SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16439 / February 16, 2000
SECURITIES AND EXCHANGE COMMISSION v.
The Commission today filed a Complaint in the United States District Court for the Southern District of New York charging one individual and two corporations as defendants in connection with a scheme to artificially inflate the value of Wellness Universe Corporation's stock by disseminating a series of fraudulent press releases, primarily over the internet. In addition, the Commission charged eight individuals and one partnership as relief defendants in connection with this "pump and dump" scheme that generated approximately $2.5 million. The Commission simultaneously filed an emergency application seeking, among other things, an order temporarily restraining and preliminarily enjoining the defendants from committing the violations alleged in the Complaint and freezing certain of the defendants' and relief defendants' assets.
Named in the Complaint filed today are:
Wellness Universe Corporation ("Wellness"), a Minnesota corporation;
Synpan Corporation ("Synpan"), a Delaware corporation; and
George Charles Pappas ("George Pappas"), Wellness' and Synpan's 64 year old Chief Executive Officer, who resides in New York, New York.
The Complaint alleges that, since December 1999, George Pappas caused Wellness and Synpan to issue false and misleading press releases, largely over the internet, which boosted the price of Wellness stock from approximately $.10 per share in December 1999 to over $1.00 per share in early February 2000. The Complaint also alleges that, during this time, 3.7 million shares of Wellness stock was sold by members of George Pappas' family and other associates to the public for an aggregate of approximately $2.5 million.
As a result of the foregoing, the Commission alleges that Wellness, Synpan, and George Pappas committed securities fraud in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C. § 77q(a), and Section 10(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78j(b) and Rule 10b-5, 17 C.F.R. § 240.10b-5. In addition to the interim relief sought in the application filed today, the Commission seeks a Final Judgment against Wellness, Synpan, and George Pappas: (i) enjoining them from future violations of the above-cited provisions; (ii) requiring disgorgement from Wellness, Synpan, George Pappas, Paul George Pappas, Karyn L. Pappas, Kyriak W. Pappas, Makypa, Brooks Williams, Tobias Weissman, Iris B. Coleman, Joann Cingari, and Louise Fiorenza of all of ill-gotten gains as a result of Wellness', Synpan's, and George Pappas' fraudulent scheme, plus pre-judgment interest; and (iii) assessing civil penalties against Wellness, Synpan, and George Pappas.
The litigation is pending as to all defendants.http://www.sec.gov/litigation/litreleases/lr16439.htm