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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
RUTLEDGE SKUFCA COMMISSION SNELLING SECURITIES MANIPULATION INTERNET PLUS SOLUTIONS MARKET CAPITALIZATION MERGER PRICE EXCHANGE COMMISSION SCHEME INTERNET FRAUD INVESTORS SECURITIES ACT CHARGES CANADIAN STOCK PROMOTER COLORADO SHELL BROKER DISTRICT COURT COMMISSION ALLEGES BUSINESS NATIONWIDE SWEEP SOLE EMPLOYEE SHARES |
UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16681/ September 6, 2000 SEC CHARGES CANADIAN STOCK PROMOTER AND COLORADO "SHELL" BROKER IN STOCK MANIPULATION SCHEME Securities and Exchange Commission v. Donald Rutledge and Gregory Skufca (United States District Court (D. Colo.) 00-K-1751). The Securities and Exchange Commission announced today that it filed civil securities fraud charges against Donald Rutledge, a Canadian stock promoter, and Gregory Skufca, a Colorado "shell" broker. The Commission charged that Rutledge and Skufca illegally manipulated the stock of Snelling Travel, Inc. on the OTC Bulletin Board in December 1999. According to the Commission's Complaint, the manipulation took Snelling from a market capitalization of $105,000 in mid-December to a theoretical market capitalization of over $93 million less than two weeks later. The Commission alleged that Skufca reaped at least $500,000 in illicit profits from the scheme. This action is part of the fourth nationwide Internet fraud sweep conducted by the Commission since October 1998. The Complaint, filed in the U.S. District Court for the District of Colorado, alleges as follows During the relevant period, Plus Solutions, Inc., was a privately held client of Rutledge. Plus Solutions had no business operations, but purportedly aspired to enter the electronic commerce business. Under agreements with investors in Plus Solutions, Rutledge was obligated to engineer a merger with an unidentified public shell that would enable the Plus Solutions investors to receive stock that traded publicly at a price above $4.50 per share. Skufca controlled the stock of Snelling, which was located in the home of its sole employee and had no revenues from operations. Skufca and Rutledge agreed to merge Snelling with Plus Solutions. The merger was designed to take Plus Solutions public without a registered offering. On December 15, 1999, Rutledge and Skufca caused a press release to be issued which announced the merger, whereby these two companies would combine their non-existent operations. The press release also announced an immediate 29 1 split of Snelling stock, which would increase the float to 15.3 million shares. On the morning of December 16, the sole market-maker in Snelling (whom Skufca had recruited) quoted the stock at $0.20 bid and no offer. Rutledge and Skufca then entered matched buy and sell orders through different broker-dealers which rocketed the stock to a price of $5.00SNIPPETS: |
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