SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16695 / September 11, 2000
SECURITIES AND EXCHANGE COMMISSION v. KENNETH STEINER AND WOODBRIDGE
FAMILY MEDICAL ASSOCIATES, P.C., Civil Action No. 00-02145 (D.D.C.)
NEW JERSEY DOCTOR AND HIS MEDICAL PRACTICE PAY $1.3 MILLION TO SETTLE
SEC CHARGES OF SELLING UNREGISTERED SYSTEMS OF EXCELLENCE SECURITIES
The Securities and Exchange Commission today announced that on
September 8, 2000 the Honorable Gladys Kessler of the United States
District Court for the District of Columbia entered final judgments
against Kenneth Steiner ("Steiner"), a New Jersey physician, and his
medical practice, Woodbridge Family Medical Associates, P.C.
("Woodbridge"), requiring them to collectively pay over $1.3 million
in disgorgement, prejudgment interest and civil penalties.
The Commission's complaint, filed on September 7, 2000, alleges that
in two separate transactions in March and June 1996, Steiner acquired
-- for himself, his corporate medical practice and in the names of
family nominees -- a total of 689,655 shares of newly-issued Systems
of Excellence, Inc. ("SOE") stock in a private placement at a total
cost of $200,000. The shares that Steiner and Woodbridge acquired were
neither registered nor exempt from registration but were nevertheless
conveyed to them without the required restrictive legend as part of a
scheme orchestrated by Charles Huttoe, former president of SOE, to
manipulate the market for SOE securities. According to the complaint,
Steiner and Woodbridge soon resold nearly all of these newly-issued
and unregistered shares into the manipulated market, realizing net
profits of $924,789.
Simultaneously with the filing of the Complaint, Steiner and
Woodbridge, without admitting or denying the SEC's allegations,
settled the action by consenting to entry of the court's Order that
(i) permanently enjoins them from violating Sections 5(a) and (c) of
the Securities Act of 1933; (ii) requires Steiner to disgorge his
illegal profits of $602,648, plus prejudgment interest of $220,433;
(iii) requires Woodbridge and Steiner to jointly and severally
disgorge $322,141, plus prejudgment interest of $111,376; and (iv)
requires Steiner to pay a civil penalty of $50,000.
With the filing of this Complaint, and the subsequent payment by
Steiner and Woodbridge, the Commission will have collected
approximately $12 million in disgorgement, which will later be
distributed by the Court-appointed receiver to victims of the SOE
fraud.
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION v. KENNETH STEINER AND WOODBRIDGE FAMILY MEDICAL
NEW JERSEY DOCTOR AND HIS MEDICAL PRACTICE PAY $1.3 MILLION TO SETTLE SEC CHARGES OF SELLING
The Securities and Exchange Commission today announced that on September 8, 2000 the
The shares that Steiner and Woodbridge acquired were neither registered nor exempt from
According to the complaint, Steiner and Woodbridge soon resold nearly all of these
Simultaneously with the filing of the Complaint, Steiner and Woodbridge, without admitting or
and requires Steiner to pay a civil penalty of $50,000.
With the filing of this Complaint, and the subsequent payment by Steiner and Woodbridge, the
The Commission previously has made several announcements concerning these matters.
See Lit Rel. 16632a, Securities Exchange Act Rel. 42616, Lit Rel. 16343, Lit.
Securities Exchange Act Rel.
This enforcement action is part of the Commission's four-pronged approach to attacking
For information about the SEC's response to Microcap fraud, visit the SEC's Microcap Fraud
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