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UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16138
Securities
and Exchange Commission v. Abacus International
Holding Corp. and Arthur Agustin, C99-2191TEH
(N.D. Cal.)
The
Securities and Exchange Commission ("Commission")
announced that, on May 11, 1999, it filed
a complaint in the United States
District Court for the Northern District of
California against Abacus International Holding
Corp. ("Abacus") and its sole
owner and employee,
Arthur
Agustin ("Agustin"), of Alameda,
California. The Commission's complaint alleges
that Agustin, acting by and through Abacus,
and
through
Abacus' Internet website which he created,
has since July 1998 fraudulently offered
and sold "prime bank" securities in
violation of the
securities registration and antifraud provisions
of the Securities Act of 1933 ("Securities
Act") and the antifraud and broker-dealer
registration
provisions
of the Securities Exchange Act of 1934 ("Exchange
Act").
The
Commission's complaint alleges that Agustin created
a website, at www.abacusintl.com, through
which he and Abacus offer non-existent
securities
to investors and promise extravagant, risk-free
guaranteed returns of 80% per month and higher.
Using materials found on other Internet
websites,
Agustin falsely describes Abacus as an international
company with access to a wide variety of
investment opportunities when, in reality, it
is
nothing more than a website operated by Agustin
out of his home. The website offers several
different investment programs, descriptions
of which
Agustin
also obtained from other websites, all of
which bear the indicia of prime bank securities.
The
complaint alleges that Agustin, through Abacus
and the website, has made numerous material
misrepresentations and omissions concerning
the
offered investments. Most importantly, the
defendants falsely suggest that prime bank securities
exist, when they do not. As a result of
these fraudulent
statements,
at least one investor sent Agustin $170,000,
and was induced by Agustin to send an additional
$80,000 to a third party. Agustin
misappropriated
at least $60,000 of the investor's funds for his
own use.
The
complaint seeks to permanently enjoin the defendants
from future violations of Sections 5(c) and 17(a)
of the Securities Act, and Sections 10(b)
and
15(a) of the Exchange Act and Rule 10b-5
thereunder. The complaint also seeks disgorgement
and civil penalties from each of the defendants.
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