U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 16818 / December 6, 2000

S.E.C. v. Global Financial Traders, Ltd., et al., 97 Civ. 1753 (S.D.N.Y.)

A Motion for Civil Contempt was filed on November 30, 2000, against Michael R. Reilly based on Reilly's failure to comply with the provisions of the Court's Final Judgment dated June 2, 1999. The Motion alleges that Reilly was ordered to pay disgorgement of $200,000 on a schedule set forth in the Court's Final Judgment. The Motion further alleges that Reilly has failed to make payments pursuant to the Court's Final Judgment. A hearing on the Commission's Motion has been scheduled for December 6, 2000.

The Commission's complaint in this matter alleged Reilly was the publisher of a newsletter which touted microcap stocks and that Reilly had received large amounts of American Image Motor Company stock, one of the issuers profiled in the newsletter. The complaint further alleged that Reilly failed to disclose his control of this stock and that he sold American Image stock while recommending its purchase. Based on this conduct Reilly was enjoined by the United States District Court for the Southern District of New York from further violations of Section 10(b) of Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder and Rule 102 of Regulation M.

http://www.sec.gov/litigation/litreleases/lr16818.htm