SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
Litigation Release No. 17144 / September 20, 2001
SEC SUES FORMER TOP OFFICERS OF MOUNTAIN ENERGY FOR PUMP AND DUMP
SCHEME. TWO OTHER DEFENDANTS AGREE TO PAY DISGORGEMENT TOTALLING $1.35
MILLION FOR SELLING UNREGISTERED STOCK.
SEC v. Donald John Christensen, II, Jack E. Uselton, Marc R. Tow,
George W. Guttman, Joseph M. Blumenthal, and Mountain Energy, Inc.,
Civ. No. HO1-3203 (September 20, 2001)
The Securities and Exchange Commission today filed a civil injunctive
action in U.S. District Court in Houston, Texas, charging Mountain
Energy, a start-up energy company headquartered in Houston, and its
two former chief executive officers and an associated individual with
engaging in a "pump-and-dump" scheme in the company's securities. The
individual defendants accused by the Commission of securities fraud
are Mountain Energy's former CEO and chairman Donald John Christensen,
II; his successor Jack E. Uselton; and California attorney Marc R.
Tow, one of the company's founders. In addition, two New York-based
financial consultants, Joseph M. Blumenthal and George W. Guttman,
were charged with illegally selling unregistered Mountain Energy
securities. Both Blumenthal and Guttman have agreed to settle the
action, without admitting or denying the Commission's allegations, and
pay a total of $1.35 million disgorgement of illegal profits.
According to the Commission's complaint
* Mountain Energy was formed in May 1998 through the reverse merger
of the public shell corporation International Casino Cruises,
Inc., controlled by Christensen, and the private shell company
Mountain Resources, Inc., controlled by Uselton and Tow. Pursuant
to the terms of the merger agreement, Christensen transferred a
controlling stock interest in International Casino to entities
managed by Tow in exchange for the mineral rights in 30 properties
in West Virginia that Tow had acquired in tax sales. Uselton was
named the CEO of the new company.
* In April and May 1998, International Casino issued three press
releases describing its merger agreement with Mountain Energy. All
three press releases, which were drafted by Christensen and
Uselton, contained false and misleading statements about the terms
of the merger agreement and about the ownership, nature and value
of Mountain Energy's assets. The first two releases stated, among
other things, that Mountain Energy owned property that contained
$200 million of coal and gas resources; and the third release
valued these resources at $110 to $180 million. In fact, the
defendants had no reasonable basis for these statements. In
SNIPPETS:
SEC SUES FORMER TOP OFFICERS OF MOUNTAIN ENERGY FOR PUMP AND DUMP SCHEME.
TWO OTHER DEFENDANTS AGREE TO PAY DISGORGEMENT TOTALLING $1.35
The Securities and Exchange Commission today filed a civil injunctive action in U.S. District
The individual defendants accused by the Commission of securities fraud are Mountain Energy's
In addition, two New York-based financial consultants, Joseph M. Blumenthal and George W.
Pursuant to the terms of the merger agreement, Christensen transferred a controlling stock
All three press releases, which were drafted by Christensen and Uselton, contained false and
The first two releases stated, among other things, that Mountain Energy owned property that
This rise occurred despite massive sales of stock by Guttman, Blumenthal and his partner
* Contemporaneously with the negotiation of the merger and the publication of the press
Christensen, who in early 1998 caused approximately 3.9 million shares of International
The Commission alleges in its complaint that, through this conduct, Mountain Energy,
Securities Exchange Act of 1934 and Exchange Act Rule 10b-5, and that Mountain Energy,
In addition, the Commission seeks civil money penalties from Christensen, Uselton and Tow,
Simultaneously with the filing of the Commission's lawsuit, Blumenthal and Guttman agreed to
In addition, Blumenthal agreed to pay disgorgement of $350,000 and consented to the entry by
|
