Thursday, February 1, 2007
On February 1, the Commission filed to amend its complaint in a lawsuit against Allixon International Corp., a Delaware corporation based in South Korea, to name Houston attorney Hank A. Vanderkam as a defendant. Vanderkam is the former securities counsel to Allixon. The SEC filed the original lawsuit in November 2005 against Allixon and other defendants to halt an ongoing unregistered distribution of 1.3 million shares of Allixon's common stock.
The amended complaint alleges that Vanderkam participated in the illegal distribution of the 1.3 million Allixon shares, which represented 94% of the company's float. The 1.3 million shares were issued to two offshore entities without a restrictive legend based on Vanderkam's opinion letter that the Allixon stock offering complied with "Section (sic) 504 of Regulation D and the laws of the State of Texas." In fact, the offering failed to comply with the requirements of Rule 504 under Regulation D of the Securities Act of 1933, and the offering was never registered in, and had no connection to, the State of Texas. The two offshore entities, defendants Silver Lake Investments, Inc. and Crescendo Investments Inc., were control persons of Allixon who allegedly sold over 900,000 of the Allixon shares in the Pink Sheets for approximately $4.3 million.
Vanderkam consented to the entry of an agreed final judgment, permanently enjoining him from future violations of the securities-registration provisions and other relief. In addition, the consent order bars Vanderkam from issuing opinion letters under Rule 504 of Regulation D. [SEC v. Allixon International Corp., et al., Civil Action No. 3:05-CV-2260-P, United States District Court for the Northern District of Texas, Dallas Division] (LR-19987)