U.S. Securities and Exchange Commission
Litigation Release No. 17339 / January 24, 2002
SECURITIES AND EXCHANGE COMMISSION V. TURBODYNE TECHNOLOGIES, INC. AND EDWARD M. HALIMI, Civil Action No. CV 02-00673 WJR (Ex)(C.D. Cal.).
The Securities and Exchange Commission announced today that it has filed and settled a complaint alleging securities fraud and reporting violations against Turbodyne Technologies, Inc. ("Turbodyne") (OTC: TRBD) and its founder and former Chairman, Edward M. Halimi, age 57 of Santa Barbara, California. Turbodyne is an automotive parts company located in Carpinteria, California. The Commission's complaint, filed in federal court in Los Angeles, alleges that Turbodyne and Halimi violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint further alleges that Turbodyne violated the reporting provisions of Section 13(a) of the Exchange Act, and Rules 12b-20 and 13a-1 thereunder, and that Halimi aided and abetted Turbodyne's reporting violations.
The complaint charges Turbodyne and Halimi with fraud and reporting violations in connection with several press releases issued by the company between 1997 and 1999 that contained false and misleading statements about purported business agreements Turbodyne had allegedly entered into with several companies. These press releases contained false and misleading statements regarding, among other things, the company's potential revenues, the state of the company's distribution arrangements, and the purported settlement of significant litigation involving the company. Turbodyne also filed a Form S-1 and 10-K with the Commission which repeated some of the misstatements contained in the press releases. These press releases and false public filings had a significant effect on the market, lifting the price of Turbodyne from a little over $2 per share in March 1998 to $17 per share by August 1998.
Without admitting or denying the allegations in the complaint, Turbodyne and Halimi consented to the entry of a final judgment permanently enjoining them from committing the violations outlined above. Additionally, Halimi agreed to pay a $50,000 civil penalty.