U.S. Securities and Exchange Commission
Litigation Release No. 18783 / July 14, 2004
Securities and Exchange Commission v. Internet Telecommunications Albany System SMR, et al., Civil Action No. 1:99CV00539 (CKK) (D.D.C.)
COURT ENTERS FINAL JUDGMENT AGAINST FREDERIC A. GLADLE IN SPECIALIZED MOBILE RADIO FRAUD
The Securities and Exchange Commission announced that on July 12, 2004, the Honorable Colleen Kollar-Kotelly, United States District Court Judge for the District of Columbia, entered a Final Judgment of Permanent Injunction and Other Relief as to Frederic A. Gladle in the matter of SEC v. Internet Telecommunications Albany System SMR, et al. The final judgment orders Gladle to pay $57,000 in disgorgement, $43,000 in prejudgment interest and a $57,000 penalty. The disgorgement amount represents funds received by Gladle as a result of his alleged unlawful conduct. The Court enjoined Gladle from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the securities registration provisions of Sections 5(a) and (c) of the Securities Act, and the broker-dealer registration provisions of Section 15(a) of the Exchange Act. Without admitting or denying the allegations against him contained in the Commission's complaint, Gladle consented to the entry of the Final Judgment.
According to the complaint, which was filed on March 2, 1999, Gladle and his company, TrendsGroup International, Inc., and other co-defendants violated various registration and antifraud provisions of the federal securities laws in connection with the unregistered nationwide sales of securities issued by three general partnerships organized to develop specialized mobile radio systems (i.e., paging systems) in Albany, New York, Reno, Nevada and Anchorage, Alaska. The Commission's complaint further alleged that Gladle functioned as a broker by selling the securities, although he was not registered as a broker as required by applicable securities laws. The Commission's complaint also alleged that Gladle used high pressure, sales tactics in marketing the partnership units and had materially misrepresented the nature of the paging systems operation, their projected costs of development, and the projected returns, both in telephone conversations with potential investors and in documents sent to potential and actual investors.
Today, the Commission also instituted settled administrative proceedings against Gladle. Gladle consented to the issuance of the Commission's Order based on the entry of the final judgment of permanent injunction against him, which bars him from association with any broker or dealer, with the right to reapply for association after five years. In the Matter of Frederic A. Gladle, Administrative Proceeding File No. 3-11546; Securities Exchange Act of 1934 Release No. 50011 (July 14, 2004).