U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19040 / January 21, 2005
SECURITIES AND EXCHANGE COMMISSION v. QUEÉNCH, INC., LYNDELL PARRIS, LESTER PARRIS, LENNOX PARRIS, JOEL RAMSDEN, MICHAEL RAO, SPROUT INVESTMENTS, LLC AND ALPINE EQUITY, LLC, Civil Action No. 05-80044 (USDC/SDFL/Ft. Lauderdale Division)
SEC SUES QUEÉNCH, INC., ITS PRESIDENT, TWO DIRECTORS AND OTHERS IN CONNECTION WITH HALTED PUMP-AND-DUMP SCHEME
On January 20, 2005 the SEC filed a complaint in the U.S. District Court in the Southern District of Florida, charging Queénch, Inc. ("Queénch"), Lennox Parris, a director, and Lester Parris, a consultant and former director, with fraud and with registration violations, and Lyndell Parris, its president, with fraud or, in the alternative, with aiding and abetting Queénch's fraud. The complaint also charges Joel Ramsden, Michael Rao, Sprout Investments, LLC ("Sprout") and Alpine Equity, LLC ("Alpine") with violating the registration provisions of the federal securities laws. The filing of the civil action was preceded by the Commission's issuance, on March 18, 2004, of an order suspending trading in the securities of Queénch.
The SEC alleges in its complaint that Lyndell, Lester and Lennox Parris engaged in a scheme to prime the market for Queénch stock by issuing at least 11 false and misleading press releases between January 15 and March 19, 2004. According to the SEC's complaint, Queénch claimed, falsely, in the press releases that it had secured distribution contracts with such prominent companies as Time Warner, 7-Eleven and Walt Disney-Grosvenor Resorts. The SEC also alleges that, concurrent with the false press releases, Lester and Lennox Parris issued 28.6 million unregistered shares of Queénch stock to Sprout and Alpine for $2.55 million. Finally, the SEC alleges that Ramsden and Rao, joint owners of Sprout and Alpine, sold the unregistered Queénch shares into the artificially primed market, netting profits of $2.4 million.
In its complaint, the SEC alleges that Queénch, Lester Parris and Lennox Parris violated Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, that Lyndell Parris violated Section 10(b) of the Exchange Act and Rule 10b-5 thereunder or, in the alternative, aided and abetted Queénch's violations of these provisions, and that Ramsden, Rao, Sprout and Alpine violated Sections 5(a) and 5(c) of the Securities Act. In its action, the SEC seeks a permanent injunction, disgorgement with prejudgment interest, a civil penalty and an accounting against each of the defendants; an officer and director bar against Lyndell Parris, Lester Parris and Lennox Parris; and a penny stock bar against Lester Parris and Lennox Parris.
The SEC acknowledges the cooperation and assistance of the Tennessee Regulatory Authority and the National Association of Securities Dealers.