SEC FILES ACTION AGAINST PRIME STAR GROUP, INC. FOR VIOLATIONS

The following excerpt is from the Securities and Exchange Commission website:

“Securities and Exchange Commission v. Prime Star Group, Inc., et al., Civil Action No. 2:12-cv-00371 (D. Nev.) (March 7, 2012)
The Securities and Exchange Commission filed a civil action in the United States District Court for the District of Nevada against Prime Star Group, Inc. and its chief executive officer Roger Mohlman of Las Vegas, Nevada, for violations of antifraud, registration, reporting, and books and records provisions, and against Danny Colon and Marysol Morera of Edgewater, New Jersey, Felix Rivera of Clifton, New Jersey, New Jersey limited liability company DC International Consulting LLC, Kevin Carson of Lake Worth, Florida, Esper Gullatt, Jr. of Aurora, Colorado, Minnesota corporation The Stone Financial Group, Inc., and Joshua Konigsberg of Palm Beach Gardens, Florida for registration violations.

According to the SEC’s complaint, Prime Star illegally distributed more than 18 million purportedly unrestricted Rule 144 shares pursuant to backdated consulting agreements or forged attorney opinion letters. The SEC alleges that in furtherance of a pump and dump scheme, Prime Star and Mohlman issued the shares to consultants Colon, Morera, Rivera, DC International Consulting LLC, Carson, The Stone Financial Group, Inc., and Konigsberg who liquidated Prime Star stock and either kept a portion of the sales proceeds or forwarded proceeds to promoters to tout Prime Star. The SEC’s complaint also alleges that Prime Star and Mohlman made false and misleading statements in Prime Star’s SEC filings and in various press releases during the relevant time period.
The SEC alleges that Prime Star and Mohlman violated Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder, and that Prime Star violated Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. The complaint further alleges that Mohlman violated Section 13(b)(5) of the Exchange Act and Rules 13a-14, 13b2-1 and 13b2-2 thereunder and aided and abetted Prime Star’s violations of Sections 10(b), 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Exchange Act and Rules 10b-5(b), 12b-20, 13a-1 and 13a-13 thereunder. The SEC also alleges Section 5(a) and 5(c) violations against Colon, Morera, Rivera, DC International Consulting LLC, Carson, Gullatt, The Stone Financial Group, Inc., and Konigsberg.

Without admitting or denying the allegations in the Commission’s complaint, and subject to court approval, Konigsberg has consented to the entry of a judgment that would enjoin him from future violations of Sections 5(a) and 5(c) of the Securities Act.

Separately, the Commission today issued an Order Instituting Administrative Proceedings and Notice of Hearing Pursuant to Section 12(j) of the Securities Exchange Act of 1934 against Prime Star, to determine whether the registration of each class of its securities should be revoked or suspended for a period not exceeding twelve months based on its failure to file required periodic reports. The Division of Enforcement alleges that Prime Star has failed to comply with Exchange Act Section 13(a) and Rules 13a-1 and 13a-13 thereunder by failing to file periodic reports required by these provisions. A hearing will be scheduled before an Administrative Law Judge to determine whether the allegations of the Division contained in the Order are true, and to provide Prime Star an opportunity to respond to these allegations."