U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 18366 / September 26, 2003
SECURITIES AND EXCHANGE COMMISSION v. DARYL G. DESJARDINS, ROBERT S.
ZABA, ALNOOR JIWAN, RONALD D. BROUILIETTE, JR. and BRIAN A. KOEHN, 1
03CV01992 (D.D.C. SEPTEMBER 25, 2003) (PLF);
SEC SUES FIVE INDIVIDUALS FOR ENGAGING IN FRAUDULENT SCHEME, INCLUDING
BRIBERY OF A TRANSFER AGENT, TO DISTRIBUTE SHARES OF PAY POP, INC.
SEC ALSO SUES ATTORNEY FOR INSIDER TRADING AND INDIVIDUAL FOR
UNREGISTERED DISTRIBUTION OF PAY POP STOCK
On September 25, 2003, the Securities and Exchange Commission filed a
civil injunctive action in the United States District Court for the
District of Columbia, alleging that defendants Daryl G. Desjardins,
Robert S. Zaba, Alnoor Jiwan, Ronald D. Brouillette and Brian A. Koehn
engaged in a fraudulent scheme to sell the stock of Pay Pop, Inc.
("Pay Pop"), a now defunct telecommunications company. The scheme
included creating purportedly "free trading" Pay Pop stock
(legend-free stock certificates that created the false impression that
the stock complied with U.S. registration requirements), issuing a
series of materially false and misleading public statements and
selling Pay Pop shares to unsuspecting investors.
The Commission's Complaint alleges that purportedly "free trading" Pay
Pop stock was secured through a series of bribes paid to Jiwan, who
was a senior manager of Pay Pop's transfer agent, CIBC Mellon Trust
Company ("CIBC Mellon"). In exchange for the bribes, the Complaint
alleges, CIBC Mellon issued Pay Pop stock certificates free of any
restrictive legends, without requiring proof that the Pay Pop shares
were subject to a registration statement filed with the Commission or
exempt from such registration. The Complaint alleges that by the end
of the fraudulent scheme, approximately 98 million Pay Pop shares were
illegally issued and distributed to the public.
The Commission's Complaint also alleges that defendants Desjardins and
Zaba made a series of material misrepresentations and omissions
regarding Pay Pop to create continued demand for Pay Pop stock. As
alleged in the Complaint, at Desjardins' and Zaba's direction, Pay Pop
issued a series of press releases that falsely reported multi-million
dollar investment bank financings that did not exist, the purchase and
sale of valuable Caribbean beach resort property that never occurred,
the growth in Pay Pop's client base and revenue in the face of
business decline, the signing of material contracts that never
existed, and the successful expansion into new business territories
that were either never pursued or recently abandoned. As further
SNIPPETS:
U.S. SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION v. DARYL G. DESJARDINS, ROBERT S. ZABA, ALNOOR JIWAN,
SEC SUES FIVE INDIVIDUALS FOR ENGAGING IN FRAUDULENT SCHEME, INCLUDING BRIBERY OF A TRANSFER
SEC ALSO SUES ATTORNEY FOR INSIDER TRADING AND INDIVIDUAL FOR UNREGISTERED DISTRIBUTION OF
The scheme included creating purportedly "free trading" Pay Pop stock, issuing a series of
The Commission's Complaint alleges that purportedly "free trading" Pay Pop stock was secured
In exchange for the bribes, the Complaint alleges, CIBC Mellon issued Pay Pop stock
The Commission's Complaint also alleges that defendants Desjardins and Zaba made a series of
As alleged in the Complaint, at Desjardins' and Zaba's direction, Pay Pop issued a series of
er never pursued or recently abandoned.
The Complaint alleges that Brouillette sold Pay Pop stock for the benefit of Desjardins and
According to the Complaint, Brouillette did this through, among other things, trading of Pay
After being terminated by his brokerage firm and being barred from acting as a registered
As a result of the scheme, the Complaint alleges that Zaba and Desjardins made over $3
The Complaint further alleges that Jiwan aided and abetted the defendants' violations of
The Complaint seeks, with respect to each defendant, permanent injunctions, accountings,
The Commission also filed two settled actions against Sean P. Nevett and Warren J. Soloski,
The settled action against Nevett alleges that he engaged in an unregistered public
Without admitting or denying the Commission's allegations, Nevett consented to the entry of a
2003) (PLF); Litigation Release No. 18367.
The Commission acknowledges the assistance in its investigation by the Federal Bureau of
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