SEC levels fraud charges against Crestview Capital Partners, managing member Flink

By Sheri Kasprzak

New York, Feb. 26 - The Securities and Exchange Commission said Monday it has filed a settled civil injunctive action against Crestview Capital Partners, LLC and managing member Stewart R. Flink, alleging the hedge fund adviser made fraudulent representations related to two registered direct placements.

"Crestview and Flink made false representations in the offering documentation for two registered direct offerings that Crestview funds had not shorted the respective issuer's stock in the 10 trading days preceding the signing of the documentation," said a report filed Monday by the SEC.

Crestview and Flink, the SEC said in its report, have neither denied nor admitted the allegations but have agreed to a civil injunction for violations of the federal securities laws.

Crestview agreed to pay $394,640 in disgorgement and civil penalties related to the allegations, and Flink has agreed to pay $120,000 in civil penalties.

The allegations are related to a $1.4 million registered direct offering from Introgen Therapeutics, Inc. announced in November 2003 and a $1.25 million registered direct offering from Targeted Genetics Corp. announced in February 2004.

The SEC alleges that Flink, acting with full authority for Crestview, "knowingly or recklessly signed the Introgen and Targeted Genetics subscription agreements on behalf of Crestview funds even though Crestview funds had short sold 108,218 and 255,000 shares, respectively, of Introgen and Targeted Genetics stock in the 10 days preceding the execution of the subscription agreements for each of the companies."

Crestview, according to the SEC charges, yielded $197,320 in illegal profits from the two offerings.

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