U.S. Securities and Exchange Commission
Litigation Release No. 18834 / August 17, 2004
SEC Files Settled Action Charging Vaso Active Pharmaceuticals, Inc. and its President and CEO with Fraud
Securities and Exchange Commission v. Vaso Active Pharmaceuticals, Inc., Civil Action No. 04 CV 01395 (RJL) (D.D.C.)
On August 17, 2004, the Securities and Exchange Commission filed a settled civil injunctive action in the United States District Court for the District of Columbia against Vaso Active Pharmaceuticals Inc., and John Masiz, its President, Chairman and CEO. The Commission's complaint alleges that the Defendants made material misrepresentations and omissions in both public statements and filings with the Commission falsely claiming FDA approval for three of the company's products which were not, in fact, FDA approved.
Specifically, the Commission's complaint alleges that on July 3, 2003, Vaso Active filed a Form SB-2 registration statement with the Commission for an initial public offering. The filing was signed by John Masiz and stated that Vaso Active's products Athlete's Relief, Osteon, and Termin8 (then called deFEET) "have received FDA approval." This statement was repeated in amendments filed with the Commission. However, this statement was false and misleading because none of these products had received FDA approval.
The Commission's complaint also alleges that, in the company's 10-KSB, filed on March 26, 2004, Vaso Active made further false and misleading statements regarding its products. The filing states: "Athlete's Relief, Osteon, and Termin8 are qualified under FDA OTC monographs and have been registered as such." This statement was false and misleading because, to the extent that these products utilize a transdermal drug delivery system, the products did not satisfy FDA monograph requirements. Masiz signed the attached certification, stating that based on his knowledge, the filing contained no untrue statement of material fact.
Without admitting or denying the allegations in the complaint, the Defendants consented to the entry of final judgments permanently enjoining each of them from violating Section 17(a) of the Securities Act of 1933, Sections 10(b) and 13(a) of the Securities Exchange Act of 1934, and Rules 10b-5 and 13a-1 thereunder; and for Masiz, violation of Rule 13a-14, the certification provision. Masiz agreed to a final judgment barring him from acting as an officer or director of a public company for five years and requiring him to pay an $80,000 civil penalty. Previously, the Commission had ordered a ten-day trading suspension in Vaso Active securities arising from the facts alleged in the Complaint.
See also Release No. 34-49513 (April 1, 2004).