SECURITIES AND EXCHANGE COMMISSION
Litigation Rel. No. 16922 / March 2, 2001
SEC v. Vigue et al., Civil Action No. 00113-B (United States District Court for the District of Maine, filed June 7, 2000)
The Securities and Exchange Commission announced today that William Goodhue, formerly a trader at Firm Investment Corp. ("Firm"), has settled the Commission's enforcement action against him. During the relevant period, Firm was a broker-dealer in Waterville, Maine and a subsidiary of Firstmark Corp., a Maine-based financial services company. The Commission's complaint alleged that, as Firm's trader, Goodhue participated in a scheme to manipulate Firstmark's stock. Goodhue, a resident of Sidney, Maine, consented, without admitting or denying the allegations of the Commission's complaint, to the entry of a permanent injunction and has agreed to pay a civil penalty of $15,000 to settle this action. In a related administrative order, based on the entry of the injunction, Goodhue cosented to be barred from association with any broker or dealer, with the right to reapply for association after eighteen months.
The Commission's complaint in SEC v. Vigue et al. (D. Maine, filed June 7, 2000) alleged that, from 1994 through 1996, Goodhue took part in a scheme to maintain the price of Firstmark stock at $4 per share by effecting manipulative trades and by enforcing a "no net sale" policy. The complaint specifically alleged that Goodhue maintained a waiting list of Firm customers who wished to sell their shares of Firstmark stock but were not permitted to do so until their sell orders could be matched with buy orders, a process that sometimes took months. The complaint alleged that, when the manipulation scheme collapsed in early 1997, the price of Firstmark stock declined from approximately $4 to less than $1, causing substantial harm to Firstmark shareholders, many of whom were residents of the Waterville area. On April 27, 1999, Firstmark stock was delisted from the NASDAQ SmallCap market.
The complaint alleged that Goodhue violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 ("the Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("the Exchange Act") and Rule 10b-5 thereunder and that he aided and abetted violations of the antifraud provisions of Sections 206(1) and 206(2) of the Investment Advisers Act of 1940 committed by James F. Vigue, Firstmark's former CEO. The complaint alleged, in the alternative, that Goodhue aided and abetted Vigue's violations of the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
The Commission previously reached settlements with Vigue and Ivy L. Gilbert, Firstmark's former CFO, the other defendants in the injunctive action. In their settlements, Vigue and Gilbert consented, without admitting or denying the allegations of the Commission's complaint, to the entry of a final judgment that: permanently enjoins them from violating the antifraud provisions of the federal securities laws; bars Vigue from acting as an officer or director of any public company; requires Vigue to pay disgorgement plus prejudgment interest in the amount of $75,000 and a civil penalty of $50,000; and requires Gilbert to pay a civil penalty of $35,000. This judgment was entered by Judge Gene Carter of the United States District Court forthe District of Maine on February 20, 2001. To settle a related administrative proceeding, Vigue has agreed to be barred from association with any broker, dealer or investment adviser, and Gilbert has agreed to be barred from association with any broker, dealer or investment adviser, with the right to reapply for association after three years. Accordingly, the Goodhue settlement resolves this action.
The Commission wishes to thank the State of Maine Securities Division for its assistance with this matter.
For further information, see Lit. Rel. No. 16586 and Lit Rel. No.http://www.sec.gov/litigation/litreleases/lr16922.htm