SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17746 / September 26, 2002
Accounting and Auditing Enforcement
Release No. 1633 / September 26, 2002
SEC v. William P. Trainor, Vincent D. Celentano, Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.), Karen Losordo, Diane M. Trainor, Daniel J. Trainor, Geraldine Trainor and Mary N. Celentano, Civil Action No. 98CV01533 (EGS) (D.D.C.)
MEDICAL DIAGNOSTIC PRODUCTS, INC.
ENJOINED IN FRAUD ACTION
The United States Securities and Exchange Commission ("Commission") today announced that on September 17, 2002, the Honorable Emmet G. Sullivan of the United States District Court for the District of Columbia entered a Final Judgment As To Medical Diagnostic Products, Inc. ("MDP") ("Final Judgment") in the above-captioned civil action. The Commission sued MDP, a Columbia, Maryland-based company, for its role in a fraudulent scheme involving the sale and purchase of its securities.
MDP (f/k/a Novatek International, Inc.), consented, without admitting or denying the allegations of the Commission's complaints, to entry of a Final Judgment that permanently enjoins the company from violating Sections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-13 and 13b2-1 promulgated thereunder.
On June 18 and August 12, 1998, the Commission filed its complaint and amended complaint ("Complaints"), respectively, against MDP and others based on their participation in a fraudulent "pump and dump" scheme involving the purchase and sale of MDP securities. MDP claimed to have the distribution rights to distribute in South America medical diagnostic test kits designed to rapidly detect the presence of infectious diseases such as cholera and HIV. Between April 11 and September 3, 1996, MDP issued a series of false press releases announcing that it had entered into contracts, worth more than $400 million, with several South American entities for the distribution of the diagnostic test kits. According the Commission's Complaints, these contracts never existed.
On January 10, 2002, Judge Sullivan entered an order staying the Commission's action against the remaining defendants in the Commission's case, pending the outcome of the criminal proceeding against defendant William P. Trainor.
For additional information, see Litigation Release Nos. 15786, 15844 and 17313, and Securities Exchange Act of 1934 Release Nos. 40169, 40170 and 40171.