STATE OF ARKANSAS

SECURITIES DEPARTMENT

 

IN THE MATTER OF
Z3 CAPITAL CORPORATION CEASE AND DESIST ORDER
STELLA BELLA CORP. USA NO. 98-4-S
INTERNATIONAL BRANDS, INC.
VLADISLAV STEVEN ZUBKIS,
BRUNO KOZIK AND MARK SCIALDONE

 

CEASE AND DESIST ORDER

    The Arkansas Securities Department ("Department") has received information and has in its possession certain evidence which indicates that The Z3 Capital Corporation ("Z3"), its president, Vladislav Steven Zubkis ("Zubkis"), Stella Bella Corp. USA ("Stella Bella"), its president, Bruno Kozik ("Kozik"), International Brands, Inc. ("International Brands") and its president, Mark Scialdone ("Scialdone") have violated provisions of the Arkansas Securities Act ("Act"), Ark. Code Ann. 23-42-101 et seq.

FINDINGS OF FACT

  1. Z3 purports to be a corporation and maintains a last known address at 4364 Bonita Road, Suite 476, Bonita California 91902.

  2. Zubkis is the President of Z3 and maintains a last known address at 4364 Bonita Road, Suite 476, Bonita California 91902.

  3. Stella Bella purports to be a corporation and maintains a last known address at 7570 Clairemont Mesa Boulevard, San Diego, California 92111-1504.

  4. Kozik is the past president of Stella Bella, is married to Zubkis’ sister, and maintains a last known address at 7570 Clairemont Mesa Boulevard, San Diego, California 92111-1504.

  5. International Brands is a successor company to Stella Bella and maintains a last known address at 7570 Clairemont Mesa Boulevard, San Diego, California 92111-1504.

  6. Scialdone is the successor president of Stella Bella, is now president of International Brands and maintains a last known address at 7570 Clairemont Mesa Boulevard, San Diego, California 92111-1504.

  7. The Department received an inquiry from an Arkansas resident, Craig Bradberry ("Bradberry") who purchased common stock in Stella Bella from Z3. Mr. Bradberry reported that after his initial purchase of common stock, through a reverse stock split he received warrants which entitled him to purchase additional shares of the common stock. When Mr. Bradberry attempted to exercise the warrants he was told by Zubkis that the stock would be restricted and could not be sold. Mr. Bradberry said he initially purchased ten thousand (10,000) shares of Stella Bella common stock for seventeen cents ($.17) per share or a total investment of about $1,700. Zubkis told Mr. Bradberry that his stock had increased in value to over $220,000 or twenty-two dollars and fifty cents ($22.50) per share. Zubkis would not honor the warrants, but offered to buy back the stock for $1,800.

  8. The Department has information that other Arkansas residents, in addition to Bradberry, were offered and purchased shares of stock in Stella Bella by agents of Z3.

  9. Information available indicates that Scaldoni succeeded Kozik as president of Stella Bella. Scaldoni is now president of International Brands, Inc. the successor company to Stella Bella.

  10. A search of records revealed that neither Stella Bella nor International Brands, Inc. are registered securities or exempted from registration with the Arkansas Securities Commissioner. The offer and sale of these stocks constitutes the offer and sale of securities by Z3, Zubkis, Stella Bella, Kozik, International Brands and Scaldoni in violation of Ark. Code Ann. 23-42-501.

  11. None of the previously named parties are registered as broker-dealers or agents for the sale of securities in the State of Arkansas. The offer and sale of securities by them is in violation of Ark. Code ann. 23-42-301.

CONCLUSIONS OF LAW

  1. Ark. Code Ann. 23-42-102(2) defines "agent" as any individual who represents a broker-dealer or issuer in effecting or attempting to effect purchases or sales of securities.

  2. Ark. Code Ann. 23-42-102(3) defines "broker-dealer" as any person engaged in the business of effecting transactions in securities for the account of others or for his own account.

  3. Ark. Code Ann. 23-42-102(14)(A) defines "security" to include any stock, certificates of interest or participation in any profit-sharing agreements; investment contracts, certificates of interest or participation in, temporary or interim certificates for, guarantees of, or warrants or rights to subscribe to purchase, any of the foregoing.

  4. Ark. Code ann. 23-42-501 states that it is unlawful for any person to offer or sell any security which is not registered or which is not exempt from registration under the terms of the Act.

  5. Ark. Code Ann. 23-42-301(a) states that is unlawful for any person to transact business in this State as a broker-dealer or agent unless such person is registered under the terms of the Act.

  6. Ark. Code Ann. 23-42-507 states in part, that it is unlawful for any person in connection with the offer, sale or purchase of any security, directly or indirectly to make any untrue statement of a material fact or to omit to state a material fact necessary in order to make the statements made, in the light of the circumstances under which they are made, not misleading.

OPINION

  1. This matter has been properly brought before the Arkansas Securities Commissioner pursuant to Ark. Code Ann. 23-42-201 and 209.

  2. From the facts known by the Department, the Commissioner has reason to believe that Z3, Zubkis, Stella Bella and Kozik have engaged in activity in violation of the Act by offering and selling securities in Arkansas.

  3. Pursuant to Ark. Code Ann. 23-42-209(a)(1), the Arkansas Securities Commissioner can and should Order Z3, Zubkis, Stella Bella, Kozik, International Brands, Inc. and Scialdone to immediately Cease and Desist from further actions in the State of Arkansas in connection with the offer and sale of securities, until such time as they and the securities offered are properly registered.

  4. This Order is in the public interest.

ORDER

    IT IS THEREFORE ORDERED that Z3 Capital Corporation, Stella Bella Corporation, USA, International Brands, Inc., Steven Zubkis, Bruno Kozik, and Mark Scialdone CEASE AND DESIST from any further actions in the State of Arkansas in connection with the offer and sale of securities until such time as they and the securities offered are properly registered pursuant to the Arkansas Securities Act.

WITNESS MY HAND AND SEAL THIS _____ DAY OF JANUARY, 1998.

                                                                              ______________________________

                                                                              MAC DODSON

                                                                              ARKANSAS SECURITIES COMMISSIONER