1999-12-10 sec-litreleases litigation_release 65 KB 2,560 chars

SEC v. Satcom, Inc.; Satcom Marketing and Distribution, Inc.; Tricap Ventures; Coastal Enterprises; Lloyd D. Paine; Scott C. Messier, et al., No. LR-16385, Southern District of California (Dec. 10, 1999) — Press Release

raw: Satcom, Inc., Satcom Marketing and Distribution, Inc., Tricap Ventures, Coastal Enterprises, Lloyd D. Paine, Scott C. Messier and Lawrence Harvey

Satcom, Inc., Satcom Marketing and Distribution, Inc., Tricap Ventures, Coastal Enterprises, Lloyd D. Paine, Scott C. Messier and Lawrence Harvey, No. LR-16385 (Dec. 10, 1999)

Caption: SEC v. Satcom, Inc, et al.

Source JSON

summary

Scott C. Messier and Lawrence Harvey, directors of SatCom, Inc. and SatCom Marketing and Distribution, defrauded over 150 investors by raising $3 million through unregistered stock sales, falsely claiming funds would develop a space launch vehicle while diverting over 95% to undisclosed commissions, personal use, and boiler-room operations, and were permanently enjoined from future securities violations without paying disgorgement due to claimed financial hardship.

paragraph

Scott C. Messier and Lawrence Harvey orchestrated a fraudulent securities offering between May 1997 and February 1999, raising over $3 million from more than 150 investors by falsely claiming funds would fund the development and marketing of a reusable space launch vehicle. In reality, only about 5% of the proceeds were used for legitimate business purposes, while over 40% went to undisclosed sales commissions, with additional funds diverted to themselves and operational costs of a boiler-room scheme. The securities were unregistered, violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934; Messier and Harvey consented to permanent injunctions without admitting guilt and were exempted from disgorgement based on sworn financial statements.

narrative

Scott C. Messier and Lawrence Harvey, both directors of SatCom, Inc. and SatCom Marketing and Distribution, Inc., orchestrated a fraudulent securities offering from May 1997 to February 1999 that raised over $3 million from more than 150 investors nationwide. They misled investors by falsely representing that funds would be used to develop, manufacture, and market a reusable space launch vehicle, and assured them that no investor money would fund sales commissions. In reality, only about 5% of the proceeds were used for legitimate business purposes; over 40% was paid as undisclosed commissions to sales agents, with substantial portions diverted to Messier and Harvey personally and to fund the boiler-room operations used to solicit investors. The securities sold were never registered with the SEC, violating Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) and Rule 10b-5 of the Securities Exchange Act of 1934. Messier and Harvey consented to final judgments imposing permanent injunctions against future violations of federal securities laws without admitting or denying the allegations. Due to sworn financial statements demonstrating their inability to pay, the court waived all disgorgement and interest obligations. The case underscores a classic boiler-room scheme exploiting investor interest in aerospace innovation to conceal massive misappropriation of funds.

Enriched metadata

Scheme: boiler-room (100%)
Court: Southern District of California
Outcome: settled
Victims: 150
Entity: Satcom, Inc.

Classified boiler-room(confidence 100%). EDGAR detection: forms Form D· recall 50% / precision 4%. detection rule →

Extracted insights

Dollar amounts 1

$3.00M $3 million $1M–$10M

Entities 3

person final judgments
person honorable irma e. gonzalez
person investor funds

Triples 9

Commission announced entry of Final Judgments against Messier and Harvey
Honorable Irma E. Gonzalez entered Final Judgments of permanent injunction and other relief against Messier and Harvey
Final Judgments enjoin Messier and Harvey from future violation of securities registration and antifraud provisions
Final Judgments waive Messier and Harvey's payments of all disgorgement and interest
Messier and Harvey consented to entry of the Final Judgments without admitting or denying allegations
Commission alleged Messier and Harvey participated in the offer and sale of stock in SatCom and SMD from May 1997 to February 1999
Messier and Harvey misrepresented to investors that funds would be used for development, manufacture, marketing and sales of SatCom products
Investor funds were used for undisclosed purposes including payment of undisclosed sales commissions and payments to Messier and Harvey
Stock was not registered with the Commission

View original SEC litigation releasesec.gov

Extracted body text (2,560c)

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16385 / December 10, 1999 SECURITIES AND EXCHANGE COMMISSION v. SATCOM, INC., SATCOM MARKETING AND DISTRIBUTION, INC., TRICAP VENTURES, COASTAL ENTERPRISES, LLOYD D. PAINE, SCOTT C. MESSIER AND LAWRENCE HARVEY, Civil Action No. 99 CV 0234 IEG LAB (S.D. Cal.) The Securities and Exchange Commission ("Commission") announced that on November 16, 1999, the Honorable Irma E. Gonzalez, United States District Judge for the Southern District of California entered Final Judgments of permanent injunction and other relief against Scott C. Messier ("Messier") and Lawrence C. Harvey ("Harvey"), both residents of San Diego, California. Messier, who is 35 years old, and Harvey, who is 38 years old, were directors of SatCom, Inc. ("SatCom") and SatCom Marketing and Distribution, Inc. ("SMD"), which are both located in San Diego, California. The Final Judgments permanently enjoin Messier and Harvey from future violation of the securities registration and antifraud provisions of the federal securities laws. The Final Judgments waive Messier and Harvey's payments of all disgorgement and interest based upon sworn financial statements demonstrating Messier and Harvey's inability to pay. Messier and Harvey consented to the entry of the Final Judgments without admitting or denying the allegations in the Commission's Complaint. In its Complaint, the Commission alleged that Messier and Harvey participated in the offer and sale of stock in SatCom and SMD from May 1997 to February 1999. The interests were sold to over 150 investors nationwide, raising over $3 million. Messier and Harvey, and sales agents acting at their direction, misrepresented to investors that investor funds would be used for the development, manufacture, marketing and sales of SatCom's products, including a reusable space launch vehicle, and that no investor funds would be used for sales commissions. However, only about 5% of the money raised from investors was used for the stated purposes. Almost all of the investor funds received were used for undisclosed purposes, including payment of undisclosed sales commissions in excess of 40% to sales agents, undisclosed payments to Messier and Harvey and operating costs of the boiler room soliciting investors. The stock was not registered with the Commission. The Final Judgments enjoin Messier and Harvey from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder.

OCR text (2,560c · plain-text · 99% conf)