UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18009 / March 3, 2003
Securities and Exchange Commission v. Internet Telecommunications Albany System SMR, et al., Civil Action No. 1:99CV00539 (CKK) (D.D.C.)
COURT ENTERS FINAL JUDGMENT AGAINST TRENDSGROUP INTERNATIONAL, INC. IN SPECIALIZED MOBILE RADIO FRAUD
The Securities and Exchange Commission announced that on February 28, 2003, the Honorable Colleen Kollar-Kotelly, United States District Court Judge for the District of Columbia, entered a Final Judgment of Permanent Injunction and Other Relief as to TrendsGroup International, Inc. in the matter of SEC v. Internet Telecommunications Albany System SMR, et al. The final judgment ordered TrendsGroup to pay $164,660 in disgorgement, $116,371 in prejudgment interest and a $164,660 penalty. The Court found that the disgorgement amount represented the amount of investor funds received by TrendsGroup as a result of its unlawful conduct. The Court enjoined TrendsGroup from violating the antifraud provisions of 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, the securities registration provisions of Sections 5(a) and (c) of the Securities Act, and the broker-dealer registration provisions of Section 15(a) of the Exchange Act.
TrendsGroup, without admitting or denying the allegations against it contained in the Commission's complaint, consented to the entry of the Final Judgment. According to the complaint, which was filed on March 2, 1999, TrendsGroup, and other co-defendants violated various registration and antifraud provisions of the federal securities laws in connection with the unregistered nationwide sales of securities issued by three general partnerships organized to develop specialized mobile radio systems (i.e., paging systems) in Albany, New York, Reno, Nevada and Anchorage, Alaska. The complaint further alleged that TrendsGroup functioned as a broker by selling the securities, although it were not registered as a broker as required by applicable securities laws. The complaint also alleged that TrendsGroup used high pressure, "boiler room" sales tactics in marketing the partnership units and had materially misrepresented the nature of the paging systems operation, their projected costs of development, and the projected returns, both in telephone conversations with potential investors and in documents sent to potential and actual investors.
See also Litigation Release Nos. 16073 (March 2,1999), 16592 (June 15, 2000), 16660 (August 21, 2000), 16666 (August 29, 2000), and 16989 (May 7, 2001).