Paramount Capital Management, Inc. and Williams C. Bolton

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C

Litigation Release No. 16801 / November 15, 2000

SECURITIES AND EXCHANGE COMMISSION v. PARAMOUNT CAPITAL MANAGEMENT, INC. AND WILLIAM C. BOLTON 97 CIV 8577 (SHS)(S.D.N.Y.)

The Commission announced today that on October 25, 2000 the United States District Court for the Southern District of New York entered a final consent judgment of permanent injunction and other relief against defendant William C. Bolton, whom the Commission charged with defrauding investors by offering and selling bogus IPO stock. The Final Consent Judgment entered against Bolton permanently enjoins Bolton from future violations of the antifraud provisions of the federal securities laws, as well as from further violations of Section 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"). The Commission also announced today that on November 7, 2000 it instituted and settled administrative proceedings against Bolton in which Bolton consented, without admitting or denying the Commission's findings, to an order barring him from association with any broker or dealer.

The Final Consent Judgment and the Commission's order resulted from a civil injunctive action commenced by the Commission on November 18, 1997, alleging that beginning in July 1997, Paramount Capital Management, Inc. ("Paramount") and "John Doe" used material misrepresentations to induce investments in the fictitious initial public offering of Micronet Corp. The complaint alleges, among other things, that Paramount purported to have underwritten the Micronet IPO and that an unknown person, sued as "John Doe," used the alias "Kenneth Bridget" in contacts with prospective investors. The complaint charged the defendants with violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5. In addition to permanent injunctions and disgorgement plus prejudgment interest, the complaint sought various forms of emergency relief, including preliminary injunctions and asset freezes, which the Court granted on December 3, 1997. On March 8, 1999, the Commission filed an amended complaint substituting William Bolton for "John Doe" a/k/a "Kenneth Bridget" as a defendant in the Paramount action.

The Court had earlier entered a final judgment by default against Paramount on September 12, 2000. The final judgments against defendants Bolton and Paramount permanently enjoin the defendants from future violations of the federal securities laws, and require the disgorgement of $44,650 plus prejudgment interest. Based on Bolton's demonstrated inability to pay, the Court waived his obligation to pay disgorgement and prejudgment interest, and did not impose a civil penalty.

For more information, see Litigation Release No.15566 and Litigation Release No. 16082.