U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18487 / December 4, 2003
Securities and Exchange Commission v. Save the World Air, Inc. et al., 01 CV 11586 (S.D.N.Y.)
BILLY BLACKWELDER, FORMER MARKETING CONSULTANT TO SAVE THE WORLD AIR, INC., PERMANENTLY ENJOINED FROM FRAUDULENT ACTIVITIES
The Securities and Exchange Commission announced today that on November 24, 2003, the Honorable George B. Daniels of the United States District Court for the Southern District of New York permanently enjoined defendant Billy Blackwelder ("Blackwelder") from violating the antifraud, anti-touting and other provisions of the federal securities laws, barred him from participating in an offer of penny stock, and ordered him to disgorge his illicit profits. Blackwelder, without admitting or denying the allegations in the Commission's Complaint, consented to the entry of the final judgment against him.
Blackwelder was a freelance consultant who, in or about July 2000, became a marketing consultant for Save the World Air, Inc. ("STWA"), a company that purported to have successfully developed and marketed a pollution control device for automobiles called the "zero emission fuel saver device." The Complaint alleges that Blackwelder prepared and arranged to have issued at least one false press release announcing a major licensing deal for STWA that, in fact, did not exist. Blackwelder also posted positive messages about STWA on an Internet stock message board without disclosing, as required, that he received shares of STWA as payment for the promotion. Blackwelder's postings were materially misleading because they created the impression that Blackwelder was expressing unbiased views about STWA and its stock, when he was actually a paid promoter.
The Complaint charged Blackwelder with violations of Section 17(b) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b 5 thereunder. The Complaint also charged STWA and Jeffrey Muller, the company's former president, with violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Rule 10b 5 thereunder. In addition, STWA and Muller, as a control person of STWA pursuant to Section 20(a) of the Exchange Act, were charged with violations of Sections 13(a) and 13(b) of the Exchange Act, and Rules 12b 20, 13a 1, 13a 13 and 13b2 1 thereunder. The Complaint further charged Muller with violations of Section 16(a) of the Exchange Act, and Rules 16a 2 and 16a 3 thereunder. On June 25, 2002, the Court ordered a final judgment of permanent injunction against STWA. STWA consented to a permanent injunction prohibiting it from violating the antifraud and reporting provisions of the securities laws. The litigation is ongoing with respect to Muller.