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SEC Sues Tradamax Over Web Claims

June 23, 2001|PETER RAMJUG | REUTERS

WASHINGTON — Federal securities regulators have sued Tradamax Group Inc., alleging the company falsely claimed in news releases and on the Internet that it had a Web portal for commodities trading.

The Securities and Exchange Commission filed a civil suit Thursday in U.S. District Court against the Newport Beach-based company; its top executive, Pattinson Hayton; and its chief financial officer, Conrad Diaz.

The suit further contends that Tradamax's financial projections lacked a reasonable basis because they were based on technology Tradamax did not have and Tradamax has no earnings history.

Tradamax, which separately owns the coffee trading Web site EGreenCoffee.com, has failed to keep proper books and records and to file reports with the SEC, it was also alleged.

A federal judge has issued a temporary restraining order and asset freeze against Tradamax and Hayton. The SEC wants to fine Diaz and Hayton as well as bar Hayton from serving as an officer or director of a company.

Telephone calls to Tradamax were not returned. Calls to EGreenCoffee.com at its Sterling, Va., office went unanswered. Its Web site, http://www.egreencoffee.com, appeared to be not functioning and its outside press relations firm, Cragon Communications, said it is no longer on retainer.

The SEC also charged that a Canadian firm run by Hayton made a profit of at least $114,408 after selling Tradamax stock into an inflated market in what regulators refer to as a "pump and dump" scheme.

Hayton, who appears not to have a permanent address, according to the SEC, also has not filed mandatory reports with the commission showing his ownership in Tradamax.

He has a history of securities violations and encounters with U.S. and foreign regulators, the agency said.

Diaz, a member of Tradamax's board, could not be reached for comment.

According to Tradamax's most recent SEC filing May 22, it ceased all operating activities from Oct. 29, 1996, to July 9, 1999, and was considered dormant.

It was renewed July 9, 1999, and since then has been in the development stage. It was formerly known as Cerritos Holdings Inc.

Tradamax shares were down 2 cents, to 2 cents on the Bulletin Board.

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