Las Vegas attorney sued by federal stock regulators

Tuesday, Aug. 3, 1999 | 11:01 a.m.

The Securities and Exchange Commission has accused a Las Vegas attorney of participating in the fraudulent sale of more than $1.3 million in unregistered securities.

Local attorney Shawn Hackman was named as a defendant in the SEC complaint, filed Monday in U.S. District Court. The lawsuit also named Alexander Kanakaris and David Valenti, both California residents. Kanakaris and Valenti are officers in Kanakaris Communications Inc., a Costa Mesa, Calif., Internet company.

Kanakaris, Valenti and KCI have settled with the SEC without admitting wrongdoing, the SEC said. Kanakaris and Valenti have each agreed to pay $25,000 fines.

The suit states KCI sold $800,000 in stock from January to November 1997, using misleading statements regarding the company's financial condition and business partnerships. After the company failed to go public, as promised, KCI offered angry investors a refund on their shares, but the refund checks bounced.

To cover the refunds, the SEC said Hackman sold $512,000 in stock to 53 investors. He gave $178,000 to KCI to pay off the earlier investors, and pocketed more than $333,000 for his personal use, the SEC alleges. Hackman told the investors the funds would be used for "general operating capital."

In July 1998 the SEC accused Hackman of preparing a $6.25 million stock registration form without KCI's consent, using accounting figures that hadn't been approved for release by KCI's auditor. KCI withdrew the registration form one month later.

The SEC demanded that Hackman be fined for his participation. The SEC also wants Hackman to pay back the $333,000 he allegedly received from the 1998 stock offering.

A partner of Hackman's said Tuesday that he couldn't comment on the allegations because he hadn't seen the lawsuit yet.

The lawsuit came as part of a 26-case enforcement sweep announced by the SEC Monday. The SEC filed suit against 82 people, saying the various schemes raised more than $12.5 million illegally.