SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17813 / October 29, 2002

FINAL JUDGMENTS OF PERMANENT INJUNCTION ENTERED AGAINST FORMER BROKERAGE FIRM AND ITS VICE PRESIDENT OF SALES

SECURITIES AND EXCHANGE COMMISSION V. DISCOVERY CAPITAL GROUP, ERIK WALSH, AND JOHN ABRESCH, Case No. 02-60363-CIV-HUCK (S.D. Fla., filed March 14, 2002)

The Securities and Exchange Commission ("SEC" or the "Commission") announced that on October 24, 2002, the United States District Court for the Southern District of Florida entered a Final Judgment of Permanent Injunction and Other Relief ("Final Judgment") against John Abresch ("Abresch"), the vice president and director of institutional sales of Discovery Capital Group, Inc. ("Discovery Capital"), a broker-dealer registered with the Commission since 1992. The Final Judgment against Abresch, entered by Abresch's consent and without admitting or denying the allegations of the Commission's Complaint, enjoins Abresch from violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act"), and Rule 10b-5 thereunder. The Final Judgment also orders Abresch to disgorge $570,816, with prejudgment interest thereon, but waives payment of disgorgement and interest in excess of $195,000, and does not impose a civil penalty, based upon his sworn financial statement and documentation provided to the Commission.

On March 14, 2002, the SEC filed an emergency action against Discovery Capital, Abresch and others seeking to enjoin the ongoing fraudulent offering of securities issued by Discovery Capital in the form of promissory notes and preferred stock. The Complaint alleged that from at least June 2001 through the filing of the action, Discovery Capital raised at least $2.7 million through the use of a network of primarily unlicensed sales agents using high pressure sales tactics and making misrepresentations about, among other things, Discovery Capital's growth, its affiliations with well-known brokerage firms and other institutions, and the safety of the investments.

On the same day, the Court also entered a Final Judgment of Permanent Injunction against Discovery Capital, by the consent of the Court-appointed Receiver for Discovery Capital, enjoining Discovery Capital from violations of Section 17(a) of the Securities Act, Sections 10(b), 15(c) and 17(a) of the Exchange Act, and Rules 10b-5, 15c1-2, 15c3-1, 17a-3, 17a-4, 17a-5, and 17a-11 thereunder. The Receiver consented to the entry of the Final Judgment without admitting or denying the allegations of the Complaint.

http://www.sec.gov/litigation/litreleases/lr17813.htm