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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
VECCHIONI BEAR SALES COURT COMMISSION INVESTORS SOLD COMPLAINT MARKETING FINANCIAL CONDITION PREJUDGMENT DISGORGEMENT PAY SECURITIES LAWS PROVISIONS ANTIFRAUD VIOLATING DISTRICT INJUNCTION AFFILIATED RESOURCES BASIC ENERGY EXCHANGE COMMISSION GAS RESERVES ESTIMATED OIL INVESTOR FUNDS BEAR PROGRAMS RISKS MATERIAL FACTS OMISSIONS |
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 14797 / January 26, 1996
SEC v. Basic Energy & Affiliated Resources, Inc., et al., Case
No. 94 CV 74434 (E.D. MI)
The Securities and Exchange Commission announced that an
Order of Permanent Injunction by Consent was entered against
Robert Vecchioni on December 22, 1995 in federal District
Court, Eastern District of Michigan. The Injunction
prohibits Vecchioni from violating the antifraud and
registration provisions of the federal securities laws.
Additionally, the Court ordered Vecchioni to pay
disgorgement in the amount of $7,947,247 and prejudgment
interest. Vecchioni is turning over cash, securities and
other assets valued at approximately $2.9 million and, based
upon his financial condition, the Court waived the payment
of the remainder of disgorgement and prejudgment interest.
The Court did not impose a civil penalty on Vecchioni based
on his demonstrated inability to pay.
Previously, the Commission had filed a complaint against
Vecchioni and others in which it alleged the defendants
fraudulently sold unregistered securities offered by Basic
Energy & Affiliated Resources, Inc. (BEAR). The complaint
alleged that Vecchioni headed the sales force for BEAR
securities, which were sold through a multi-level marketing
structure consisting of at least 150 marketers. BEAR
securities were sold to at least 1000 investors and such
sales raised at least $27 million. Vecchioni received
$7,947,247 in commissions for his participation in the sale
of BEAR securities. The complaint also alleged that
Vecchioni willfully violated the antifraud provisions of the
securities laws in the sale of BEAR securities in that he
made misrepresentations and omissions of material facts
concerning the risks associated with investing in BEAR
programs, the financial condition of BEAR, the use of
investor funds, and the estimated oil and gas reserves of
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