SEC Seeks Contempt Order against Repeat Offender for Alleged Violations of Previous Injunction
FOR IMMEDIATE RELEASE
Federal Judge Freezes Respondents' Assets, Schedules Contempt Hearing
Washington, DC, March 27, 2002 The Securities and Exchange Commission has filed a contempt action and obtained emergency relief against Roc G. Hatfield and his Florida company, Global Diamond Fund Inc. According to the SEC's court papers, Hatfield and GDF are fraudulently offering unregistered securities to potential investors in blatant disregard of prior permanent injunctions and the federal securities laws.
The court granted the Commission's request for orders temporarily freezing Hatfield's and GDFs' assets and appointed a receiver to take control of GDF. The Commission is also seeking to have Hatfield and GDF held in contempt of court and ordered to disgorge all profits they received from the offer and sale of GDF securities.
According to the SEC's contempt application, Hatfield and GDF are fraudulently selling high yield notes in an unregistered offering, purportedly secured by diamonds, and claiming to offer a return of 24% in nine months. Although GDF's offering materials contain glowing descriptions of Hatfield's background, they conceal Hatfield's extensive history of violating the securities laws, including two separate injunctions (one involving a purported international mining company) previously entered against him in cases brought by the SEC. Hatfield was most recently enjoined by a federal court in Tampa on Sept. 8, 1995, in SEC v. Marada Global Corporation, Marada Capital, Inc. and Roc G. Hatfield, Case No. 94-1504-CIV-T-21A. The contempt application also alleges that GDF's offering materials fail to disclose that its "chief diamond buyer," Jack Paulsen, is also a recidivist securities law violator.
The final judgment in the Marada action enjoins Hatfield from, among other things, violating the antifraud and securities registration provisions of the federal securities laws. The SEC has also previously barred Hatfield from the securities industry. Several states have also taken enforcement actions against Hatfield, and he served jail time in California after pleading guilty to criminal fraud, false pretenses, and the unlawful sale of securities.
David Nelson, Regional Director of the SEC's Southeast Regional Office in Miami, said that the SEC's action shows its commitment to protecting investors from serial securities laws violators.
"The SEC's civil injunctive authority is one of its most important regulatory tools, and this action re-emphasizes the agency's intent to take prompt action against those who ignore court orders and try again to violate the federal securities laws," Nelson said.
U.S. Dist. Judge Richard A. Lazzara of Tampa granted the SEC's contempt application. The Court ordered that Hatfield and GDF show cause at a hearing on April 26, 2002, why they should not be held in civil contempt. The Court also ordered GDF to provide an accounting within five business days of all funds it received from the sale of GDF securities.
Contact: John C. Mattimore, Assistant Regional Director (305) 982-6357