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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 16985 \ May 2, 2001

SEC v. Nunzio P. DeSantis, Civil Action No. CIV-01-484 (D.N.M. April 30, 2001)

The Securities and Exchange Commission (SEC) today announced that on May 1, 2001, it filed a complaint against Nunzio P. DeSantis (DeSantis), of Albuquerque, New Mexico, alleging he violated certain antifraud, tender offer and reporting provisions of the federal securities laws. Specifically, the SEC's complaint alleges that DeSantis, while president, chief executive officer, a director and the chairman of the board of directors of AutoLend Group Inc. (AutoLend), a publicly traded Delaware corporation located in Albuquerque, engaged in a scheme to defraud the holders of AutoLend's 9.5% Convertible Subordinated Debentures (the Bonds) during a self tender offer made between October 22, 1996 and April 8, 1997 to the AutoLend bondholders. The complaint alleges that, at DeSantis' direction, (1) AutoLend negotiated with non-accepting bondholders terms different than the self tender offer, without disclosing or extending such alternative to all bondholders; and (2) AutoLend failed to disclose a secret agreement and sham transaction, occurring during the tender offer and arranged by DeSantis, through which a straw party, on behalf of AutoLend, agreed to purchase certain of the Bonds under terms different than the tender offer. The complaint also alleges that DeSantis aided and abetted AutoLend's failure to disclose related party transactions in AutoLend's December 31, 1996 Form 10-Q and in its March 31, 1997 Form 10-K filed with the SEC. The complaint alleges that DeSantis violated Section 10(b), 13(a), 13(e), and 14(e) of the Securities Exchange Act of 1934 and Rules 10b-5, 10b-13 (redesignated as Rule 14e-5), 13a-1, 13a-13, and 13e-4(b) (redesignated as Rule 13e-4(j)) promulgated thereunder. The SEC is seeking a permanent injunction and civil penalties against DeSantis.

In a related matter, on April 19, 2001, the SEC instituted, and simultaneously settled, cease-and-desist proceedings against AutoLend for its role in the above-described fraudulent scheme. The SEC ordered AutoLend to cease and desist from committing or causing any violation and any future violation of certain antifraud, tender offer and reporting provisions of the federal securities laws. AutoLend consented to the cease-and-desist order without admitting or denying the findings in the Order. (Rel. No. 34-44202).