U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20282 / September 13, 2007

SEC v. Efoora, Inc., et al., U.S. District Court for the Northern District of Illinois, No. 06-CV-3526

U.S. v. Grosky, et al., U.S. District Court for the Northern District of Illinois, No. 06-CR-0359

SEC Obtains Injunctions in Offering Fraud Action Against David S. Grosky and Partners Holding, LLC

On August 23, the United States District Court for the Northern District of Illinois, entered judgments against David S. Grosky, the former CEO of Efoora, Inc. and a resident of Highland Park, and Partners Holding, LLC, a company controlled by Grosky, enjoining them from future violations of the antifraud provisions of the Securities Act of 1933 and the Securities Exchange Act of 1934, the securities registration provisions of the Securities Act, and the broker-dealer registration provisions of the Exchange Act. The Court had previously entered preliminarily injunctions against Grosky and Partners Holding.

The Commission's complaint alleged that, from at least January 2000 through at least April 2006, Efoora raised approximately $40 million by selling over 100 million shares of its stock to about 5,000 investors. Efoora did not register its offering with the Commission as required by the federal securities laws. Efoora, through a network of "finders" that included Partners Holding, also solicited investors by making a series of false or misleading statements about Efoora's business, including, among other things, the amount of offering proceeds it paid to its finders and that it would be receiving FDA approval for its HIV Rapid Test and conducting an IPO by certain dates. Partners Holding was not registered as a broker or dealer at the time its salespersons sold shares of Efoora stock. Grosky drafted or approved Efoora's false and misleading offering materials and controlled Partners Holding. Grosky and Defendant Melvin S. Dokich also improperly sold Efoora stock issued in their names directly to the general public.

The judgments enjoin Grosky and Partners Holding from future violations of Sections 5 and 17(a) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. The judgments also bar both defendants from participating in an offering of penny stock. Finally, the judgments provide that, upon motion of the Commission, the Court shall determine if it should order the defendants to disgorge any ill-gotten gains or to pay a civil penalty. Grosky and Partners Holding consented to the entry of the judgments without admitting or denying the allegations in the Commission's complaint.

On August 27, in a related criminal action, also in the United States District Court for the Northern District of Illinois, Grosky and Dokich pled guilty to criminal charges related to their roles with Efoora. Grosky and Dokich pled guilty to one count of mail fraud in connection with the fraudulent sale of Efoora stock to investors. Grosky also pled guilty to one count of wire fraud in connection with commissions paid to finders, and Dokich pled guilty to 33 counts of structuring bank transactions to avoid the currency transactions reporting requirements. Both defendants are scheduled to be sentenced on December 7.

The Commission acknowledges the assistance of the United States Attorney for the Northern District of Illinois, the Federal Bureau of Investigation and the United States Postal Inspection Service.

http://www.sec.gov/litigation/litreleases/2007/lr20282.htm