UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16683/ September 6, 2000
., Civ. No. CIV 00-1699-PHX VAM (D. Ariz.)
Today, the Securities and Exchange Commission sued George E. Mahfouz,
Jr. and Thor Equity Group, LLC ("Thor Equity") both of Scottsdale,
Arizona, charging that, through use of the Internet, they manipulated
the stock of CancerOption.com, Inc. ("CancerOption"). CancerOption, a
microcap company headquartered in Scottsdale, operates a website
focused on cancer-related products and information. The Commission
alleges that Mahfouz and Thor Equity, as CancerOption's investor
relations company, made false financial and stock price projections
and drafted false press releases to inflate the price of CancerOption
stock. The Commission contends that Mahfouz then sold large amounts of
his CancerOption stock at the artificially inflated prices. This
action is part of the fourth nationwide Internet fraud sweep conducted
by the Commission since October 1998.
In the Complaint, the Commission charges that Thor Equity and Mahfouz,
arranged for two analysts to draft research reports regarding
CancerOption. The reports, recommending the purchase of CancerOption's
stock, contained false revenue and stock price projections for the
company based on information provided by Thor Equity and Mahfouz. The
Commission also alleges that from August 1999 through January 2000,
Thor Equity and Mahfouz placed the reports on CancerOption's website
and arranged for the false financial information to be disseminated on
the Internet. Moreover Thor Equity and Mahfouz drafted and issued a
CancerOption press release which falsely characterized one of the
analysts as the "first independent analyst" to cover CancerOption. The
analyst was not independent because Thor Equity had agreed to pay the
analyst 5,000 shares of CancerOption stock for the report. The
Commission alleges that the false financial projections which appeared
on the Internet fueled a dramatic rise in both the price and the
trading volume of CancerOption's common stock. Throughout the time the
false financial information appeared on the Internet, Mahfouz sold
over 350,000 shares of CancerOption stock for profits of more than
$180,000.
Thor Equity and Mahfouz have agreed, without admitting or denying the
allegations in the Commission's complaint, to an Order enjoining them
from violating Section 10(b) of the Exchange Act and Rule 10b-5
thereunder. Mahfouz has agreed to pay disgorgement of $180,038.51,
representing the amount of ill-gotten gain from his trading in
CancerOption stock, and a civil money penalty of $50,000.00. In the
settlement, no civil penalty will be imposed against Thor Equity based
on its demonstrated inability to pay.
SNIPPETS:
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Today, the Securities and Exchange Commission sued George E. Mahfouz, Jr.
and Thor Equity Group, LLC both of Scottsdale, Arizona, charging that, through use of the
CancerOption, a microcap company headquartered in Scottsdale, operates a website focused on
The Commission alleges that Mahfouz and Thor Equity, as CancerOption's investor relations
The Commission contends that Mahfouz then sold large amounts of his CancerOption stock at the
This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission
The reports, recommending the purchase of CancerOption's stock, contained false revenue and
The Commission also alleges that from August 1999 through January 2000, Thor Equity and
Moreover Thor Equity and Mahfouz drafted and issued a CancerOption press release which
The analyst was not independent because Thor Equity had agreed to pay the
The Commission alleges that the false financial projections which appeared on the Internet
Throughout the time the false financial information appeared on the Internet, Mahfouz sold
Thor Equity and Mahfouz have agreed, without admitting or denying the allegations in the
Mahfouz has agreed to pay disgorgement of $180,038.51, representing the amount of ill-gotten
In the settlement, no civil penalty will be imposed against Thor Equity based on its
For a description of other SEC enforcement actions involved in this Internet Market
|