SEC v. Nu Star Holdings, Inc.; Gerald Levine; Marie Levine; Alan Copeland; Mary Ann Metz; Darin Metz, et al., No. LR-20077, District of Nevada (Apr. 18, 2007) — Press Release
raw: Nu Star Holdings, Inc. et al.
Nu Star Holdings, Inc. et al., No. 2:07-cv-00506-LDG (Apr. 18, 2007)
The SEC charged recidivist Gerald and Marie Levine, Nu Star Holdings, and six others with orchestrating a $4 million boiler room fraud from 2003–2005, artificially inflating Pink Sheet stock prices via wash trades and fake research, concealing 70% commissions, and selling unregistered securities, resulting in charges for multiple securities law violations and demands for injunctions, disgorgement, and bars.
The SEC alleged that Gerald and Marie Levine, along with Nu Star Holdings and five other individuals, ran boiler room operations in Barcelona and Santa Ana from late 2003 to 2005, defrauding investors by artificially inflating the share prices of Nu Star and other Pink Sheet companies through wash trades and fabricated research reports. The defendants concealed commissions as high as 70% of purchase prices, overstated company prospects, and sold unregistered securities, generating at least $4 million in illicit proceeds, with four entities controlled by the Levines and Metzes receiving the funds. The SEC charged them with violations of Sections 10(b), 17(a), and 5(a)/(c) of federal securities laws, as well as Section 15(a) for acting as unregistered brokers, seeking permanent injunctions, disgorgement with interest, civil penalties, penny stock bars, and officer/director bars.
The U.S. Securities and Exchange Commission filed a civil fraud action on April 17, 2007, against Nu Star Holdings, Inc., recidivist defendants Gerald and Marie Levine, and six other individuals for orchestrating a fraudulent boiler room scheme from late 2003 through 2005. The defendants operated out of offices in Barcelona, Spain, and Santa Ana, California, targeting primarily overseas and U.S. investors with shares of Nu Star and other Pink Sheet companies, using wash trades to artificially inflate stock prices and issuing fake independent research reports to mislead buyers. They concealed that commissions on sales reached as high as 70% of the purchase price, while also fabricating financial reports that grossly overstated the companies’ prospects. The scheme generated at least $4 million in illicit proceeds, with four entities controlled by the Levines and Metzes—Wire to Wire, Inc., Public Highway, Inc., the 1975 Trust, and Global Environmental Systems, Inc.—receiving the proceeds. The SEC charged the defendants with multiple violations, including Section 10(b) and Rule 10b-5 for fraud, Sections 17(a)(1)-(3) and 5(a)/(c) for unregistered securities offerings, and Section 15(a) for acting as unregistered brokers. Gerald and Marie Levine, previously convicted in a 2003 securities fraud case, were also charged with selling unregistered shares and acting as unregistered brokers. The SEC sought permanent injunctions, disgorgement with prejudgment interest, civil money penalties, penny stock bars against all individuals, and officer and director bars against the Levines, Copeland, and the Metzes, as well as disgorgement from the four relief defendant entities.
Exhibits & Attached Documents (1)
Extracted insights
- $4.00M $4 million $1M–$10M
- company 1975 Trust
- person Alan Copeland
- person Bruce Rothenberg
- person civil fraud action
- person Darin Metz
- person Gerald Levine
- company Global Environmental Systems, Inc.
- person Isaac Morley
- person Marie Levine
- person Mary Ann Metz
- company Nu Star Holdings, Inc.
- company Public Highway, Inc.
- agency Securities and Exchange Commission
- company Wire To Wire, Inc.
- SEC sued Gerald and Marie Levine and others
- SEC filed civil fraud action against Nu Star Holdings, Inc., seven individuals and four relief defendants
- civil fraud action involved sale of shares in Nu Star Holdings, Inc. and other pink sheet companies
- Litigation Release No. 20077 issued on April 18, 2007
- SEC filed the action on April 17, 2007
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20077 / April 18, 2007 SEC v. Nu Star Holdings, Inc. et al., Civil Action No. 2:07-cv-00506-LDG-RJJ (D. Nev.) SEC Sues Recidivists Gerald and Marie Levine and Others for Fraudulent Scheme Involving Sale of Shares in Nu Star Holdings, Inc., and Other "Pink Sheet" Companies Fraudulent Sales Accomplished Through Boiler Room Operations On April 17, 2007, the Securities and Exchange Commission filed a civil fraud action against Nu Star Holdings, Inc. ("Nu Star"), seven individuals and four relief defendants. According to the complaint, Nu Star, recidivists Gerald and Marie Levine, along with Alan Copeland, Mary Ann Metz, Darin Metz and Isaac Morley, engaged in a fraudulent scheme to sell shares of Nu Star and other "Pink Sheet" companies to innocent investors. The complaint alleges that from late 2003 through 2005, certain of the defendants established "boiler rooms" in Barcelona, Spain and Santa Ana, California to sell shares of the relevant companies primarily to overseas investors. The complaint also states that defendants Gerald and Marie Levine and Bruce Rothenberg sold Nu Star stock to several investors in western New York. The complaint alleges that the defendants' fraudulent conduct resulted in sales of securities of at least $4 million, and that four entities controlled by the Levines and the Metzes, Wire to Wire, Inc., Public Highway, Inc., the 1975 Trust and Global Environmental Systems, Inc., received proceeds from the fraudulent stock sales. The complaint alleges that to induce investors to buy shares of Nu Star, the defendants artificially inflated its share price through numerous, small-volume purchases of its stock, and then offered Nu Star's shares to the public at a purported "discount" to the "market" price. The complaint further alleges that the defendants made false statements about Nu Star by issuing a fabricated "independent" research report recommending that investors buy Nu Star, preparing company reports that far overstated its prospects, and failing to disclose that commissions for boiler room sales of Nu Star and other companies were as high as 70 percent of the purchase price of the stocks. In addition to the anti-fraud violations charges, the Commission's complaint charges Gerald and Marie Levine, Mary Ann Metz and Isaac Morley with selling shares of Nu Star without complying with the registration provisions of the federal securities laws, and Gerald and Marie Levine and Bruce Rothenberg with acting as unregistered brokers in selling shares of Nu Star. Specifically, the complaint charges that Nu Star, Gerald Levine, Marie Levine, Alan Copeland, Isaac Morley, Mary Ann Metz and Darin Metz violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The complaint also charges that Nu Star, Gerald Levine, Marie Levine, Alan Copeland, Isaac Morley and Mary Ann Metz violated Sections 17(a)(1), (2) and (3) of the Securities Act of 1933 ("Securities Act"). The complaint also charges that Nu Star, Gerald Levine, Marie Levine, Isaac Morley and Mary Ann Metz violated Sections 5(a) and (c) of the Securities Act. Finally, the complaint charges that Gerald Levine, Marie Levine and Bruce Rothenberg violated Section 15(a) of the Exchange Act. The Commission seeks permanent injunctions, disgorgement with prejudgment interest and civil money penalties against Nu Star and each individual defendant. The Commission also seeks penny stock bars against each individual defendant. Additionally, the Commission seeks officer and director bars against Gerald and Marie Levine, Alan Copeland, Mary Ann Metz, Darin Metz and Isaac Morley. Finally, the Commission seeks disgorgement with prejudgment interest from the four relief defendants. # # # Details of the prior securities fraud verdict returned against Gerald and Marie Levine on October 16, 2003, are at http://www.sec.gov/litigation/litreleases/lr18420.htm. SEC Complaint in this matterU.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 20077 / April 18, 2007 SEC v. Nu Star Holdings, Inc. et al., Civil Action No. 2:07-cv-00506-LDG-RJJ (D. Nev.) SEC Sues Recidivists Gerald and Marie Levine and Others for Fraudulent Scheme Involving Sale of Shares in Nu Star Holdings, Inc., and Other "Pink Sheet" Companies Fraudulent Sales Accomplished Through Boiler Room Operations On April 17, 2007, the Securities and Exchange Commission filed a civil fraud action against Nu Star Holdings, Inc. ("Nu Star"), seven individuals and four relief defendants. According to the complaint, Nu Star, recidivists Gerald and Marie Levine, along with Alan Copeland, Mary Ann Metz, Darin Metz and Isaac Morley, engaged in a fraudulent scheme to sell shares of Nu Star and other "Pink Sheet" companies to innocent investors. The complaint alleges that from late 2003 through 2005, certain of the defendants established "boiler rooms" in Barcelona, Spain and Santa Ana, California to sell shares of the relevant companies primarily to overseas investors. The complaint also states that defendants Gerald and Marie Levine and Bruce Rothenberg sold Nu Star stock to several investors in western New York. The complaint alleges that the defendants' fraudulent conduct resulted in sales of securities of at least $4 million, and that four entities controlled by the Levines and the Metzes, Wire to Wire, Inc., Public Highway, Inc., the 1975 Trust and Global Environmental Systems, Inc., received proceeds from the fraudulent stock sales. The complaint alleges that to induce investors to buy shares of Nu Star, the defendants artificially inflated its share price through numerous, small-volume purchases of its stock, and then offered Nu Star's shares to the public at a purported "discount" to the "market" price. The complaint further alleges that the defendants made false statements about Nu Star by issuing a fabricated "independent" research report recommending that investors buy Nu Star, preparing company reports that far overstated its prospects, and failing to disclose that commissions for boiler room sales of Nu Star and other companies were as high as 70 percent of the purchase price of the stocks. In addition to the anti-fraud violations charges, the Commission's complaint charges Gerald and Marie Levine, Mary Ann Metz and Isaac Morley with selling shares of Nu Star without complying with the registration provisions of the federal securities laws, and Gerald and Marie Levine and Bruce Rothenberg with acting as unregistered brokers in selling shares of Nu Star. Specifically, the complaint charges that Nu Star, Gerald Levine, Marie Levine, Alan Copeland, Isaac Morley, Mary Ann Metz and Darin Metz violated Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. The complaint also charges that Nu Star, Gerald Levine, Marie Levine, Alan Copeland, Isaac Morley and Mary Ann Metz violated Sections 17(a)(1), (2) and (3) of the Securities Act of 1933 ("Securities Act"). The complaint also charges that Nu Star, Gerald Levine, Marie Levine, Isaac Morley and Mary Ann Metz violated Sections 5(a) and (c) of the Securities Act. Finally, the complaint charges that Gerald Levine, Marie Levine and Bruce Rothenberg violated Section 15(a) of the Exchange Act. The Commission seeks permanent injunctions, disgorgement with prejudgment interest and civil money penalties against Nu Star and each individual defendant. The Commission also seeks penny stock bars against each individual defendant. Additionally, the Commission seeks officer and director bars against Gerald and Marie Levine, Alan Copeland, Mary Ann Metz, Darin Metz and Isaac Morley. Finally, the Commission seeks disgorgement with prejudgment interest from the four relief defendants. # # # Details of the prior securities fraud verdict returned against Gerald and Marie Levine on October 16, 2003, are at http://www.sec.gov/litigation/litreleases/lr18420.htm. SEC Complaint in this matter