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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE No. 15386 / June 12, 1997
SECURITIES AND EXCHANGE COMMISSION v. WYE RESOURCES, INC. AND
REHAN MALIK, Civil Action No. 96CV02223 (D.D.C., filed September
26, 1996).
The Securities and Exchange Commission today announced that
on May 28, 1997, the Honorable Paul L. Friedman of the United
States District Court for the District of Columbia entered a
Default Judgment as to Defendant Wye Resources, Inc. The Default
Judgment permanently enjoins Wye Resources from violating the
antifraud and registration provisions of the federal securities
laws.
Wye is a Canadian corporation headquartered in Toronto,
Ontario and claims to own interests in various gold and diamond
mining properties. However, as alleged in the Commission's
complaint, Wye has recorded no earnings from actual mining
operations. The complaint, filed on September 26, 1996 against
Wye and its former President, Rehan Malik, alleges that Wye and
Malik participated in a fraudulent promotional campaign targeted
towards U.S. investors and improperly distributed Wye stock to
those investors. See SEC v. Wye Resources, Inc. and Rehan Malik,
Lit. Release No. 15073 (September 26, 1996).
With respect to Wye, the complaint specifically alleges that
Wye issued press releases and placed messages over the Internet
through a New Orleans-based computer bulletin board service
("BBS") called the "Emerging Growth Stock" BBS. Certain of these
releases and messages were false and misleading in that, among
other things, they misrepresented the status of Wye's ongoing
attempts to exploit certain diamond mining properties in the
country of Congo (formerly Zaire). The complaint alleges that
Wye thereby violated Section 10(b) of the Securities Exchange Act
of 1934 and Rule 10b-5 thereunder.
The complaint also alleges that Wye violated Section 5 of
the Securities Act of 1933 by engaging in a scheme to distribute
approximately 5.3 million shares of Wye stock that were not
properly issued under Canadian law nor properly registered with
the Commission. According to the complaint, approximately 2.5
million of these improperly issued shares were distributed to
U.S. investors. As of February 1, 1994, approximately 4 million
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION v. WYE RESOURCES,
AND REHAN MALIK, Civil Action No. 96CV02223 (D.D.C., filed September
The Securities and Exchange Commission today announced that on May 28, 1997, the Honorable
The Default Judgment permanently enjoins Wye Resources from violating the antifraud and
Wye is a Canadian corporation headquartered in Toronto, Ontario and claims to own interests
However, as alleged in the Commission's complaint, Wye has recorded no earnings from actual
The complaint, filed on September 26, 1996 against Wye and its former President, Rehan Malik,
See SEC v. Wye Resources, Inc. and Rehan Malik, Lit.
the complaint specifically alleges that Wye issued press releases and placed messages over
Certain of these releases and messages were false and misleading in that, among other things,
The complaint also alleges that Wye violated Section 5 of the Securities Act of 1933 by
According to the complaint, approximately 2.5 million of these improperly issued shares were
As of February 1, 1994, approximately 4 million shares, or 28.9 percent of the Wye stock then
On September 26, 1996, the Commission instituted public administrative proceedings against a
See In the Matter of Broad Capital Associates, Inc. and Murray Aaron Huberfeld,
On December 26, 1996, Malik consented, without admitting or denying the allegations of the
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