U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 16955 / April 9, 2001
Securities and Exchange Commission v. Steven H. Schiffer, Joann R. Schulz, Gary S. Kramer, Jonathan Solow, Frank J. Cannata, and Peter G. Mintz, 97 Civ. 5853 (RO) (S.D.N.Y.)
JONATHAN SOLOW PERMANENTLY ENJOINED FROM SECURITIES VIOLATIONS AND ORDERED TO PAY $25,000 CIVIL PENALTY
The Securities and Exchange Commission ("Commission") announced today that a judgment was entered on April 4, 2001, by the United States District Court for the Southern District of New York against Jonathan Solow, a defendant in Securities and Exchange Commission v. Steven H. Schiffer, Joann R. Schulz, Gary S. Kramer, Jonathan Solow, Frank J. Cannata, and Peter G. Mintz, 97 Civ. 5853 (RO) (S.D.N.Y.), a civil action brought by the Commission and currently pending in the District Court. The judgment permanently enjoins Solow from violating Sections 9(a)(2) and 10(b) of the Securities Exchange Act of 1934 and Exchange Act Rule 10b-5. Section 9(a)(2) prohibits manipulation of the securities markets. Section 10(b) and Rule 10b-5 are anti-fraud provisions of the federal securities laws. The judgment also orders Solow to pay a civil money penalty of $25,000. Solow consented to the entry of the judgment without admitting or denying the allegations in the Commission's complaint, except as to jurisdiction.
The Commission's complaint includes the following allegations: Between May 1992 and August 1992, Solow and other defendants manipulated the price of the common stock of Phoenix Laser Systems, Inc. ("Phoenix"), a now-defunct company that was in the business of developing a laser workstation to perform eye surgery. As part of the scheme to manipulate the price of Phoenix common stock, which traded on the American Stock Exchange, Solow, at the direction of Phoenix's CEO, placed purchase orders for Phoenix common stock in nominee accounts. Solow was a Phoenix vice president at the time. These purchases often were executed at or near the end of the trading day, in a manner that increased the price of the stock. The end-of-day or "marking the close" purchases frequently caused Phoenix's daily closing price to be higher than it would have been in the absence of those purchases.
The entry of judgment against Solow resolves this litigation as to all living defendants. The Commission's motion for summary judgment against the two remaining defendants -- the estates of now-deceased defendants Steven H. Schiffer and Gary S. Kramer -- is pending before the Court. The Commission previously reached settlements with defendants Joann R. Schulz, Frank J. Cannata, and Peter G. Mintz. See Lit. Rel. No. 15435 (Aug. 7, 1997); Exchange Act Rel. No. 42416 (Feb. 11, 2000); Exchange Act Rel. No. 42880 (June 1, 2000); Lit. Rel No. 16827 (Dec. 13, 2000).