 |
 |
|
|
|
|
|
|
|
| | | |
|
|
|
|
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
1
.
SEC LITIGATION RELEASE
|
EXTRACTED KEY WORDS
COMPLAINT DISTRICT ALLEGES MEMBERSHIPS SECURITIES INVESTORS DYNAMICS CORPORATION UNITED STATES DISTRICT EXCHANGE COMMISSION STATES DISTRICT COURT UTAH TEMPORARY RESTRAINING ORDER ACT PURCHASE SALE MARKETING PYRAMID SCHEME INDEPENDENT CONSULTANT MEMBERSHIPS MISREPRESENTATIONS OMITTING STATE MATERIAL FACTS POTENTIAL PROFIT OMISSION DISCLOSE RISK MARKET SATURATION INHERENT SIGNING EXCESS JUDGE DAVID SAM |
==========================================START OF PAGE 1======
Litigation Release No. 14844 / March 13, 1996
S.E.C. v. Investors Dynamics Corporation and Steven L. Down
(USDC, UT, Docket No. 2:96CV 0220S)
The Securities and Exchange Commission announced the filing
of a Complaint in the United States District Court for the
District of Utah, Central Division, on March 12, 1996, seeking a
temporary restraining order, preliminary and permanent injunctive
relief and the acceleration of discovery, including the
production of books and records, against Investors Dynamics
Corporation ("IDC") and Steven L. Down ("Down"). The
Commission's Complaint also seeks a freeze of assets, an
accounting and disgorgement from IDC.
The Commission's Complaint alleges violations of Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933, and Section
10(b) of the Securities Exchange Act of 1934 and Rule 10b-5
promulgated thereunder, in connection with the offer, purchase
and sale of unregistered securities of IDC.
The Commission alleges that, from at least October 1994 to
the present, IDC and Down have been operating a multilevel
marketing pyramid scheme by offering and selling independent
consultant memberships in IDC in an unregistered distribution.
The Complaint also alleges that IDC and Down are making
fraudulent misrepresentations, and omitting to state material
facts, to potential and current investors regarding the purchase
of a membership in IDC. The alleged misrepresentations involve
the potential profit to be expected from an IDC membership and
the omission to disclose the risk of market saturation inherent
in IDC's pyramid scheme.
The Complaint alleges that IDC is currently signing up
approximately 100 new members each day and has raised in excess
of $1 million to date from sales of independent consultant
memberships.
Judge David Sam of the United States District Court for the
District of Utah has scheduled a hearing for March 15, 1996, on
the Commission's application for a temporary restraining order.
SNIPPETS:
|
|
|
| | | |
|
|
