U.S. Securities and Exchange Commission

Litigation Release No. 18344 / September 11, 2003

United States District Court for the Central District of California, Case
No. LACV 03-6499 CAS (VBKx) (September 11, 2003)

SEC FILES FRAUD CHARGES ARISING OUT OF $130 MILLION STOCK LENDING AND
MANIPULATION SCHEME

   Defendant DAngelo Pleads Guilty in Related Criminal Action Brought by
   U.S. Attorneys Office for the Central District of California

   The Securities and Exchange Commission today filed a complaint in the
   United States District Court for the Central District of California
   charging Kenneth P. DAngelo and his company, RBF International, Inc.,
   with participating in an unlawful scheme to manipulate the stock price
   of GenesisIntermedia, Inc. (GENI), a now defunct public company that
   was based in Van Nuys, California. The Commission alleges that the
   scheme, which occurred between September 1999 and September 2001,
   resulted in the misappropriation of more than $130 million, the
   collapse of three broker-dealers, and the largest bailout in the
   history of the Securities Investor Protection Corporation.

   According to the complaint, the manipulation of GENIs stock price
   began shortly after the companys June 1999 public offering. To benefit
   from the manipulation, GENIs Chief Executive Officer developed a stock
   lending scheme. The Commission alleges that the CEO and an accomplice
   loaned approximately 15 million shares of GENI stock to Native Nations
   Securities, Inc., a New Jersey broker-dealer, and more than a dozen
   other broker-dealers in exchange for approximately $130 million. To
   facilitate these stock loan transactions, DAngelo defrauded those
   broker-dealers by leading them to believe that reputable brokerage
   firms were lending the GENI shares to them. The complaint alleges that
   the GENI shares actually were being loaned by Ultimate Holdings, Ltd.,
   which was an offshore entity controlled by GENIs CEO and his
   accomplice. The stock loans generated cash proceeds for the full
   market value of the GENI shares and assured that Ultimate Holdings and
   the CEO would benefit from future price increases. According to the
   complaint, DAngelo secretly paid others for their assistance in this
   scheme.

   The complaint alleges that, in a typical stock loan transaction,
   Ultimate Holdings loaned stock to a broker-dealer and received the
   current market value of the stock in cash. As GENIs stock price
   fluctuated, the loaned stock was marked-to-market by the
   broker-dealer. In a hypothetical example, if Ultimate Holdings loaned
   a broker-dealer 1,000 shares of stock valued at $5.00 per share,