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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
HUTTOE SECURITIES ALLEGES COMMISSION COMPLAINT ACT EXCHANGE SHARES DISTRICT DEFENDANTS VIOLATING SOE STOCK WORD CORPORATION TRADING PURVIS MELCHER TERRY MARKET INFLATE SCHEME REGISTRATION STATEMENTS MATERIALLY FALSE THEREUNDER PERKINS BROOKS SGA ALPHA DUNBAR PERIODIC REPORTS |
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15153 / November 7, 1996
SECURITIES AND EXCHANGE COMMISSION v. CHARLES O. HUTTOE, ET AL.,
Civil Action No. 96-CV-02543 (GK)(D.D.C.)
The Securities and Exchange Commission ("Commission")
announced the filing today of a Complaint and Applications for a
Temporary Restraining Order, Preliminary Injunction and other
emergency relief against Charles O. Huttoe ("Huttoe"), Huttoe &
Associates, Inc., Word Corporation, National Trading Services,
Inc. ("NTSI"), Karen Purvis, also known as Karen Purvis Huttoe
("Purvis"), Tammy Jo Perkins ("Perkins"), Josephine Brooks
("Brooks"), SGA Goldstar Research Inc. ("SGA"), Theodore R.
Melcher, Jr. ("Melcher"), Shannon B. Terry ("Terry"), Systems of
Excellence, Inc. ("SOE"), Alpha Securities Ltd. ("Alpha"), and
Dunbar Holdings Ltd. ("Dunbar") in the United States District
Court for the District of Columbia. The Complaint alleges a
massive and ongoing market manipulation orchestrated by Huttoe,
Chairman of the Board and Chief Executive Officer of SOE, a
manufacturer and distributor of video teleconferencing equipment
with offices in McLean, Virginia and Coral Gables, Florida. The
Commission alleges that Huttoe secretly distributed millions of
SOE shares to his family members and corporations, manipulated
the market by issuing false favorable information concerning SOE
and its business, and then sold his shares into the inflated
market.
In particular, according to the Commission, as the first
part of that scheme Huttoe executed an unregistered distribution
of tens of millions of shares of SOE stock by causing a series of
false purported Form S-8 registration statements to be submitted
to SOE's transfer agent begining in March, 1995. Huttoe secretly
issued millions of those unregistered but unrestricted and free
trading SOE shares to various Huttoe family members and entities
that served as Huttoe's nominees, including defendants Word
Corporation, NTSI, Purvis (his wife), Brooks (his mother) and
Perkins (his niece). According to the Commission, as the second
step in the scheme, Huttoe artificially inflated the price of SOE
shares by issuing a series of materially false and misleading
press releases that, among other things, announced nonexistent
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