U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19387 / September 22, 2005
Accounting and Auditing Enforcement
Release No. 2318 / September 22, 2005
Securities and Exchange Commission v. Armand Dauplaise and Bernard Shinder, Civil Action No. 6:05CV1391-ORL-31-KRS (M.D. Fla.)
SEC CHARGES BIO ONE CORPORATION AND TWO SENIOR OFFICERS WITH FRAUD
The Securities and Exchange Commission today announced that it filed a civil action in the United States District Court for the Middle District of Florida charging former Bio One Corporation executives Armand Dauplaise and Bernard Shinder with fraud and other securities law violations. Bio One is a nutritional supplement company located in Winter Springs, Florida. Its stock was traded on the OTC BB, but now trades in the pink sheets.
In the Complaint filed today, the Commission alleges that former CEO Dauplaise, of Winter Park, Florida, and former CFO Shinder, of Boca Raton, violated the antifraud provisions of the federal securities laws when they failed to disclose the company's default on a $15 million (Canadian) promissory note and related subsequent events. According to the complaint, Bio One purchased a private company, Interactive Nutrition International Inc. (INI), on March 31, 2004, in part, by issuing the promissory note. The Complaint alleges that Bio One never made any of the payments on the note, and the company's former executives signed forbearance agreements in August and November 2004 acknowledging that the company was in default of the note. According to the Complaint, in December 2004, the note holder appointed a receiver for INI and provided notice to Bio One that it intended to exercise its security rights under the agreement.
The Complaint further alleges that Dauplaise and Shinder failed to disclose the default, the forbearance agreements and the appointment of a receiver in its quarterly reports filed in August and November 2004 or in its Form 8-Ks filed in November and December 2004. The Commission also alleges that the defendants violated the record-keeping and reporting provisions of the federal securities laws.
The Commission's Complaint charges Dauplaise and Shinder with violations of Section 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Rules 10b-5, 13b2-1 and 13b2-2 thereunder, and with aiding and abetting Bio One's violations of Sections 13(a), 13a-11, 13a-13, 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act. In addition, the Commission's Complaint charges Dauplaise with violations of Rule 13a-14 and aiding and abetting Bio One's violations of Rule 13b2-2 and charges Shinder with aiding and abetting violations of Section 10(b) of the Exchange Act and Rules 10b-5 and 13b2-2 thereunder.
In the action, the Commission seeks permanent injunctions, civil penalties, and officer and director bars.
At the same time that the Commission filed its Complaint, the Commission also instituted and simultaneously settled an administrative proceeding against Bio One in which the company consented to the entry of an Order imposing a cease-and-desist order and revoking the registration of the company's securities pursuant to Section 12(j) of the Exchange Act.
In the Order, the Commission found that Bio One violated and failed to comply with the antifraud provisions of the federal securities laws when it failed to disclose its default on a $15 million (Canadian) promissory note and related subsequent events.