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U.S. Securities and Exchange CommissionLitigation Release No. 18841 / August 23, 2004Securities and Exchange Commission v. Internet Broadcast Group, et al., Civil Action No. 96CV02226 (RCL) (D.D.C.)COURT ENTERS FINAL JUDGMENT AND ORDERS PAYMENT OF $1,608,102 IN DISGORGEMENT AND CIVIL PENALTIES AGAINST RICHARD PARNELL AND ONE TOUCH MARKETING, INC. IN WIRELESS CABLE FRAUDThe Securities and Exchange Commission announced that on August 17, 2004, the Honorable Royce C. Lamberth, United States District Court Judge for the District of Columbia, entered an Order and Amended Judgment as to Defendants Richard B. Parnell and One Touch Marketing, Inc. (OTM). Previously, on June 9, 2004, the court had entered a Final Judgment of Permanent Injunction and Other Relief against Parnell and OTM. The Final Judgment and Order (collectively, "the final judgment") were both entered following the Commission's motion for summary judgment, to which the defendants failed to respond. The final judgment orders the defendants Parnell and OTM, jointly and severally, to pay disgorgement of $663,000, prejudgment interest of $141,051, and a $804,051 civil penalty. The disgorgement amount represents the amount of investor funds received by the defendants as a result of their unlawful conduct. The Court enjoined Parnell and OTM from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, the securities registration provisions of Sections 5(a) and (c) of the Securities Act, and the broker-dealer registration provisions of Section 15(a) of the Exchange Act. According to the Commission's complaint, which was filed on September 26, 1996, Parnell and OTM and other co-defendants violated various registration and antifraud provisions of the federal securities laws in connection with the unregistered nationwide sales of securities designated as partnership units in Internet Broadcast Group, a purported general partnership formed to engage in the wireless and hardwired cable business in Muskegon, Michigan and Mesa, Arizona. The Commission's complaint alleged that Parnell and OTM, his wholly controlled company, functioned as brokers in selling the securities although they were not registered as brokers as required by applicable securities laws. Further, the Commission's complaint alleged that Parnell and OTM used a variety of false and misleading sales literature, correspondence, and telephone statements to sell the securities. Parnell and OTM also were defendants in another Commission lawsuit. In SEC v. Internet Telecommunications Albany System SMR, et al., Parnell and OTM were charged with violations of various registration and antifraud provisions of the federal securities laws in connection with the sale of securities in three general partnerships organized to develop specialized mobile radio systems, i.e. paging systems. Default judgments previously were entered against Parnell and OTM in that case (1) enjoining them from future violations of the federal securities laws and (2) ordering them to pay, jointly and severally, $43,951 in disgorgement, $30,485 in prejudgment interest, and a $43,951 penalty. (See Litigation Release Nos. 16073, 16592 and 16989) See also Litigation Release Nos. 15074 (September 26, 1996), 15383 (June 10, 1997), 15778 (June 11, 1998), 16617 (July 3, 2000), and 17205 (October 25, 2001).
http://www.sec.gov/litigation/litreleases/lr18841.htm
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