U.S. Securities and Exchange Commission
Litigation Release No. 18529 / January 5, 2004
Securities and Exchange Commission v. Online Power Supply, Inc., Larry G. Arnold and Kris M. Budinger, Civil Action No. 03-M-0121(OES) (D. Colo.)
The Securities and Exchange Commission ("Commission") announced that on December 12, 2003 the United States District Court for the District of Colorado entered a Final Judgment as to Defendant Kris M. Budinger, former president of Online Power Supply. The judgment settles the Commission's claims against Budinger in a civil action filed on January 21, 2003. The complaint alleges that Budinger made false and misleading statements or omitted to state material facts to investors concerning, among other things, compensation that OnLine paid to registered representatives, and that Budinger misappropriated some of the proceeds from the sale of 841,000 shares of OnLine treasury stock. The complaint further alleges that Budinger violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, and aided and abetted Online's violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder.
Budinger consented, without admitting or denying any factual allegations in the complaint, to the entry of the Order which imposes an officer and director bar against him, along with a penny stock bar. The Order also requires Budinger to pay disgorgement in the total amount of $106,000, but waived payment of disgorgement and did not impose a penalty based on his demonstrated inability to pay them. In addition, Budinger consented to a permanent injunction restraining and enjoining him from violating Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, Sections 13(a) and 13(b)(2)(A) and Rules 12b-20, 13a-1 and 13a-13 thereunder.