UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16919 / February 28, 2001
Civil Action No. H-01-9711 (NFA) (S.D. Texas, Houston Division)
On February 28, 2001, the Securities and Exchange Commission ("SEC")
filed civil fraud charges in federal district court in Houston, Texas,
against PinkMonkey.com, Inc. and Patrick R. Greene (collectively, the
"Defendants") in connection with a fraudulent press release that
caused an unwarranted 950% increase in the price of PinkMonkey's
common stock. The Defendants have consented to entry of permanent
anti-fraud injunctions, and Greene has agreed to a $20,000 civil
penalty.
* PinkMonkey.com, Inc., a Nevada corporation based in Houston,
Texas, is an on-line publisher that offers educational services,
including literature study notes, via the Internet. Currently
PinkMonkey's common stock is listed in the pink sheets. Until
March 1999, its common stock was quoted on the National
Association of Securities Dealers OTC Bulletin Board.
* Patrick R. Greene, 58, of Liberty, Texas, founded PinkMonkey and
remains its controlling shareholder and a director. He was its
president and chairman, until he resigned as chairman in August
1999 and as president in September 1999.
The SEC's complaint charges the Defendants with securities fraud in
connection with a November 30, 1998 press release in violation of
Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
thereunder. Greene approved the November 30 release, which falsely
announced the "launch" of a new website service that could "quickly
reach a significant market share in the $400+ million" study aids
market. The website was neither newly launched nor likely to realize
any significant market share, however. Instead, by November 30, 1998,
PinkMonkey had operated the website for 14 months and generated only
$30 in sales. Furthermore, although the November 30 release proclaimed
expectations of "quickly reaching" a "significant" share of a $400+
million market, PinkMonkey and Greene instead anticipated needing one
year to capture five per cent of a market totaling only $160 million.
Before the release, PinkMonkey's stock was thinly traded, at a price
of $1.50 or less. Within an hour after the release, PinkMonkey shares
traded for as much as $4.375 per share, on heavy volume. The price
continued to soar, eventually reaching a peak on December 2 at $17 per
share, a 950% increase from just two days earlier, before closing at
$13.50 per share. At its zenith, PinkMonkey's market capitalization
exceeded $200 million, although the company had only four full time
employees and nominal sales. After PinkMonkey and Greene issued a
clarifying press release on December 3, 1998, the company's stock
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Civil Action No. H-01-9711 (S.D.
Texas, Houston Division)
The Defendants have consented to entry of permanent anti-fraud injunctions, and Greene has
Currently PinkMonkey's common stock is listed in the pink sheets.
* Patrick R. Greene, 58, of Liberty, Texas, founded PinkMonkey and remains its controlling
He was its president and chairman, until he resigned as chairman in August 1999 and as
The SEC's complaint charges the Defendants with securities fraud in connection with a
Greene approved the November 30 release, which falsely announced the "launch" of a new
Instead, by November 30, 1998, PinkMonkey had operated the website for 14 months and
Furthermore, although the November 30 release proclaimed expectations of "quickly reaching" a
Before the release, PinkMonkey's stock was thinly traded, at a price of $1.50 or less.
The price continued to soar, eventually reaching a peak on December 2 at $17 per share, a
At its zenith, PinkMonkey's market capitalization exceeded $200 million, although the company
This action is brought as part of the SEC's Fifth Internet Fraud Sweep.
For a description of other SEC enforcement actions involved in this Internet Fraud Sweep,
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