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U.S. Securities and Exchange Commission


Litigation Release No. 16683/ September 6, 2000

SEC v. Thor Equity Group, LLC and George E. Mahfouz, Jr., Civ. No. CIV 00-1699-PHX VAM (D. Ariz.)

Today, the Securities and Exchange Commission sued George E. Mahfouz, Jr. and Thor Equity Group, LLC ("Thor Equity") both of Scottsdale, Arizona, charging that, through use of the Internet, they manipulated the stock of CancerOption.com, Inc. ("CancerOption"). CancerOption, a microcap company headquartered in Scottsdale, operates a website focused on cancer-related products and information. The Commission alleges that Mahfouz and Thor Equity, as CancerOption's investor relations company, made false financial and stock price projections and drafted false press releases to inflate the price of CancerOption stock. The Commission contends that Mahfouz then sold large amounts of his CancerOption stock at the artificially inflated prices. This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998.

In the Complaint, the Commission charges that Thor Equity and Mahfouz, arranged for two analysts to draft research reports regarding CancerOption. The reports, recommending the purchase of CancerOption's stock, contained false revenue and stock price projections for the company based on information provided by Thor Equity and Mahfouz. The Commission also alleges that from August 1999 through January 2000, Thor Equity and Mahfouz placed the reports on CancerOption's website and arranged for the false financial information to be disseminated on the Internet. Moreover Thor Equity and Mahfouz drafted and issued a CancerOption press release which falsely characterized one of the analysts as the "first independent analyst" to cover CancerOption. The analyst was not independent because Thor Equity had agreed to pay the analyst 5,000 shares of CancerOption stock for the report. The Commission alleges that the false financial projections which appeared on the Internet fueled a dramatic rise in both the price and the trading volume of CancerOption's common stock. Throughout the time the false financial information appeared on the Internet, Mahfouz sold over 350,000 shares of CancerOption stock for profits of more than $180,000.

Thor Equity and Mahfouz have agreed, without admitting or denying the allegations in the Commission's complaint, to an Order enjoining them from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. Mahfouz has agreed to pay disgorgement of $180,038.51, representing the amount of ill-gotten gain from his trading in CancerOption stock, and a civil money penalty of $50,000.00. In the settlement, no civil penalty will be imposed against Thor Equity based on its demonstrated inability to pay.

For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm . For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm . To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. For a description of other SEC enforcement actions involved in this Internet Market Manipulation Sweep, visit http://www.sec.gov/news/extra/intmm.htm.