SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17507 / May 8, 2002
Securities and Exchange Commission v. Pinnacle Business Management, Inc., Vincent A. Lo Castro, and Jeffrey G. Turino, 8:02-CV-822 (M.D. Fla., Tampa Div.) (May 8, 2002)
SEC FILES FRAUD CHARGES AGAINST PINNACLE BUSINESS MANAGEMENT INC., VINCENT A. LO CASTRO AND JEFFREY G. TURINO
The Commission announced today the filing of a civil action against Pinnacle Business Management, Inc. ("Pinnacle"), and two of its top officers, Vincent A. Lo Castro and Jeffrey G. Turino, in federal district court in Tampa, Florida. The Commission's complaint alleges that Lo Castro and Turino are responsible for a materially false and misleading press release that Pinnacle issued on April 2, 2002. The Commission's complaint charges that Pinnacle, Lo Castro and Turino violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder.
The Commission's complaint alleges that the April 2, 2002 press release materially misled investors regarding a proposed spin-off of a Pinnacle subsidiary known as All Pro. In the press release, Pinnacle stated that after a spin-off to Pinnacle shareholders, All Pro will seek a listing on the American Stock Exchange ("AMEX"), and that its initial trading price will be $4.00 per share. Pinnacle's shareholders are scheduled to receive one share of All Pro for every fifty shares of Pinnacle stock that they own. Under Pinnacle's formulation, an investment of $0.35 for fifty Pinnacle shares (Pinnacle shares trade for approximately $0.007) would pay a $4.00 dividend when All Pro begins trading on the AMEX in June 2002. The Commission's complaint alleges that Pinnacle lacked a reasonable basis for stating that All Pro will trade at $4.00 per share, that Pinnacle misquoted an AMEX floor broker to convey a false and misleading endorsement of the company's claims, that Pinnacle overstated the likelihood that All Pro will obtain an AMEX listing, and that given Pinnacle's nearly two billion shares of common stock outstanding, an implied initial market capitalization of $160 million for All Pro is materially misleading.
The Commission is seeking permanent injunctions and civil penalties against Pinnacle, Lo Castro and Turino. The Commission is also seeking to bar Lo Castro and Turino from serving as officers or directors of any public company. A copy of the complaint can be found on the Commission's public website.