SEC reportedly drops claim against Md. firm

Maryland Watch

October 23, 1997

The Securities and Exchange Commission does not intend to file a claim in U.S. Bankruptcy Court against the assets of Novatek International, the former Columbia company the SEC is investigating for stock fraud, a lawyer representing the company said yesterday.

Attorney Jay Shulman said he was told of the SEC's decision by attorneys representing creditors in the case.

The SEC did not return a call for comment yesterday. An SEC claim would seek assets to protect stockholders and could take precedence over other claims.

A hearing in U.S. Bankruptcy Court yesterday was canceled by agreement of the creditors and Novatek, said Shulman. The hearing was to discuss an SEC request to be allowed more time to file a claim against Novatek.

The company, which has been renamed Medical Diagnostic Products Inc., filed for bankruptcy protection in October 1996.

A report filed in September says the company has no income and just one employee, Dr. Erick Gray, a Howard County resident who quit the company's board of directors after the SEC probe began. He is now listed as chief executive officer.

Pub Date: 10/23/97

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