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U.S. SECURITIES AND EXCHANGE COMMISSIONLitigation Release No. 19765 / July 20, 2006Steven Misner, Civil Action No. 06CV5465 (S.D.N.Y.)SEC Charges Steven Misner, Former CEO of Southwestern Water Exploration Co., With Securities FraudThe Securities and Exchange Commission ("Commission") yesterday filed a civil injunctive action in the United States District Court for the Southern District of New York against Steven Misner ("Misner"), the former CEO of now-bankrupt Southwestern Water Exploration Co. ("Southwestern"). The Commission's complaint alleges that Misner engaged in a scheme to inflate Southwestern's stock price by creating the false impression that Southwestern owned water of great value. The complaint's allegations include the following:
If this project blows up in our face . . . we, the company, need to ensure that we have taken every step possible to both maximize the return to the company and limit our liability. . . . [R]emember that everyone, including [our large investor] and the majority of our shareholders, think that we have at least 100 million of water for sale which is not the case . . . In the action, the Commission seeks a final judgment permanently enjoining Misner from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission also seeks an order requiring Misner to account for and disgorge all ill-gotten gains he received by virtue of his misconduct, with prejudgment interest; directing Misner to pay civil penalties; barring Misner from acting as an officer or director of a public company; and barring Misner from any future participation in the offering of any penny stock.
http://www.sec.gov/litigation/litreleases/2006/lr19765.htm
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