Facts

The Securities and Exchange Commission filed a lawsuit against Thomas Ronk, owner and cofounder of Wealthmakers Ltd. for violating antifraud provisions of the Securities Act. Ronk, a Corona Del Mar resident, held several securities licenses and was associated with various registered broker-dealers between 1992 and 1998.

PLAINTIFF'S CONTENTIONS: Plaintiff alleged that defendant misled investors in regards to material information affecting their decision to invest: the returns that his company purportedly generated and the amount of seed capital invested by defendant and other officers of the company. Moreover, according to plaintiff, defendant broadcasted false and misleading information in connection with the unregistered offerings of securities in two companies, Casablanca Mining and Gepco Ltd., by asserting revenue projections not factually based while scheming to drive up the two companies stock prices through deception and manipulation. For example, Casablanca Mining's marketing materials gave the impression that it had an active, productive gold mining operation when in reality no mining had ever been done by the company and there were no contracts in place with anyone to purchase any mined product.

DEFENDANT'S CONTENTIONS: Defendant denied plaintiff's contentions.

Result

Along with other restrictions, defendant was permanently enjoined from certain practices pertaining to the sale or purchase of securities; was barred for five years from participating in penny stock offerings; required to pay a civil penalty of $75,000.