UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16180 / June 9, 1999
SECURITIES AND EXCHANGE COMMISSION v. JOHN C. ROCKETT, et al.,
H-97-CV-0981, USDC, SD/TX (Houston Division)
On May 28, 1999, final judgments were entered by default against John C. Rockett ("Rockett"), Leonard D. Wayne ("Wayne") and Anthony J. Leo ("Leo") imposing a $100,000 civil penalty against each defendant. In previous actions, orders of permanent injunction and disgorgement were entered by default against Leo on June 1, 1998, and Rockett and Wayne on July 23, 1998. The orders permanently enjoined the defendants from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, and Sections 10(b) and 15(a)(1) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and ordered Rockett to disgorge $1,217,282, plus prejudgment interest of $346,544.57; Wayne to disgorge $143,710, plus prejudgment interest of $43,724.51, and Leo to disgorge $631,210, plus prejudgment interest of $203.071.01.
The Commission's complaint, filed March 27, 1997, charged that the defendants, through Pro-Tex Pipe and Tubing Corporation, raised approximately $2.9 million from investors in 31 states for the purported purpose of purchasing oil field equipment and pipe. The equipment was to be resold, and a portion of the profits be returned to investors. Investors were guaranteed returns of up to 20% per annum, with complete security of principal, and were told there were no risks associated with the investment. In fact, Rockett and Wayne operated an undisclosed "Ponzi" scheme whereby monies contributed by new investors were paid as "profits" to previous investors. The complaint also charged that Rockett and Wayne misappropriated investors' funds, and Wayne and Leo received undisclosed commissions for their efforts in selling the securities.