U.S. Securities and Exchange Commission
Litigation Release No. 18144 / May 19, 2003
SEC v. Concentrax, Inc. and Mark Gifford, Civ. Action. No. 03-CV-1639 (Southern District of Texas, Houston Division)
Concentrax, Inc. And Its CEO Mark Gifford Consent To Permanent Injunction, Gifford To Pay $35,000 Penalty In False Press Release Case
The SEC filed a lawsuit on May 14, 2003, in U.S. District Court for the Southern District of Texas, Houston Division, against Houston-based Concentrax, Inc. and its CEO, Mark Gifford, for issuing several press releases in October and November 2002 that made false and misleading claims regarding purported contracts to sell the company's vehicle-tracking system. The false releases materially impacted Concentrax's stock price and volume, and resulted in the SEC temporarily suspending trading in Concentrax's stock on November 22, 2002. According to the complaint, Concentrax falsely announced that it had contracts to sell its tracking system to three nationally known companies, including a vehicle-leasing company, an oil and gas drilling company and a mechanical engineering firm. In fact, Concentrax had no contracts to sell the system to any of these companies. The complaint also alleges that the company made misleading earnings projections in two of its press releases that were based in part, on the purported sales contract with the major vehicle-leasing firm. Finally, the complaint alleges that Concentrax raised approximately $560,000 in a private stock offering during the period that it was issuing the false and misleading press releases.
Simultaneously with the filing of the complaint, Concentrax and Gifford consented to the entry of a permanent injunction for violations of the anti-fraud provisions of the federal securities laws, specifically 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. In addition, Gifford consented to pay a $35,000 civil penalty and Concentrax consented to corporate undertakings that remove Gifford from the company's press-release drafting and approval process. The settlement terms are subject to court approval.