U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): March 13, 2000
eConnect
(Exact name of registrant as specified in its charter)
Nevada
(State or jurisdiction of incorporation or organization)
33-68570
(Commission File Number)
43-1239043
(I.R.S. Employer Identification Number)
2500 Via Cabrillo Marina, Suite 112, San Pedro, Ca 90731
(Address of principal executive offices) (Zip Code)
Registrant's telephone number: (310) 514-9482
.
(Former name or former address, if changed since last report)
ITEM 5. OTHER EVENTS.
On March 24, 2000, a temporary restraining order was issued
prohibiting eConnect and its president, Thomas S. Hughes, from
committing violations of the antifraud provisions of the federal
securities laws. eConnect and Mr. Hughes consented to the
temporary restraining order, which will expire after sixty days
at or before which time the Court will hear the Commission's
request for a preliminary injunction.
In a complaint filed on March 23, 2000 (Securities and Exchange
Commission v. eConnect and Thomas S. Hughes, Civil Action No. CV
00 02959 AHM (C.D. Cal.)), the Commission alleged that since
February 28, 2000, eConnect has issued false and misleading
press releases claiming: (1) eConnect and its joint venture
partner had a unique licensing arrangement with PalmPilot; and
(2) a subsidiary of eConnect had a strategic alliance with a
brokerage firm concerning a system that would permit cash
transactions over the Internet. The complaint further alleges
that the press releases, which were disseminated through a wire
service as well as by postings on internet bulletin boards,
caused a dramatic rise in the price of eConnect stock from $1.39
on February 28 to a high of $21.88 on March 9, 2000, on heavy
trading volume. The Commission suspended trading in eConnect's
stock on March 13. The complaint alleges that despite the
trading suspension and the Commission's related investigation,
eConnect and Hughes continued to issue false and misleading
statements concerning eConnect's business opportunities. In
addition to the interim relief granted, the Commission seeks a
final judgment against eConnect and Hughes enjoining them from
future violations of Section 10(b) of the Exchange Act and Rule
10b-5 thereunder and assessing civil penalties against them.
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, the Registrant has duly caused
this report to be signed on its behalf by the undersigned,
thereunto duly authorized.
eConnect
Dated: March 30, 2000 By:/s/Thomas S. Hughes, President
Thomas S. Hughes, President
EXHIBIT INDEX
Exhibit No. Description
99 Litigation Release of the U.S. Securities and Exchange
Commission, dated March 24, 2000 (see below).
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16484 / March 24, 2000
SECURITIES AND EXCHANGE COMMISSION v. eCONNECT AND THOMAS S.
HUGHES, Civil Action No. CV 00 02959 AHM (C.D. Cal.)
The Securities and Exchange Commission ("Commission") announced
that on March 24, 2000, the Honorable Margaret M. Morrow, United
States District Judge for the Central District of California,
issued a temporary restraining order prohibiting eConnect, a
publicly traded corporation, and its president, Thomas S. Hughes
("Hughes"), from committing violations of the antifraud
provisions of the federal securities laws. Hughes and eConnect
consented to the temporary restraining order, which will expire
after sixty days at or before which time the Court will hear the
Commission's request for a preliminary injunction.
The Commission's complaint, filed on March 23, alleges that
since February 28, 2000, eConnect has issued false and
misleading press releases claiming: (1) eConnect and its joint
venture partner had a unique licensing arrangement with
PalmPilot; and (2) a subsidiary of eConnect had a strategic
alliance with a brokerage firm concerning a system that would
permit cash transactions over the Internet. In fact, eConnect
has no licensing arrangement whatsoever with Palm, Inc., and the
"strategic alliance" is no more than a letter of intent between
a brokerage and a joint venture partner of eConnect. The
complaint further alleges that the fraudulent press releases,
which were disseminated through a wire service as well as by
postings on internet bulletin boards, caused a dramatic rise in
the price of eConnect stock from $1.39 on February 28 to a high
of $21.88 on March 9, 2000, on heavy trading volume. The
Commission suspended trading in eConnect's stock on March 13.
The complaint alleges that despite the trading suspension and
the Commission's related investigation, eConnect and Hughes
continued to issue false and misleading statements concerning
eConnect's business opportunities.
The Commission obtained an order temporarily restraining
eConnect and Hughes committed from committing securities fraud
in violation of Section 10(b) of the Securities Exchange Act of
1934 ("Exchange Act") and Rule 10b-5 thereunder. In addition to
the interim relief granted today, the Commission seeks a final
judgment against eConnect and Hughes enjoining them from future
violations of Section 10(b) of the Exchange Act and Rule 10b-5
thereunder and assessing civil penalties against them.
