SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17352 / February 5, 2002
SEC v. Wayne F. Gorsek, Lyndell Parks, P. Brenden Gebben and Troy
Justus, U.S. District Court for the Central District of Illinois, C.A.
No. 99 CV 3072 (JES)
Jury Finds P. Brenden Gebben Liable for Unlawful Stock Touting,
Judge Directs Verdict For the Commission against Gebben for Securities
Fraud
On Wednesday, January 30, 2002, after deliberating for two hours, a
jury in the federal district court for the Central District of
Illinois in Springfield, Illinois, found that defendant P. Brenden
Gebben ("Gebben") violated Section 17(b) of the Securities Act of 1933
("Securities Act"), the anti-touting provision of the Securities Act.
The previous day, on January 29, 2002, U.S. District Court Judge
Jeanne E. Scott directed a verdict in the Commission's favor on its
claim that Gebben violated Section 10(b) of the Securities Exchange
Act of 1934 ("Exchange Act").
Gebben was the "Lead Analyst" and "Assistant Director of Research and
Communications" of Strategic Investment Advisory ("SIA"), a company
based in Springfield, Illinois. The Commission's complaint alleged
that Gebben, along with co-defendants Wayne F. Gorsek, Lyndell Parks,
and Troy Justus, fraudulently promoted approximately 20 microcap
companies through SIA. The Complaint alleged that SIA deceived
investors into believing that it was an independent securities
research firm providing objective investment advice about
"undiscovered" companies. In fact, the SEC alleged, SIA was merely a
paid promotional firm that uncritically published glowingly optimistic
recommendations of the securities of its clients in exchange for cash
and securities.
In April 2001, Judge Scott granted the Commission's motion for summary
judgment against defendants Gorsek and Parks and found them liable for
violations of Section 10(b) of the Exchange Act and Rule 10b-5
thereunder, and Section 17(b) of the Securities Act for their conduct
at SIA. The Court will hold further proceedings on the Commission's
claims that Gorsek and Parks defrauded their brokerage customers in
violation of Section 17(a) of the Securities Act, and Section 10(b) of
the Exchange Act, and Rule 10b-5 thereunder, while they were
registered representatives and owners of Strategic Investments, Inc.,
a Springfield, Illinois-based broker-dealer.
The Court also previously entered a consent judgment against defendant
Justus that permanently restrained and enjoined him from violating
SNIPPETS:
SECURITIES AND EXCHANGE COMMISSION
Jury Finds P. Brenden Gebben Liable for Unlawful Stock Touting, Judge Directs Verdict For the
On Wednesday, January 30, 2002, after deliberating for two hours, a jury in the federal
Gebben was the "Lead Analyst" and "Assistant Director of Research and Communications" of
The Commission's complaint alleged that Gebben, along with co-defendants Wayne F. Gorsek,
The Complaint alleged that SIA deceived investors into believing that it was an independent
In April 2001, Judge Scott granted the Commission's motion for summary judgment against
The Court also previously entered a consent judgment against defendant Justus that
After the conclusion of the brokerage fraud claims against defendants Gorsek and Parks, the
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