U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19196 / April 20, 2005

SEC v. Douglas Norman, Civil Action No. 03-CV-1155 (NRB) (S.D.N.Y.)

COURT ENTERS $3.9 MILLION JUDGMENT AGAINST DOUGLAS NORMAN, FORMER PRINCIPAL OF WORLD TRANSPORT AUTHORITY, INC.

The Commission announced that on March 16, 2005, the U.S. District Court for the Southern District of New York entered Final Judgment against Douglas Norman. The Commission's Complaint, filed in February 2003, alleged that Norman, the founder of World Transport Authority, Inc. (WTA), knew of and approved materially false or misleading press releases and statements on the internet concerning WTA, that he failed to file required reports concerning his beneficial ownership and holdings of WTA stock, and that he permitted WTA to file materially false or misleading quarterly and annual reports with the Commission. The Complaint also alleged that during the period when the false or misleading statements were being made, Norman sold, at inflated prices, at least 5.5 million shares of WTA stock without registration, realizing at least $1.8 million from the unlawful sales. Norman never answered the Complaint.

According to the Complaint, Norman was the founder and de facto chief executive of WTA, a Canadian corporation then headquartered in the San Diego, California area. WTA claimed to have designed a revolutionary car, called the WorldStar, and a unique system for manufacturing the car, called a "micro-factory," which could be set up in ninety days and thereafter produce one car per day. The Complaint alleged, among other things, that in the year 2000 and into 2001, WTA issued numerous materially false and misleading press releases and other statements concerning licenses for production of the WorldStar in underdeveloped countries and regions, and the revenue expected from the license deals. For example, in September 2000, WTA announced the sale of the license for China for $40 million, and projected revenues from the license over three years at $900 million. The Commission's Complaint alleged that it was materially false and misleading to describe the license fee as a fixed amount when the agreement did not unconditionally commit the licensee to pay any fee at all. The Complaint further alleged that even if the license led to the sale and production of cars, there was no reasonable basis to believe that it would do so quickly enough to fulfill the announced revenue projection.

The Court's Final Judgment enjoins Norman from future violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933, Sections 10(b), 13(a), 13(d) and 16(a) of the Securities Exchange Act of 1934, and Rules 10b-5, 12b-20, 13a-1, 13a-13, 13d-1 and 16a-3 thereunder, orders him to pay disgorgement of $1,800,000, plus prejudgment interest of $382,883, for a total of $2,182,833, and assesses a $1,800,000 civil monetary penalty against him. The Final Judgment also permanently bars Norman from acting as officer or director of a public company and from participating in any offering of penny stock.

For further information, see Litigation Release Number 17993 (February 21, 2003).

http://www.sec.gov/litigation/litreleases/lr19196.htm