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U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

Litigation Release No. 18890 / September 20, 2004

SEC v. iShopNoMarkup.com, Inc., et al., Civil Action No. CV 04 4057 (DRH) (E.D.N.Y.)


The Securities and Exchange Commission today filed a complaint in the U.S. District Court for the Eastern District of New York against iShopNoMarkup.com, Inc. ("iShop"), a company located on Long Island, New York. The Commission's complaint alleges that from the fall of 1999 through the summer of 2000, iShop conducted a fraudulent offering scheme that defrauded over 350 investors who invested approximately $2.3 million in unregistered iShop stock.

The complaint names the following defendants:

  • IShop is a Nevada corporation with its principal place of business on Long Island, New York. IShop was purportedly developing a shopping mall on the Internet to sell products directly from manufacturers to customers at no markup.

  • Anthony M. Knight, age 38, was a resident of Great Neck, New York. Knight was the Chairman of iShop's Board of Directors, and he served at various times as Director of Planning, Secretary, and Chief Executive Officer.

  • Moussa Yeroushalmi, age 51, is a resident of Great Neck, New York. Yeroushalmi was iShop's President.

  • Scott W. Brockop, age 39, is a resident of Edison, New Jersey. Brockop served as iShop's Vice President of Sales and Marketing.

The complaint alleges the following. From the fall of 1999 until the summer of 2000, iShop conducted a series of fraudulent and unregistered securities offerings. IShop distributed offering memoranda and other documents to investors that misrepresented, and failed to disclose, material information concerning iShop's business operations. Knight, Yeroushalmi, and Brockop also made oral misrepresentations to investors falsely indicating that iShop had imminent plans to conduct an initial public offering of stock, and that after the IPO, iShop's stock would dramatically increase in value. Knight also established a "boiler room" operation at iShop, which Brockop supervised. Through this boiler room, employees cold-called potential investors, and made material misrepresentations to induce them to purchase iShop stock. Through the offerings, iShop sold approximately 6,748,600 shares of stock to over 350 investors, and obtained proceeds of approximately $2.3 million. IShop did not file a registration statement for the sale of these securities, and there was no registration statement otherwise in effect.

The Commission's complaint charges iShop, Knight, Yeroushalmi, and Brockop with violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The complaint also charges Brockop with violating, and Knight with aiding and abetting violations of, Section 15(a) of the Exchange Act. The complaint seeks permanent injunctions against all defendants. The complaint also seeks disgorgement of ill-gotten gains plus prejudgment interest, and the imposition of civil monetary penalties, against Knight, Yeroushalmi, and Brockop. Finally, the complaint seeks officer and director bars against Knight and Yeroushalmi.

SEC Complaint in this matter



Modified: 0X/XX/2004