SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17043 / June 20, 2001
SEC v. The AppleTree Companies, Inc., et al., Case No. 96-8675-CIV-Seitz (S.D. Fla.)
FINAL JUDGMENT OF PERMANENT INJUNCTION AND OTHER RELIEF ENTERED AGAINST MICHAEL H. SALIT AND DAVID B. LOBEL, FORMER OFFICERS OF THE APPLETREE COMPANIES, INC., AND W. SCOTT LONG, FORMER OFFICER OF BROKER-DEALER
On March 3, 2000, the United States District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction and Other Relief against Michael H. Salit and David B. Lobel, by consent, which enjoined them from violations of Sections 17(a) of the Securities Act of 1933, Section10(b) and 13(b)(5) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder. They were ordered to pay disgorgement of $600,000, jointly and severally, plus pre-judgment interest. Payment of all but $25,000 in disgorgement and pre-judgment against Salit was waived, and no civil money penalty imposed, based upon their demonstrated financial inability to pay.
On January 29, 1999, an Order of Permanent Injunction and Other Relief was entered against W. Scott Long, III - - as the president of the underwriting firm for AppleTree's 1992 Offering - - enjoining him from violations of Sections 17(a) of the Securities Act of 1933, Section10(b) of the Exchange Act and Rule 10b-5 thereunder. On March 3, 2000, the Court entered a Final Judgment Relating to Disgorgement and Civil Penalties imposing and simultaneously waiving payment of $26,000 in disgorgement, and not imposing civil penalties, based upon Long's demonstrated inability to pay.
On September 30, 1996, the Commission filed a civil injunctive action against The AppleTree Companies, Inc. ("AppleTree"), Salit, Lobel and another former officer and director of AppleTree, and W. Scott Long III, the former president of the now-defunct underwriter of AppleTree's August 1992 registered offering. AppleTree, formerly known as Modami Services, Inc., was located in Boca Raton, Florida. The Commission charged the individual defendants with making material misrepresentations and omissions in connection with AppleTree's 1992 offering. Salit and Lobel were charged with making fraudulent periodic filings with the Commission during 1992 and 1993 and providing AppleTree's independent accountants with false information that caused AppleTree to fail to make and keep accurate books and records. Long (in his capacity as an underwriter) was charged with failing to cause a $250,000 loan to an unrelated company, made from the proceeds of AppleTree's 1992 registered offering, to be disclosed to prospective or actual investors in the offering.