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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMMISSION INTERNATIONAL FINANCE INVESTORS SECURITIES GICS VIOLATIONS STIRES DEFENDANTS GUARANTORS FALSE REGISTRATION ADMINISTRATIVE PROCEEDINGS EXCHANGE COMMISSION DISTRICT ROBINSON SCHEME OFFERING SELLING INSURANCE ANTIFRAUD PROVISIONS FEDERAL SECURITIES LAWS INVESTMENT ADVISERS BALANCE SHEET ASSETS EXCESS SIDNEY LYNCH HOLLANDER DISGORGEMENT |
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 15090 / September 30, 1996
SECURITIES AND EXCHANGE COMMISSION v. M.T.L. INTERNATIONAL
FINANCE INC., ET AL., 96 Civ. 7412 (RWS) (S.D.N.Y.)
On September 30, 1996, the Commission filed a complaint in
the United States District Court for the Southern District of New
York seeking injunctive and other equitable relief against M.T.L.
International Finance Inc., Equity Action Inc., John K. Robinson,
Leon Howard and Harry Walker. The Commission's complaint alleges
that from December 1992, until at least April 1994, the
defendants engaged in a scheme to defraud investors by offering
and selling securities in the form of purported guaranteed
insurance contracts ("GICs"), which they falsely claimed were
issued and guaranteed by a consortium of European insurance and
reinsurance companies. The complaint alleges that the GICs did
not exist. The complaint also alleges that the defendants
promised prospective investors returns at an annualized rate of
almost 840% for investing in the GICs, and that the defendants
had no authority to act on behalf of the purported issuers and
guarantors of the GICs for any purpose whatsoever. At least five
investors lost approximately $712,000 as a result of the GIC
scheme. The complaint alleges that the defendant's conduct
violated the antifraud provisions of the federal securities laws.
In addition, the complaint alleges that M.T.L. International
Finance Inc. and Robinson violated Section 207 of the Investment
Advisers Act of 1940 by willfully filing a false registration
form with the Commission in an attempt to register M.T.L.
International Finance as an investment adviser. Specifically,
the complaint alleges that the false registration statement
included a balance sheet listing assets totalling in excess of
$62 million. According to the complaint, the balance sheet was
false and misleading in that M.T.L. International Finance did not
then have, nor had it ever had, assets in excess of $10,000.
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