U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16836 / December 20, 2000
Securities and Exchange Commission v. Keith Greenberg and Coyote Consulting and Financial Services, LLP, 00-9109-CIV-HURLEY (S.D. Fla.).
COMMISSION SUES KEITH GREENBERG FOR CONCEALING PREVIOUS FELONY CONVICTION FROM INVESTORS
Also Charged with Violation of Broker-Dealer Registration Requirement
The Securities and Exchange Commission ("Commission") today filed a complaint in the United States District Court for the Southern District of Florida against Keith Greenberg and Coyote Consulting and Financial Services, LLP ("Coyote"). Greenberg was a co-founder of US Diagnostic, Inc. ("USDL"), a company that operates outpatient diagnostic imaging centers and has its headquarters in West Palm Beach, Florida. In June 1993, Greenberg consented to a judgment enjoining him from violating the antifraud provisions of the federal securities laws, and, in September 1994, Greenberg pleaded guilty to two felony counts in a related federal criminal proceeding. The complaint alleges that Greenberg prepared or directed the preparation of numerous statements by USDL to the press and to shareholders which identified him as an officer of USDL and purported to discuss his background, but which fraudulently failed to disclose his criminal conviction and previous injunction. The Commission's complaint further alleges that, although Greenberg operated as an officer of USDL, was represented as such in statements disseminated to the press and investors, and held himself out as such, Greenberg was not identified as an officer in USDL's filings with the Commission, and his conviction and injunction were not disclosed in those filings. Although Greenberg was aware of the fraudulent omissions in those filings, he did nothing to correct or prohibit them. The complaint also alleges that Coyote, through the activities of Greenberg, acted as a broker without registering with the Commission. Coyote is a Florida limited liability company owned by a Greenberg family trust and Greenberg's wife and controlled by Greenberg.
The Commission's complaint alleges that Greenberg violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5 -- all of which are antifraud provisions of the federal securities laws -- through his preparation and direction of the fraudulent USDL statements and his knowing failure to correct the false USDL filings. The complaint also alleges that Greenberg, by knowingly failing to correct or prohibit the false USDL filings, aided and abetted violations by USDL of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13 -- all of which are corporate reporting provisions of the federal securities laws. The Commission's complaint further alleges that Coyote violated Section 15(a)(1) of the Exchange Act, which prohibits acting as a broker without registration with the Commission, and that Greenberg, as a controlling person of Coyote, is liable for those violations.
The Commission's complaint seeks an injunction permanently enjoining Greenberg from violations of the antifraud provisions and from aiding and abetting violations of the corporate reporting provisions, an order permanently barring him from serving as an officer or director of any public company, an injunction permanently enjoining him from violations of the broker-dealer registration provisions, disgorgement of the monies that he received in compensation for his activities in violation of the broker-dealer registration provisions, plus prejudgment interest thereon, and a civil money penalty. The complaint also asks that Coyote be permanently enjoined from violating the broker-dealer registration provisions, ordered to pay disgorgement of the monies that it received in compensation for its activities in violation of those provisions, plus prejudgment interest thereon, and ordered to pay a civil money penalty.
The Commission also today instituted, and simultaneously settled, related cease-and-desist proceedings against USDL and Jeffrey Goffman, USDL's former Chairman and CEO. USDL and Goffman consented to the entry of an Order settling those proceedings without admitting or denying the findings set forth therein. See Securities Act Rel. No. 7928, (Dec. 20, 2000).