The U.S. Securities and Exchange Commission (SEC) has settled its lawsuit against an e-tailer it said raised approximately $3.8 million (US$) from investors by touting false information about plans for an initial public offering (IPO).
Austin, Texas-based 1stBuy.com, Inc. and its founder and chief financial officer, Roger D. Pringle, made “false and misleading statements” about the company’s supposed plans for an IPO, the projected value of the stock, and the company’s ability to make money for stockholders, according to the SEC.
Moreover, the commission said, 1stBuy’s offering failed to meet delivery and timing requirements called for under securities laws.
Without admitting to any of the allegations, 1stBuy and Pringle agreed to settle the charges that they broke the fraud and registration provisions of federal securities laws. As part of the settlement, Pringle will pay a $25,000 civil penalty, the SEC said.
Special Exemption Flaunted
1stBuy raised money from about 1,200 investors in 1999 and early 2000 through a stock offering completed under a special exemption contained in securities laws for small issues. The company and Pringle, according to the SEC, billed the offering as a “pre-IPO” to drum up investor interest.
According to the SEC, 1stBuy claimed that a price range for its IPO of $12 to $18 per share had already been set; that a $5,000 investment would grow 1,200 percent in one year and an additional 21,000 percent over the following three years; and that after the small-business offering, 1stBuy would have a market capitalization of more than $28 million — meeting Nasdaq listing requirements for small-capitalization stocks.
The claims, the SEC said, were made on the company’s Web site and in unsolicited e-mails the commission called “spams.”
Claims Unsupported
In fact, according to the SEC, 1stBuy was rejected by the one brokerage firm it approached about underwriting an IPO; the statements about returns had “no basis in fact”; the company did not meet Nasdaq listing requirements; and the $28 million figure was based on an “arbitrary and unsupported share price figure.”
Moreover, said the SEC, 1stBuy did not comply with the small-issues exemption, which lets eligible companies sell up to $5 million of securities during any 12-month period. The company, the commission said, waited until after the 12-month period to sell its shares and failed to provide investors with an offering circular containing financial information, as required.
Instead of issuing a circular, the company said, 1stBuy directed investors through a series of Web site links before the offering was available for viewing. While navigating the site, the SEC said, “potential investors were repeatedly exposed to the false claims concerning the company’s financial future, prospects for an IPO, NASDAQ listing and the potential for shares to increase in value.”
Other Fraud Cases Pending
The SEC said it filed the civil action after 1stBuy failed to take appropriate action in response to problems that SEC staffers pointed out in December 1999.
The SEC said it has observed a number of pitches for securities offerings made over the Internet or by Internet companies that use the term “pre-IPO,” often referring to plans for an IPO and a predicted stock price. Charges have been filed in three similar cases, the commission said.
For investors, the SEC has a free publication, “Cyberspace Alert,” available on its Web site or by calling (800) SEC-0330.
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This is the first time I have heard of this fraudulent behavior. I had moved approximately 3 years ago, and figured that my financial statements stopped coming because they didn’t have an updated address……how’s that for being duped? I didn’t even realize that the website had been taken down – yes, I know I should be more vigilent with my investments, but I’m BUSY!!
Well, anyway….I know that it’s been a few years since this all started, but I really would like to recoup the hard-earned money that my family and I invested with these high-tech criminals. Someone who takes petty theft to a new level by using a computer and spam, is still a petty thief- AM I right or AM I right? I WANT MY MONEY BACK! Or at least permission to claim it as a loss on my taxes…. I’ve got some ocean front property in Arizona for sale REAL CHEAP?? ANYONE??
Please contact me if there is any further information about some type of lawsuit or legal action or recourse. THANKS!!
Tena
I invested on 1buy.com how can I get any information on 1buy.com
I invested in 1stbuy.com and also a friend and his family….anything I can do?
I also purchased from this company, any recourse?
This is a total surprise … I invested $5K and even have a stock certificate. Perhaps we should contact legal resources?
I invested in 1st Buy about 1 1/2 years ago. I was told the same thing by a member of their board of directors, that my $5.00/share investment would grow to ~$90.00/share after they went public. After many tries to contact people at 1st Buy, I was told they were going to have just one more private offering, then go public. This never happened! I talked to them after the SEC problem and they told me that a lawsuit would only devalue my existing investment, and that I should just hold on till they worked it all out. Boy, was I ever stupid twice or what!
Hello,
I invested in 1stBuy. I did not know about the SEC lawsuit. I was not notified. Today I saw that their site vanished too.
I want to participate in the LAWSUIT. Please let me know what I have to do.
With Best Regards,
Kishalay Haldar
I made a substantial investment in 1stBuy as well. The SEC lawsuit is a complete surprise to me too. I just happened to be checking out their website today and realized that it had vanished! Upon further investigation, I began discovering information on the internet detailing the fraud that they have perpetrated upon us all. The 25K civil penalty levied by the SEC is just a slap on the wrist. So, the SEC got 25K … what about the investors?
Hi
I would also be interested to see what recourse we have. I would also like to know what has to be done in order to file this as a loss on my taxes.
Thanks
Hi
I also invested and would be interested in learning what options we have. I also would like to know how and when we can take this as a loss on taxes. Please keep me advised.
Thanks
I also invested in 1stbuy.com…..HELP!
Hi
I also invested and would like to know if anything can be done. Please contact me at [email protected].
Thanks
I also invested, any way to contact them??
please contact us,we invested with 1stbuy.com too and are filing legal action.
[email protected]
Well, looks like the 1stbuy website is about to be launched again….I wonder what will come of it?
anyone heard anything?
Has anyone been able to find out what recourse we have, if any?????? Seems like we all have questions, but no answers..
you may email me at [email protected] Please use 1stbuy in subject line.
Thank you 🙂
How about we pull together and file a lawsuit against Mr. Pringle and 1stBuy.com? Is anyone else instrested????
I’m all for a lawsuit, I’ve also invested a large sum of money into this and I want to see something done.
i AM interested please email me
Thanks
[email protected]
Charles
Has any legal action started? I was taken for several k’s . I would like information if anyone has it.
I just by chance found this information on the web… we have to stand together.
Yes! I was only taken for a few hundred but that’s a few hundred I can use now! Count me in!
email: [email protected]
Hi
I would also like to know what action can be taken, and what options we have.
Thanks
They got me for 5K and Pringle acted like he was doing me a favor to talk with him about my investment! I know they changed the format a couple of times and now the site is offline.
It really steams me to think that these folks might be a hell of a lot richer for our worse!!!
I’m looking for information on class action lawsuit, I would like to join.
Does anyone have any information on class action lawsuit?
Please add me to the list of those interested in recouping money invested under false pretences. Good to see that truth in advertising truly is dead.
I’ve been burned too. Despite all the postings, I’m unable to determine from this site nor from SEC, if any action is being taken. Are there no lawyers out there? Does anyone know anything?
There is a law firm in Houston that is taking the case…. I will have to look tonight at home for the name… It was given to me by one of the people in the forum…. if someone could post the law office and phone numbers…. this would be good…. I was told that only two people one other had joined the suit… Jeff
I too was duped into buying this stock. If you can pass any info on legal recourse or tax write-offs…please contact me at: [email protected]
Thanks much…
United we will win!!!
Please post the law firm if you find it, it would be much appreciated. I sent a letter to the FTC and they said they couldn’t help me.
57pass posted a message on 2/7/02 that a law firm in Houston Texas had filed lawsuit against 1stBuy.com. I never saw that information posted, does anyone know if 1stbuy.com is still trading or has it closed doors completely?
I’m still looking for information on 1st Buy, does anyone have any information for law firm, telephone number, email address, names anything?
Thanks for the information. I have sent a letter to the DOJ. Hopefully, someone will answer. Please post if you get a reply.
Thanks again.
Sounds like there is a growing list of dissatisfied investors with 1stbuy.com
If you find out anything we can do to recoup our losses please let us know
Just happened to run across this post. I lost $5k to the 1stBuy pre-IPO scam. Anyone out there who can tell me what the final resolution to all of this was. I was never notified of a bankruptcy or a class action lawsuit. Did either finally happen? I’m sure its too late for me to file now, but what year were we supposed to have claimed this stock as a loss for tax purposes? Thanks in advance.
I invested a good sum of money for this IPO that never happened. I was wondering about the tax information also. Please keep me informed if there is an class-action lawsuit. I have made many phone calls and emails to 1st Buy.com and never received any return calls and messages from the company.
I also lost money by investing in 1st buy.
I would appreciate knowing what recourse, if any,
is available, and whether the stock can be considered "worthless". My e-mail is [email protected]
I got a letter yesterday from a lawyer about them going into bankruptcy. Did anyone else get this letter?
Yep!! Read through the legal jargon and still feel we are at the same place we were before. NOWHERE!! From what I got out of it, they would like to re~organize and keep us listed as stock holders. But they owe a great deal of money to their creditors. Looks like they weren’t paying them for quite some time. I guess we should look at this as one of life’s lessons we learn.
I feel the same.
Sending it a lawyer to see what to do. I can’t imagine what people who invested thousands are feeling. These guys should be locked up.
I guess we did learn a lesson, but too bad these guys aren’t paying for being dishonest.
I just found out about this! A year ago I found out that a new partnership had formed. I sent an e-mail asking what impact it would have on my stock. I got the following response from Roger Pringle:
"Roger Pringle Here. The Subscription Service is a revenue plan for 1stBuy that we hope will build an increasing revenue stream for 1stbuy.
Cold River Data does the programming, hosting, transactions, customer support, etc for thier portion. 1stBuy has customers. Its a cost effective revenue generation plan. Our goal is to have 2,000 members signed up."
So anyone know of any recourse?
I have also invested, although it was a very small AM ount, but I would like to know of any actions that can be taken. I have read of two main concerns, the class-action lawsuit out of Houston and also any tax benefits. Does anyone know about either of these?
I have attached a copy of an email I sent to the Attorney General regarding this case.
I also attached the article to familiarize them with what transpired.
The only way for us to stop the Rodger Pringles of the world is to apply pressure on the Attorney General to prosecute these individuals to the max and freeze all their assets to assure individuals are compensated.
A copy was also sent to the O’Reilly Factor, hoping he will take up the issue.
Bombard the Attorney Generals office email: [email protected] until we can receive a satisfactory reply.
I thought you’d like to read this article from E-Commerce Times:
"Feds Settle E-Commerce IPO Fraud Case" with reference to Robert Pringle,
Founder and Chief Financial Officer for 1stbuy.com.
1200 small time investors, invested #3.8 million and we
were all duped by this man. What was his penalty, a $25,000
fine.
What great odds. $3.8 million for only $25,000.00?
I believe we would all take those odds every day!
Question?
So What about the 1200 investors and $3.8 million stolen
by this individual?
Besides the slap on the hand for Roger Pringle and allowing
him to walk away with $3,775,000.00, that is it?
We want Justice and would like to see Justice Served.
From what we are seeing, stealing $3.8 million is not
really a crime!
What about restitution for the investors?
Who cares for Rodger Pringle, freeze all his assets etc.
and use that money to repay the people hurt by this crime.
What say you Mr. Attorney General?
cc. O’Reilly Factor – Fox News.
First I’ve heard about this. I happened upon this article by chance. Anyone have the law firm’s address in Houston? Please respond.
I was also taken for a few hundred dollars. If anyone hears anything on how to get our hard-earned money back, please email me!
I, too, was duped into investing in 1stBuy. I AM interested in finding out what the options are for the recoupment of the investment or a tax write off. Contact [email protected].
I AM definitely interested in legal action. I worked for those scumbags at 1stbuy.com for a *year* without pay – they gave me stock instead. Now my stock (200,000 shares) is worthless. If anyone is actually taking legal action, please let me know.
Right before I left, I also convinced a family friend to invest – he lost $20,000! I want a (legal) piece of Roger Pringle, Chris Hess, Shaemus Nordine and company.
My e-mail is thomas DOT cameron AT camerontech DOT com.
anyone interested in takeing legal action against 1stbuy.com please contact us at
[email protected]
Also an investor, any recourse? And what about taking the loss off taxes for the year 2001?
Looks like I was a sucker, too. Can we do anything?
I also invested in 1stbuy.com I was wondering what I should do as well.
Hiram Babineaux
I’m yet another investor wondering if 1stbuy has “officially” gone under. Can I take my investment as a loss for tax purposes?
I too invested $7,000.00 and never heard NOTHING from 1stbuy.com.
Should we write this off taxes as a loss ?
What should we try and do now…. is the company still open or doing business? Thanks Ray
I’m a stock holder for 1st Buy and I was not aware of this information. How come I wasn’t contacted? I accidentally came across it tonight. Who do I contact concerning the lawsuit??????
anyone else invested with 1stbuy.com?, contact us
this is the first time I heard about 1stbuy. what is avail for the investors? is there any money returned? is this notice to file a loose against for tax lose?