U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 19542 / January 25, 2006
Securities and Exchange Commission v. Morgan Cooper et al., Civil Action No. 1:05CV00207 (D.D.C.) (January 28, 2005)
Court Orders Permanent Injunctions and Penalties Against Morgan Cooper, James J. Caprio and Jeffrey G. Nunez for Unregistered Stock Sales
The Securities and Exchange Commission announced that, on January 9, 2006, the United States District Court for the District of Columbia entered final judgments against Morgan Cooper, James J. Caprio and Jeffrey G. Nunez, enjoining the defendants from violating certain provisions of the federal securities laws and imposing, in total, over $250,000 in penalties. The Court entered the judgments against Cooper and Nunez by default; Caprio consented to the judgment against him without admitting or denying the allegations in the Commission's complaint.
The Commission alleged in its complaint that, in 1999, Cooper retained Caprio and another individual, now deceased, to sell stock for his company, Morgan Cooper, Inc. ("MCII"). According to the complaint, Caprio and the other individual, with the assistance of Nunez, sold hundreds of thousands of MCII shares, raising approximately $1.2 million for the company, without registering those sales with the Commission. The complaint also alleged that Cooper disseminated a number of false and misleading statements in press releases touting MCII. Additionally, Cooper and Caprio failed to file the required reports on Schedule 13D to disclose their ownership interests in MCII, which exceeded 5% of outstanding shares. Cooper also failed to file reports on Forms 3, 4 and 5 to disclose his acquisition and transfer of shares in the company as required of an officer and director.
The Court permanently enjoined Cooper from violating the registration provisions of the federal securities laws, Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), and the antifraud provisions, Section 10b-5 and Rule 10b-5 of the Securities Exchange Act of 1934 ("Exchange Act"). The Court also enjoined Cooper from violating the stock ownership disclosure provisions, Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1, 13d-2 and 16a-3 thereunder. Finally, the Court ordered Cooper to pay a penalty of $110,000 and permanently barred him from acting as an officer or director of any public company.
The Court permanently enjoined Caprio from violating Sections 5(a) and 5(c) of the Securities Act and Section 13(d) of the Exchange Act and Rules 13d-1 and 13d-2 thereunder and ordered Caprio to pay a penalty of $125,000. The Court permanently enjoined Nunez from violating Sections 5(a) and 5(c) of the Securities Act and ordered Nunez to pay a penalty of $55,000.
The Commission also announced two related enforcement actions. The Commission issued an order suspending Caprio from association with any broker or dealer for six months. Caprio consented to the issuance of the order. The Commission also issued an order instituting administrative proceedings against Nunez based upon the entry of the permanent injunction against him.
For more information, see Litigation Release No. 19057 (Jan. 28, 2005).