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Exotics.com, Inc. (Charged with Exotic Fraud) - Nevada 2001  

Exotics.com, Inc. (Charged with Exotic Fraud) - Nevada 2001

Product #: newitem228683058

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PRODUCT DESCRIPTION  
Beautiful certificate from Exotics.com, Inc. issued in 2001. This historic document has an ornate border around it. This item has the printed signatures of the Company’s President, and Secretary, and is over 10 years old.

U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 19207 / April 28, 2005 ACCOUNTING AND AUDITING ENFORCEMENT RELEASE NO. 2239 / April 28, 2005 Securities and Exchange Commission v. Exotics.com, Inc., et al., (United States District Court, District of Nevada, C.A. No. CV-S-05-0531-PMP-RJJ, filed April 25, 2005) SEC FILES FRAUD CHARGES AGAINST EXOTICS.COM, INC., ITS SOLE OFFICER, OUTSIDE ACCOUNTANTS AND ITS ATTORNEYS The Securities and Exchange Commission, on April 25, 2005, filed a civil fraud action against Exotics.com, Inc. ("Exotics-Nevada"), its sole officer, four individual outside accountants, two outside attorneys and several other individuals alleging that they knowingly participated in a stock manipulation scheme and accounting fraud during the period 1999 through 2002. Exotics-Nevada is a Nevada corporation based in Vancouver, British Columbia, which owned, operated and licensed adult Web sites. The complaint, which was filed in the United States District Court in Nevada, names individual defendants Firoz Jinnah of Burnaby, British Columbia, Ingo W. Mueller and Barry F. Duggan of Vancouver, British Columbia, Stephen P. Corso, Jr. of Ridgefield, Connecticut, Brian K. Rabinovitz of Los Angeles, California, Marlin R. Brinsky of Santa Monica, California, L. Rex Andersen of Draper, Utah, Sean P. Flanagan and Daniel G. Chapman of Las Vegas, Nevada, E. James Wexler of Scottsdale, Arizona, James L. Ericksteen of Kamloops, British Columbia, and Gary Thomas, of Playa Del Rey, California. In addition, the complaint names the law firm of Flanagan & Associates, Ltd. of Las Vegas, Nevada, as a relief defendant.

In its complaint, the Commission alleges that, during the period 1999 through 2002, the participants in the scheme engaged in manipulative trading of Exotics-Nevada stock for the purpose of artificially increasing the stock's price and trading volume and were involved in or responsible for various false and misleading public filings that Exotics-Nevada made with the Commission and/or for the dissemination of a false and misleading press release and fax and e-mail spams about Exotics-Nevada. According to the complaint, the accountants fraudulently participated in audits of Exotics-Nevada's year-end financial statements and in a review of its quarterly financial statements and failed to conduct those engagements in accordance with GAAS, as required. The Commission also alleges in its complaint that, among other things, the accountants prepared or created many of Exotics-Nevada's books and records and then audited the financial statements they created. According to the complaint, they also caused their firms to issue false audit reports which, together with the underlying financial statements, were incorporated in Exotics-Nevada's public filings with the Commission.

The complaint charges all of the primary defendants with violating antifraud provisions of the federal securities laws, Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and charges Mueller, Jinnah, Duggan, Andersen and Thomas with aiding and abetting Exotics-Nevada's violations of those provisions. The complaint also charges Exotics-Nevada with violating the reporting and books and records provisions, Sections13(a), 13(B)(2)(A) and 13(B)(2)(B) of the Exchange Act and Rues 13a-1, 13a-11, 13a-13, 12b-20 and 12b-11 thereunder, and charges Andersen, Jinnah, Duggan and Thomas with aiding and abetting Exotics-Nevada's violations of those provisions. In addition, the complaint charges Jinnah and Duggan with violating the internal controls provision, Section 13(b)(5) of the Exchange Act, and charges Exotics-Nevada with violating the securities registration provisions, Sections 5(a) and 5(c) of the Securities Act of 1933. The complaint also charges Andersen, Corso, Rabinovitz and Brinsky with violating the provision governing audit reports, Article 2 of Regulation S-X. Finally, the complaint charges Mueller, Jinnah and Thomas with violating the securities ownership reporting provisions, Sections 13(d) and 16(a) of the Exchange Act and Rules 13d-1 and 16a-3 thereunder.

The Commission is seeking permanent injunctions against all the defendants, civil money penalties and disgorgement of all ill-gotten gains by all of the defendants except Exotics-Nevada, bars from serving as an officer or director of any public company against Mueller, Jinnah and Duggan, and penny stock bars against Mueller, Jinnah, Duggan, Flanagan, Chapman, Ericksteen and Wexler. In addition, the Commission is seeking disgorgement by relief defendant Flanagan & Associates of all funds it received from the primary defendants.

The Commission staff acknowledges the assistance of the British Columbia Securities Commission in its investigation.




U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21456 / March 19, 2010

Accounting and Auditing Enforcement Release No. 3121 / March 19, 2010

Securities and Exchange Commission v. Exotics.com, Inc, Civil Action No. 2:05-cv-00531-PMP-GWF, United States District Court, District of Nevada

Final Judgments Entered Against Certified Public Accountants Stephen P. Corso and Brian K. Rabinovitz in Market Manipulation and Financial Fraud Case

The Securities and Exchange Commission announced that a federal district court in Nevada has entered final judgments, by consent, against Stephen P. Corso, of Las Vegas, Nevada, and Brian K. Rabinovitz of Oak Park, California, in connection with an enforcement action filed in 2005 concerning a stock manipulation and accounting fraud scheme. The judgment against Corso, entered on March 18, 2010, permanently enjoins him from violating the antifraud and auditor independence provisions of the federal securities laws. The judgment against Rabinovitz, entered on March 15, 2010, permanently enjoins him from violating the auditor independence provisions of the federal securities laws and orders him to pay a civil penalty of $30,000.

The Commission's civil injunctive action was filed on April 25, 2005, against Exotics.com, Inc., a Nevada corporation based in Vancouver, British Columbia, and 12 additional principal defendants and one relief defendant. The Commission's complaint alleged that, between at least 1999 and 2002, Exotics.com, which was then an Over-the-Counter Bulletin Board company in the business of operating adult Web sites, was the subject of a stock manipulation and accounting fraud perpetrated by, among others, its officers, attorneys and outside auditors. The complaint alleged, among other things, that Corso, Rabinovitz, and others engaged in conduct that resulted in Exotics.com filing materially false and misleading financial statements in its Commission filings. The complaint further alleged that audit staff under the supervision of Corso and Rabinovitz committed acts and/or omissions that caused them to become non-independent during audits of Exotics.com and that Corso and Rabinovitz approved the issuance of audit reports that were incorporated in Exotics.com's Commission filings. According to the complaint, the audit reports, among other things, falsely stated that the audits had been conducted by an independent auditor and in accordance with generally accepted auditing standards (GAAS). The Complaint also alleged that Rabinovitz and audit staff under his supervision engaged in a number of improper accounting practices that caused Exotics.com's financial statements to depart from generally accepted accounting principles (GAAP).

Without admitting or denying the allegations in the Commission's complaint, Corso and Rabinovitz consented to the entry of final judgments against them. The final judgment against Corso enjoins him from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder and Rule 2-02 of Regulation S-X. The final judgment against Rabinovitz enjoins him from violating Rule 2-02 of Regulation S-X and orders him to pay a civil penalty of $30,000.

Rabinovitz also consented to the entry of an Administrative Order, pursuant to Rule 102(e) of the Commission's Rules of Practice, suspending him from appearing or practicing before the Commission as an accountant, with a right to apply for reinstatement after three years. Corso was previously forthwith suspended, on April 14, 2009, from appearing or practicing before the Commission as an accountant.

The Commission previously obtained judgments by default against two defendants and judgments by consent against two additional defendants. The action remains pending against the remaining seven defendants and a relief defendant.

For further information, see Litigation Release Nos. 19207 (April 28, 2005) [civil injunctive action filed], 19645 (April 7, 2006) [judgment by default against Exotics.com], 19699 (May 15, 2006) [judgment by consent against Barry Duggan], 19957 (January 4, 2007) [judgment by default against Gary Thomas], and 21028 (May 7, 2009) [judgment by consent against Edward James Wexler], and Exchange Act Release No. 59766 (April 14, 2009) [forthwith suspension of Stephen Corso].

History from OldCompany.com (old stock certificate research service) and WWI Liberty Bonds Buyer.

Product #: newitem228683058

Normal Price: $89.95
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