 UNITED
STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 17137 / September 19,
2001
Securities
and Exchange Commission v. Zappa International
Corporation, Scott L. Simpson, Scott B. Walker,
Equity Management Services, Eagle Vision Holdings
Inc., Wayne Nattrass, and Westminster Trading
Trust, Civil Action No. 98-CV-213-B (USDC Wyo.)
On
December 29, 1999, the Commission obtained final
judgments against defendants Scott L. Simpson,
Zappa International Corporation, and Westminster
Trading Trust, all formerly located in Richmond,
Texas, and Eagle Vision Holdings Inc. and Wayne
L. Nattrass, both formerly located in the Seattle,
Washington area, which permanently enjoined the
defendants from violating the anti-fraud provisions
of Section 17(a) of the Securities Act of 1933,
Section 10(b) of the Securities Exchange Act of
1934 and Rule 10b-5. The United States District
Court for the District of Wyoming ordered Simpson,
Zappa and Westminster to jointly and severally
pay disgorgement of $5,802,657 plus prejudgment
interest of $630,267, and ordered Nattrass and
Eagle Vision to jointly and severally pay disgorgement
of $2,405,789 plus prejudgment interest of $209,012.
The Commission alleged the defendants raised these
funds from investors through the fraudulent sale
of investments in trading programs that supposedly
purchased prime bank instruments, by falsely offering
guaranteed returns exceeding 200 percent per month,
falsely claiming the programs were sponsored by
the Federal Reserve Bank and the International
Monetary Fund, and falsely representing that investors
apostrophe funds were guaranteed against risk
of loss by the top twenty-five world banks. The
defendants consented to entry of the final judgments
without admitting or denying the allegations in
the Commission's amended complaint.
On
March 3, 2000, the District Court entered a final
judgment against defendants Scott B. Walker and
Equity Management Services of Afton, Wyoming,
which permanently enjoined the defendants from
violating the anti-fraud provisions of Section
17(a) of the Securities Act of 1933, Section 10(b)
of the Securities Exchange Act of 1934 and Rule
10b-5. Based on the defendants' default the Court
found that Walker and Equity Management had made
false statements in connection with the sales
of interests in a fictitious trading program of
prime bank instruments. The Court found that Walker
had no basis for his statements about the prime
bank program because he did not obtain a bank
guarantee of investors' funds; he did not know
the persons trading the funds; had he inquired,
he would have learned that the International Monetary
Fund does not license traders and neither the
International Chamber of Commerce nor the Federal
reserve participates in nor approves prime bank
instrument trading programs; he had no basis to
claim returns of 50 to 100 percent per trade;
and he did not disclose that he received a commission
of 10 to 20 percent and used investors' funds
to pay his personal expenses. Walker's actions
and knowledge were attributed to Equity Management,
because he acted as its trustee and agent. The
Court ordered Walker and Equity Management to
jointly and severally pay disgorgement of $220,000,
which were the funds they had raised from investors,
plus prejudgment interest of $27,049.
On
September 30, 1999, the Court appointed a receiver
to take control of the defendants' assets and
collect funds for distribution back to the investors.
The receiver is preparing a distribution plan
to be approved by the Court.
On
December 28, 1999, in the related criminal case
based upon the same conduct, defendants Scott
Simpson and Wayne Nattrass each pled guilty to
one count of conspiracy to commit securities fraud
and wire fraud, and Scott Walker pled guilty to
one count of wire fraud. U.S. v. Scott B. Walker
d/b/a Equity Management Services, Scott L. Simpson
d/b/a Zappa International Corporation, and Wayne
L. Nattrass d/b/a/ Eagle Vision Holdings Inc.,
Case No. 99-CR-009B (D. Wyo.).
from:
http://www.sec.gov/litigation/litreleases/lr17137.htm
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