Oriental New Investments Ltd. Case 10/11/2001

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Company Name(s): 
Oriental New Investments
Case Name: 
Oriental New Investments Ltd. Case 10/11/2001
Case Status: 
Judgment Issued
Lawsuit Overview
Type of Lawsuit: 
Shareholder Class Action
Date Filed: 
10/11/2001
Summary: 

A federal district court in New York recently entered final judgments by default against three parties, each of which was involved in two related stock manipulation schemes.

On April 15, 2008, and March 11, 2008, the court entered the judgments against defendant Alfred Peeper and relief defendants Oriental New Investments, Ltd. (ONI), and Orienstar Finance, Ltd. (OFL) in two civil enforcement actions brought by the Commission. In its complaints, the Commission charged that Peeper, ONI, and OFL were involved in complex schemes to manipulate the common stocks of AbsoluteFuture.com (AFTI) and Wamex Holdings, Inc. (WAMX), respectively. According to the complaints, the manipulation schemes occurred from July 1999 through June 2000 and employed false and misleading press releases and manipulative trading techniques. Among other things, the judgments ordered Peeper, ONI, and OFL to disgorge trading profits totaling $12,869,543 and to pay prejudgment interest totaling $8,017,919.48.

The complaint against Wamex Holdings, Inc., et al. was filed on October 11, 2001, and named 22 defendants, including Peeper, and four relief defendants, including ONI and OFL. The April 15, 2008 judgment against Peeper permanently enjoins him from violating the antifraud provisions of the federal securities laws - namely, Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The court also ordered that Peeper, ONI, and OFL are jointly and severally liable to pay disgorgement totaling $9,096,298, representing their trading profits in the WAMX scheme, plus prejudgment interest of $5,667,130.92, for a total of $14,763,428.92. In addition, Peeper was ordered to a pay civil money penalty of $110,000 and was permanently barred from participating in an offering of penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase or sale of any penny stock. Previously, in October 2002, July 2004, and March 2007, the Commission obtained default judgments in the WAMX litigation against 20 of the 21 other defendants and both of the other relief defendants. The litigation is continuing as to the remaining party, defendant Eugene Geiger.

The complaint against Absolutefuture.com, et al. also was filed on October 11, 2001, and named 12 defendants, including Peeper, and four relief defendants, including ONI and OFL. The March 11, 2008 judgment against Peeper permanently enjoins him from violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder. The court also ordered that Peeper, ONI, and OFL are jointly and severally liable to pay disgorgement totaling $3,773,245, representing their trading profits in the AFTI scheme, plus prejudgment interest of $2,350,788.56, for a total of $6,124,033.48. In addition, Peeper was ordered to pay a civil money penalty of $110,000. Previously, in January 2003, February 2003, and October 2004, the Commission obtained default judgments in the AFTI litigation against 10 of the 11 other defendants and one of the two other relief defendants. The litigation is continuing as to the remaining parties, defendant Eugene Geiger and relief defendant VJV, Inc.

Background:

The complaint alleged that Peeper, a financier residing in Spain, participated in the schemes by purchasing large blocks of AFTI and WAMX stock at undisclosed discounts through trades prearranged with co-defendant Edward A. Durante. According to the complaints, relief defendants ONI and OFL, which are Hong Kong corporations with offices in Switzerland and Spain, were unjustly enriched by Peeper’s illegal trading of AFTI and WAMX stock in their brokerage accounts, which he controlled. The complaints alleged that the transactions were manipulative in nature because they were misleadingly reported to the market and created a false impression of the trading volume and the demand for AFTI and WAMX shares. Overall, the manipulation schemes increased AFTI’s stock price from a low of $0.21 per share in December 1999 to a high of $6.00 per share in March 2000, and increased WAMX’s stock price from a low of $1.375 per share in December 1999 to a high of $19.50 per share in February 2000.