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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
BLUEPOINT SECURITIES COMMISSION ACT VIOLATING EXCHANGE ACT TSAI SHARES RICHARDSON DISTRICT OWNERSHIP ALLEGES SIERRA BROKER-DEALER DEFENDANTS THEREUNDER OHIO CIVIL ACTION PRICE MAS MARKOW CONTROL SOLD REGISTRATION STATEMENT GLOBAL GUARANTEE CORPORATION GOELO REPORTING RICHARD GEIGER JEFFREY RICHARDSON ARMSTRONG |
U.S. SECURITIES & EXCHANGE COMMISSION
LITIGATION RELEASE NO. 18088 / APRIL 14, 2003
, U.S. District Court for the Southern District of Ohio, Civil Action
No. CV03-326 (S.D. Ohio)
The Securities and Exchange Commission ("Commission") today filed a
civil action against eight individuals and four entities for their
conduct between April 1999 and July 2000 relating to the price
manipulation, unregistered sales, unreported stock ownership, and
touting of securities issued by BluePoint Linux Software Corporation
("BluePoint"), a publicly-traded company located in Evansville,
Indiana.
The Commission's complaint, filed in the United States District Court
for the Southern District of Ohio, alleges that Aaron Tsai ("Tsai")
formed a shell company called MAS Acquisition XI Corporation in 1996
and made false filings with the Commission to conceal his true
ownership and control of MAS shares and to make it appear that the
shares could be later sold without a registration statement in effect.
According to the Complaint, on February 17, 2000, MAS acquired a
Chinese Linux company and changed its name to BluePoint. On the same
day, Michael Markow ("Markow") and his company Global Guarantee
Corporation, Francois Goelo ("Goelo"), Yongzhi Yang and his company,
K&J Consulting, Ltd., and Ke Luo and his company, M&M Management, Ltd.
(collectively, the "Promoter Defendants") bought 3.75 million shares
from Tsai for $250,000, or a little more than $0.06 per share. The
Commission alleges that the Promoter Defendants acquired over 90% of
BluePoint publicly traded shares without reporting their ownership in
any Commission filing.
The Commission further alleges that the Promoter Defendants along with
the participation of Sierra Brokerage Services, Inc. ("Sierra") and
its two employees, Richard Geiger and Jeffrey Richardson,
(collectively, the "Broker-dealer Defendants") worked in concert to
create artificial trading activity and to manipulate the share price
of BluePoint from $6 to a high price of $21 on the first day that
BluePoint shares were traded on March 6, 2001. The Promoter Defendants
and Broker-dealer Defendants dominated and control the BluePoint
market that day. At all relevant times, Tsai, the Promoter Defendants,
Sierra and Richardson sold or offered to sell shares in BluePoint
without a registration statement in effect, and Tsai and the Promoter
Defendants never reported their sales of BluePoint securities and the
change in their ownership.
The Commission also alleges that Jerome Armstrong engaged in illegal
touting of BluePoint on March 6 and after because he promoted
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