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EConnect's Ex-CEO to Pay Fine for False News Releases

September 09, 2003|From Bloomberg News

EConnect Inc. former Chief Executive Thomas S. Hughes will pay a $120,000 fine stemming from civil charges that he tried to boost the company's stock with false news releases, federal regulators said Monday.

The fine is part of a Sept. 4 consent judgment issued by a federal court in California also barring Hughes, 55, of Rancho Palos Verdes, from serving as an officer or director at another publicly traded company, according to the Securities and Exchange Commission.

The SEC accused Hughes and the company of issuing news releases in 2002 that falsely stated that EConnect received a $20-million investment in AA-rated asset-backed bonds from another issuer and that the company had begun a stock repurchase program.

Earlier this year, after installing a new management team, EConnect changed its name to EyeCashNetworks Inc. and moved its headquarters to Glendale from Los Angeles.

The consent judgment wraps up the SEC's civil case against Hughes and EConnect, said Lisa Gok, assistant regional director of the SEC's Los Angeles office.

Hughes still faces a possible prison term of as much as 30 years after pleading guilty last month to three counts of securities fraud and one count of criminal contempt of court for spreading misleading information about EConnect in violation of an SEC order in 2000 barring him from violating securities laws, according to the U.S. attorney's office in Los Angeles.

Hughes is scheduled to be sentenced in December

In May, U.S. District Judge Nora M. Manella ordered EyeCashNetworks to disgorge $70,000 in ill-gotten gains in connection with the EConnect news releases as part of another consent judgment.

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