PRESS RELEASE
Federal and State Regulators File Coordinated Actions to Halt “Broadband Wireless” Stock Manipulation Scheme
 
For Immediate Release
Friday, August 11, 2000 
 
Contact: Irving Faught, Administrator and Spencer Barasch, Associate District Administrator
  Oklahoma Department of Securities
  405-280-7700
 
 
Oklahoma City/////  The United States Securities and Exchange Commission (“SEC”) and the Oklahoma Department of Securities (“ODS”) announced today that they have filed coordinated enforcement lawsuits in federal and state district courts to halt an alleged “pump and dump” stock manipulation scheme involving the securities of Broadband Wireless International Corporation (“BBAN”). BBAN is a Nevada Corporation with offices in Cisco, Texas and Oklahoma City. Its common stock trades in the over the counter market on the NASD OTC Bulletin Board under the symbol “BBAN.”

The lawsuits allege that the scheme was primarily orchestrated by two individuals with histories of prior problems with regulators and law enforcement agencies, namely, Donald L. Knight (“Knight”), a convicted felon, and Ivan W. Webb (“Webb”), who was charged with fraud in a prior SEC lawsuit. Knight pled guilty in 1990 to wire fraud in connection with a securities scheme, for which he previously was incarcerated and remains on probation. Webb was permanently enjoined by a federal court from engaging in violations of the federal securities laws in 1982 and was ordered to cease and desist from violations of Kansas securities laws in 1992.

According to the SEC and ODS, in the fall of 1999, Knight, operating through one of his several “nominee” companies, BroadCom Wireless Communications Corporation (“BroadCom”), acquired control of BBAN, a struggling public oil and gas company, and changed the company’s stated business purpose to “telecommunications.” Over the next several months, Knight and Webb caused BBAN to issue press releases and file reports with the SEC that fraudulently touted the company’s purported acquisition of several private telecommunications companies. Knight and Webb further hyped the acquisitions and BBAN’s favorable business prospects on the company’s website and the “Raging Bull” Internet bulletin board.

The SEC and ODS further allege that these promotional or “pumping” efforts resulted in a dramatic rise in the price of BBAN’s stock. In late 1999, shortly after Knight acquired control of the company, BBAN stock was trading at about $.12 per share. By February 2000, the price had increased by 10,000% to more than $12 per share. Concurrently, Knight sold or “dumped” millions of shares of restricted BBAN stock he held in the name of BroadCom to investors, reaping at least $5 million. Unbeknownst to these investors and to the public marketplace, BBAN did not have the financial wherewithal to consummate any of the acquisitions it touted and eventually defaulted on each one. Moreover, investors who bought shares through Knight were falsely led to believe that they were purchasing shares directly from BBAN and that their funds were earmarked for the company’s operations. These investors also were falsely led to believe that they were buying BBAN shares that they could freely sell into the market within 90 days.

Knight and Webb later caused BBAN to file a false and misleading registration statement with the SEC on Form S-8. The registration statement falsely represented that the registered shares were for legitimate company consultants and employee purposes when, in fact, they were not. Later, Knight, in an effort to re-gain control over BBAN from Webb, caused BroadCom to conduct a fraudulent Internet proxy solicitation.

Irving Faught, Administrator of the ODS, said: “Using half-truths, misstatements and smoke and mirrors, the Defendants drove the price of the stock up while dumping low cost shares on the market. We know of millions of dollars received from investors across the country.” Faught further said: ”Since the Defendants received a significant amount of money from numerous people, we asked the Court to freeze any assets of the Defendants and return such assets, if any, to the investors.”

Spencer C. Barasch, Associate Administrator in charge of the SEC’s enforcement program for Oklahoma and other states, stated that: “”pump and dump stock manipulation schemes like this undermine the integrity of the markets to the extreme disadvantage of investors. For some time, the SEC has made it a priority to root out these schemes.” Barasch went on to state, “Investors must test the information that they receive regarding a company’s prospects and must view with skepticism comments made on the Internet until the information can be confirmed.”

The SEC and/or ODS lawsuits seek a myriad of relief including a freeze of assets, injunctions, and the appointment of a receiver for BBAN and other entities under Knight’s control.

Both the SEC and ODS worked closely with the Federal Bureau of Investigation in this matter. The U.S. Attorney’s Office has filed a Petition in U.S. District Court seeking to revoke Knight’s criminal probation.
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This press release, and related information, is available on the Securities Commission's web site at securities.ok.gov, by phone at (405) 280-7700, or in writing at:  Oklahoma Securities Commission, 204 North Robinson, Suite 400, Oklahoma City, OK 73102.