U.S. Securities & Exchange Commission
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U.S. Securities and Exchange Commission


LITIGATION RELEASE NO. 18047 / March 21, 2003


The Commission today announced it has filed a civil complaint in federal court in Seattle, Washington seeking injunctions, civil penalties, and officer and director bars against Robert Papalia and David Hunter, both residents of Vancouver, British Columbia, for allegedly issuing false and misleading press releases about Nano World Projects Corporation's business dealings with the research and development arm of Fiat Group and other companies. The complaint alleges that Hunter and Papalia, who were officers and directors of Nano World a company that operated out of South Bothell, Washington, issued false press releases in 2000 and 2001 that misrepresented the company's commitments for financing to develop its business, misrepresented it was in a partnership with Fiat Group to develop nano-technology when it did not have the financial resources to meet its obligations under the agreement, and misrepresented its acquisition of another company and the terms of sale of its assets to a third-party, among other things. These false and misleading press releases, one of which was distributed to thousands of potential investors over the Internet, caused increases in the price and volume of Nano World's stock, which was traded at the time on the National Association of Securities Dealers Bulletin Board under the symbol "NAPH" but has since been delisted. The complaint also alleges that Papalia caused Nano World to file a false report with the SEC about the acquisition of another company, and that he caused Nano World to fail to file quarterly and annual reports which are required of public companies.

The Commission alleged that Papalia and Hunter violated the anti-fraud provisions of Sections 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5, and that Papalia also aided and abetted Nano World's violations of the corporate reporting provisions of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11, and 13a-13. The Commission is seeking an injunction prohibiting the defendants from making false statements in connection with the purchase or sale of securities, civil penalties for each of their violations, and an order prohibiting them from acting as officers and directors of other public companies.

A trial will be scheduled to determine whether the Commission's allegations are true and what if any sanctions should be imposed.

In a separate action, the Commission instituted administrative proceedings pursuant to Section 12(j) of the Securities Act of 1933 against Nano World to determine whether the registration of its securities should be revoked or suspended in light of the allegations that it submitted a false Form 8-K and failed to make quarterly and annual filings. See Exchange Act Release No. 47512.


SEC Complaint in this matter


Modified: 03/24/2003