U.S. Securities and Exchange Commission
Litigation Release No. 18075 / April 7, 2003
SEC Obtains Summary Judgment against Defendants in $2.2 Million Offering
Fraud
, 00 Civ. 1848 (TCP) (WDW) (E.D.N.Y.)
On March 24, 2003, Judge Thomas C. Platt of the United States District
Court for the Eastern District of New York granted summary judgment in
favor of the Securities and Exchange Commission in an enforcement
action arising out of the fraudulent offer and sale of securities in
NNPD Textiles, Inc. ("NNPD"). In its order, the court found that the
three remaining defendants in the action, Richard Brower, Mark Coates,
and Tejbir Singh ("Remaining Defendants"), are liable for violating
antifraud and other provisions of the federal securities laws, and
that relief defendants Ana Andrescu, Jon Andrescu, and Magic Knits
("Relief Defendants") are liable for receiving illegal proceeds from
the fraud.
In granting the Commission's motion for summary judgment, the court
permanently enjoined each of the Remaining Defendants from future
violations of the antifraud and registration provisions of the federal
securities laws -- specifically Sections 5(a), 5(c), and 17(a) of the
Securities Act of 1933 and Section 10(b) of the Securities Exchange
Act of 1934 and Rule 10b-5 thereunder. The court also ordered that the
Remaining Defendants pay civil penalties, and that the Remaining and
Relief Defendants disgorge ill-gotten gains plus prejudgment interest,
in amounts to be determined by Magistrate Judge William D. Wall. Judge
Wall has scheduled a hearing on May 5, 2003 to determine the
disgorgement, pre-judgment interest and civil penalty amounts.
In its complaint, the Commission alleged that From at least October
1997 to at least March 1999, the defendants fraudulently raised over
$2.2 million by making a litany of false statements to investors
concerning a private placement in NNPD. For example, each of the
Remaining Defendants falsely represented that investors would be able
to sell their NNPD shares for a substantial profit in an imminent
initial public offering ("IPO"), when, in fact, no IPO was planned.
Most of the proceeds raised in the offering were misappropriated to
pay personal expenses of the defendants. NNPD securities were not
registered with the Commission or subject to an exemption from filing.
Previously, on April 5, 2001, the court entered default judgments
against Allen Andrescu, Vikram Randhawa, and two companies Andrescu
controlled, Renaissance Capital Management, Inc. ("Renaissance
Capital"), and NNPD Escrow Holding Company, Inc. ("NNPD Escrow"),
SNIPPETS:
U.S. Securities and Exchange Commission
SEC Obtains Summary Judgment against Defendants in $2.2 Million Offering Fraud
On March 24, 2003, Judge Thomas C. Platt of the United States District Court for the Eastern
In its order, the court found that the three remaining defendants in the action, Richard
In granting the Commission's motion for summary judgment, the court permanently enjoined each
The court also ordered that the Remaining Defendants pay civil penalties, and that the
Judge Wall has scheduled a hearing on May 5, 2003 to determine the disgorgement, pre-judgment
In its complaint, the Commission alleged that From at least October 1997 to at least March
For example, each of the Remaining Defendants falsely represented that investors would be
Most of the proceeds raised in the offering were misappropriated to pay personal expenses of
Previously, on April 5, 2001, the court entered default judgments against Allen Andrescu,
In its April 5, 2001 judgment, the court also ordered Allen Andrescu and NNPD Escrow to pay,
issance Capital to pay a $370,000 civil penalty; Randhawa to pay $326,693, representing $278,330 in
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