corporate revenues, and OSF's imminent Nasdaq listing. Moreover, the complaint alleged that Broussard and Fields arranged for the dissemination of large numbers of unsolicited junk faxes and spam e-mails which republished information contained in the false or misleading releases.

The Commission's complaint alleged that OSF, Broussard, Fields, Preciado, Raven and Tenn-Stone violated Section 5 of the Securities Act. Further, the complaint alleged that OSF, Broussard and Fields violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.