SEC Accuses Defendant of Contempt in Internet Offering Case
On October 4, the SEC filed a motion seeking a contempt citation against defendant Clealon Mann in SEC v. Capital Acquisitions, Inc., Somerset Group, Inc., Wayne Notwell and Clealon Mann, Civ. Action No. 2:97CV-0977S (D. UT, complaint filed Dec. 23, 1997). The SEC alleges that the defendant violated an asset freeze entered in the case by trying to sell stock owned by a company that he controls which is a relief defendant in the case. The SEC’s original complaint in the action alleged that Capital Acquisitions, Inc. raised $20 million from at least 600 investors in an oil and gas drilling venture described as a “ponzi scheme” by the SEC. The scheme allegedly was discovered by the SEC when one of the venture’s sales agents, directed by defendants Somerset Group and Clealon Mann, “posted the offering on the Internet which led to its detection by the Commission’s Internet Surveillance Program.” For more about the SEC’s motion seeking a contempt citation against Mann, see SEC Litig. Rel. No. 16329 (Oct. 5, 1999) <http://www.sec.gov/enforce/litigrel/lr16329.htm>; SEC News Digest Issue 99-193 (Oct. 6, 1999) <http://www.sec.gov/news/digests/10-06.txt> (scroll down to “Contempt Citation Sought Against Capital Acquisitions, Inc. [sic]“); Federal News – Antifraud: SEC Says Ponzi Defendant Violated Asset Freeze; Seeks Contempt Citation, 31(40) Sec. Reg. & Law Rep. (BNA) 1370 (Oct. 15, 1999).
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