SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 17038 / June 19, 2001

SECURITIES AND EXCHANGE COMMISSION v. STEPHEN C. SAYRE, INDEPENDENT FINANCIAL REPORTS, INC. AND SILVER SCREEN INDUSTRIES, INC., Civil Action No. CV-00-03800 MMM (Ex) (C.D. Cal.)

The Securities and Exchange Commission ("Commission") announced that on May 31, 2001, the Honorable Margaret M. Morrow, United States District Judge for the Central District of California, entered judgment against Stephen C. Sayre (Sayre), Independent Financial Reports, Inc. (IFR) and Silver Screen Industries, Inc. ("Silver Screen"). The judgment permanently enjoins Sayre and IFR from violating the antifraud provisions of the federal securities laws, and orders Sayre, IFR and Silver Screen to pay disgorgement of $1,027,881.69, and prejudgment interest of $75,582.59. The judgment also orders Sayre to pay a $110,000 civil money penalty.

The Commission's complaint alleged that Sayre, a tree trimmer masquerading as a financial analyst under the name IFR, twice publicly issued recommendations to buy shares in a publicly traded company, eConnect. In the recommendations, Sayre touted eConnect as an undervalued company and projected a short term "target" price of $12 to $25 a share and a one year "target" price of $100 - $135 a share. The complaint further alleged that, prior to issuing the recommendations, Sayre bought several thousand shares of eConnect stock in accounts held by Silver Screen. After the IFR reports were widely disseminated on the Internet, Sayre allegedly took advantage of the market interest he had created by selling his eConnect stock into the inflated market. The complaint alleged that, while each recommendation stated IFR held no stock in eConnect, Sayre failed to disclose that he owned large amounts of eConnect stock through Silver Screen, which stock he intended to sell in contravention of his buy recommendations - a fraudulent practice known as "scalping."