U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

Litigation Release No. 18367 / September 26, 2003

Securities and Exchange Commission v. Sean Nevett, Civil Action No. 1:03CV01994 (D.D.C.) (September 25, 2003) (PLF)

SEC Sues Sean Nevett For Engaging In Unregistered Distribution of Pay Pop, Inc. Stock

Nevett Settles And Agrees To Pay $386,997.96 In Disgorgement, Prejudgment Interest And Penalties

On September 25, 2003, the Securities and Exchange Commission filed a settled civil injunctive action in the United States District Court for the District of Columbia, alleging that Sean Nevett, a California resident, engaged in an unlawful distribution and sale of the stock of Pay Pop, Inc. ("Pay Pop"), a now defunct British Columbia-based telecommunications company. Specifically, the Complaint alleges that Nevett participated in the public distribution and sale of Pay Pop stock, notwithstanding the fact that there was no registration statement filed with the Commission or any applicable exemption from registration, in violation of Section 5 of the Securities Act of 1933 (the "Securities Act"). As alleged in the Commission's Complaint, between 1998 and 1999, Nevett sold approximately 3.1 million shares of Pay Pop common stock into the market through a variety of brokerage accounts located in Canada and the United States. As a result, Nevett made unlawful profits of $257,061.01.

Nevett settled the civil injunctive action without admitting or denying the allegations of the Complaint. Nevett consented to the entry of a final judgment: (i) enjoining him from future violations of Section 5 of the Securities Act; (ii) requiring the payment of disgorgement of $257,061.01, plus prejudgment interest of $79,936.95; (iii) requiring payment of a civil penalty of $50,000; and (iv) barring Nevett for two years from participating in the distribution of any penny stock.

Simultaneously with the filing of this action, the Commission also filed a civil injunctive action against five individuals, including a former senior manager of Pay Pop's transfer agent, CIBC Mellon Trust Company, for engaging in a fraudulent scheme to create purportedly "free trading" Pay Pop stock (i.e., legend-free stock certificates that created the false impression that the stock complied with U.S. registration requirements), issuing a series of materially false and misleading public statements and selling Pay Pop shares to unsuspecting investors. Securities and Exchange Commission v. Daryl Desjardins, et al., 1:03CV01992 (D.D.C. Sept. 25, 2003) (PLF); Litigation Release No. 18366. In addition, the Commission also filed a settled civil action and a cease-and-desist order against a former attorney of Pay Pop for alleged insider trading. Securities and Exchange Commission v. Warren J. Soloski, 1:03CV01993 (D.D.C. Sept. 25, 2003) (PLF); Litigation Release No. 18368; In re Warren J. Soloski, Exchange Act Release No. 34-48551 and Securities Act Release No. 33-8293.

The Commission acknowledges the assistance in its investigation by the Federal Bureau of Investigation, NASD Regulation, Inc., the District Attorney for San Diego County, California, the Organized Crime Agency of British Columbia, the Royal Canadian Mounted Police, the British Columbia Securities Commission, and the Ontario Securities Commission.

The Commission's investigation in this matter is continuing.

SEC Complaint in this matter



Modified: 09/30/2003