U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17787 / October 16, 2002
Securities and Exchange Commission v. Donald John Christensen, II, Jack E. Uselton, Marc R. Tow, George W. Guttman, Joseph M. Blumenthal, and Mountain Energy, Inc., Civil Action No. HO1-3203 (S.D.Tex.)
Jack E. Uselton Settles SEC Fraud Charges in Mountain Energy Case
On October 10, 2002, the U.S. District Court for the Southern District of Texas entered a final judgment against Jack E. Uselton, the former CEO of Mountain Energy, Inc., in a case filed by the Securities and Exchange Commission in September 2001. Without admitting or denying the allegations in the Commission's complaint, Uselton agreed to be permanently restrained and enjoined from violating the anti-fraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder). Uselton also agreed to be barred from serving as an officer or director of any public company. In settlement of its claims against Uselton, the Commission did not seek a civil penalty based on Uselton's submission of sworn financial statements to the Commission.
According to the allegations in the Commission's complaint, Uselton participated in an illegal "pump-and-dump" scheme in the securities of Mountain Energy, Inc., a start-up energy company headquartered in Houston, Texas. During the spring and summer of 1998, Uselton and others published six fraudulent press releases that misrepresented the ownership, nature and value of Mountain Energy's assets. These press releases caused a dramatic increase in the price of Mountain Energy stock and significant harm to investors when the market for the stock collapsed.
Two other defendants in the case, Joseph Blumenthal and George Guttman, previously settled with the Commission. The case remains pending against Mountain Energy, Donald John Christensen and Marc R. Tow.
For further information about this matter, see Litigation Release No. 17144 (September 20, 2002) and Securities Exchange Act Release No. 40273 (July 29, 1998).