The SEC alleged that: "... PacketPort.com, Inc. ("PacketPort.com"), Ronald Durando ..., PacketPort, Inc., Microphase Corp. ..., Robert H. Jaffe ..., Gustave Dotoli ..., IP Equity, Inc. ..., M. Christopher Agarwal ..., and Theodore Kunzog ... executed a fraudulent "pump and dump" market manipulation scheme, aided and abetted by ... William Coons III ..., involving the illegal sale of PacketPort.com common stock from about December 14, 1999, into February 2000. The scheme included, among others acts, acquiring majority control of a failed and indebted public company, changing the company's name, laundering restrictive legends from stock certificates representing restricted and affiliate-owned stock, pumping up the trading price of the company's stock through false publicity, and selling restricted stock to the public at artificially-inflated prices for large profits...."

The SEC and the Defendants "... agree that upon execution of [the] Stipulation of Dismissal ... [and the] district court action shall be dismissed against all defendants ... [where] [c]ertain of the defendant have submitted to the Commission written offers of settlement agreeing to the institution of cease-and-desist proceedings against them pursuant to Section 8A of the Securities Act of 1933 and Section 21C of the Securities Exchange Act of 1934 ... [and] [t]hese defendants agree to abide by these offers of settlement and consent to the Commission's issuance of an an administrative cease-and-desist order as described in their offers of settlement."