SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16071 / February 25, 1999
Securities and Exchange Commission v. Commercial Express, et.al
Civil Action No. 98-M-2014 (USDC CO)
On December 31, 1998, the SEC obtained judgments and
substantial penalties against the perpetrators of a telemarketing
Ponzi scheme that raised over $15 million from investors
nationwide. Chief Judge Richard P. Matsch of the United States
District Court for the District of Colorado issued Final
Judgments of Permanent Injunction ("Final Judgments") against
Defendants Joel A. Fein ("Fein"), Timothy M. Hazzard ("Hazzard"),
Mark D. McClafferty ("McClafferty") and Grace Na ("Na"). The
Final Judgments enjoin Fein, Hazzard and McClafferty from
violations of Section 17(a) of the Securities Act of 1933
("Securities Act") and Sections 10(b) and 15(a) of the Securities
Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder.
The Final Judgment as to Na enjoins her from violations of
Section 17(a) of the Securities Act and Section 10(b) of the
Exchange Act and Rule 10b-5 thereunder. In addition, the Final
Judgments order: (1) Fein to disgorge $1,074,945 plus prejudgment
interest and pay a $500,000 penalty; (2) Hazzard to disgorge
$1,143,220 plus prejudgment interest and pay a $500,000 penalty;
(3) McClafferty to disgorge $2,644,198 plus prejudgment interest
and pay a $750,000 penalty; and (4) Na to disgorge $396,909 plus
prejudgment interest and pay a $100,000 penalty. Also named in
the complaint as defendants were Commercial Express, LLC
("Commercial Express") and Progressive Financial, Inc.
("Progressive Financial"), both operating in Santa Monica,
California, as well as six other entities and individuals. The
action against these defendants is pending.
Commercial Express and Progressive Financial, headed by
Fein, Hazzard, McClafferty and Na, raised funds from investors
since approximately September 1997 with the avowed purpose of
purchasing air time on television stations to run infomercials
for consumer goods. They raised at least $15 million from 500
investors nationwide through sales of media units and equity
positions offering quarterly returns ranging from 8% to 26%.
Investors were solicited through a "boiler room" operation at the
offices of Progressive Financial and Commercial Express, as well
as by independent sales offices ("ISOs") throughout the United
States.
The Commission alleged that the defendants defrauded
SNIPPETS:
Securities and Exchange Commission v. Commercial Express, et.al Civil Action No. 98-M-2014
On December 31, 1998, the SEC obtained judgments and substantial penalties against the
Chief Judge Richard P. Matsch of the United States District Court for the District of
The Final Judgments enjoin Fein, Hazzard and McClafferty from violations of Section 17of the
The Final Judgment as to Na enjoins her from violations of Section 17of the Securities Act
In addition, the Final Judgments order: Fein to disgorge $1,074,945 plus prejudgment interest
Also named in the complaint as defendants were Commercial Express, LLC and Progressive
Commercial Express and Progressive Financial, headed by Fein, Hazzard, McClafferty and Na,
They raised at least $15 million from 500 investors nationwide through sales of media units
Investors were solicited through a "boiler room" operation at the offices of Progressive
The Commission alleged that the defendants defrauded investors by conducting a Ponzi scheme,
The Commission further alleged that the defendants failed to disclose the excessive
d no business operations to generate revenue for future distributions; and misrepresented to
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