SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17552 /June 10, 2002
SECURITIES AND EXCHANGE COMMISSION v. BRIAN M. VOLMER, JOHN R. SWITZER, INTERNATIONAL ALLIANCE TRADING, INC., SUN PACIFIC CAPITAL GROUP, INC., Defendants, and LISA NEWMAN VOLMER, Relief Defendant, United States District Court for the Central District of California, No. CV 98-8698-JSL (Mcx)
SECURITIES AND EXCHANGE COMMISSION v. BRIAN M. VOLMER, INTERNATIONAL ALLIANCE TRADING, INC., SUN PACIFIC CAPITAL GROUP, INC., Defendants/Appellants, and LISA NEWMAN VOLMER, Relief Defendant/Appellant, United States Court of Appeals for the Ninth Circuit, No. 00-57045
On May 3, 2002 the U.S. Court of Appeals for the Ninth Circuit, in an unpublished opinion, affirmed a judgment against Brian M. Volmer and two corporate entities he controlled, International Alliance Trading, Inc. ("International Alliance") and Sun Pacific Capital Group, Inc., that was entered by the Hon. J. Spencer Letts of the U.S. District Court for the Central District of California on October 18, 2000. After a bench trial, Judge Letts found Volmer and his two companies liable for touting the stock of two issuers on the internet without disclosing the compensation they received from the issuer for doing so, in violation of the anti-touting provision of the securities laws [Section 17(b) of the Securities Act of 1933 ("Securities Act")]. The District Court also found that in an advertisement they placed in a nationally distributed newspaper Volmer and International Alliance violated the antifraud provisions of the securities laws [Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder] by misidentifying the author of the ad, misrepresenting the assets of the issuer promoted in the ad, and falsely recommending the stock as a good buy.
The judgment enjoins Volmer and his two companies from further violations of the anti-touting provision and enjoins Volmer and International Alliance from violating the antifraud provisions. It also orders Volmer to disgorge $296,429.13 in illicit proceeds (both his compensation and trading profits), and imposes a civil penalty against him in the same amount. Volmer's wife, Lisa Newman Volmer, who was named in the Commission's complaint as a relief defendant, was ordered to disgorge $106,646 she received from Volmer, if he fails to satisfy the disgorgement judgment. The Court of Appeals affirmed the judgment of the District Court in all respects.
Another defendant in the case, John R. Switzer, previously consented to the entry of a final judgment enjoining him from violating the anti-touting provision [Section 17(b) of the Securities Act]. The consent judgment against Switzer, which was entered on February 11, 2000, did not impose a civil penalty based upon Switzer's sworn representations concerning his financial condition.
Investors are advised to read the SEC's "Cyberspace" Alert before purchasing any investment promoted on the Internet. The free publication, which alerts investors to the telltale signs of online investment fraud, is available on the Investor Assistance and Complaints link of the SEC's Home Page on the World Wide Web, www.sec.gov/investor/pubs/cyberfraud.htm. It can also be obtained by calling 800-SEC-0330. Investors are encouraged to report suspicious Internet offerings (or other suspicious offerings) via e-mail to enforcement@SEC.gov. A user-friendly form to assist you in making a report is available at the Enforcement Complaint Center on the Enforcement Division link of the SEC Home Page, www.sec.gov. Investors can also mail a report to the SEC Enforcement Complaint Center, 450 Fifth Street, Washington, D.C. 20549-0213.
See also Litigation Release No. 15952 (October 27, 1998).