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U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23206 / February 24, 2015

Securities and Exchange Commission v. Mark A. Lefkowitz, et al., Civil Action No. 8:12-CV-1210

SEC Settles Civil Action Against Penny Stock Company, Its Former Chief Executive Officer, and Two Penny Stock Financiers for Their Roles in Illegal Unregistered Stock Distributions and Will Continue to Litigate with a Third Penny Stock Financier

The Securities and Exchange Commission announced today that on February 10, 2015, the Honorable Mary S. Scriven of the United States District Court for the Middle District of Florida entered final judgments against Unico, Inc., Mark A. Lopez, Steven R. Peacock, and Shane H. Traveller (the "Settling Defendants"), arising from their respective roles in the illegal unregistered distribution of billions of shares of penny stocks, imposing permanent injunctions and, variously, penny stock bars, orders of disgorgement, and civil penalties. The Settling Defendants consented to the entry of the final judgments without admitting or denying the allegations in the Commission's Complaint. Defendant Mark A. Lefkowitz consented to the entry of a partial judgment, described below, which was entered by the Court on February 18, 2015.

The Commission's Complaint, filed on May 30, 2012, alleged that seven defendants, including Unico, a penny stock company with headquarters in New Orleans, Louisiana, Lopez, Unico's former chief executive officer, and Peacock, Traveller, and Lefkowitz, three penny stock financiers, violated the federal securities laws by engaging or providing substantial assistance in the illegal unregistered distribution of billions of shares of penny stocks through the repeated misuse of the exemption from registration contained in Section 3(a)(10) of the Securities Act of 1933 ("Securities Act"). Section 3(a)(10) permits a public company to issue common stock to public investors other than pursuant to an effective registration statement to settle bona fide debts and other claims. The Section 3(a)(10) exemption may not be relied upon for capital formation by issuers, and the Commission alleged in its Complaint that it was improperly used for that purpose by the Settling Defendants in these transactions.

According to the Complaint, as a result of their involvement in the unregistered distributions, each Settling Defendant violated Section 5 of the Securities Act, which requires public distributions of securities to be conducted pursuant to an effective registration statement filed with the Commission or pursuant to a valid and properly invoked exemption from registration. The Complaint also alleges that Unico filed false and misleading disclosures with the Commission concerning the monies it received from the Financiers and failed to timely disclose the settlement agreements and issuance of over nine billion unregistered shares of its common stocks in connection with the Section 3(a)(10) settlements. In addition, the Complaint further alleges that Peacock, aided and abetted by Traveller, failed to report his beneficial ownership of more than five percent of the outstanding shares of Unico common stock in December 2006.

Without admitting or denying the allegations in the Complaint, Unico, Lopez, Peacock, Traveller and Lefkowitz have reached settlements with the SEC, as described below.

  • Unico consented to the entry of a final judgment that permanently enjoins it from violating Sections 5(a) and 5(c) of the Securities Act and Section 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 12b-20,13a-1, and 13a-11 thereunder, and orders Unico to disgorge of $9,350,000 in ill-gotten gains from the illegal unregistered distributions, together with prejudgment interest in the amount of $2,532,327, for a total of $11,882,327, but waives these payments, except for $250,000, and does not impose a civil penalty based upon Unico's financial condition.

  • Lopez consented to the entry of a final judgment that permanently enjoins him from violating Sections 5(a) and 5(c) of the Securities Act and from aiding and abetting violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-11 thereunder, and imposes a permanent penny stock bar, but does not impose a civil penalty based on Lopez's financial condition.

  • Peacock consented to the entry of a final judgment that permanently enjoins him from violating Sections 5(a) and 5(c) of the Securities Act and Section 13(d) of the Exchange Act and Rule 13d-1 thereunder, imposes a five-year penny stock bar, orders him to disgorge $609,763 in ill-gotten gains from the illegal unregistered distributions, together with prejudgment interest of $136,858, for a total of $746,621, but waives the payment of such amounts and does not impose a civil penalty based on Peacock's financial condition. The final judgment also orders Peacock to return each GTREX Capital, Inc. and Green Globe International, Inc. stock certificate issued to him and still held in his name to the issuers' transfer agent along with instructions to cancel the shares represented by such stock certificates.

  • Traveller consented to the entry of a final judgment that permanently enjoins him from violating Sections 5(a) and 5(c) of the Securities Act and from aiding and abetting violations of Section 13(d) of the Exchange Act and Rule 13d-1 thereunder, imposes a permanent penny stock bar, and orders him to disgorge $169,369 in ill-gotten gains from the illegal unregistered distributions and pay a civil penalty of $52,000.

  • Lefkowitz pled guilty in a related criminal case, United States v. Mark Allen Lefkowitz, 12-CR-4714 (S.D. Cal.), and has admitted as part of his settlement with the Commission the facts set forth in his criminal plea agreement. Lefkowitz also consented in the Commission's action to the entry of a judgment that imposes a permanent penny stock bar. The Commission's litigation against Lefkowitz is continuing with regard to monetary relief, including disgorgement and/or a civil penalty.

The SEC's litigation has been led by Suzanne J. Romajas, Assistant Chief Litigation Counsel, and Drew M. Dorman, Senior Counsel.

For further information, please see Litigation Release Nos. 22381 (May 30, 2012) and 22896 (December 23, 2013).

 

http://www.sec.gov/litigation/litreleases/2015/lr23206.htm


Modified: 02/24/2015