U.S. Securities and Exchange Commission
Litigation Release No. 18391 / October 3, 2003
SEC v. B. Roland Frasier, III and Richard A. May, Civ. Action No. 03CV - 1958 BTM (JFS) (Southern District of California)
Today, the Securities and Exchange Commission filed suit in the United States District Court for the Southern District of California against B. Roland Frasier, III and Richard May, both of San Diego, California, for violations of the antifraud and securities registration provisions of the federal securities laws. Frasier and May had previously been associated with Zandria Corp., a defunct Internet company previously located in San Diego.
In the suit, the Commission alleges that between October 1999 and November 2000, Frasier and May orchestrated a fraudulent scheme regarding the trading of Zandria stock on the Over-The-Counter bulletin board. The Commission alleges that Frasier and May obtained control over more than 90 percent of Zandria's free-trading stock through a series of sham transactions. The Commission further alleges that Frasier and May then paid a network of sales agents undisclosed commissions to tout Zandria stock to investors, while they sold Zandria stock, splitting the proceeds.
The Commission has further agreed to a settlement with Frasier wherein he consents to: a judgment permanently enjoining him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder; barring him from participating in any penny stock offering; ordering him to pay $280,000 disgorgement plus $65,898.43 in prejudgment interest; and ordering him to pay a $110,000 civil money penalty.
The Complaint alleges that Frasier violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and that May violated Sections 5(a) and 5(c) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.