SEC v. Reed J. Killion; Jeffrey Tomz; Uni-Pixel Inc.; and Bernard T. Marren, No. LR-23484, Southern District of Texas (Mar. 10, 2016) — Press Release
raw: Reed J. Killion, et al.
Reed J. Killion, et al., No. LR-23484 (Mar. 10, 2016)
The SEC charged Uni-Pixel Inc
The SEC charged Uni-Pixel Inc. with misleading investors about the production status and sales agreements for its touchscreen sensor product, resulting in a $750,000 settlement without admitting or denying guilt. Former CEO Reed Killion and former CFO Jeffrey Tomz are separately sued for allegedly knowing the company’s claims were false—such as touting “multi-million dollar” sales and “production-ready” capacity when only $10 worth of samples had been made—enabling them to profit over $2 million from insider stock sales. Former board chairman Bernard T. Marren entered a deferred prosecution agreement, agreeing to cooperate, be barred from officer/director roles for five years, and avoid charges in exchange for aiding the SEC’s investigation. The SEC alleges violations of Sections 17(a) of the Securities Act and 10(b), 13(a), and 13(b) of the Exchange Act, along with related rules, and litigation continues against Killion and Tomz.
The SEC charged Uni-Pixel Inc. with misleading investors about the production status and sales agreements for its touchscreen sensor product, resulting in a $750,000 settlement without admitting or denying guilt. Former CEO Reed Killion and former CFO Jeffrey Tomz are separately sued for allegedly knowing the company’s claims were false—such as touting “multi-million dollar” sales and “production-ready” capacity when only $10 worth of samples had been made—enabling them to profit over $2 million from insider stock sales. Former board chairman Bernard T. Marren entered a deferred prosecution agreement, agreeing to cooperate, be barred from officer/director roles for five years, and avoid charges in exchange for aiding the SEC’s investigation. The SEC alleges violations of Sections 17(a) of the Securities Act and 10(b), 13(a), and 13(b) of the Exchange Act, along with related rules, and litigation continues against Killion and Tomz. The SEC charged Uni-Pixel Inc. with misleading investors about the production status and sales agreements for its touchscreen sensor product, resulting in a $750,000 settlement—without admitting or denying guilt—after its stock price more than doubled due to false claims of high-volume production and multi-million-dollar contracts. Former CEO Reed Killion and former CFO Jeffrey Tomz are separately accused of knowingly issuing false statements and profiting over $2 million from insider sales of company stock, while former board chairman Bernard T. Marren entered a deferred prosecution agreement requiring cooperation and a five-year bar from serving as an officer or director for failing to correct misleading disclosures. The SEC alleges Uni-Pixel misrepresented its manufacturing capabilities, claiming its production line was “production ready” when only a few manual samples had been made, and concealed that a purported “purchase order” was for just $10 in sample sensors. The company consented to permanent injunctions against violations of key securities laws, while litigation continues against Killion and Tomz. The investigation was handled by the SEC’s Fort Worth Regional Office.
Exhibits & Attached Documents (2)
Extracted insights
- $2.00M $2 million $1M–$10M
- $750K $750,000 $100K–$1M
- agency an sec complaint
- person related charges
- agency Securities and Exchange Commission
- organization Securities and Exchange Commission
- developer of technologies for touchscreen devices agreed to pay $750,000
- developer of technologies for touchscreen devices misled investors about the production status and sales agreements for a key product
- Securities and Exchange Commission announced a developer of technologies for touchscreen devices has agreed to pay $750,000 to settle charges
- Securities and Exchange Commission filed an SEC complaint
- Two former company executives face related charges
- Securities and Exchange Commission filed Civil Action No. 16-cv-621
- Tech Company misled investors about the production status and sales agreements for a key product
- Tech Company pay $750,000 to settle charges
- SEC filed charges against two former company executives
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23484 / March 10, 2016 Securities and Exchange Commission v. Reed J. Killion, et al., Civil Action No. 16-cv-621 (S.D. Tex. filed Mar. 9, 2016) SEC: Tech Company Misled Investors About Key Product The Securities and Exchange Commission announced that a developer of technologies for touchscreen devices has agreed to pay $750,000 to settle charges that it misled investors about the production status and sales agreements for a key product. Two former company executives face related charges in an SEC complaint filed today in U.S. District Court for the Southern District of Texas. The SEC entered into a deferred prosecution agreement with the company's former chairman of the board, who has agreed to cooperate and be barred from serving as an officer and director for five years. The SEC alleges that Uni-Pixel Inc. began publicly touting sales of a touchscreen sensor product supposedly in speedy high-volume commercial production when in fact only a few samples had been manually completed. The misrepresentations caused Uni-Pixel's stock price to more than double, enabling then-CEO Reed Killion and then-CFO Jeffrey Tomz to make more than $2 million in personal profits from selling their own shares of company stock. Killion and Tomz allegedly knew the company's statements were untrue and Uni-Pixel's manufacturing process was still incapable of mass producing commercial quantities of sensors. According to the SEC's complaint, filed on March 9, 2016: Uni-Pixel announced "multi-million dollar" sales agreements in 2012 and 2013 that highlighted potential revenues but omitted material conditions the company had to meet to actually receive those revenues. Uni-Pixel announced in April 2013 that its high-volume production line was "qualified and production ready" and its capacity "started at fifty moving to hundreds and then thousands over the next several months." At the time, Uni-Pixel had yet to produce any functional sensors through its high-speed process. Uni-Pixel issued a press release in November 2013 touting a "purchase order" for its sensors that expected to ship an initial "commercial run" of sensors by year-end. The company concealed that the order was for a mere $10 worth of sensors for the customer to review as samples. Without admitting or denying the SEC's charges, Uni-Pixel consented to entry of a final judgment permanently enjoining it from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities and Exchange Act of 1934 as well as Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13. The settlement is subject to court approval. The SEC's litigation continues against Killion and Tomz. The deferred prosecution agreement with former board chairman Bernard T. Marren alleges that he became aware that information in Uni-Pixel's press releases was inaccurate but failed to ensure that the company corrected the releases. The agreement requires him to cooperate with the SEC's continuing case while complying with certain undertakings in order to avoid civil charges against him. The SEC's investigation was conducted by David Whipple, Carol Hahn, and David King, and the case was supervised by Jessica Magee in the SEC's Fort Worth Regional Office. The SEC's litigation will be led by Matt Gulde. See also: Complaint, Deferred Prosecution Agreement
U.S. SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 23484 / March 10, 2016 Securities and Exchange Commission v. Reed J. Killion, et al., Civil Action No. 16-cv-621 (S.D. Tex. filed Mar. 9, 2016) SEC: Tech Company Misled Investors About Key Product The Securities and Exchange Commission announced that a developer of technologies for touchscreen devices has agreed to pay $750,000 to settle charges that it misled investors about the production status and sales agreements for a key product. Two former company executives face related charges in an SEC complaint filed today in U.S. District Court for the Southern District of Texas. The SEC entered into a deferred prosecution agreement with the company's former chairman of the board, who has agreed to cooperate and be barred from serving as an officer and director for five years. The SEC alleges that Uni-Pixel Inc. began publicly touting sales of a touchscreen sensor product supposedly in speedy high-volume commercial production when in fact only a few samples had been manually completed. The misrepresentations caused Uni-Pixel's stock price to more than double, enabling then-CEO Reed Killion and then-CFO Jeffrey Tomz to make more than $2 million in personal profits from selling their own shares of company stock. Killion and Tomz allegedly knew the company's statements were untrue and Uni-Pixel's manufacturing process was still incapable of mass producing commercial quantities of sensors. According to the SEC's complaint, filed on March 9, 2016: Uni-Pixel announced "multi-million dollar" sales agreements in 2012 and 2013 that highlighted potential revenues but omitted material conditions the company had to meet to actually receive those revenues. Uni-Pixel announced in April 2013 that its high-volume production line was "qualified and production ready" and its capacity "started at fifty moving to hundreds and then thousands over the next several months." At the time, Uni-Pixel had yet to produce any functional sensors through its high-speed process. Uni-Pixel issued a press release in November 2013 touting a "purchase order" for its sensors that expected to ship an initial "commercial run" of sensors by year-end. The company concealed that the order was for a mere $10 worth of sensors for the customer to review as samples. Without admitting or denying the SEC's charges, Uni-Pixel consented to entry of a final judgment permanently enjoining it from violating Section 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), and 13(b) of the Securities and Exchange Act of 1934 as well as Rules 10b-5, 12b-20, 13a-1, 13a-11, and 13a-13. The settlement is subject to court approval. The SEC's litigation continues against Killion and Tomz. The deferred prosecution agreement with former board chairman Bernard T. Marren alleges that he became aware that information in Uni-Pixel's press releases was inaccurate but failed to ensure that the company corrected the releases. The agreement requires him to cooperate with the SEC's continuing case while complying with certain undertakings in order to avoid civil charges against him. The SEC's investigation was conducted by David Whipple, Carol Hahn, and David King, and the case was supervised by Jessica Magee in the SEC's Fort Worth Regional Office. The SEC's litigation will be led by Matt Gulde. See also: Complaint, Deferred Prosecution Agreement