UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17603 / July 9, 2002
SAVE THE WORLD AIR, INC. PERMANENTLY ENJOINED FROM FRAUDULENT
ACTIVITIES
Securities and Exchange Commission v. Save the World Air, Inc. et al.,
01 CV 11586 (S.D.N.Y.)
The Securities and Exchange Commission announced today that on June
27, 2002, the Honorable George B. Daniels of the United States
District Court for the Southern District of New York permanently
enjoined defendant Save the World Air, Inc. ("STWA") from violating
the antifraud and other provisions of the federal securities laws.
STWA, without admitting or denying the allegations in the Commission's
Complaint, consented to the entry of the final judgment against it.
STWA is a Nevada corporation headquartered in Australia with its
principal offices in California, whose business involves the
manufacture, licensing, and distribution of a device called the "Zero
Emission Fuel Saver" ("ZEFS") device.
In its Complaint, filed December 19, 2001, the Commission alleged that
from at least February 1999 through at least April 2001, STWA and its
former president and CEO, Jeffrey Muller, carried out a fraudulent
promotional campaign using press releases, Internet postings, an
elaborate Internet website, and televised media events to disseminate
false and materially misleading information about STWA's product and
commercial prospects. STWA's and Muller's actions led to the
artificial inflation of the price and trading volume of STWA stock,
causing its market capitalization to be as much as $218,728,062. The
promotional information distributed by STWA and Muller included (1)
announcements of significant licensing agreements and other important
business developments, and (2) announcements concerning public
automotive demonstrations that purportedly proved or would prove that
the ZEFS materially reduces emissions and improves fuel economy in
motor vehicles. In fact, the purported licensing agreements and other
purported business events simply did not exist, and the ZEFS
demonstrations did not prove that the ZEFS actually worked as
represented. At the same time he publicly promoted STWA, Muller
privately sold millions of shares of restricted STWA stock that, if
sold at then-prevailing market prices, would have provided him with
over $9 million in personal profits. He concealed these sales by
failing to disclose in Commission filings, as required, any changes in
his beneficial ownership in STWA. Finally, STWA and Muller made at
least nine SEC filings that contain false financials statements and
disclosures. For example, STWA reported $125,000 in revenue for the
sale of a license that in fact it never sold, thus causing its
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
The Securities and Exchange Commission announced today that on June 27, 2002, the Honorable
STWA, without admitting or denying the allegations in the Commission's Complaint, consented
STWA is a Nevada corporation headquartered in Australia with its principal offices in
In its Complaint, filed December 19, 2001, the Commission alleged that from at least February
STWA's and Muller's actions led to the artificial inflation of the price and trading volume
The promotional information distributed by STWA and Muller included announcements of
At the same time he publicly promoted STWA, Muller privately sold millions of shares of
He concealed these sales by failing to disclose in Commission filings, as required, any
For example, STWA reported $125,000 in revenue for the sale of a license that in fact it
Blackwelder also posted positive messages on Raging Bull, an Internet message board, without
The complaint charged STWA and Muller with violations of the antifraud and reporting
The complaint also alleged that Muller violated Section 16of the Exchange Act and Rules 16a-2
Under the terms of the settlement between the Commission and STWA, STWA consents to a
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