SEC v. DCI Telecommunications; Joseph J. Murphy; and Russell B. Hintz, No. LR-18611, Southern District of New York — Press Release
raw: DCI, et al.
DCI, et al., No. LR-18611
The SEC settled with DCI Telecommunications and its executives Joseph J. Murphy and Russell B. Hintz for accounting fraud involving inflated acquisitions and fictitious contracts, resulting in false filings, with Murphy paying a $75,000 penalty and both facing permanent injunctions, while DCI’s stock registration was revoked and relief defendant Grace Murphy was dismissed.
The SEC alleged that DCI Telecommunications, Joseph J. Murphy, and Russell B. Hintz materially misstated financial statements by improperly accounting for seven acquisitions and overstating a $15 million contract and $5 million promissory note, leading to inaccurate SEC filings. Murphy consented to a $75,000 civil penalty and a permanent injunction against violating Securities Act Sections 5(a), 5(c), 17(a)(2), and 17(a)(3), as well as aiding and abetting Exchange Act violations. DCI was permanently enjoined and had its common stock registration revoked under Exchange Act Section 12(j), while Hintz was enjoined from aiding violations but faced no monetary penalty; the relief defendant, Grace Murphy, was dismissed without admission or denial of wrongdoing.
The SEC settled litigation against DCI Telecommunications, its CEO Joseph J. Murphy, and CFO Russell B. Hintz for accounting fraud and securities law violations, without either party admitting or denying the allegations. The defendants were accused of improperly accounting for seven acquisitions and inflating the value of a purported $15 million contract and $5 million promissory note, resulting in materially false financial statements filed with the SEC. Murphy agreed to pay a $75,000 civil penalty and was permanently enjoined from violating Securities Act Sections 5(a), 5(c), 17(a)(2), and 17(a)(3), as well as from aiding and abetting violations of Exchange Act reporting provisions. DCI consented to a permanent injunction and the revocation of its common stock registration under Exchange Act Section 12(j), effectively delisting the company. Hintz was permanently enjoined from violating anti-fraud provisions under Section 17(a)(2) and (3) and from aiding and abetting Exchange Act reporting violations, but was not assessed a monetary penalty. The SEC also alleged that Murphy and DCI violated Section 5 of the Securities Act by distributing unregistered securities. The relief defendant, Grace P. Murphy, was dismissed from the case without any findings or penalties. The settlements were approved by the U.S. District Court for the Southern District of New York.
Extracted insights
- $15.00M $15 million $10M–$100M
- $5.00M $5 million $1M–$10M
- $75K $75,000 $10K–$100K
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- court united states district court for the southern district of new york
- organization United States District Court For The Southern District Of New York
- Securities and Exchange Commission announced settlement against defendants DCI Telecommunications, Joseph J. Murphy, Russell B. Hintz, and relief defendant Grace P. Murphy
- DCI Telecommunications consented to be enjoined from violating Sections 5(a), 5(c), 17(a)(2), 17(a)(3) of the Securities Act of 1933 and Sections 13(a), 13(b)(2)(A), 13(b)(2)(B) of the Securities Exchange Act
- United States District Court for the Southern District of New York approved settlements in the SEC's litigation against DCI Telecommunications and individuals
The Securities and Exchange Commission today announced that it has settled its litigation against defendants DCI Telecommunications, Joseph J. Murphy, Russell B. Hintz, and relief defendant Grace P. Murphy. The settlements were approved by the United States District Court for the Southern District of New York. Without admitting or denying the allegations in the Commission's amended complaint, defendant DCI consented to be permanently enjoined from violating Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), and Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. DCI further consented to have the registration of its common stock revoked pursuant to Exchange Act Section 12(j). Defendant Murphy consented to be permanently enjoined from violating Securities Act Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. Murphy also consented to pay a civil money penalty of $75,000. Defendant Hintz consented to be permanently enjoined from violating Securities Act Sections 17(a)(2) and 17(a)(3), and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. The Commission dismissed its claim against the relief defendant, Grace Murphy. The Commission's amended complaint alleges, among other things, that the defendants improperly accounted for seven acquisitions and overvalued a purported $15 million contract and $5 million promissory note, causing financial statements that DCI filed with the Commission to be inaccurate. The amended complaint also alleges that Murphy and DCI violated Securities Act Section 5 by distributing securities that were not registered with the Commission and not exempt from registration.
The Securities and Exchange Commission today announced that it has settled its litigation against defendants DCI Telecommunications, Joseph J. Murphy, Russell B. Hintz, and relief defendant Grace P. Murphy. The settlements were approved by the United States District Court for the Southern District of New York. Without admitting or denying the allegations in the Commission's amended complaint, defendant DCI consented to be permanently enjoined from violating Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) of the Securities Act of 1933 (Securities Act), and Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) of the Securities Exchange Act of 1934 (Exchange Act) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. DCI further consented to have the registration of its common stock revoked pursuant to Exchange Act Section 12(j). Defendant Murphy consented to be permanently enjoined from violating Securities Act Sections 5(a), 5(c), 17(a)(2) and 17(a)(3) and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. Murphy also consented to pay a civil money penalty of $75,000. Defendant Hintz consented to be permanently enjoined from violating Securities Act Sections 17(a)(2) and 17(a)(3), and from aiding and abetting violations of Exchange Act Sections 13(a), 13(b)(2)(A) and 13(b)(2)(B) and Exchange Act Rules 12b-20, 13a-1 and 13a-13. The Commission dismissed its claim against the relief defendant, Grace Murphy. The Commission's amended complaint alleges, among other things, that the defendants improperly accounted for seven acquisitions and overvalued a purported $15 million contract and $5 million promissory note, causing financial statements that DCI filed with the Commission to be inaccurate. The amended complaint also alleges that Murphy and DCI violated Securities Act Section 5 by distributing securities that were not registered with the Commission and not exempt from registration.