SEC Cracks Down on Electro-Optical Systems Corp.
The Securities and Exchange Commission has filed suit in a New York federal court to stop what it claims is the "unregistered and fraudulent sale" of stock of Electro-Optical Systems Corp.
In the lawsuit, the SEC charges that Electro-Optical Systems in Stow, Mass., sold unregistered, restricted shares as unrestricted shares and bought small quantities of the stock at above market price to raise its value. The commission says that the stock rose more than 1000% to more than $5 per share. It also says that Electro-Optical's predecessor, WTS Transnational Corp., claimed it was developing a fingerprint verification device but that no prototype was completed.
Charles Weaver, the chief executive officer of Electro-Optical, said the company did not believe it violated any laws: "Our position has been there were some people that apparently manipulated the stock but that we didn't have any knowledge of this."
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