U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18720 / May 20, 2004
Securities and Exchange Commission v. Gabor S. Acs and Penny King Holdings, Inc., Civil Action No. CV-N-03-0463-ECR-VPC
The Commission announced that on May 12, 2004, the United States District Court for the District of Nevada entered a Final Judgment against Gabor S. Acs and Penny King Holdings, Inc. Between January and May 2002, Acs wrote, edited and approved six false and misleading press releases concerning Quintek Technologies, Inc. ("Quintek") and Eknowledge Group, Inc. ("Eknowledge") and between at least March and August 2002 he created and maintained two Internet websites containing false statements. The releases and websites contained false and misleading statements concerning, among other things, the financial prospects of Quintek and Eknowledge, a business combination between these two companies, Penny King's assets and Acs' financial experience. Acs and Penny King also failed to disclose payments made by Quintek and Eknowledge in exchange for touting services.
At a hearing on May 6, 2004 on the SEC's Motion for Summary Judgment against Acs and a Default Judgment against Penny King, the court found that Acs and Penny King violated Section 17(b) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. By order of the court, Acs and Penny King were permanently enjoined and a penny stock bar was entered against Acs. In addition, Acs was ordered to pay disgorgement and prejudgment interest in the amount of $43,962.81 along with a civil penalty in the amount of $600,000. Penny King was ordered to pay a civil penalty of $600,000.