International Law

Contempt Hearing Ordered for Steven Rodd

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From the SEC Press Release, regarding the LinkTel bizop scam;

The Securities and Exchange Commission ("Commission") announced today that an application for an order to show cause why defendant Steven B. Rodd ("Rodd") should not be held in civil contempt was filed by the Commission on September 26, 2008, in the United States District Court for the Northern District of Georgia, based on his failure to pay disgorgement and civil penalties, as directed by the Court's August 30, 2007 order.

The Commission's application alleged that Rodd and others made material misrepresentations and omissions while selling investments on behalf of LinkTel Communications, Inc. ("LinkTel"), an Atlanta, Georgia company that sold and operated pay telephones.

Rodd represented to potential investors that he had investigated LinkTel and that it was a profitable company.

The application further alleged that Rodd did not reasonably investigate LinkTel's financial status.

Rodd further represented that LinkTel was a safe investment because the investment was fully insured. In fact, LinkTel was an insolvent ponzi scheme."

What is novel about this order is that it is unusual for a contempt hearing to be convened for the failure to pay money. Generally, contempt is reserved for something more than simply not paying - otherwise debtor's prison would beckon.

Full post as published by Misleading Advertising Law on September 30, 2008 (boomark / email).