U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19006 / December 20, 2004
SECURITIES AND EXCHANGE COMMISSION v. JOHN W. SURGENT, ET AL., Civil Action No. 04-60493 -CIV (S.D. Fla.) (JIC)
SEC OBTAINS FINAL JUDGMENT AGAINST MARK J. CHAVEZ
The Commission announced that, on November 24, 2004, the Honorable James I. Cohn, United States District Judge for the Southern District of Florida, entered a final judgment by consent against Mark J. Chavez in SEC v. John Surgent, et al., Civil Action No. 04-60493 -CIV (S.D. Fla.) (JIC). The judgment enjoins Chavez from violating the antifraud, registration, and penny stock disclosure provisions of the federal securities laws and permanently bars Chavez from participating in any penny stock offerings. Chavez consented to entry of the final judgment without admitting or denying the allegations in the Commission's complaint.
In its complaint, filed on April 16, 2004, the Commission alleged, among other things, that Chavez -- a registered broker at Preferred Securities Group -- engaged in various sales practice abuses in connection with the sale of the stock of Orex Gold Mines Corporation, allowed unregistered brokers to use his name while they solicited investments in Orex, made false and misleading statements about Orex, failed to disclose the actual amount of compensation he and others received from the transactions in Orex, and otherwise engaged in a variety of conduct which operated as a fraud and deceit on investors. See Litigation Release No. 18669 (April 19, 2004). As a result of the conduct described in the complaint, the Commission charged Chavez with violating Sections 5 and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Exchange Act Rule 10b-5, and aiding and abetting violations of Section 15(g) of the Exchange Act and Exchange Act Rules 15g-2, 15g-4 and 15g-5.
The final judgment permanently enjoins Chavez from violating the foregoing provisions of the federal securities laws and permanently bars him from participating in any penny stock offerings. The final judgment also orders Chavez to pay disgorgement of $242,545.00, plus prejudgment interest thereon, but waives payment of those amounts based on his demonstrated inability to pay. In a related administrative proceeding, Chavez consented to a Commission Order -- without admitting or denying the findings therein -- barring him from association with any broker or dealer pursuant to Section 15(b) of the Exchange Act.