Waldron & Co., Inc.; Cery B. Perle

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 15897 /September 24, 1998

SECURITIES AND EXCHANGE COMMISSION v. WALDRON & CO., INC.; CERY B. PERLE, Civil Action No.98-824 LHM (ANx) (C.D. Cal.)

On September 23, 1998, the Securities and Exchange Commission sued an Orange County, California based brokerage firm and its former president for manipulating the stock of the Internet retailer Shopping.com. The lawsuit charges the defendants with fraud and seeks the return of over $4 million in ill-gotten gains. The Commission alleges that from November 25, 1997 through March 23, 1998, Waldron & Co. and its former president, Cery B. Perle, age 36, pumped up the price of Shopping.com stock 255%, from its IPO price of $9.00 to more than $32.00 a share.

In its lawsuit, which was filed in federal court in Los Angeles, the Commission charged Waldron and Perle with, among other things, parking stock, creating fictitious customer accounts, executing unauthorized customer trades, issuing a false and misleading press release and preventing customers from selling Shopping.com stock. This was done, according to the Commission, to control the supply and create artificial demand for the security.

On March 24, 1998, the Commission suspended trading of Shopping.com stock for ten days citing "recent market activity . . . that may have been the result of manipulative conduct."

Waldron, which is based in Irvine, California with branch offices in San Francisco, South Carolina and Connecticut, underwrote Shopping.com's initial public offering in November 1997. Shopping.com is based in Corona del Mar, California. Perle lives in Corona del Mar.

As part of its lawsuit, the Commission charged Waldron and Perle with violating the antifraud provisions, Section 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(c)(1) of the Securities Exchange Act of 1934 and Rules 10b-5 and 15c1-2 thereunder. The Commission is seeking permanent injunctions, disgorgement of all ill-gotten gains plus prejudgment interest and civil penalties.

The Commission recognizes the assistance of the National Association of Securities Dealers in preparing its case against Waldron and Perle.