Securities and Exchange Commission
Litigation Release No. 17640 / July 31, 2002
Securities and Exchange Commission v. Robert N. Rooks, John W. Duffell III, and Charles E. Yost II Civil Action No. EDCV 01-846 (SGLx) (Central District of California, Eastern Division)
CEO ENJOINED AND ORDERED TO PAY $100,000 PENALTY FOR SECURITIES FRAUD
Recidivist Securities Law Violator also liable for violating securities registration provisions
The Securities and Exchange Commission announced today that Robert N. Rooks, former CEO of JDMC Global Corp., was found liable for securities fraud by a Los Angeles federal court. On July 29, 2002, the United States District Court for the Central District of California entered a final judgment against Rooks, a resident of Malibu, California, age 57, permanently enjoining him from future violations of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and ordering him to pay a $100,000 third tier civil penalty. The Court found that in 1996 Rooks disseminated false and misleading information about JDMC Global's financial condition and a supposed South African housing project. The Court found that Rooks' false and misleading information caused JDMC Global's stock price to skyrocket from $.13 to $4, or more than 3,000%, during June through September 1996. At the time of Rooks' fraud, JDMC Global was a publicly-traded company based in Los Angeles, California that purportedly engaged in mining, construction, and entertainment.
The Court also found that John W. Duffell, JDMC Global's stock promoter and a repeat securities law offender, violated the securities registration provisions of the federal securities laws, Sections 5(a) and 5(c) of the Securities Act of 1933. Duffell, an American living in France, age 52, promoted JDMC Global's unregistered stock and directed the company's sales efforts in the United States. The Court will decide in later proceedings the appropriate remedies against Duffell, including the amount of disgorgement and civil penalties and whether to issue an injunction for violating the federal securities registration provisions.
In September 1996, the Commission suspended trading in the stock of JDMC Global, whose stock was traded on the Over-The-Counter Bulletin Board. (See Lit. Release No. 34-37681, September 16, 1996.) In May 2000, the SEC sued Rooks, Duffell and Charles E. Yost, another stock promoter, for fraudulently selling unregistered stock of JDMC Global. (See Lit. Release No. 16550, May 12, 2000.) The trial against Duffell and Yost for federal securities fraud is set for December 3, 2002.
In 1979, in another SEC action, the United States District Court for the Central District of California issued a permanent injunction against Duffell for securities fraud and registration violations of the federal securities laws. In 1982, Duffell was convicted and sentenced to prison for securities fraud arising out of the same conduct in the 1979 SEC action.