Presto Telecommunications, Inc., et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21662 / September 24, 2010

Securities and Exchange Commission v. Presto Telecommunications, Inc., et al., United States District Court for the Southern District of California, Case No. 04CV00162IEG (filed Jan. 24, 2004).

SEC Obtains Order To Show Cause Re Civil Contempt Against Defendant Alfred Louis "Bobby" Vassallo, Jr.

On September 24, 2010, the Honorable Chief Judge Irma E. Gonzalez of the U.S. District Court for the Southern District of California issued an Order to Show Cause against Alfred Louis Vassallo, Jr. aka Bobby Vassallo ("Vassallo") requiring Vassallo to show cause why he should not be held in civil contempt for violating the Court's Permanent Injunction entered against him on August 24, 2005. A hearing on the Order to Show Cuase is set for October 7, 2010.

The Court's Order follows from the Commission's Application for an Order to Show Cause, filed on September 21, 2010, which alleged that Vassallo violated the Court's Permanent Injunction enjoining him from engaging in the offer and sale of unregistered securities in violation of the securities registration provisions and committing fraud in connection with the offer and sale of securities in violation of the antifraud provisions of the federal securities laws. The Commission's Application further alleged that Vassallo violated the Permanent Injunction by failing to disgorge his ill-gotten gains and pay civil penalties and other monetary relief to the Court-appointed Receiver for Presto Telecommunications, Inc. ("Presto").

The Commission's Application seeks an order finding Vassallo in civil contempt, an order freezing his assets, an order prohibiting the destruction of documents, an order expediting discovery, an order requiring him to provide an accounting and to repatriate funds, and an order requiring Vassallo to surrender his passport until his contempt is purged through compliance with the Permanent Injunction.

The Commission previously filed a complaint against Vassallo and Presto on January 27, 2004 that charged Vassallo with violating the securities registration provisions of Section 5 of the Securities Act of 1933 and the antifraud provisions of Section 17(a) of the Securities Act and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder for Vassallo's role in perpetrating a fraudulent scheme through Presto, which the Receiver for Presto calculated raised about $20 million from more than 500 investors.

For further information, see Litigation Release Nos. 19368 (September 9, 2005), 18554 (January 28, 2004), 18616 (March 9, 2004), and 18858 (August 26, 2004).

See Also: SEC Complaint