Christine Favara is back in the news – this time as the defendant in an SEC suit charging securities fraud. Those
who have followed Ms. Favara’s career running penny stock companies may
not be surprised to learn that she has run afoul of regulators, and not
for the first time. Favara has been known by a number of different names and so have the companies she has run. While the names keep changing, however, the results remained the same – dismal. Ms. Favara and her companies entice investors with bold promises and lofty projections but inevitably fail to perform.
The failure of those companies has been costly for investors. Now Ms. Favara has received some bad news of her own. The
SEC is alleging that she issued false press releases on behalf of Core
Solutions and improperly registered shares to be issued to consultants
and employees.
When StockPatrol.com
first wrote about Ms. Favara in April 2002, she was heading an obscure
company called Premier Axium ASP, Inc, first as Christine McKiernan and
later as Christine Favara. (According to the SEC she also has been known as Christine Anderson and Christine Anderson Holtzman). The
Company, which had become public through a reverse-merger one year
earlier, claimed to be in the human resources business, although it had
enjoyed only modest success. By
September 2001, Premier Axium was out of cash and overdrawn at the bank,
yet promoters were touting the Company potential for “enormous growth”
in 2002. See Premier Axium ASP, Inc. — 25 Million Reasons.
By the summer of 2002, the Company had changed its name to Core Solutions. With
Ms. Favara still at the helm, Core Solutions began issuing press
releases promising major acquisitions and projecting millions of dollars
in revenues. See Update: Core Solutions, Inc — Only The Name Has Changed. Those
promises proved hollow; by April 2003, Core Solutions had abandoned the
human resources business and announced plans to pursue real estate
ventures. Later that month the Company changed its name to Sunshine Ventures and announced Ms. Favara’s resignation. By May 2003 she was back in charge and the Company was called Christine’s Precious Petals. Three
months later, in August 2003, the Company changed its name to Global
Business Markets and said it now planned to sell guitars, not real
estate. Favara resigned as CEO, apparently for good this time.
On July 28, 2005, the Commission filed suit in federal court in Los Angeles
alleging that Favara caused Core Solutions to issue false and
misleading press releases about its financial condition and future
prospects. As StockPatrol.com reported at the time, Core Solutions
issued a series of press releases in January 2003 stating the Company
had generated new accounts representing over $1 million in annual
revenues and projecting annual revenues of $50 million to $250 million. At the time, Core Solutions had no revenues and approximately $11,000 in assets. See Update: Core Solutions, Inc — So Much For Promises. The
SEC alleges that the Core Solutions press releases were false and
misleading since they did not accurately reflect the Company’s business
or condition.
In addition, the SEC
alleges that Favara failed to disclose in a Form 10-KSB filed by Core
Solutions that she was subject to a previous injunction issued in
connection with insider trading charges. The complaint also alleges that
Favara caused Core Solutions to improperly register and issue shares
under a Form S-8 registration statement (i.e., stock that was intended
to be issued in connection with an employee benefit plan), because the
recipients of those shares did not qualify as proper recipients of Form
S-8 shares.
The Commission is seeking a permanent injunction, disgorgement, and civil penalties. In
addition, the Commission is seeking to prohibit Favara from
participating in a penny stock offering and from serving as an officer
or director of an issuer. The Company she ran, which has enjoyed many incarnations, now is known as GREM USA. As of March 31, 2005, it had no assets and no revenues.
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