United States Securities and Exchange Commission
Litigation Release No. 16400 / January 5, 2000
Securities and Exchange Commission v. Capital Acquisitions, Inc, et al., Civil Action No. 2:97-0977S (D. Utah)
On January 4, 2000, United States Magistrate Judge Samuel Alba found defendant Clealon Mann in contempt of court for selling stock in violation of a court order freezing his assets. Judge Alba fined Mann $2,500 and ordered him to pay the Commission's attorney fees in connection with the motion for contempt. Judge Alba also ruled that the proceeds of the stock sales be retained in the registry of the court pending final determination of the Commission's complaint.
Mann violated the asset freeze by ordering sales of stock owned by Genie Total Products, Inc., a corporation that Mann controls and that is also a relief defendant in this case. Mann ordered the sales, which resulted in approximately $100,000 in total proceeds, through the account of a Bahamas trust that he controls at a registered broker-dealer.
The Commission obtained the asset freeze as part of a preliminary injunction entered with Mann's consent on January 13, 1998. The Commission has charged that Mann, along with other defendants, directed two Ponzi schemes that raised over $30 million from investors in violation of the federal securities laws. Among other things, the Commission seeks an order requiring Mann to disgorge ill-gotten gains that he received from the schemes and to pay civil penalties.