SEC Sues Ristau and PacketSwitch
Music Industry News - as it happens
Source: Mi2N - December 18, 2001
The Securities and Exchange Commission (SEC) filed securities fraud charges
against PacketSwitch.Com Inc, a California corporation, "purportedly set up
to develop a wireless internet technology by which movies could be viewed
through the Internet," and its former President and CEO, Steven A. Ristau.
The SEC alleges the defendants sold $3.7 million of stock in
PacketSwitch.Com to between 700 and 900 investors, "many of whom included
individuals that Ristau knew through his relationships with large churches
in the San Jose area, in an unregistered offering and made numerous
misrepresentations in soliciting investors".
The SEC says Ristau's and PacketSwitch.Com's "numerous misrepresentations"
included claiming the company had a new technology that allowed it to
broadcast movies wirelessly over the Net; either had, or was, in the process
of obtaining patents for its purported ,technology; had substantial
operations in Africa and Asia, including a billion dollar contract with the
Republic of Korea; and, had strategic partnerships and alliances with
various large, publicly traded telecommunications companies.
According to the complaint, PacketSwitch.Com was in reality a start-up with
no revenue and no real product. It also alleges the defendants didn't
disclose that a significant portion of the funds raised went to Ristau for
his own personal use, including purchasing a $1.8 million home in San Jose,
paying for the Ristaus' family vacation to Hawaii, $66,000 of Ristau's
delinquent child support, payments for Ristau's Lexis automobile, a
camper/trailer for Ristau's wife and various other personal items; and, that
Ristau received sales commissions based on a percentage of proceeds raised
by the company and that Ristau didn't disclose to investors that any of the
funds raised would go to pay for sales commissions.
Related News from Mi2N:
» SEC Sues Steven A. Ristau And PacketSwitch.Com For Securities Fraud
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