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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 15084 / September 27, 1996
ACCOUNTING AND AUDITING ENFORCEMENT
RELEASE NO. 830 / September 27, 1996
SECURITIES AND EXCHANGE COMMISSION v. GORDON L. HALL AND R.L.
PORTER , Civil Action No. 96-2223 PHX (ROS) (D. Ariz., filed
September 26, 1996).
The Securities and Exchange Commission ("Commission")
announced the filing on September 26, 1996 of a complaint in
federal district court in Phoenix, Arizona naming Gordon L. Hall
and R.L. Porter, formerly officers and directors of Eagle
Holdings, Inc., for violations of the federal securities laws in
connection with a fraudulent scheme to inflate the value of
assets reported by Eagle in periodic filings from September 1992
through April 1994. The Commission's complaint alleges that Hall
and Porter violated the fraud, reporting, books and records and
internal control provisions of the federal securities laws. In
addition, the complaint alleges that Hall sold unregistered Eagle
stock, and traded Eagle securities while in possession of
material nonpublic information that Eagle's financial statements
were grossly overstated.
Specifically, the Commission's complaint alleges that Hall
and Porter caused Eagle to acquire and record on its financial
statements three purported assets which they knew or should have
known were materially overvalued. The first, a note acquired
from a company controlled by Hall, was secured by real estate
worth approximately $367,000 but valued on Eagle's financial
statements at $2.5 million. The second, an undivided one-half
interest in undeveloped land in Oklahoma which was acquired from
a company controlled by Porter, was worth approximately $200,000
but valued on Eagle's financial statements at $1.3 million. The
third, a debenture obtained pursuant to an agreement to lease
restricted stock to offshore insurance companies, was improperly
listed as a $10.5 million asset.
The complaint alleges that, while Eagle's false financial
statements were being publicly disseminated, Hall generated over
$2 million in proceeds from sales of Eagle stock, most of which
was unregistered. The complaint also alleges that, as part of
the scheme, Hall and Porter made false and misleading statements
to Eagle's independent auditor concerning the transactions in
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission announced the filing on September 26, 1996 of a
The Commission's complaint alleges that Hall and Porter violated the fraud, reporting, books
In addition, the complaint alleges that Hall sold unregistered Eagle stock, and traded Eagle
the Commission's complaint alleges that Hall and Porter caused Eagle to acquire and record on
The third, a debenture obtained pursuant to an agreement to lease restricted stock to
The complaint alleges that, while Eagle's false financial statements were being publicly
The complaint also alleges that, as part of the scheme, Hall and Porter made false and
The Commission's complaint seeks an injunction prohibiting further violations of Sections 5,
In addition, the complaint names Hall's wife, Stacy Hall, as a relief defendant and seeks
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