UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16372 / November 29, 1999
SECURITIES AND EXCHANGE COMMISSION v. CAVANAGH, et al.,98 Civ. 1818
(DLC) (S.D.N.Y)
On November 19, 1999, the Honorable Denise L. Cote of the United
States District Court for the Southern District of New York issued a
default judgment against defendants Cambiarios, S.L., Customer Safety,
S.L., Construcciones Solariegas, S.L. and Vicente Tur Ortola and
relief defendants SHBL Associates Europe Ltd., Inversora Dactilar,
S.L. and Baja Ltd. The amended complaint alleges that defendants
engaged in a fraudulent and manipulative scheme involving the
unregistered offer and sale of securities of Electro-Optical Systems
Corp. ("EOSC") at artificially inflated prices and that relief
defendants received from defendants, without consideration, EOSC
shares and proceeds from the sale of those shares. This default
judgment permanently enjoins defendants from violating anti-fraud and
registration provisions of the securities laws and orders them to
disgorge, jointly and severally, the sum of $9,062,397.42 in proceeds
of EOSC stock illegally sold to the public and $946,470.13 in
prejudgment interest thereon. See Sections 5 and 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities Act of 1934
and Rule 10b-5 thereunder.
The November 19, 1999 default judgment also orders the defaulting
relief defendants to disgorge cash and/or securities and pay
prejudgment interest as follows SHBL to disgorge 18,000 EOSC shares
and $328,649.80, plus $34, 323.94 in prejudgment interest; Inversora
to disgorge 857,081 EOSC shares; and Baja to disgorge $6,922,175.02,
plus $722,946.89 prejudgment interest, which sums shall be reduced to
the extent of aggregate disgorgement payments in excess of
$2,363,661.62 received by the Court from defendants Cambiarios,
Customer Safety, Construcciones and Ortola.
An earlier default judgment was issued on July 23, 1999 against
defendant Agira Trading and relief defendants Erin Nicolois, whose
maiden name is Erin Martin, Arthur De Acutis, Joseph Falco, Kenneth C.
Kehoe, Ana P. Lopez and Metropolitan Trade Finance Ltd. That judgment
permanently enjoined defendant Agira from violating registration
provisions of the securites laws and ordered it to disgorge $579,690
in illegally obtained proceeds of EOSC stock, plus $59,350.13 in
prejudgment interest thereon, and ordered disgorgement from the
defaulting relief defendants, as follows Acutis to disgorge
$62,812.50, plus $2,965.16 in prejudgment interest; Falco to disgorge
$15,750, plus $1,741.77 in prejudgment interest; Lopez to disgorge
$131,012.40, plus $13,413.38 in prejudgment interest; Kehoe to
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. CAVANAGH, et al.,98 Civ.
On November 19, 1999, the Honorable Denise L. Cote of the United States District Court for
The amended complaint alleges that defendants engaged in a fraudulent and manipulative scheme
This default judgment permanently enjoins defendants from violating anti-fraud and
See Sections 5 and 17of the Securities Act of 1933 and Section 10of the Securities Act of
The November 19, 1999 default judgment also orders the defaulting relief defendants to
ourt from defendants Cambiarios, Customer Safety, Construcciones and Ortola.
An earlier default judgment was issued on July 23, 1999 against defendant Agira Trading and
That judgment permanently enjoined defendant Agira from violating registration provisions of
13,413.38 in prejudgment interest; Kehoe to disgorge $5,700, plus $583.59 in prejudgment interest;
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