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U.S. Securities and Exchange Commission

Litigation Release No. 18159 / May 28, 2003

Securities and Exchange Commission v. Bernard Artz

(United States District Court for the District of Massachusetts, MBD No. 03-10154-GAO)

The Securities and Exchange Commission today announced that, on May 23, 2003, it filed an action to enforce an investigative subpoena against Bernard Artz, the chairman, chief executive officer, and chief financial officer of Neurotech Development Corporation (" Neurotech"). The Commission alleges in its papers that Artz failed to comply with a subpoena requiring him to provide testimony in connection with an investigation to determine whether Neurotech and others may have violated the antifraud, reporting, and books and records provisions of the Securities Exchange Act of 1934. Accordingly, the Commission filed its Application for an Order to Show Cause and For an Order Requiring Bernard Artz to Comply with Administrative Subpoena. The action was filed in federal district court in Massachusetts.

In its Application and supporting papers, the Commission alleges that, on March 20, 2003 the Commission issued a formal order of private investigation entitled In the Matter Neurotech Development Corporation, File No. B-01933 ("Formal Order"). The Commission supplemented the Former Order on April 17, 2003, to designate an additional officer for the purposes of conducting the investigation. The Formal Order, as supplemented, directed certain Commission staff members to undertake a private investigation to determine if there were violations of the federal securities laws. According to the Commission's court papers, the Commission staff is investigating possible material false statements made by Neurotech in press releases and in periodic reports filed with the Commission that were signed by Artz.

According to the Commission's court papers, Commission staff issued a subpoena to Artz on March 20, 2003 requiring him to testify on March 31, 2003. After the Commission staff granted several extensions requested by Artz, he failed to appear for testimony on April 24, 2003 at the Commission's Northeast Regional Office in New York. The staff issued Artz a new subpoena on May 5, 2003, after his attorney ended his representation of Artz, to appear at the Commission's Boston District Office. That subpoena required Artz to appear for testimony on May 19, 2003. On May 16, 2003, the Commission staff granted the request of Artz's new attorney that Artz be relieved of immediate compliance with the May 19, 2003 appearance date. The Commission filed the enforcement action when Artz's new attorney would not commit to a reasonable date for rescheduling Artz's testimony.



Modified: 05/28/2003