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U.S. Securities and Exchange Commission

Litigation Release No. 18230 / July 14, 2003

Securities and Exchange Commission v. Wolfson, et al., 2:02 CV-1086 TC (D. Utah)

SEC Settles Market Manipulation Charges Against Kevin Kirkpatrick

The Securities and Exchange Commission ("Commission") announced today that on July 9, 2003, the Honorable Tena Campbell, United States District Judge for the District of Utah, Central Division, entered a Judgment of Permanent Injunction as to Kevin Kirkpatrick of Salt Lake City, Utah.

The Commission's Complaint alleged that Kirkpatrick, then a trader at a brokerage firm in Salt Lake City, engaged in a scheme with other defendants from July through November 2000 to manipulate the public trading market for stock issued by Freedom Surf, Inc. ("Freedom Surf"). Freedom Surf was then a start-up company with offices in Huntington Beach, California. The Complaint alleged that certain defendants transferred Freedom Surf stock at no cost to defendant Allen Wolfson. Wolfson, Kirkpatrick and other defendants then participated in a scheme to artificially run up the price of Freedom Surf stock. The Complaint alleged that Kirkpatrick and others advanced the bid quotation in Freedom Surf stock without relation to genuine market demand or worth of the company. Further, Kirkpatrick and other defendants made arranged purchases and sales among brokerage accounts that Wolfson controlled. The Complaint also alleged that Kirkpatrick made unregistered sales of securities. The stock manipulation scheme perpetrated by Kirkpatrick and others appeared to shut down when SEC staff began investigating in November 2000.

The Judgment against Kirkpatrick enjoins him from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 promulgated thereunder. The Judgment also orders that the Court will retain jurisdiction to decide the appropriate amount, if any, of disgorgement, prejudgment interest and penalties against Kirkpatrick.

See also: Litigation Release No. 17756 (September 30, 2002). 



Modified: 07/14/2003