UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16916 / February 28, 2001
SECURITIES AND EXCHANGE COMMISSION V. INTERNET SOLUTIONS FOR BUSINESS, INC, AND LAWRENCE SHAW, CIVIL ACTION NO. CDS-01-0225 (DH) (USDC/District of Nevada)
On February 28, 2001, the Commission filed a civil lawsuit against Internet Solutions For Business, Inc. (ISFB) and its founder and CEO, Lawrence Shaw. The SEC's action pertains to the fraudulent promotional activities by ISFB, a publicly traded Internet company located in Coventry, England. From March 1999 until at least October 2000, ISFB held itself out as a sophisticated, high-tech Internet company with cutting edge new products and profitable business relationships with recognizable "blue chip" companies. ISFB hyped these products and relationships on its website, in press releases and through reports it paid to have published. All the promotional statements contained on ISFB's website and in its releases, and which were repeated in the published reports, were authorized by Shaw.
The defendants are:
The SEC alleges that ISFB's promotional statements were false and misleading. The company's supposed cutting edge new products never reached the point of commercial viability. For example, a "$4.1 billion website audit service," repeatedly hyped by the company, was nothing more than a concept which was never developed. Similarly, announcements of business relationships with "blue chip" companies were either outright lies or gross exaggerations of the true scope of work or ongoing status of the relationship. Further, ISFB's stock price projections (300% increase over the mid-term) were without any reasonable basis and were made at a time during which the company was in a precarious financial position. Notwithstanding dire financial problems, ISFB's stock price and trading volume substantially increased contemporaneously with the company's fraudulent promotional activities.
The SEC is seeking permanent injunctions against future violations of the antifraud provisions of the federal securities laws, specifically Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is further seeking a civil monetary penalty against Shaw.
In a related action, the SEC instituted and simultaneously settled cease-and-desist proceedings against a New Jersey corporation, Imcadvisors, Inc. ("Imcad"), and its owner, Stuart Bockler. The SEC found in that proceeding that Imcad and Bockler violated the anti-touting provision of the Securities Act of 1933 in the promotion of ISFB stock. See Exchange Act Release 33-7956.
This action is brought as part of the SEC's Fifth Internet Fraud Sweep. For tips on how to avoid Internet investment schemes, visit http://www.sec.gov/investor/pubs/cyberfraud.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 Fraud Sweep, visit http://www.sec.gov/news/press.shtml.http://www.sec.gov/litigation/litreleases/lr16916.htm