SEC target Wile loses motion to dismiss


2009-10-06 15:33 AT - Street Wire

Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission


by Mike Caswell

West Vancouver promoter Anthony Wile has lost his motion to have civil fraud charges in New York dismissed. Mr. Wile had sought to have a market manipulation case dismissed on the grounds that the SEC took five years to file it, and then another 1-1/2 years to serve him. Judge Denise Cote, in a decision dated Sept. 30, 2009, has found that the SEC was reasonably diligent in efforts to locate Mr. Wile and serve him with its complaint.

The charges are for the manipulation of Sedona Software Solutions Inc. in 2003. The SEC initially filed the suit on Dec. 19, 2007, but it was unable to serve Mr. Wile. A process server could not get past the walls and a gate at Mr. Wile's home, and an investigator was unable to observe anybody matching Mr. Wile's description entering the house. The SEC was only able to serve Mr. Wile on Aug. 29, 2009, after the judge granted special permission to serve him by e-mail and courier. Shortly after receiving the complaint, Mr. Wile filed a motion to have it dismissed.

Judge Cote's decision

Judge Cote, in denying that motion, says it is not appropriate to dismiss the case given that Mr. Wile has known about it since early 2008. She says he chose to gamble that the SEC would be unable to find and serve him. "While Wile was entitled to make that choice, it ill behooves him to complain of the delay in service in such circumstances," the decision reads.

The judge's decision contains a brief history of the events leading up to the motion. Prior to filing the initial complaint, the SEC had been in communication with Mr. Wile's lawyer, Leonard Bloom of Miami, about the possibility of charging him for manipulating Sedona. Mr. Bloom responded to the potential lawsuit with two Wells submissions, documents in which a potential defendant is permitted to argue his side of the case before charges are filed. In some instances, this persuades the SEC that a suit is not necessary.

In Mr. Wile's case, the submissions did not prevent charges. The SEC filed the complaint against him and others on Dec. 19, 2007. After filing the case, the SEC approached Mr. Bloom, and asked if he would accept service on Mr. Wile's behalf. Mr. Bloom said he was not authorized to do so, and refused to provide the SEC with Mr. Wile's address.

The judge has ruled that the SEC's subsequent efforts to to locate and serve Mr. Wile were appropriately diligent. The delay in serving him was caused by circumstances outside of the SEC's control, including the fact that Mr. Wile moved out of the United States. (He previously lived in Boca Raton, Fla.)

In addition, Judge Cote says Mr. Wile has presented little evidence showing that the delay caused him any serious prejudice. For example, he argued that lawyers for the SEC and the other defendants interviewed three witnesses in Canada recently without his participation. He did not, however, identify any question that he would have asked the witness that the other lawyers did not ask.

In addition to rejecting Mr. Wile's motion, Judge Cote has denied a motion to dismiss filed by Mr. Wile's uncle, Wayne Wew (formerly known as Wayne Wile). Mr. Wew had sought to have the case thrown out on similar grounds. The judge rejected his motion on Oct. 2, 2009.

SEC's complaint

The SEC's complaint, filed on Dec. 19, 2007, in the Southern District of New York, claimed that Mr. Wile and others manipulated the market for Sedona and another company, SHEP Technologies Inc. In addition to Mr. Wile and Mr. Wew, the complaint named as defendants Scott and Brian Lines of Bermuda brokerage LOM (Holdings) Ltd.; Vancouver residents Scott Peever and William Curtis; and newsletter writer Robert Chapman. The SEC claimed the men grossed $1.5-million from the Sedona scheme and $4.3-million from SHEP. (All figures are in U.S. dollars.)

The case against Mr. Wile was for the Sedona manipulation. According to the complaint, he issued a series of misleading news releases in January, 2003, for his private company, Renaissance Mining Corp., which was to merge with Sedona. He claimed that Renaissance had acquired producing gold mines in Central South America, the SEC said.

Mr. Wile also recruited several tout sheet authors to repeat those claims, the complaint stated. The only author the SEC named was Mr. Chapman, who purported to be an independent mining analyst. He projected the stock would hit $62. The SEC said Mr. Chapman failed to disclose that he had bought 300,000 shares of the company at 25 cents.

Sedona and Renaissance merged in January, 2003, and the combined company began trading on Jan. 23, 2003. Mr. Wew and the Lines brothers then carried out a series of manipulative trades, according to the complaint. At 9:12 a.m., LOM placed an order to sell 20,000 shares at $9. Thirteen minutes later, Mr. Wew placed an order to buy 5,000 shares at $8.25, the SEC alleged. The activity was unusual, because the stock had last traded at three cents. In the six days after that, the Lines brothers sold 159,300 shares at prices between $9 and $10, the SEC claimed. They had purchased those shares earlier for seven cents.

The SEC halted Sedona on Jan. 29, 2003, citing concerns about the accuracy of its publicly available information. When it resumed trading two weeks later, Sedona quickly fell under $1.

The SHEP manipulation was somewhat similar. Ahead of that manipulation, Mr. Peever, Mr. Curtis and the Lines brothers acquired nine million of the company's shares, or 80 per cent of its tradable stock, the SEC claimed. Then, several paid touts issued recommendations to buy the company. They said its product, a new form of car brakes, was a "billion dollar royalty gusher." The tout sheets failed to disclose that Mr. Peever and Mr. Curtis had paid for the coverage, and that they planned to sell their shares, according to the complaint.

The SHEP scheme continued through the first half of 2003, the SEC claimed. During that time, Mr. Peever, Mr. Curtis and the Lines brothers allegedly sold three million shares. The SEC said they did not report those sales.

The SEC sought orders permanently banning all of the men from participating in penny stock offerings, as well as appropriate civil penalties and disgorgement.

Mr. Peever and Mr. Curtis, without admitting any wrongdoing, settled the case without a trial on Sept. 22, 2008. They agreed to penny stock bans and to financial penalties to be determined by the judge.

The Lines brothers, meanwhile, are fighting the case. They filed separate answers on May 16, 2008, denying any wrongdoing. Scott Lines admitted that accounts at LOM held shares of SHEP, but said they were not held for his benefit.

The judge has not yet set a trial date in the case.

years later not much new
SEC target Wile files motion to dismiss


2009-09-10 15:44 AT - Street Wire

Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission


by Mike Caswell

Anthony Wile, the West Vancouver promoter facing civil fraud charges in New York for the alleged manipulation of Sedona Software Solutions Inc., has filed a motion to dismiss the case. He says delays by the U.S. Securities and Exchange Commission's lawyers have unfairly prejudiced his defence. The SEC did not file the case until nearly five years after the alleged fraud, and then it did not serve Mr. Wile with the suit until 20 months after that.

The SEC claimed that it had been unable to serve Mr. Wile with its complaint because the process server could not find a way past the walls and gate at his West Vancouver home. The SEC sought and received special permission from the judge to serve Mr. Wile by e-mail and by courier. It sent him the documents on Aug. 13, 2009.

Another recently served defendant, Wayne Wew (formerly known as Wayne Wile), has filed a motion seeking to have the charges dropped on similar grounds. He too says the trial schedule gives him little time to prepare, and the delay is prejudicial to his defence. His motion also notes that the complaint incorrectly identifies him as Wayne Wile. He changed his name in 2005.

SEC's complaint

The SEC filed a civil fraud complaint on Dec. 19, 2007, against Mr. Wile, Mr. Wew and others in the Southern District of New York. The defendants included newsletter writer Robert Chapman, Bermuda brokerage LOM (Holdings) Ltd., LOM principals Scott and Brian Lines, and Vancouver residents Scott Peever and William Curtis. The SEC claimed the men manipulated Sedona and another company, SHEP Technologies Inc., in 2002 and 2003. They allegedly grossed $1.5-million from the Sedona scheme and $4.3-million from SHEP. (All figures are in U.S. dollars.)

The allegations against Mr. Wile and Mr. Wew were for the alleged Sedona manipulation. The SEC claimed that Mr. Wile issued a series of misleading news releases ahead of a merger between Sedona and Renaissance Mining Corp., a private company that he controlled. The news releases allegedly stated that Renaissance had acquired gold mines in Central America and was a leading producer of gold, when it was not. According to the complaint, he also arranged for several tout sheets that promoted Sedona. They included one written by Mr. Chapman, which allegedly stated that the stock could hit $62.

In addition to the newsletter allegations, the men carried out manipulative trades to boost Sedona, the complaint stated. The trades, which were between the Lines brothers and Mr. Wew, happened when the stock began trading on Jan. 21, 2003, the SEC said. That morning, at 9:12 a.m., LOM allegedly placed an order to sell 20,000 shares at $9. (The stock had last traded at three cents.) Thirteen minutes later, Mr. Wew placed an order to buy 5,000 shares at $8.25. In the ensuing week of market activity, the Lines brothers sold 159,300 shares at prices between $9 and $10, the SEC claimed. They had bought those shares for seven cents.

The SEC halted Sedona on Jan. 29, 2003, citing concerns about the accuracy of publicly available information on the company. The stock quickly fell under $1 when it resumed two weeks later.

The SHEP manipulation was similar to Sedona, according to the complaint. In that scheme, Mr. Peever and Mr. Curtis allegedly acquired control of a public shell that would become SHEP. They, along with the Lines brothers, secretly held nine million shares of the company, or over 80 per cent of its tradable shares, the SEC claimed.

As with Sedona, they allegedly paid for several touts to write about the company. One claimed that SHEP's product, a new form of car brakes, was the greatest automobile discovery since anti-lock brakes, and was a "billion dollar royalty gusher." The tout sheets did not disclose that Mr. Peever and Mr. Curtis had paid for the coverage and that they intended to sell their shares.

The stock traded between $1 and $2 for much of 2003. During the first half of the year, Mr. Peever, Mr. Curtis and the Lines brothers sold their stock, generating $4.3-million in illegal proceeds, the complaint alleged. The men did not report their sales, and Brian Lines filed several false and misleading reports with the SEC in an attempt to conceal the selling, the SEC said.

The SEC sought orders permanently banning all of the defendants from participating in penny stock offerings, as well as appropriate civil penalties and disgorgement orders. Mr. Peever and Mr. Curtis settled the case before it went to trial. Without admitting any wrongdoing, they agreed to a permanent penny stock ban and yet-to-be-determined civil penalties and disgorgement.

The Lines brothers filed separate answers, in which they denied in any wrongdoing. Scott Lines filed his on May 16, 2008. In it, he admitted that accounts at LOM held shares of SHEP, but denied that the shares were held for his benefit. Brian Lines, in his answer, issued a general denial of the allegations. Both brothers asked that the complaint be dismissed with costs.

Motions to dismiss

Mr. Wile filed his motion to dismiss the case on Sept. 2, 2009. In it, he notes that the SEC waited five years, until just before the expiration of the statute of limitations, to file the suit. Then, on the eve of the discovery deadline, it finally served him with the complaint. He says that because of the SEC's procrastination, it is virtually impossible to properly defend himself.

Now, Mr. Wile's lawyers must examine the substantial evidence in the case while facing a discovery deadline of Dec. 18, 2009. He says the SEC's evidence includes 12,000 documents, including 30 transcripts of testimony. Additionally, LOM has produced 1,500 documents totalling 6,400 pages. "With only a few months to go before the close of discovery, and seven years since the conduct complained of allegedly occurred, to require Wile to now defend himself, given the Commission's actions (and inactions) would be grossly unjust and inequitable," the motion reads. He says that the complaint should be dismissed for failure to prosecute and for failure to make timely and sufficient service.

Mr. Wew, in his motion, repeats the same argument. He adds that the SEC illegally served him via e-mail in Switzerland, where he is now a citizen. He says such service is not permitted in Switzerland, because it is seen as circumventing the jurisdiction of local authorities. As a result, any judgment obtained by the SEC would not be enforceable in that country.

The judge has not yet set a date to hear the motions.

ahaaaaaaaaaaaaa
one i am NOT in!!!!!!!!!!!!!

Well that's a GOOD thing...I think...because I just found this at the very tippy end of their latest filing.....The SEC is apparently a bit miffed with them:

Item 1. Legal Proceedings

We are aware that a formal order of investigation by the SEC was entered in the matter titled "Sedona Software Solutions, Inc. / HO-9634." In accordance with this investigation, Mr. John E. Cooper, our Chief Executive and Financial Officer, testified before the SEC on February 11, 2003 in regard to this matter. On June 7, 2005, Mr. Cooper received notice from the staff at the SEC that it intends to recommend that the Commission file a civil action in U.S. District Court seeking the following:


•

A permanent injunction pursuant to Section 20(b) of the Securities Act of 1933 (“Securities Act”) and Section 21(d)(1) of the Securities Exchange Act for the following conduct in or about January 2003:

1.
Violating Sections 5(a) and 5(c) of the Securities Act by offering and selling shares of Sedona Software Solutions, Inc. (“Sedona”) without a registration statement or proper exemption from registration;
2.
Violation Section 13(d) of the Exchange Act and Rule 13d-2 thereunder by failing to file an amended Schedule 13D with the Commission to report sales of Sedona stock;
3.
Violating Section 16(a) of the Exchange Act and Rules 16a-2 and 16a-3 thereunder by failing to make proper filing with the Commission disclosing sales and annual ownership of Sedona stock;
4.
Aiding and abetting Sedona’s violation of Section 13(a) of the Exchange Act and Rule 13a-11 thereunder by failing to file a current report on Form 8-K with the Commission disclosing that Sedona had been sold and that Mr. Cooper had resigned as chairman and CEO of the company (and was later reinstated as such).


•

Disgorgement (including pre-judgment interest) of profits received in connection with unlawful sales of Sedona stock in or about January 2003;


•

The imposition of civil penalties pursuant to Section 20(d) of the Sections Act and Section 21(d)(3) of the Exchange Act; and


•

A permanent bar to Section 20(g) of the Securities Act and Section 21(d)(6) of the Exchange Act prohibiting Mr. Cooper from participating in penny stock offerings.

On June 23, 2005, the SEC sent a letter confirming a telephone conversation between SEC staff and our securities counsel indicating that the Commission intends to recommend enforcement action against us. The SEC further indicated that the Commission intends to file a civil action in the United States District Court to seek a permanent injunction against us pursuant to Section 20(b) of the Securities Act and Section 21(d)(1) of the Exchange Act for violations of Section 5(a) and 5(c) of the Securities Act, and Section 13(a) of the Exchange Act and Rule 13a-11

8
Table of Contents

thereunder.

Since then, management has discussed possible resolutions with the Staff of the SEC. Those discussions are ongoing.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

Item 3. Defaults upon Senior Securities

......z

lolol...i don't even own it any more Zar!
lololol

Cause it's a shell, and will one day make us all RICH???


Well, the new symbol is SDSW. They filed last month, but I can't find any quotes on it............Why would they file if they're not trading............mystery......z

have no clue why i created this board

here a sympathy post for ya..lol,, It may get lonely over on mine as well..

ok i have NO idea why i started this hopping board

First post. Need to see what category.

Edit: Wrong one, as I suspected.