SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16723 / September 25, 2000
S.E.C. v. Source Energy Corporation and Timothy R. Kraft, Docket No. 2:00CV00757B (U.S.D.C., D. Utah)
The Securities and Exchange Commission today announced that it has filed a complaint against Source Energy Corp. and Timothy R. Kraft, Source's chief executive officer, alleging they violated the antifraud provisions of the securities laws by issuing false press releases regarding non-existent business operations and the income expected from those operations.
The complaint alleges that Source in February of 1998 issued a press release stating that Source had entered into a joint venture agreement with a Canadian company to manufacture, operate and market portable natural gas refineries in Ukraine. The complaint alleges the press release claimed that the agreement would bring approximately $26 million in revenue to the joint venture. It is further alleged that in October 1998, Source issued another press release claiming it had acquired a license to technology for the manufacture of manned and remote operated underwater submersibles to service deep-water oil and natural gas wells.
The complaint seeks injunctions against Source and Kraft from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the imposition of civil money penalties against Kraft. [SEC v. Source Energy Corporation and Timothy R. Kraft, Docket No. 2:00CV00757B, U.S.D.C., D Utah.]