U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18970 / November 15, 2004
Securities and Exchange Commission v. Investment Technology, Inc. et al., Case No. CV-S-03-0831-KJD-RJJ (D. Nev.).
SEC Obtains Final Judgment in On-line Casino Stock Fraud Case
The Securities and Exchange Commission announced today that on October 22, 2004, the Honorable Kent J. Dawson, U.S. District Judge, District of Nevada, entered a final judgment by default against all Defendants as a sanction for repeated misconduct by Ulysses "Thomas" Ware ("Ware"), a Defendant who also acted as attorney for himself and other Defendants. In its order, the Court noted that Ware had continued to act in bad faith, even after the Court had imposed multiple monetary sanctions on him.
In its complaint, filed July 14, 2004, the Commission alleged that the Defendants conducted a fraudulent scheme involving the stock of Investment Technology, Inc., a Las Vegas, Nevada publicly-traded company, with a purported on-line gambling casino. The complaint charged that Thomas D. Vidmar ("Vidmar"), of Las Vegas, Nevada, the company's CEO and chairman, and Ware, of Atlanta, Georgia, the company's investment banker and securities counsel, caused Investment Technology to file two false and misleading registered securities offerings with the Commission. Thereafter, the complaint alleged, the Defendants issued numerous press releases and "analyst reports" recommending the purchase of Investment Technology stock based on various unfounded claims regarding the company's purported on-line gambling casino operation. According to the Complaint, Ware used Defendants Rosenfeld, Goldman & Ware ("RGW"), Small Cap Research Group, Inc. ("Small Cap"), and Centennial Advisors, LLC ("Centennial") to perpetrate various aspects of the fraudulent scheme.
For example, a February 7, 2002, press release claimed that the casino's website had "accepted over 100,000 wagers on the Super Bowl, for more than $4 million." Other releases and reports described Investment Technology, which had no history of operations or revenue, as "a leader" in the online gaming industry. However, no bets were ever placed on the company's casino website.
The complaint further alleged that Vidmar and Ware dumped millions of Investment Technology shares into the manipulated market, amassing unlawful profits. In addition, according to the complaint, the company and Vidmar filed materially misleading reports with the Commission and that Vidmar, Ware and RGW failed to file required reports with the Commission disclosing their Investment Technology stock holdings.
Based on the conduct set forth above, the Court's final judgment:
For more information on earlier action in this case, see Litigation Release No. 18249 (July 24, 2003).