U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19160 / March 29, 2005
SECURITIES AND EXCHANGE COMMISSION v. NEW ENERGY CORP., TOR EWALD, GENEVA FINANCIAL LTD., MARCELINO COLT aka MARCELINO COLT VASQUEZ, MAGNUM FINANCIAL, LLC, MICHAEL S. MANAHAN, BLD TRUST, BARCLAY DAVIS, LORETTA DAVIS, BURKE T. MAXFIELD, YORK CHANDLER, AND HECTOR CAMPA ACEDO, Civil Action No. CV-02-989-MMM (CWx) (C.D. Cal.)
PERPETRATORS OF PUMP AND DUMP MANIPULATION SCHEME ARE CRIMINALLY CHARGED
The Securities and Exchange Commission and the United States Attorney for the Central District of California announced that a federal grand jury in Los Angeles indicted Marshall Algird Zolp aka Marcelino Colt, a recidivist securities violator and fugitive, for his participation in a "pump and dump" scheme to manipulate over the Internet the price of securities of New Energy Corporation (now known as NECO Energy Corp., ticker: NECE.OB), based in San Diego, California. The previously sealed indictment, handed down on August 13, 2003, charged Zolp with securities fraud for causing false and misleading press releases and a research report about New Energy to be issued to the public via the Internet. Zolp pleaded guilty and is scheduled to be sentenced on April 18, 2005.
In a separate felony indictment that was previously sealed, Tor Ewald, New Energy's secretary and treasurer, and Ernest Paul Lampert, a fugitive, were indicted on July 7, 2004 for their participation in perpetrating the New Energy scheme. Ewald and Lampert were charged with securities fraud for causing false and misleading press releases and a research report about New Energy to be issued to the public via the Internet. Ewald was further charged with obstruction of justice and making a false statement under oath to the Commission. It was further alleged that Lampert violated a prior judgment in a criminal case. Trial is scheduled to begin on July 12, 2005.
The indictments follow the Commission's complaint filed in federal court in Los Angeles on February 1, 2002. The Commission's complaint alleged that New Energy, Ewald, Colt, and his firm, Geneva Financial Ltd., a Nevis corporation, and Magnum Financial LLC dba Stratos Research LLC, of Los Angeles, California, and its president, Michael S. Manahan, of San Pedro, California, violated the antifraud provisions, specifically, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Colt and Geneva were also charged with violating Section 17(a) of the Securities Act of 1933. The complaint alleged that these defendants were part of a pump and dump scheme to manipulate New Energy's stock price during a one-month period ending on January 18, 2002, when the Commission suspended trading.
The Commission obtained a final judgment against Colt and Geneva that permanently enjoined them from future violations of the antifraud provisions and imposed orders of disgorgement and civil penalties. The Commission obtained final judgments against New Energy, Ewald, Magnum, and Manahan that permanently enjoined them from future violations of the antifraud provisions and imposed civil penalties.
Prior to the entry of the permanent injunction in the New Energy case, Zolp had been enjoined by the Commission on four previous occasions. Separately, Zolp and Lampert had previously been criminally convicted in other securities fraud cases.