United States Securities and Exchange Commission
Litigation Release No. 18249 / July 24, 2003
SEC Files Civil Lawsuit in On-line Casino Stock Fraud Case
Securities and Exchange Commission v. Investment Technology, Inc. et al., Case No. CV-S-03-0831 (D. Nev.).
The Securities and Exchange Commission announced today that on July 15, 2003, it filed a complaint against Investment Technology, Inc., a Las Vegas, Nevada publicly-traded company, in connection with an alleged fraudulent scheme involving the company's stock and its purported on-line gambling casino. The complaint alleges that Thomas D. Vidmar, of Las Vegas, Nevada, the company's CEO and chairman, and Ulysses "Thomas" Ware, of Atlanta, Georgia, the company's securities counsel, falsely promoted Investment Technology in press releases and "analyst reports" as a leader in on-line gambling, even though its casino website never received wagers or generated revenues. The complaint further alleges that Vidmar and Ware dumped millions of Investment Technology shares into the manipulated market, and collectively realized more than $200,000 in unlawful profits.
The other defendants in the case are:
The complaint alleges that Vidmar and Ware caused Investment Technology to file two false and misleading registered securities offerings with the Commission. Thereafter, the complaint alleges that the defendants issued numerous press releases and "analyst reports" recommending the purchase of Investment Technology stock based on various unfounded claims regarding the company's purported on-line gambling casino operation. For example, a February 7, 2002, press release claimed that the casino's website had "accepted over 100,000 wagers on the Super Bowl, for more than $4 million." Other releases and reports described Investment Technology, which had no history of operations or revenue, as "a leader" in the online gaming industry. However, no bets were ever placed on the company's casino website. In addition, the complaint alleges that the company and Vidmar filed materially misleading reports with the Commission and that Vidmar, Ware and RGW failed to filed required reports with the Commission disclosing their Investment Technology stock holdings.
The Commission's complaint alleges that based on the conduct set forth above:
The complaint seeks injunctions against all defendants, disgorgement with pre-judgment interest from Vidmar, RGW and Ware, civil money penalties from all defendants except Investment Technology, penny stock bars against Vidmar, Ware, RGW, Small Cap and Centennial, and an officer and director bar against Vidmar.