7 The principals were informed by counsel that if the SEC were successful against Peters it would rescind his license, and it would probably turn its attention towards the company and attempt to revoke its license. The principals of PGWV were involved in all aspects of the representation by counsel and in forming a strategy as to how to proceed; they did not want Peters to make any decisions without them, especially regarding any settlements with the SEC. Their efforts were aimed at avoiding litigation. In December 1988, the SEC filed a complaint against Peters and five other individuals, alleging acts in violation of the Securities Exchange Act of 1934, and rules promulgated thereunder. PGWV was not named as a party to the suit. Specifically, the SEC alleged in its complaint that Peters improperly obtained material nonpublic information from Ivan's files, which he communicated to Mick and Lounsbury who were able to profit by buying the stock of ERG themselves or by supplying the information to others who did so. Pursuant to such scheme, Peters allegedly received a portion of those profits in the form of repayment of loans previously made by him to Mick and Lounsbury. At the time of repayment, Mick had financial problems. The case was heard before a jury, which held for Peters. The SEC appealed to the Tenth Circuit Court of Appeals, which reversed and remanded to the trial court. SEC v. Peters, 978 F.2d 1162 (10th Cir. 1992). Prior to rehearing, the partiesPage: Previous 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Next
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