U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18821 / August 6, 2004
SEC v. Autocorp Equities, Inc., Docket No. (2:98CV0562)(USDC, D.UT)
On August 4, 2004, the honorable Judge Paul Cassell granted in part the Securities and Exchange Commission's Motion for Summary Judgment against defendant Robert Cord Beatty ("Beatty"). The Court's order enjoined Beatty from future violations of the antifraud and issuer books and records provisions of the federal securities laws, but the Court declined to enjoin Beatty from violations of the securities registration provisions of the securities laws.
The Commission filed its Complaint against Beatty and others on August 10, 1998, alleging that Beatty and others engaged in a scheme to inflate the assets of Diamond Entertainment, Inc. by acquiring $5 million in certificates of deposit ostensibly issued by a Russian bank but actually created at a Kinko's copy center in Hollywood, Florida. The Complaint alleged that in order to finance the acquisition of the certificates of deposit Beatty and others arranged to have Chariot Entertainment, Inc. issue stock, ostensibly in reliance on Regulation S, to a California corporation; those shares were then sold after forty days with $1.5 million of the proceeds used to pay for the certificates of deposit.
The Order against Beatty prohibits Beatty from further violations 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 promulgated thereunder, and aiding and abetting violations of Section 13(b)(2)(A) of the Exchange Act and Rule 13b2-2 promulgated thereunder.