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U.S. Securities and Exchange Commission


Litigation Rel. No. 17452 / April 2, 2002

SEC Obtains Preliminary Injunction Against Anamar Communications, Inc. and Brett Mallory in Connection with Alleged Fraudulent Stock Offering

SEC v. Anamar Communications, Inc. and Brett Mallory, (United States District Court for the District of Massachusetts, C.A. No. 02-10471DPW, filed March 15, 2002)

The Commission announced today that on April 1, 2002, the Honorable Douglas P. Woodlock, United States District Judge for the District of Massachusetts, granted the Commission's request for a preliminary injunction, an asset freeze and other ancillary relief against Anamar Communications, Inc., and its president and CEO, Brett R. Mallory, 41, of Boston, Massachusetts. The court's order was based on the Commission's prima facie showing that Mallory fraudulently offered and sold shares of Anamar stock, via the Internet and other means, to investors in at least four states. The Commission alleged in its complaint, filed on March 15, 2002, that, since August 2001, Mallory has raised at least $130,000 from at least 14 investors in Massachusetts, Ohio, Virginia and California, promising them they would double their money in as little as 90 days without risk. Mallory falsely promised investors Verizon Communications, Inc. would buy the company by the end of 2001. According to the Commission, several investors borrowed money from family members or high interest credit cards to invest, and some invested substantial portions of their life savings.

In its complaint, the Commission alleges that, Mallory falsely told investors that, if they purchased Anamar stock at five cents per share, they would double their money in as little as 90 days because Verizon had agreed to purchase the company for ten cents per share by December 31, 2001. Mallory also falsely told investors their investments would be risk-free because Verizon had agreed to pay Anamar an opt-out fee if the deal fell through. According to the Commission, however, Verizon never offered or agreed to purchase Anamar, and investors have been unable to recover any of their investments. The Commission alleges that Mallory offered additional shares of Anamar for sale in January 2002, falsely telling investors the Verizon transaction had closed, and that he had a meeting scheduled with Bill Gates of Microsoft Corporation. According to the Commission, Mallory continues to solicit investments via Anamar's Internet web site. The web site has a direct link to an online payment service that allows investors to purchase Anamar stock with a credit card.

The Commission alleged in its complaint that Anamar and Mallory violated Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder. Previously, on March 15, 2002, the Commission obtained entry of an order temporarily restraining Anamar and Mallory from directly or indirectly continuing to violate the federal securities laws, an asset freeze, an accounting of investor proceeds, and prohibitions against the destruction or alteration of documents. The court's April 1, 2001 order, maintains the asset freeze and preliminarily enjoins Anamar and Mallory from directly or indirectly violating the federal securities laws. For further information, see Litigation Release No. 17419.


Modified: 04/02/2002