U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18964 / November 9, 2004
SECURITIES AND EXCHANGE COMMISSION v. OSF, Inc. et al., No. H-04-4291 (USDC S.D. TEX.)
The Securities and Exchange Commission ("Commission") announced that it filed an injunctive action on November 9, 2004 against OSF, Inc. ("OSF"), two of its officers, Lloyd P. Broussard, and Winfred Fields, as well as Broussard's daughter, Monyette Preciado and two companies with which she was nominally affiliated, Raven Interests, Inc. ("Raven") and Tenn-Stone, Inc. ("Tenn-Stone"). The Commission's complaint alleges that between August 2003 and June 2004, Broussard and Fields, with the assistance of their nominee Preciado, orchestrated an illegal distribution of approximately 22.2 million shares of OSF stock to the public for total proceeds of approximately $531,238. According to the complaint, Broussard and Fields effected the distribution both personally and through Raven and Tenn-Stone, which they secretly controlled. The complaint further alleges that to facilitate the distribution, Broussard and Fields issued a series of false OSF press releases from June 2003 to September 2003 concerning business relationships with third parties, corporate revenues, and imminent Nasdaq listing. Moreover, the complaint alleges that as recently as January 2004, Broussard and Fields arranged for the dissemination of large numbers of unsolicited junk faxes and spam e-mails, which republished information contained in the false releases.
The Commission's complaint alleges that OSF, Broussard, Fields, Preciado, Raven and Tenn-Stone violated Sections 5(a), and 5(c) of the Securities Act of 1933. Further, the complaint alleges that OSF, Broussard and Fields violated 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 complaint seeks preliminary and permanent injunctions, disgorgement and prejudgment interest, and civil penalties as to all of the defendants; officer and director bars against Broussard and Fields; and penny stock bars against Broussard, Fields and Preciado.
For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit http://www.sec.gov/investor/online/pump.htm. For more information about Internet fraud, visit http://www.sec.gov/investor/pubs/cyberfraud.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml.