Sep 10, 2014
FTC | Consumer Updates - September 10, 2014: Data breaches, credit freezes, and identity theft… oh my!.
SEC | Litigation Release - September 10, 2014: Securities and Exchange Commission v. Heart Tronics, Inc., et al., Civil Action No. SACV11-1962-JVS (C.D. Cal. filed Dec. 15, 2011).
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 23081 / September 10, 2014
Securities and Exchange Commission v. Heart Tronics, Inc., et al., Civil Action No. SACV11-1962-JVS (C.D. Cal. filed Dec. 15, 2011)
SEC Settles Fraud Charges Against Former Heart Tronics CEO and Former Registered Representative.
The Securities and Exchange Commission today announced that J. Rowland Perkins, II and Mark C. Nevdahl have settled charges arising out of their involvement with Heart Tronics, Inc., a microcap company formerly known as Signalife, Inc. that the SEC has alleged engaged in a series of frauds between 2006 and 2009. As part of the settlement, Perkins will pay a penalty of $42,500 and is now barred for three years from serving as an officer or director of a public company or engaging in an offering of penny stock. He also consented to the full injunctive relief sought by the SEC. Nevdahl, in his settlement, will pay a civil penalty of $13,000 and was ordered to cease and desist from aiding or abetting or committing any future violations. Nevdahl also was suspended for six months from associating with certain regulated entities and from participating in any offering of penny stock. The SEC’s litigation against Heart Tronics, its co-CEO, Willie Gault, and a former attorney, Mitchell Stein, is continuing. Stein is currently incarcerated while awaiting sentencing, after a jury returned a verdict in May 2013 convicting him of fourteen felonies for his role.
According to the SEC’s complaint, Perkins, acting as CEO in 2008, signed and certified pursuant to the Sarbanes-Oxley Act of 2002 three quarterly reports Heart Tronics filed with the SEC that contained material misstatements about the company’s sales orders, potential customers, and internal accounting and disclosure controls. The SEC alleged, among other things, that Perkins knew of significant red flags indicating that Heart Tronics’ purported sales orders in 2007 and 2008 were fictional yet allowed the orders to be publicly disclosed without taking adequate steps to determine their validity. Neither admitting nor denying the SEC’s allegations, Perkins consented to a final judgment ordering him to pay a civil penalty of $42,500 and enjoining him from violating Sections 10(b) and 13(b)(5) of the Securities Exchange Act of 1934 and Rules 10b-5 and 13a-14 thereunder, or aiding and abetting violations of Exchange Act Section 13(b)2)(B). He also consented to court-imposed, three-year officer and director and penny stock bars. The court entered a final judgment against Perkins on September 4, 2014.
The SEC’s complaint also alleged that Nevdahl, who, at the time, was a registered representative of an SEC-registered broker-dealer, served as the trustee for a number of nominee accounts and blind trusts that Mitchell Stein and his wife used to secretly and unlawfully sell millions of dollars’ worth of Heart Tronics stock. According to the complaint, the trusts were designed to create the façade that the shares were under the control of Nevdahl as an independent trustee, but Nevdahl met the Steins’ regular demands for cash by continually selling Heart Tronics stock on the public market and in transactions negotiated by Stein. Without either admitting or denying the SEC’s allegations, Nevdahl consented to pay a penalty of $13,000 to resolve the SEC’s action. Nevdahl also consented to the institution and settlement of administrative cease-and-desist proceedings in which the SEC issued an order finding that he willfully violated Section 17(a)(3) of the Securities Act, ordering him to cease and desist from aiding or abetting or committing any future violations, and suspending him from participation in any penny stock offering for a period of six months. The order also suspended Nevdahl for six months from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical organization, and from serving or acting as an employee, officer, director, member of an advisory board, investment adviser or depositor of, or principal underwriter for, a registered investment company. The court entered a final judgment against Nevdahl on August 29, 2014, and the Commission issued its Order on September 5, 2014.
For further information, see Litigation Release No. 22204 (Dec. 20, 2011)
|WEDNESDAY, SEPTEMBER 10, 2014|
Includes common, closed end funds, ETFs, ETNs and REITS with prior day close of $2 a share or higher, with volume of at least 2,000.
x - stock is trading ex-dividend
Source: WSJ Market Data Group