SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17198 / October 19, 2001
SECURITIES AND EXCHANGE COMMISSION v. EARL A. ABBOTT, RICHARD L. STALVEY,
GLENN PURDUE, KENNETH C. NUNN AND THOMAS J. O'KEEFFE (United States District
Court for the Middle District of Florida, C.A. No. 6 01-CV-364-ORL-31-KRS)
The Commission announced today that on October 9, 2001, a judgment by
default was entered in United States District Court for the Middle
District of Florida against Robert E. Gerwin of Cincinnati, Ohio. The
Commission's complaint in the matter, filed on March 22, 2001, alleged
that Gerwin acted as a sales agent for Earl A. Abbott, a Titusville,
Florida businessman by selling $300,000 of non-existent prime bank
securities to investors. Gerwin, the complaint alleged, entered into a
joint venture agreement promising the investors a weekly return of 16%
over forty weeks, or 640%. Gerwin allegedly told the investors that
the profits would be earned by trading in "medium term bank
debentures" of the "top 25" western European Banks. The Commission
alleged there were no bank debentures and no trading and that, as a
result of Gerwin's actions, investors lost $245,000.
The Commission's complaint alleged that, in connection with this
scheme, Gerwin engaged in transactions, acts, practices and courses of
business which constituted violations of Section 17(a) of the
Securities Act of 1933 ("Securities Act"), Section 10(b) of the
Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5
thereunder, Section 5(a) and 5(c) of the Securities Act and Section
15(a) of the Exchange Act. The Commission sought, and the Court
entered, a Permanent Injunction prohibiting Gerwin from violating the
securities registration, antifraud and broker-dealer registration
provisions of the Securities Act and the Exchange Act. The Commission
did not allege that Gerwin received any sales commission or profits
and according the Commission did not seek disgorgement. However, the
Commission sought imposition of civil monetary penalties against
Gerwin pursuant to Section 20(d) of the Securities Act and Section
21(d)(3) of the Exchange Act. The Court entered an order requiring
Gerwin to pay a monetary penalty of $50,000.
In an earlier related action, the Commission filed a complaint in the
United States District Court for the District of Massachusetts against
Richard J. Briden, an Ashland, Massachusetts business consultant
alleging violations of the securities registration, antifraud and
broker-dealer registration provisions of the federal securities laws
in connection with the offer and sale of fraudulent prime bank
securities. That complaint alleged that Briden convinced seven
investors, three of whom were from Massachusetts, to invest in the
Abbott/Gerwin prime bank trading program. The Florida complaint
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION v. EARL A. ABBOTT, RICHARD L. STALVEY, GLENN PURDUE,
The Commission announced today that on October 9, 2001, a judgment by default was entered in
The Commission's complaint in the matter, filed on March 22, 2001, alleged that Gerwin acted
Gerwin, the complaint alleged, entered into a joint venture agreement promising the investors
Gerwin allegedly told the investors that the profits would be earned by trading in "medium
The Commission's complaint alleged that, in connection with this scheme, Gerwin engaged in
The Commission sought, and the Court entered, a Permanent Injunction prohibiting Gerwin from
The Commission did not allege that Gerwin received any sales commission or profits and
the Commission sought imposition of civil monetary penalties against Gerwin pursuant to
In an earlier related action, the Commission filed a complaint in the United States District
The Florida complaint alleges that Briden found the Abbott program through defendant Gerwin.
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