U.S. Securities and Exchange Commission

Litigation Release No. 18354 / September 22, 2003

Case No. 03-61747-CIV-MARTINEZ (S.D.Fla., filed September 16, 2003)

SEC Charges Three Former Brokers In Offering Fraud

   On September 16, 2003, the Securities and Exchange Commission
   (Commission) filed a complaint in the United States District Court,
   Southern District of Florida, alleging securities fraud against James
   Mulhearn, the CEO of Safetynet Industries, Inc. (Safetynet), and two
   Safetynet sales agents, Damian Delgado and Adrian Balboa.

   The Commission's complaint alleges that from approximately November
   2001 through December 2002, Mulhearn, Balboa and Delgado raised more
   than $600,000 from investors in a fraudulent, unregistered offering of
   Safetynet stock. In connection with the offering of Safetynet stock,
   the defendants made numerous material misrepresentations and omissions
   to prospective and actual investors regarding, among other things,
   Safetynet's business operations, projected revenues and profitability,
   use of investor proceeds and projected rate of return on the
   investment. In addition, Mulhearn misappropriated much of the monies
   raised for his personal use, and Balboa and Delgado collectively
   received over $100,000 in undisclosed commissions and bonuses.
   According to the complaint, Safetynet never operated a legitimate
   business and never sold or marketed any of its alleged products. The
   complaint also alleges that all three defendants were former brokers
   who were associated with registered broker-dealers as recently as
   2002.

   Mulhearn, of Coral Springs, Florida and Balboa, of Coconut Creek,
   Florida, have agreed to settle the charges against them, without
   admitting or denying the allegations contained in the Commission's
   complaint. Under the terms of the settlement, Mulhearn and Balboa
   consented to the entry of a final judgment permanently enjoining them
   from violating Sections 5(a), 5(c), and 17(a) of the Securities Act of
   1933 (Securities Act), Section 10(b) of the Securities Exchange Act of
   1934 (Exchange Act), and Rule 10b-5 thereunder, and barring them from
   participating in an offering of penny stock. The judgment will enjoin
   Balboa from violating Section 15(a) of the Exchange Act. The judgment
   also orders Mulhearn and Balboa to disgorge ill-gotten gains and
   imposed a civil penalty in amounts to be determined later by the
   court.

   The complaint also charges Delgado, of Boca Raton, Florida, with
   violating Sections 5(a), 5(c), and 17(a) of the Securities Act,
   Sections 10(b) and 15(a) of the Exchange Act, and Rule 10b-5