2002-09-26 sec-litreleases litigation_release 65 KB 2,439 chars

SEC v. William P. Trainor; Vincent D. Celentano; Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.); Karen Losordo; Diane M. Trainor; Daniel J. Trainor, et al., No. LR-17746, District of Columbia (Sept. 26, 2002) — Press Release

raw: William P. Trainor, Vincent D. Celentano, Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.), Karen Losordo, Diane M. Trainor, Daniel J. Trainor, Geraldine Trainor and Mary N. Celentano

William P. Trainor, Vincent D. Celentano, Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.), Karen Losordo, Diane M. Trainor, Daniel J. Trainor, Geraldine Trainor and Mary N. Celentano, No. LR-17746 (D.D.C. Sept. 26, 2002)

Caption
SEC v. William P. Trainor, et al.
Source JSON
summary

Medical Diagnostic Products, Inc. (f/k/a Novatek International) was permanently enjoined by the SEC for orchestrating a pump-and-dump scheme by issuing false press releases claiming $400 million in nonexistent South American distribution contracts for medical diagnostic kits, artificially inflating its stock price.

paragraph

The SEC charged Medical Diagnostic Products, Inc. (MDP) with violating Sections 10(b), 13(d), and 13(b)(2) of the Securities Exchange Act and related rules by fabricating $400 million in distribution contracts with South American entities for HIV and cholera diagnostic test kits between April and September 1996. MDP consented to a permanent injunction without admitting or denying guilt, effectively resolving its civil liability via a Final Judgment entered on September 17, 2002. Proceedings against individual defendants, including William P. Trainor, were stayed pending criminal proceedings.

narrative

Medical Diagnostic Products, Inc. (MDP), formerly Novatek International, was the subject of an SEC enforcement action for orchestrating a fraudulent pump-and-dump scheme involving its securities. Between April 11 and September 3, 1996, MDP issued a series of false press releases claiming it had secured over $400 million in distribution contracts with South American entities for medical diagnostic test kits designed to detect infectious diseases like cholera and HIV—contracts that never existed. These fabricated announcements artificially inflated MDP’s stock price to facilitate illegal securities sales. On September 17, 2002, the U.S. District Court for the District of Columbia entered a Final Judgment permanently enjoining MDP from violating key provisions of the Securities Exchange Act, including Sections 10(b), 13(d), and 13(b)(2), and related rules, with MDP consenting without admitting or denying the allegations. While MDP’s civil case was resolved, proceedings against individual defendants—including William P. Trainor, Vincent D. Celentano, and others—were stayed on January 10, 2002, pending the outcome of criminal proceedings against Trainor. The SEC’s action was part of a broader investigation documented in multiple Litigation and Exchange Act Releases from 1998 to 2002. The case underscores the SEC’s enforcement focus on deceptive press releases used to manipulate small-cap stock prices.

Enriched metadata

Scheme
pump-and-dump (100%)
Court
District of Columbia
Outcome
settled
Victim loss
$400,000,000
Entity
Medical Diagnostic Products, Inc.
Classified pump-and-dump(confidence 100%). EDGAR detection: forms S-8/S-1/424B/8-K· recall 69% / precision 12%. detection rule →
Statutes
Sections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange ActSections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange ActSections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange ActSections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange Act
Parties
Securities and Exchange CommissionWilliam P. TrainorVincent D. CelentanoMedical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.)Karen LosordoDiane M. TrainorDaniel J. TrainorGeraldine TrainorMary N. Celentano
Keywords
trainormedical diagnosticincdiagnostic productsdiagnosticwilliam trainornovatek internationalcelentanomedicalmdptrainor vincentvincent celentanocelentano medicalkaren losordolosordo diane

Extracted insights

Dollar amounts 1
  • $400.00M $400 million $100M–$1B
Entities 2
  • person judge sullivan
  • agency the united states securities and exchange commission
Triples 6
  • The United States Securities and Exchange Commission announced that on September 17, 2002, the Honorable Emmet G. Sullivan of the United States District Court for the District of Columbia entered a Final Judgment As To Medical Diagnostic Products, Inc. ("MDP") ("Final Judgment") in the above-captioned civil action
  • The Commission sued MDP, a Columbia, Maryland-based company, for its role in a fraudulent scheme involving the sale and purchase of its securities
  • MDP (f/k/a Novatek International, Inc.) consented to entry of a Final Judgment that permanently enjoins the company from violating Sections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-13 and 13b2-1 promulgated thereunder
  • The Commission filed its complaint and amended complaint ("Complaints"), respectively, against MDP and others based on their participation in a fraudulent "pump and dump" scheme involving the purchase and sale of MDP securities
  • MDP issued a series of false press releases announcing that it had entered into contracts, worth more than $400 million, with several South American entities for the distribution of the diagnostic test kits
  • Judge Sullivan entered an order staying the Commission's action against the remaining defendants in the Commission's case, pending the outcome of the criminal proceeding against defendant William P. Trainor
View original SEC litigation releasesec.gov
Extracted body text (2,439c) 
Litigation Release No. 17746 / September 26, 2002 Accounting and Auditing Enforcement Release No. 1633 / September 26, 2002 SEC v. William P. Trainor, Vincent D. Celentano, Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.), Karen Losordo, Diane M. Trainor, Daniel J. Trainor, Geraldine Trainor and Mary N. Celentano, Civil Action No. 98CV01533 (EGS) (D.D.C.) MEDICAL DIAGNOSTIC PRODUCTS, INC. ENJOINED IN FRAUD ACTION The United States Securities and Exchange Commission ("Commission") today announced that on September 17, 2002, the Honorable Emmet G. Sullivan of the United States District Court for the District of Columbia entered a Final Judgment As To Medical Diagnostic Products, Inc. ("MDP") ("Final Judgment") in the above-captioned civil action. The Commission sued MDP, a Columbia, Maryland-based company, for its role in a fraudulent scheme involving the sale and purchase of its securities. MDP (f/k/a Novatek International, Inc.), consented, without admitting or denying the allegations of the Commission's complaints, to entry of a Final Judgment that permanently enjoins the company from violating Sections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-13 and 13b2-1 promulgated thereunder. On June 18 and August 12, 1998, the Commission filed its complaint and amended complaint ("Complaints"), respectively, against MDP and others based on their participation in a fraudulent "pump and dump" scheme involving the purchase and sale of MDP securities. MDP claimed to have the distribution rights to distribute in South America medical diagnostic test kits designed to rapidly detect the presence of infectious diseases such as cholera and HIV. Between April 11 and September 3, 1996, MDP issued a series of false press releases announcing that it had entered into contracts, worth more than $400 million, with several South American entities for the distribution of the diagnostic test kits. According the Commission's Complaints, these contracts never existed. On January 10, 2002, Judge Sullivan entered an order staying the Commission's action against the remaining defendants in the Commission's case, pending the outcome of the criminal proceeding against defendant William P. Trainor. For additional information, see Litigation Release Nos. 15786, 15844 and 17313, and Securities Exchange Act of 1934 Release Nos. 40169, 40170 and 40171.
OCR text (2,439c · plain-text · 99% conf) 
Litigation Release No. 17746 / September 26, 2002 Accounting and Auditing Enforcement Release No. 1633 / September 26, 2002 SEC v. William P. Trainor, Vincent D. Celentano, Medical Diagnostic Products, Inc. (f/k/a Novatek International, Inc.), Karen Losordo, Diane M. Trainor, Daniel J. Trainor, Geraldine Trainor and Mary N. Celentano, Civil Action No. 98CV01533 (EGS) (D.D.C.) MEDICAL DIAGNOSTIC PRODUCTS, INC. ENJOINED IN FRAUD ACTION The United States Securities and Exchange Commission ("Commission") today announced that on September 17, 2002, the Honorable Emmet G. Sullivan of the United States District Court for the District of Columbia entered a Final Judgment As To Medical Diagnostic Products, Inc. ("MDP") ("Final Judgment") in the above-captioned civil action. The Commission sued MDP, a Columbia, Maryland-based company, for its role in a fraudulent scheme involving the sale and purchase of its securities. MDP (f/k/a Novatek International, Inc.), consented, without admitting or denying the allegations of the Commission's complaints, to entry of a Final Judgment that permanently enjoins the company from violating Sections 10(b), 13(d), and 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 and Rules 10b-5, 12b-20, 13a-13 and 13b2-1 promulgated thereunder. On June 18 and August 12, 1998, the Commission filed its complaint and amended complaint ("Complaints"), respectively, against MDP and others based on their participation in a fraudulent "pump and dump" scheme involving the purchase and sale of MDP securities. MDP claimed to have the distribution rights to distribute in South America medical diagnostic test kits designed to rapidly detect the presence of infectious diseases such as cholera and HIV. Between April 11 and September 3, 1996, MDP issued a series of false press releases announcing that it had entered into contracts, worth more than $400 million, with several South American entities for the distribution of the diagnostic test kits. According the Commission's Complaints, these contracts never existed. On January 10, 2002, Judge Sullivan entered an order staying the Commission's action against the remaining defendants in the Commission's case, pending the outcome of the criminal proceeding against defendant William P. Trainor. For additional information, see Litigation Release Nos. 15786, 15844 and 17313, and Securities Exchange Act of 1934 Release Nos. 40169, 40170 and 40171.