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U.S. Securities and Exchange Commission


Litigation Release No. 17679 / August 14, 2002

SEC v. PLATINUM INVESTMENT CORP., et al. (S.D.N.Y. 02 Civ. 6093 (JSR))


The Securities and Exchange Commission announced today that on August 9, 2002, the United States District Court for the Southern District of New York entered a preliminary injunction and imposed other relief against Platinum Investment Corp. ("Platinum"), a registered broker-dealer; Platinum Investment Holding Corp. ("PIHC"), a supposed "financial service holding corporation"; Lee Antonucci, a PIHC principal; and Platinum associates Andrew Antonucci, Marcos Martinez, James Frace, and Mathew Beaulieu. The order preliminarily enjoins the defendants from violating the antifraud provisions of the Securities Act of 1933 ("Securities Act") and Securities Exchange Act of 1934 ("Exchange Act"); the registration provisions of the Securities Act; and - in the case of Platinum - the broker-dealer books and records and penny stock reporting provisions of the Exchange Act. The Court's order also freezes the defendants' assets, requires the defendants to account for their illegal gains, prohibits defendants from destroying relevant documents, and allows for the continuation of expedited discovery. The Court previously entered a temporary restraining order and an asset freeze against the defendants on July 31, 2002.

In its complaint, the Commission alleges that:

The defendants have fraudulently obtained over $1.5 million from at least 56 investors by making material misrepresentations in two, unregistered stock offerings: (a) an offering of stock in PIHC for $1.00 per share purportedly to raise capital for PIHC's business operations, and (b) an offering in New Focus Capital Partners ("New Focus"), a purported hedge fund. The defendants have falsely claimed that PIHC is on the verge of launching an IPO within weeks or days even though PIHC has not filed any registration statement with the Commission or otherwise taken any steps toward an IPO. The defendants also have made baseless projections about the price at which PIHC stock would trade on the secondary market, misrepresented the identity of PIHC's officers, diverted investor proceeds, and falsely claimed that PIHC owns a successful, proprietary "momentum" trading program called "IntelliTrendXLTM." The defendants further have falsely portrayed New Focus as a hedge fund with a successful track record.

The complaint seeks, as final relief against all defendants, permanent injunctions against future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act; Section 10(b) of the Exchange Act, and Rule 10b-5 thereunder. In addition, the complaint seeks against Platinum permanent injunctions against future violations of Sections 15(g), 17(a) and 17(b) of the Exchange Act, and Rule 15g-9 thereunder. The Commission also seeks against all defendants disgorgement of all ill-gotten gains plus prejudgment interest, and civil penalties.

The litigation is pending. For more information, see Litigation Release No. 17643 (July 31, 2002).


Modified: 08/14/2002