U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16628 / July 14, 2000
SECURITIES AND EXCHANGE COMMISSION v. NICHOLAS L. GERANIO; CALIFORNIA LASER COMPANY, Civil Action No. 99-4702 WJR (AIJx) (C.D. Cal.)
The Securities and Exchange Commission ("Commission") announced that the United States District Court for the Central District of California has entered Final Judgments of Permanent Injunction and Disgorgement ("Final Judgments") against defendants Nicholas L. Geranio ("Geranio") and California Laser Company ("California Laser"), on July 10 and March 7, 2000, respectively. The Final Judgments permanently enjoin Geranio and California Laser from future violations of the antifraud and securities registration provisions of the federal securities laws. The Final Judgments also order Geranio and California Laser to pay disgorgement in the amounts of $252,506 and $1,963,989, respectively, representing their ill-gotten gains, but waive payment of disgorgement due to their demonstrated inability to pay. Geranio and California Laser consented to the entry of the Final Judgments without admitting or denying the allegations in the Complaint.
The Commission alleged in its Complaint that, from January 1998 to April 1999, Geranio and California Laser engaged in the fraudulent offer and sale of unregistered common stock, raising over $2.3 million from approximately 500 investors nationwide. Geranio and California Laser represented that investor funds would be used for the development, manufacture and sale of three-dimensional image projectors. The Complaint further alleged that the defendants misused some of the funds raised to pay undisclosed sales commissions and that Geranio misappropriated some of the funds for his own use. The Complaint alleged that the defendants violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act.