United States Securities and Exchange Commission

Litigation Release No. 18249 / July 24, 2003

SEC Files Civil Lawsuit in On-line Casino Stock Fraud Case

Securities and Exchange Commission v. Investment Technology, Inc. et al., Case No. CV-S-03-0831 (D. Nev.).

The Securities and Exchange Commission announced today that on July 15, 2003, it filed a complaint against Investment Technology, Inc., a Las Vegas, Nevada publicly-traded company, in connection with an alleged fraudulent scheme involving the company's stock and its purported on-line gambling casino. The complaint alleges that Thomas D. Vidmar, of Las Vegas, Nevada, the company's CEO and chairman, and Ulysses "Thomas" Ware, of Atlanta, Georgia, the company's securities counsel, falsely promoted Investment Technology in press releases and "analyst reports" as a leader in on-line gambling, even though its casino website never received wagers or generated revenues. The complaint further alleges that Vidmar and Ware dumped millions of Investment Technology shares into the manipulated market, and collectively realized more than $200,000 in unlawful profits.

The other defendants in the case are:

• Rosenfeld, Goldman & Ware, Inc. ("RGW"), Ware's Atlanta, Georgia law firm and self-styled "investment banking" firm;
   
• Small Cap Research Group, Inc., a Georgia corporation which touted Investment Technology's stock through "analyst reports" prepared by Ware; and
   
• Centennial Advisors, LLC, a Georgia limited liability company, which also touted Investment Technology's stock through "analyst reports" prepared by Ware.

The complaint alleges that Vidmar and Ware caused Investment Technology to file two false and misleading registered securities offerings with the Commission. Thereafter, the complaint alleges that the defendants issued numerous press releases and "analyst reports" recommending the purchase of Investment Technology stock based on various unfounded claims regarding the company's purported on-line gambling casino operation. For example, a February 7, 2002, press release claimed that the casino's website had "accepted over 100,000 wagers on the Super Bowl, for more than $4 million." Other releases and reports described Investment Technology, which had no history of operations or revenue, as "a leader" in the online gaming industry. However, no bets were ever placed on the company's casino website. In addition, the complaint alleges that the company and Vidmar filed materially misleading reports with the Commission and that Vidmar, Ware and RGW failed to filed required reports with the Commission disclosing their Investment Technology stock holdings.

The Commission's complaint alleges that based on the conduct set forth above:

• Investment Technology violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act"), and Sections 10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5, 12b-20, 13a-1, 13a-11 and 13a-13 thereunder;
   
• Vidmar violated Sections 5(a), 5(c) and 17(a) of the Securities Act, and Sections 10(b) and 16(a) of the Exchange Act and Rules 10b-5 and 16a-3 thereunder, and aided and abetted violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, 13a-11 and 13a-13 thereunder;
   
• Ware and RGW violated Sections 5(a), 5(c), 17(a) and 17(b) of the Securities Act, and Sections 10(b) and 13(d) of the Exchange Act and Rules 10b-5 and 13d-1 thereunder; and
   
• Small Cap and Centennial Advisors violated Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

The complaint seeks injunctions against all defendants, disgorgement with pre-judgment interest from Vidmar, RGW and Ware, civil money penalties from all defendants except Investment Technology, penny stock bars against Vidmar, Ware, RGW, Small Cap and Centennial, and an officer and director bar against Vidmar.

http://www.sec.gov/litigation/litreleases/lr18249.htm