UNITED STATES SECURITIES AND EXCHANGE COMMISSION UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 15378 / May 30, 1997 SECURITIES AND EXCHANGE COMMISSION v. AFFORDABLE PREPAID CELLULAR, INC.AND JOHN C. ROCKETT, Civil Action No. 97-3750 RAP (JGx) (C.D. Cal.). The Securities and Exchange Commission announced that on May 20, 1997, the Honorable Richard A. Paez, United States District Judge for the Central District of California, issued a temporary restraining order against Affordable Prepaid Cellular, Inc., and its part-owner and Vice President, John C. Rockett ("Rockett"). APC is based in Lake Forest, California, and its stated business is to provide prepaid cellular telephone service to "credit-challenged" individuals. The Court also issued orders prohibiting APC and Rockett from destroying documents, and requiring APC to account for investor funds. The Commission's complaint, filed May 20, 1997, alleges that the Defendants have fraudulently offered and/or sold units in APC, in the form of $5,000 corporate notes, to at least three individuals since January 1997. The investors' monies, according to APC, will be used to fund APC's business operations. The complaint further alleges that in return for their investment, APC promises investors a guaranteed 16 3/4% annual return, plus 1% of half of APC's profits, and that the investor's original contribution will be returned at the end of one year. As further alleged, in offering securities to investors, APC and Rockett did not tell investors that: (1) Rockett is Vice President and part-owner of APC; (2) Rockett has been twice convicted for selling fraudulent investments; (3) In 1992 an order was issued by the State of California against Rockett prohibiting him from selling securities in California; (4) Eight other states have obtained orders against Rockett for violating state securities laws; and (5) contrary to APC's statements to investors that it is located in Seattle, Washington, APC is in fact located in Lake Forest, California. The Court has set a hearing on the Commission's request for a preliminary injunction for June 2, 1997 at 3:00 p.m. The Commission wishes to thank the Southern California COBRA Task Force, and specifically the California Department of Corporations and the Orange County Sheriff's Department, for their valuable assistance in this matter. For more information, please contact James A. Howell, Regional Trial ======END OF PAGE 1====== Counsel, at (213) 965-3877. ======END OF PAGE 2======