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United States Securities and Exchange Commission

Litigation Release No. 18171 / June 4, 2003

Accounting and Auditing Enforcement Release No. 1793 / June 4, 2003

Ray Fernandez, Former Chairman and CEO of Madera International, Inc., Enjoined and Barred from Serving as an Officer or Director of a Public Company

SEC v. Ramiro M. Fernandez-Moris, Daniel S. Lezak, and Ramiro Rafael ("Ray") Fernandez, 01 Civ. 1985 (JR) (D.D.C. filed Sept. 19, 2001)

On May 8, 2003, the United States District Court for the District of Columbia entered a judgment of permanent injunction against Ramiro Rafael ("Ray") Fernandez. The judgment enjoins Fernandez from violating the antifraud provisions of the federal securities laws (specifically, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5) and from aiding and abetting violations of the reporting provisions (Section 13(a) of the Exchange Act and Rules 12b-20 and 13a-1 thereunder). The judgment also permanently prohibits Fernandez from acting as an officer or director of any publicly-held company

The judgment further provides that the amount of any disgorgement or civil penalty to be paid by Fernandez shall be determined by the Court following a hearing. At that hearing, the issues will be limited to determining the appropriateness and amount of any such disgorgement and civil penalty, Fernandez will be precluded from arguing that he did not violate the federal securities laws as alleged in the Commission's amended complaint, and the allegations of the complaint will be accepted as true by the Court.

Fernandez consented to the entry of the judgment without admitting or denying the allegations of the Commission's amended complaint.

Ray Fernandez was Madera's Executive Vice President in charge of sales and marketing and Chief Executive Officer of Madera International Environmental, Inc., a wholly-owned subsidiary of Madera. In December 1998, he was additionally elected Chairman of the Board of Directors of Madera, and later, in November 2000, also became its Chief Executive Officer, replacing his father, Ramiro M. Fernandez-Moris. The amended complaint alleges:

  • Fernandez signed, in his capacities as Director and Chairman of the Board, Madera's fiscal year 1999 annual report on Form 10-K that was filed with the SEC on March 8, 2000 and that contained numerous false statements.
  • Fernandez posted numerous false statements concerning Madera on an Internet message board during the period April through September 19, 2001.
  • At the same time he inflated the share price of Madera through these fraudulent public disclosures about Madera's assets, operations, and revenues, Fernandez sold personal holdings of Madera common stock. Specifically, from May 2000 through July 2001, Fernandez sold at least 7,939,200 shares of Madera common stock and obtained proceeds of at least $68,791.65.

The Court previously entered a Final Judgment of Permanent Injunction By Default against Madera International, Inc. The judgment enjoins Madera from violating the antifraud, reporting, books and records, and internal control provisions of the Securities Exchange Act of 1934 (Sections 10(b), 13(a) and 13(b)(2)(A) and (B), and Rules 10b-5, 12b-20, 13a-1 and 13a-13). Litigation Release No. 17546 (June 6, 2002).

For more information, see Litigation Release Nos. 17140 (September 19, 2001) and 17916 (January 7, 2003).



Modified: 06/05/2003