In an unusual follow-up to one of its civil suits, the Securities and Exchange Commission yesterday sought contempt charges against a former defendant who, it said, disseminated "false and misleading" information about the settlements terms of the suit.
SEC asked U.S. District Court Judge John Manos in Cleveland to find fashion Two-Twenty Inc. of Aurora, Hoio, and its president, Roger G. Gochneaur, in civil contempt. Manos gave the defendants until April 27 to answer the SEC allegations.
On March 9, the SEC sued the company and its chairman, Vernon G. Gocheaur, who is Roger's father. The suit alleged that hundreds of thousands of dollars had been diverted to Vernon's personal use for such things as a horse, a stable, use of the company yacht, vacations and his wife's personal shopping expenditures.
That day, the defendants consented to the entry, of Judge Manos' final judgment without admitting or denying the substances of the SEC allegations.
Then, on March 13, Roger Gochneaur, the chairman's son, sent a memo to business clients concerning the settlement, the SEC said.
Among other things, the memo claimed the SEC suit and a criminal investigation by the internal Revenue Service "have now been dropped. . . ."
The memo also suggested that the consent decree was with the SEC, when it really was handled through through the court.
In its application to have the defendants judged in contempt, the SEC said the Roger Gochneaur also distrubuted the false information to company shareholders.