U.S. Securities and Exchange Commission
Litigation Release No. 18069 / April 3, 2003
S.E.C. v. Rocky Mountain Energy Corporation, Inc., John N. Ehrman, W.
Roderick Johnson, and John W. Ehrman, Jr. (Defendant Solely for Purposes of
Equitable Relief) Case No. H-03-CV-1133 (U.S.D.C., S.D. Tex.)
SEC Halts Fraudulent Stock Manipulation Scheme Orchestrated by CEO and
General Counsel of Rocky Mountain Energy Corporation
On April 3, 2003, the Securities and Exchange Commission ("SEC") filed
a lawsuit in U.S. District Court for the Southern District of Texas
(Houston) to halt a fraudulent stock manipulation scheme involving
Rocky Mountain Energy Corporation, a Houston-based oil-and-gas company
whose stock is quoted on the OTC Bulletin Board (symbol, "RMEC"). U.S.
District Judge Sim Lake granted the SEC's requests for a temporary
restraining order and an asset freeze against Rocky Mountain, its CEO,
John N. Ehrman, and its General Counsel, W. Roderick Johnson, Sr. The
Court also appointed a temporary receiver to take control of Rocky
Mountain and the assets of Ehrman. The complaint also named John W.
Ehrman, Jr., Ehrman's father, as a relief defendant to recover
proceeds from the alleged fraud in his possession or control.
The complaint alleges that, from July 2002 to the present, Ehrman and
Johnson used four bogus share-exchange transactions to secretly obtain
control of approximately 50% of Rocky Mountain's issued and
outstanding stock. Additionally, it is alleged that Rocky Mountain and
Ehrman issued a stream of glowing but false and misleading press
releases to artificially inflate the price and trading volume of the
company's stock. The press releases and other promotional statements,
touted numerous "acquisitions" of valuable oil-and-gas properties, or
agreements to acquire such properties, along with expected revenues
and other benefits from the acquisitions. The complaint alleges that
Rocky Mountain had neither the assets nor the financing to complete
these acquisitions. Concurrent with the misleading public
announcements, it is alleged that Ehrman and Johnson dumped more than
$800,000 of Rocky Mountain stock into the unsuspecting marketplace.
In carrying out the fraudulent scheme, Ehrman allegedly caused Rocky
Mountain to file false and misleading reports and registration
statements with the SEC. Among other things, these filings failed to
disclose that Ehrman and Johnson caused Rocky Mountain to issue
approximately 47 million shares of stock in the four sham
share-exchange transactions. The filings also misrepresented, among
other things, Ehrman and Johnson's ownership, transfer, and sale of
approximately 31 million of these shares.
SNIPPETS:
U.S. Securities and Exchange Commission
S.E.C. v. Rocky Mountain Energy Corporation, Inc., John N. Ehrman, W. Roderick Johnson, and
SEC Halts Fraudulent Stock Manipulation Scheme Orchestrated by CEO and General Counsel of
On April 3, 2003, the Securities and Exchange Commission filed a lawsuit in U.S. District
U.S. District Judge Sim Lake granted the SEC's requests for a temporary restraining order and
The Court also appointed a temporary receiver to take control of Rocky Mountain and the
The complaint also named John W. Ehrman, Jr., Ehrman's father, as a relief defendant to
The complaint alleges that, from July 2002 to the present, Ehrman and Johnson used four bogus
it is alleged that Rocky Mountain and Ehrman issued a stream of glowing but false and
The press releases and other promotional statements, touted numerous "acquisitions" of
The complaint alleges that Rocky Mountain had neither the assets nor the financing to
In carrying out the fraudulent scheme, Ehrman allegedly caused Rocky Mountain to file false
these filings failed to disclose that Ehrman and Johnson caused Rocky Mountain to issue
It is alleged in the complaint that, in connection with the scheme, Rocky Mountain, Ehrman,
It is also alleged that Rocky Mountain violated, and that Ehrman aided and abetted violations
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