Friday, May 23, 2008
The SEC charged Global Development & Environmental Resources, Inc., and individual defendants with securities fraud for their participation in a fraudulent scheme to evade registration requirements and a "pump and dump" stock manipulation scheme. The SEC also settled fraud charges against California-based securities attorney, Carmine J. Bua, who authored a fraudulent legal opinion, which authorized the issuance of purportedly unrestricted Global shares. The SEC alleges that from June through August 2005, defendants engaged in a complex scheme to evade the registration requirements by obtaining a fraudulently backdated convertible promissory note, using a forged assignment to assign the note to three foreign entities and then converting the note into unrestricted Global shares. The complaint alleges that defendant Bua drafted the assignment and legal opinion letter authorizing the issuance of unrestricted shares, despite possessing information which undermined the validity of the note and its subsequent assignment. The complaint further alleges that the defendants then engaged in a "pump-and-dump" scheme by arranging for Global to issue numerous press releases that contained false and misleading information relating to Global's purported clients, pending contracts and revenue projections.
Upon the filing of the Commission's complaint, and without admitting or denying the allegations in the complaint, Bua consented to the entry of a final judgment permanently enjoining him from violating Section 5 of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder and to a penny stock bar. Bua has agreed to pay disgorgement and civil penalties in an amount to be determined at a later date.