U.S. SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17483 / April 23, 2002
Securities and Exchange Commission v. Keith Greenberg and Coyote Consulting and Financial Services, LLP, 00-9109-CIV-HURLEY/LYNCH (S.D. Fla. filed Dec. 20, 2000).
DISTRICT COURT ENTERS DEFAULT JUDGMENT AGAINST KEITH GREENBERG IN COMMISSION'S LITIGATION ALLEGING CONCEALMENT OF PREVIOUS FELONY CONVICTION AND VIOLATION OF BROKER-DEALER REGISTRATION REQUIREMENTS
On April 4, 2002, the U.S. District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction by Default in Securities and Exchange Commission v. Keith Greenberg and Coyote Consulting and Financial Services, LLP, 00-9109-CIV-HURLEY/LYNCH (S.D. Fla.), against defendants Keith Greenberg and Coyote Consulting and Financial Services LLP ("Coyote"). Greenberg was a co-founder of US Diagnostic, Inc. ("USDL"), a company that operates outpatient diagnostic imaging centers and has its headquarters in West Palm Beach, Florida. In June 1993, Greenberg consented to a judgment enjoining him from violating the antifraud provisions of the federal securities laws, and, in September 1994, Greenberg pleaded guilty to two felony counts in a related federal criminal proceeding. The Commission's complaint alleged that Greenberg prepared or directed the preparation of numerous statements by USDL to the press and to shareholders which identified him as an officer of USDL and purported to discuss his background, but which fraudulently failed to disclose his criminal conviction and previous injunction. The Commission's complaint further alleged that, although Greenberg operated as an officer of USDL, was represented as such in statements disseminated to the press and investors, and held himself out as such, Greenberg was not identified as an officer in USDL's filings with the Commission, and his conviction and injunction were not disclosed in those filings. Although Greenberg was aware of the fraudulent omissions in those filings, he did nothing to correct or prohibit them. The complaint also alleged that Coyote, through the activities of Greenberg, acted as a broker without registering with the Commission. Coyote is a Florida limited liability company owned by a Greenberg family trust and Greenberg's wife and controlled by Greenberg.
The Final Judgment by Default permanently enjoins Greenberg from violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and Exchange Act Rule 10b-5, and from aiding and abetting violations of Section 13(a) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1, and 13a-13. It also permanently enjoins Coyote from violating Section 15(a) of the Exchange Act. The Final Judgment by Default also bars Greenberg, pursuant to Section 21(d)(2) of the Exchange Act, from acting as an officer or director of any public company. The District Court also held Greenberg and Coyote liable for civil penalties and jointly and severally liable for disgorgement, the amounts of which will be determined by the District Court after an evidentiary hearing.
The Commission previously instituted, and simultaneously settled, related cease-and-desist proceedings against USDL and its former Chairman and CEO. See Securities Act Rel. No. 7928 (Dec. 20, 2000); Litigation Rel. No. 16836 (Dec. 20, 2000).