Platforms Wireless International Corp., William C. Martin, Charles B. Nelson, Robert D. Perry, Francois M. Draper, and Victor L. Ziller
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20230 / August 8, 2007
SEC v. Platforms Wireless International Corp., William C. Martin, Charles B. Nelson, Robert D. Perry, Francois M. Draper, and Victor L. Ziller, Civil Action No. 1:06-CV-1260 Civil Action No. 04 CV 2105 JM (AJB)(S.D.CA)
Court Enters Final Judgment Finding Platforms Wireless International Corporation and Four Officers Liable For Securities Fraud
The Securities and Exchange Commission announced today that on August 6, 2007, the United States District Court for the Southern District of California entered final judgments against Platforms Wireless International Corp. and three of its current or former officers, William C. Martin, former President, Chief Executive Officer and Chairman of the Board of Directors, Robert D. Perry, former President, and Francois M. Draper, former Chief Operating Officer, for violating anti-fraud provisions of the federal securities laws. The Court also entered final judgment against Platforms, Martin, and Draper for violations of the registration requirements of the federal securities laws. By order dated July 31, 2007, the Court also entered final judgment against Charles B. Nelson, Senior Vice President and Chief Financial Officer, for violating anti-fraud provisions of the federal securities laws.
The Commission's complaint alleged that during 2000 and 2001 the defendants issued a series of fraudulent press releases which falsely portrayed Platforms' business activities. Platforms claimed to have an aerial system, the ARC System, for transmitting cellular telephone calls and other types of electronic data, using either fixed-wing aircraft or a blimp to carry transmission equipment. However, many of the statements in the press releases were fraudulent. During the period when the defendants were issuing the statements in the press releases, they were profiting from payments they received from the company, from illegal stock sales into the secondary market, and/or from stock sales made directly to investors.
The final judgments follow two orders granting partial summary judgment to the Commission. On January 8, 2007, the Court granted partial summary judgment against Platforms, Martin, and Draper for violating Section 5 of the Securities Act of 1933. On April 25, 2007, the Court granted partial summary judgment against Platforms, Martin, Perry, and Draper, for violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.
The final judgment against Platforms permanently enjoins it from violating Section 5 of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. For its violation of Section 5 of the Securities Act, the final judgment holds Platforms jointly and severally liable with Draper and Martin for $402,920 in disgorgement plus prejudgment interest of $121,303 and jointly and severally liable with Martin for $1,353,941 in disgorgement, plus prejudgment interest of $428,049, for a total of $2,306,213. The final judgment also imposes a penalty of $125,000 on Platforms for these violations.
The final judgment against Martin permanently enjoins him from violating Section 5 of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. For violating Section 5 of the Securities Act, it holds him jointly and severally liable with Platforms and Draper for amounts described above. For violating Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 thereunder, the final judgment also holds him individually liable for $701,236 in disgorgement plus prejudgment interest of $296,968, for total disgorgement and prejudgment interest of $3,304,417. Finally, the final judgment imposes a penalty of $50,000 for Martin's Section 5 violations and $40,000 for his Section 10(b) violations, and imposes eight-year officer and director and penny stock bars against him.
The final judgment against Draper permanently enjoins him from violating Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. For his violations of Section 5 of the Securities Act, it holds him jointly and severally with Platforms and Martin for the amounts described above and further holds him jointly and severally with Perry for $91,714 of that amount, plus prejudgment interest of $26,923. The total disgorgement and prejudgment interest assessed against Draper is $521,199. The final judgment also imposes on Draper a penalty of $20,000 for his violations of Section 5 of the Securities Act and $80,000 for his violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and imposes seven-year officer and director and penny stock bars against him. Draper was not enjoined from violation of Section 5 of the Securities Act.
The final judgment against Perry orders disgorgement of $13,943 plus prejudgment interest of $6,335, representing his individual liability and jointly and severally with defendant Draper, for amounts described above, realized as a result of his violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder, for total disgorgement and prejudgment interest of $138,915. The final judgment against Perry also imposes a penalty of $40,000 and a four-year officer and director and penny stock bar. Perry was not enjoined.
Nelson consented to the entry of the final judgment against him without admitting or denying the allegations of the Complaint. The final judgment against Nelson permanently enjoins him from future violations of Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.
Previously, on September 23, 2005, pursuant to a consent agreement, the Court entered final judgment against Victor L. Ziller.
For further information, see Litigation Release No. 18939 (October 25, 2004) and Litigation Release No. 19824 (September 8, 2006).