U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18930 / October 14, 2004
S.E.C. v. David M. Wolfson et al., Docket No. 2:03CV00914DAK (USDC, D.Ut.)
On October 6, 2004, the Honorable Dale A. Kimball, United States District Judge for the District of Utah, entered a Final Judgment against Gino Carlucci ("Carlucci") and G&G Capital, LLC ("G&G"), a limited liability company controlled by Carlucci. Carlucci and G&G were permanently enjoined from future violations of the antifraud provisions of the federal securities laws and ordered to pay disgorgement of $1,012,453.00 plus prejudgment interest thereon together with a civil penalty of $1,076,486.31. Carlucci was also enjoined from future violations of the issuer reporting and officer certification provisions of the Securities Exchange Act of 1934 and placed under officer-director and penny stock bars. Finally, Carlucci and G & G were ordered to dismiss an adversary proceeding they had filed against the Commission in the United States Bankruptcy Court for the District of Arizona.
In October 2003, the Commission filed a Complaint, in the United States District Court for the District of Utah, against twenty-one individuals and entities involved in a scheme to sell securities in five United States-based microcap issuers to hundreds of investors located primarily in the United Kingdom, Australia and New Zealand through a boiler room located in Vientiane, Laos. In that action, the Commission obtained an order which , among other things, froze the assets of a number of defendants, including Carlucci. On March 17, 2004, the Court found Carlucci and G&G in contempt of the order freezing Carlucci's assets.
The Final Judgment specifically enjoins Carlucci and G&G from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 promulgated thereunder, and Section 17(a) of the Securities Act of 1933 and orders Carlucci and G&G to pay disgorgement of $1,012,453.00, together with prejudgment interest thereon in the amount of $64,033.31, and a civil penalty of $1,076,486.31.
The Final Judgment, to which the defendants consented without admitting or denying the allegations of the Commission's complaint, also enjoins Carlucci from future violations of Rule 13a-14 under the Exchange Act and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-11, and 13a-13 thereunder. The judgment also bars Carlucci from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act or that is required to file reports pursuant to Section 15(d) of the Exchange Act as well as barring Carlucci from participating in any offering of penny stock.