UNITED STATES SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17269 / December 12, 2001
Securities and Exchange Commission v. Jon F. Williams, et al., Civil Action No. C-00-594 SC (USDC ND Cal.)
Two California Men Enjoined In Stock Repurchase Scheme
The Commission announced that a federal district court in San Francisco entered judgments against James B. Dean of San Diego and Conrado B. Topacio of San Francisco. The judgments were entered in a case alleging fraudulent sales of interests in the stocks of start-up companies.
Dean was formerly associated with Global Strategies Group, Inc., a now defunct small brokerage firm headquartered in San Francisco. On June 26, 2001, the court entered a judgment requiring Dean to disgorge $168,833.28 in commissions and pay a $50,000 civil penalty and refrain from future violations of the antifraud provisions of the federal securities laws (Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5).
The Court entered a judgment against Topacio on November 28, 2001, enforcing a prior Commission order that forbid Topacio from associating with any broker or dealer. Topacio consented to the entry of the judgment without admitting or denying the allegations of the Commission's complaint. Topacio has also pleaded guilty to criminal charges relating to these events and is awaiting sentence.
The Commission alleged in its complaint that Dean and Topacio worked together to defraud clients of Global Strategies Group. The complaint alleged that between 1995 and 1997 Dean and Topacio made false statements and withheld material information from investors concerning the sale of $2.1 million in stock repurchase agreements. Under these agreements, investors purchased shares in start-up companies and were promised that the stock would be repurchased within six months for a 20 percent or greater return. The Commission asserted that Dean and Topacio improperly gave assurances that the investments were safe. The complaint further alleged that Topacio's participation in the scheme violated both a 1990 judgment that enjoined him from violations of the antifraud provisions of the federal securities laws and a 1992 order by the Commission that prohibited Topacio from associating with any broker or dealer.