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Pastimes : Discuss ATEL - ACCESSTEL INC
ATEL 0.00Sep 11 4:00 PM EDT

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To: Mr. Jens Tingleff who wrote (61)2/3/2003 6:46:38 PM
From: StockDung  Read Replies (1) of 130
Litigation Release No. 17939 / January 16, 2003
S.E.C. v. Dale Carone, et al., Docket No. CV 03 374NM (FMOx) (USDC C.D. Cal.)

The Securities and Exchange Commission today charged LinkNet, Inc., LinkNet de America Latina, Ltd., Allen R. Johnson, Joseph W. Isaac and Dale R. Carone with the fraudulent offer and sale of unregistered securities of LinkNet and Latina. The complaint alleges the defendants conducted these offerings from August 1999 through October 2000 and raised approximately $17 million from investors by selling the stock through a boiler room established by Johnson, Isaac and Carone in Encino, California.

The complaint alleges that in making the offering the defendants failed to disclose the fact that at least $5.1 million, or thirty percent, of the offering proceeds were paid as commissions to the boiler room operations. It is also alleges that the defendants made false representations that: (1) a public offering of LinkNet stock was imminent; LinkNet's stock would shortly be listed on NASDAQ; investors could realize phenomenal returns on their investment in a short time; and LinkNet and Latina had contracts for the sale of long distance service in the United States and Mexico which would generate millions of dollars in revenue to the companies. The complaint also alleges that, while the offerings were ongoing, Isaac, Carone and Johnson also sold their personal shares of LinkNet and Latina stock through the Encino boiler room and by other means.

All of the defendants are charged with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder. Johnson, Isaac and Carone are also charged with violations of Section 15(a) of the Exchange Act. The Complaint seeks a final judgment: (i) enjoining the defendants from future violations of the above-cited provisions, (ii) requiring an accounting and disgorgement of their ill-gotten gains, plus prejudgment interest; (iii) assessing civil penalties; (iv) barring Johnson from acting as an officer or director of any public company registered with the Commission; and (v) barring Johnson, Isaac and Carone from any future participation in an offering of penny stock.

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