SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported) May 14, 2002
FoneCash, Inc.
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(Exact name of registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
0-30536 22-3530573
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(Commission File Number) (IRS Employer Identification No.)
90 PARK AVENUE, SUITE 1700
NEW YORK, NEW YORK 10016-1301
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(Address of Principal Executive Offices) (Zip Code)
(212) 984-0641
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(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former Name or Former Address, if Changed Since Last Report)
ITEM 5. OTHER EVENTS
1. On May 9, 2002, FoneCash and its Chairman and Chief Executive Officer
executed and entered into a consent to Preliminary Injunctions ("Consent")
in the pending action, Securities and Exchange Commission vs. FoneCash,
Inc. and Daniel E. Charboneau ("Civil Action"). This Consent was without
admitting or denying the allegations of the Commission's complaint. The
Proposed Order enjoins FoneCash, Inc. and Daniel E. Charboneau, during the
pendency of the Civil Action, from violating, directly or indirectly.
Section 17(a) of the Securities Act of 1933 [15 U.S.C. 77q(a)] and Sections
10(b) and 13(a) of the Securities Exchange Act of 1934 ("Exchange Act"),
{15U.S.C. 78j(b) and 78m(m)] and Rules 10b-5, 12b-20, 13a-1 and 13a-13 [17
C.F.R. 240.10b-5, 240.12b-20, 240.13a-1 and 240.13a-[3], thereunder, and
enjoins Charboneau from violating Sections 16(a) of the Exchange Act, [15
U.S.C. 78p(a)] and Rules 16a-3 [17C.F.R. 240.16a-2 and 240.16a-3],
thereunder.
A copy of the Consent and Proposed Order is attached as Exhibit A. The
Consent is subject to the approval of the Commission.
2. On May 21, 2002, FoneCash, Inc. by its Chairman and Chief Executive
Officer, executed an Offer of Settlement to the administrative proceeding
(the "Proceeding") which is pending before the Securities and Exchange
Commission to suspend the Registration Statement and all amendments
previously filed by FoneCash, Inc. The Offer of Settlement agrees to have
the Commission issue an Order suspending the Registration Statement and all
amendments thereto. This agreement and the Consent to the findings
contained therein are limited solely to the Proceeding and any other
proceeding to which the Commission is a party, except the pending Civil
Action, and are made without admitting or denying the accuracy of the
allegations in the Divisions' Statement of Matters or any Order Making
Finding and Issuing Stop Order with may be issued.
A copy of the Offer of Settlement is attached as Exhibit B.
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
:
SECURITIES AND EXCHANGE :
COMMISSION, :
:
Plaintiff, : Civil Action No. 1:02CV00651-RJL
:
:
FONECASH, INC., and :
DANIEL E. CHARBONEAU, :
:
Defendants, :
:
____________________________________
CONSENT TO PRELIMINARY INJUNCTION
1. Defendants FoneCash, Inc. ("FoneCash") and Daniel E. Charboneau
("Charboneau") submit to the in personam jurisdiction of this Court over them,
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acknowledge service of summons and the Complaint in this matter, admit the
jurisdiction of this Court over the subject matter of this action, waive the
entry of findings of the fact and conclusions of law pursuant to Rules 52 and 65
of the Federal Rules of Civil Procedure, and hereby consent to the entry of a
preliminary injunction ("Order") without further notice in the form annexed
hereto and incorporated by reference herein.
2. Defendants FoneCash and Charboneau, without admitting or denying any of
the allegations of the Commission's Complaint, except as to jurisdiction with
they admit, consent to the entry of the order attached as Exhibit A which
enjoins FoneCash and
Exhibit A
Charboneau from violating, directly or indirectly, Section 17(a) of the
Securities Act of 1933 [15 U.S.C. 77q(a)] and Sections 10(b), and 13(a) of the
Securities Exchange Act of 1934 ("Exchange Act"), [15 U.S.C. 78j(b) and 78m(a)]
and Rules 10b-5, 12b-20, 13a-1 and 13a-13 [17 C.F.R. 240.10b-5 240.12b-20,
240.13a-1 and 240.13a-13], thereunder, and enjoins Charboneau from violating
Sections 16(a) of the Exchange Act, [15 U.S.C.78p(a)] and Rules 16a-2 and 16a-3
[17 C.F.R. 240.16a-3], thereunder.
3. Defendants FoneCash and Charboneau enter into this Consent voluntarily
and acknowledge that no promise or threat of any kind whatsoever has been made
by Plaintiff Securities and Exchange Commission or any member, officer, agent or
representative thereof to induce them to enter into this stipulation and
consent.
4. Defendants FoneCash and Charboneau waive any right they may have to
appeal from the entry of the Order.
5. Defendants FoneCash and Charboneau agree that the Order may be presented
by the Commission to the Court for signature without further notice.
6. Defendants FoneCash and Charboneau agree that this Consent shall be
incorporated into the Order with the same force and effect as if fully set forth
therein.
7. Defendants FoneCash and Charboneau agree that they will not oppose the
enforcement of the Order on the ground, if nay exists, that it fails to comply
with Rule 65(d) of the Federal Rules of Civil Procedure, and they hereby waive
any objection they may have based thereon.
8. Defendants FoneCash and Charboneau hereby understand that the Plaintiff,
at its sole and exclusive discretion, may refer this matter or any information
or evidence gathered in connection therewith, or derived therefrom, to any
person or entity, public or private, having criminal, civil or administrative
jurisdiction for action thereby.
9. Defendants FoneCash and Charboneau further state that they understand
that the Plaintiff cannot and does not confer upon them, or upon any other
person or entity, immunity from any criminal proceeding for any actions related
to or arising from this or any other matter.
Executed this 9th day of May, 2002.
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/s/ Daniel E. Charboneau
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FoneCash, Inc., and Daniel E. Charboneau
By: Daniel E. Charboneau, individually
and as president, chairman and CEO of FoneCash
State of New York
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County of New York
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On this 9th day of May, 2002, before me personally appeared Daniel E.
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Charboneau, known to me to be the person who
executed the foregoing Stipulation and Consent and he acknowledged to me that he
executed the same.
/s/ DATED: May 9, 2002.
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NOTARY PUBLIC
MY COMMISSION EXPIRES: ___________________________________
[Notary Seal]
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
:
SECURITIES AND EXCHANGE :
COMMISSION, :
:
Plaintiff, : Civil Action No. 1:02CV00651-RJL
:
v. :
:
FONECASH, INC., and :
DANIEL E. CHARBONEAU, :
:
Defendants, :
:
____________________________________
PLAINTIFF'S NOTICE OF FILING CONSENT TO PRELIMINARY INJUNCTION
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AND PROPOSED PRELIMINARY INJUNCTION
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The Securities and Exchange Commission, plaintiff in this matter, hereby
notifies all parties that it has filed a consent to preliminary injunction
signed by the defendants and a proposed preliminary injunction.
DATED: May 13, 2002
Respectfully Submitted,
/s/ William P. Hicks
--------------------------------
William P. Hicks
District Trial Counsel
Georgia Bar No. 351649
D.C. Bar No. 426980
Counsel for Plaintiff
SECURITIES AND EXCHANGE COMMISSION
3475 Lenox Road, N.E. Suite 1000
Atlanta, Georgia 30326
(404) 842-7612
LOCAL COUNSEL
Mark J. Kreitman, Esq.
D.C. Bar No. 260828
Securities and Exchange
Commission
450 5th St., NW
Washington DC 20549
Tel. (202) 942-4677
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Certificate of Service
----------------------
I hereby certify that on this 13th day of May, 2002, I caused copies of the
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foregoing to be served by U.S. Mail, in a properly addressed envelope as
follows:
FoneCash, Inc.
c/o Daniel E. Charboneau, President
90 Park Ave.
New York, New York 10016
Daniel E. Charboneau
475 Dobbs Ferry Road
White Plains, NY 10607
Michael S. Krome, Esq.
8 Teak Court
Lake Grove, NY 11755
(Attorney for FoneCash)
Malcolm Taub, Esq.
Taub & Shoman
New York, NY 10019
(Counsel for Defendants)
/s/ William P. Hicks
----------------------------------
Attorney for Plaintiff
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF COLUMBIA
____________________________________
:
SECURITIES AND EXCHANGE :
COMMISSION, :
:
Plaintiff, : Civil Action No. 1:02CV00651-RJL
:
:
v. :
:
FONECASH, INC., and :
DANIEL E. CHARBONEAU, :
:
Defendants, :
:
____________________________________
ORDER OF PRELIMINARY INJUNCTION
Plaintiff, Securities and Exchange Commission ("Commission"), having filed
its complaint in this matter against defendants FoneCash, Inc. ("FoneCash") and
Daniel E. Charboneau ("Charboneau"), said defendants having entered a general
appearance and consented to the jurisdiction of this Court over them and over
the subject matter of this action, having waived entry of findings of fact and
conclusions of law pursuant to Rules 52 and 65 of the Federal Rules of Civil
Procedure with respect to the relief granted in this order, and without
admitting or denying any of the allegations of the complaint having consented to
the entry of this order, it is hereby,
I.
ORDERED that, until further order of this Court, defendants FoneCash and
Charboneau, their agents, servants, employees, attorneys and those persons in
active concert or participation with them, in connection with the purchase or
sale or in the offer or sale of securities, by use of any means or instruments
of transportation or communication in interstate commerce, or by the mails or
any facility of any national securities exchange, be, and they are enjoined
from, directly or indirectly:
(1) employing any device, scheme or artifice to defraud;
(2) engaging in any act, practice or course of business which operates or
would operated as a fraud or deceit upon any person;
(3) obtaining money or property by means of any untrue statement of a
material fact; or omitting to state a material fact necessary in order
to make the statements made, in light of the circumstances under which
they were made, not misleading; or
(4) making any untrue statement of a material fact or omitting to state a
material fact necessary in order to make the statements made, in light
of the circumstances under which they were made, not misleading,
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in violation of Section 17(a) of the Securities Act of 1933, 15 U.S.C.
77q(a), Section 10(b) of the Securities Exchange Act of 1934
("Exchange Act"), 15 U.S.C. 78j(b), and Rule 10b-5, 17 C.F.R.
240.10b-5, thereunder.
II.
IT IS FURTHER ORDERED that, until further order of this Court, defendants
FoneCash and Charboneau, their officers, agents, servants, employees, and those
persons in active concert or participation with them who receive actual notice
of this Order by personal service or otherwise, be, and they hereby are,
enjoined from, directly or indirectly, filing annual, quarterly or other reports
with the Commission which are materially false and misleading, in violation of
Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1 and
13a-13 thereunder [17 C.F.R. 240.12b-20, 240.13a-1 and 240.13a-13].
III.
IT IS FURTHER ORDERED that, until further order of this Court, defendant
Charboneau, his officers, agents, servants, employees, and those persons in
active concert or participation with them who receive actual notice of this
Order by personal service or otherwise, be, and they hereby are, enjoined from,
directly or indirectly, failing to file accurate and timely reports as required
by Section 16(a) of the Exchange Act [15 U.S.C. 78p(a)] and Rules 16a-2 and
16a-3 thereunder [17 C.F.R. 240.16a-2 and 240.16a-3], in
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connection with ownership of or transactions in any security registered under
Section 12 of the Exchange Act.
IV.
IT IS FURTHER ORDERED that this Court will retain jurisdiction over this
matter and the defendants for all purposes and will order other and further
relief that this Court deems appropriate under the circumstances.
Done and ordered at ___________ o'clock _____________ m. this _________ day
of __________________, 2002.
____________________________
UNITED STATES DISTRICT JUDGE
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UNITED STATES OF AMERICA
____________________________________
:
In the Matter of :
:
a Registration Statement of :
: Offer of Settlement
:
:
FONECASH, INC., :
90 Park Ave. :
New York, NY 10016 :
:
:
____________________________________
FoneCash, Inc. ("FoneCash"), pursuant to Rule 240 (a) of the Rules of
Practice of the Securities and Exchange Commission ("Commission"), submits this
Offer of Settlement ("Offer") of proceedings pursuant to Section 8(d) of the
Securities Act of 1933 ("Securities Act") instituted by the Commission.
I.
By submitting this Offer, FoneCash hereby acknowledges its waiver of those
rights specified in Rules 240(c)(4) and (5) of the Commission's Rules of
Practice.
II.
This Offer is submitted only for the purpose of settling this proceeding
and with the express understanding that it will not be used in any way in this
or any other proceedings unless this Offer is accepted by the Commission. If
this Offer is not accepted by the Commission, this Offer is withdrawn without
prejudice to FoneCash and shall not become a part of the record in these or any
other proceedings, except for the waiver expressed in Section II with respect to
Rule 240(c)(5) of the Commission's Rules of Practice.
III.
On the basis of the foregoing, FoneCash hereby admits the jurisdiction of
the Commission over it, and over the subject matter of the proceedings
instituted with regard to its registration statement and amendments at issue in
this proceeding.
Exhibit B
Solely for the purpose of this proceeding and any other proceedings brought by
or on behalf of the Commission or in which the Commission is a party, except the
pending civil litigation SEC v. FoneCash, Inc. et al., Civil Action No.
-------------------------------
1:02CV000651RJL (D.D.C.), FoneCash, without admitting or denying the accuracy of
the allegations in the Division's Statement of Matters or any Order Making
Findings and Issuing Stop Order which may be issued pursuant to his Offer,
waives any objections to the materiality of those matters and hereby consents to
the entry by the Commission of an Order Making Findings and Issuing Stop Order
("Order").
Making findings that:
1. On December 26, 2001, FoneCash, with offices located at 90 Park Ave.,
New York, NY filed a registration statement with the Commission on Form SB-2.
FoneCash filed a preeffective amendment on January 14, 2002. Pursuant to the
provisions of Section 8(a) of the Securities Act, the registration statement
became effective on January 16, 2002. FoneCash filed post effective amendments
on March 6, 2002, March 14, 2002 and March 25, 2002. The post effective
amendments have not become effective. FoneCash's registration statement
describes the offering as an offering of 7,275,730 shares of FoneCash common
stock by certain stockholders of FoneCash who will receive all of the proceeds
from the sales, and who may offer their shares, from time to time, through
public or private transactions.
2. The registration statement and amendments misrepresent or omit to state
material facts required to be stated therein, including but not limited to,
failing to disclose that a patent to which FoneCash has rights and which
purportedly will not expire until 2004, has lapsed, failing to disclose a
substantial increase in the number of shares outstanding, failing to disclose
that a contract, attached to the registration statement, pursuant to which
FoneCash was to receive an advance of funds, has been voided, and including
financial statements audited by an accountant who was not independent, as
required by the Commission's regulations governing the offer and sale of
securities to the public.
_______________________________
1. FoneCash agrees that any order issued pursuant to this offer may, at the
option of the Commission, contain a footnote stating "The findings herein
are made pursuant to the Offer of Settlement of FoneCash and are not
binding on any other person or entity named as a respondent in this or any
other proceeding.
2
Issuing an Order suspending the effectiveness of the registration statement
filed by FoneCash and all amendments thereto.
IV.
FoneCash states that it has read the Offer and declares that no offer,
promise, threat or inducement of any kid has been tendered to it by the
Commission, its staff or it representatives to induce it to make this Offer, and
it represents that this Offer is a voluntary act on its part and that it
understands its consequences.
Consistent with the provisions of 17 C.F.R. Section 202.5(f), FoneCash
waives any claim of Double Jeopardy based upon the settlement of this
proceeding, including the imposition of any remedy or civil penalty herein.
FoneCash also hereby waives any rights under the Equal Access to Justice Act,
the Small Business Regulatory Enforcement Fairness Act of 1996 or any other
provision of law to pursue reimbursement of attorney's fees or other fees,
expenses or costs expended by FoneCash to defend against this action. For these
purposes, FoneCash agrees that FoneCash is not the prevailing party in this
action since the parties have reached a good faith settlement.
FoneCash understands and agrees to comply with the Commission's policy "not
to permit a defendant or respondent to consent to a judgment or order that
imposes a sanction while denying the allegation in the complaint or order for
proceedings" (17 C.F.R. Section 202.5). In compliance with this policy, FoneCash
agrees (i) not to take any action or to make or permit to be made any public
statement denying, directly or indirectly, any allegation in the Order or
creating the impression that the Order is without factual basis, and (ii) that
upon the filing of this offer of settlement, FoneCash hereby withdraws any
papers previously filed in this proceeding to the extent that they deny,
directly or indirectly, any allegation in the Order. If FoneCash breaches this
agreement, the Division of Enforcement may petition the Commission to vacate the
Order and restore this proceeding to its active docket. Nothing in this
provision affects FoneCash's: (i) testimonial obligations; or (ii) right to take
legal position in litigation in which the Commission is not a party.
DATED: May 21, 2002 /s/ Daniel E. Charboneau
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FoneCash, Inc., by Daniel E.
Charboneau, president, chairman and
chief executive officer
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On this 22nd day of May, 2002, before me personally appeared Daniel E.
Charboneau, to me known to be the person who executed the foregoing Offer of
Settlement.
/s/
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NOTARY PUBLIC
My Commission expires: [Notary Seal]
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