U.S. Securities and Exchange Commission

Litigation Release No. 17646 / July 31, 2002

Court Orders Arizona Trust and Trustee to Pay $2.1 Million for Role in Internet Pump and Dump Scheme

SEC v. Hitsgalore.com, Inc., Stephen J. Bradford, Life Foundation Trust and Jeanette B. Wilcher, Civil Action No. SACV 01-1133 GLT (ANx) (C.D. Cal.).

The Securities and Exchange Commission announced today that a federal judge in Southern California ordered Life Foundation Trust and its trustee Jeannette Wilcher to pay $2.1 million in combined disgorgement of illegal profits and penalties for their role in a pump and dump scheme involving the stock of Hitsgalore.com, Inc. Hitsgalore was a publicly traded Internet company located in Rancho Cucamonga, California, that maintained a website providing an Internet search engine and leasing advertising space to consumers.

On November 28, 2001, the Commission filed an action against Wilcher and Life Foundation Trust along with Hitsgalore and its former president, Stephen J. Bradford. The complaint charged Hitsgalore and Bradford with fraud in connection with several press releases issued by the company between April 16 and May 10, 1999 that contained false and misleading statements about a purported investment in Hitsgalore by Life Foundation Trust. The fraudulent press releases caused a dramatic rise in the price of Hitsgalore's stock, quoted on the OTCBB, from $6.3125 to a high of $20.125. The complaint also charged Life Foundation Trust, a Scottsdale, Arizona, for-profit trust, and Wilcher, a resident of Scottsdale, Arizona, with aiding and abetting Hitsgalore's fraud and illegally selling Hitsgalore stock. The Commission previously settled its claims against Bradford and Hitsgalore.

On July 29, 2002, the Honorable Gary L. Taylor, United States District Judge for the Central District of California, resolved the case against Life Foundation Trust and Wilcher on summary judgment without the need for trial. The Court (1) permanently enjoined Life Foundation Trust and Wilcher from further violations of the antifraud provisions of Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and the registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933; (2) held Life Foundation Trust and Wilcher jointly liable for disgorgement of the $1,024,418.50 that Life Foundation Trust made in profits on the illegal sale of Hitsgalore stock; (3) ordered Life Foundation Trust to pay a civil penalty of $1,024,418.50; and (4) ordered Wilcher to pay a civil penalty of $110,000.

http://www.sec.gov/litigation/litreleases/lr17646.htm