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SEC v HEARTSOFT, INC., BENJAMIN SHELL and JIMMY BUTLER Click to find out why . . .



Keywords & Phrases
CaseNo: LR-16685, CourtCode: DIS, CourtName: FILED SUIT IN THE UNITED STATES DISTRICT COURT FOR THE NORTHERN, Defendant: Heartsoft, Inc., Benjamin Shell and Jimmy Butler, Plaintiff: SEC, State: OK Oklahoma, UniqueCaseRef: SEC>LR-16685, Internet, Exchange, Heartsoft, Shell, Butler, Securities, District, Complaint, Exchange Act, Agreements, Market, United States, Exchange Commission, Complaint Alleges, Misleading, School Districts, Internet Fraud, Stock, Violating, Thereunder, Alliances, Licensing Agreement, Child Safe, Internet Web Browser, Sweep, Purchase, Reports, Amounts, Profiting, Enjoins , ContentID: 120241427

Case Documents
1 2000-09-06 SEC LITIGATION RELEASE
[ see first page and extracted highlights below  ] ItemID: 104520
2 pages
HTML
Total Documents: 1 document , 2 pages
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1 . SEC LITIGATION RELEASE

EXTRACTED KEY WORDS
EXCHANGE
HEARTSOFT
SHELL
BUTLER
SECURITIES
DISTRICT
COMPLAINT
EXCHANGE ACT
AGREEMENTS
MARKET
UNITED STATES
EXCHANGE COMMISSION
COMPLAINT ALLEGES
MISLEADING
SCHOOL DISTRICTS
INTERNET FRAUD
STOCK
VIOLATING
THEREUNDER
ALLIANCES
LICENSING AGREEMENT
CHILD SAFE
INTERNET WEB BROWSER
SWEEP
PURCHASE
REPORTS
AMOUNTS
PROFITING
ENJOINS
   UNITED STATES SECURITIES AND EXCHANGE COMMISSION

   LITIGATION RELEASE NO. 16685/September 6, 2000

   UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. HEARTSOFT, INC.,
   BENJAMIN SHELL AND JIMMY BUTLER, Civil Action No. 00-CV-0766-B (M),
   USDC (ND OK)

   The Securities and Exchange Commission ("SEC") announced today that it
   filed suit in the United States District Court for the Northern
   District of Oklahoma against a publicly traded educational software
   firm and its only two officers and directors. The SEC's Complaint
   alleges that in early 1999 Heartsoft, Inc., Benjamin Shell, and Jimmy
   Butler perpetrated an Internet "pump and dump" scheme in which the
   defendants issued a series of fraudulent press releases that were
   simultaneously posted on Heartsoft's website. The releases included a
   myriad of false and misleading statements concerning the purported
   "adoption" and "endorsement" of Heartsoft's Thinkology software by two
   large school districts, foreign distribution agreements for the
   software, "strategic business ventures and alliances" with various
   Internet companies to market the software, and a licensing agreement
   to develop a "child safe" Internet web browser. This action is part of
   the fourth nationwide Internet fraud sweep conducted by the SEC since
   October 1998.

   The Complaint alleges that only certain schools within the two school
   districts had purchased copies of Heartsoft's educational software and
   there were no agreements to distribute Thinkology to foreign
   countries. Moreover, the purported marketing alliances and business
   ventures were nothing more than Heartsoft's purchase of advertisement
   space in catalogs. Finally, Heartsoft never entered into a licensing
   agreement to develop a "child safe" Internet web browser.

   The Complaint further alleges that the misleading press releases were,
   in fact, the only public information available to investors, because
   the company had not filed any of its required quarterly or annual
   reports with the SEC from May 1, 1997 until November 1999. As a result
   of Heartsoft's misleading promotional campaign, Heartsoft's stock
   price increased over 1500%. Shell and Butler "dumped" substantial
   amounts of their Heartsoft stock into the market, thereby profiting
   from their illegal conduct.

   Simultaneous with the filing of the Complaint, Heartsoft, Shell and
   Butler consented, without admitting or denying the allegations of the
   Complaint, to the entry of an order of permanent injunction which (1)
   enjoins Heartsoft from violating Sections 10(b) and 13(a) of the
   Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5,
   13a-1 and 13a-13 thereunder; and (2) enjoins Shell and Butler from
SNIPPETS:
  • UNITED STATES SECURITIES AND EXCHANGE COMMISSION
  • UNITED STATES SECURITIES AND EXCHANGE COMMISSION v. HEARTSOFT, INC., BENJAMIN SHELL AND JIMMY
  • The Securities and Exchange Commission announced today that it filed suit in the United
  • The SEC's Complaint alleges that in early 1999 Heartsoft, Inc., Benjamin Shell, and Jimmy
  • The releases included a myriad of false and misleading statements concerning the purported
  • This action is part of the fourth nationwide Internet fraud sweep conducted by the SEC since
  • the purported marketing alliances and business ventures were nothing more than Heartsoft's
  • The Complaint further alleges that the misleading press releases were, in fact, the only
  • Shell and Butler "dumped" substantial amounts of their Heartsoft stock into the market,
  • Simultaneous with the filing of the Complaint, Heartsoft, Shell and Butler consented, without from aiding and abetting Heartsoft's violations of Section 13of the Exchange Act and Rules 13a-1
  • For a description of other SEC enforcement actions involved in this Internet Market
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