The Securities and Exchange Commission today filed a complaint in the United States District Court for the Northern District of California against penny stock company ZNext Mining Corporation, Inc., formerly known as Pearl Asian Mining Industries (PAIM), and its principal, Elvira G. Gamboa.

The SEC’s complaint alleges that from as early as 2004 through 2008, Gamboa caused PAIM to issue numerous materially false and misleading press releases and other disclosures, which gave the impression that PAIM owned and operated a viable gold mining operation in the Philippines. In reality, as alleged in the complaint, PAIM was and currently is nothing but a shell used by Gamboa to generate stock sale profits, and any gold mining operations that do exist belong to a separate Philippine company of the same name owned almost entirely by Gamboa.

The SEC’s complaint further alleges that Gamboa issued the false and misleading disclosures to artificially sustain demand for PAIM stock. According to the complaint, from 2006 through March 2008, PAIM sold at least 1.9 billion shares of purportedly unrestricted PAIM stock to a penny stock promoter. Gamboa allegedly knew the buyer acquired PAIM shares for immediate resale and facilitated such resales by issuing stock certificates without restrictive legends and at times providing the buyer advance copies of PAIM press releases.

The complaint alleges that Gamboa profited from her misconduct by at least $1 million through misappropriation of PAIM’s stock sale proceeds and an arrangement to sell 1.5 billion of her PAIM shares through the company’s investor relations officer.

The SEC’s complaint charges ZNext Mining and Gamboa with violating Sections 5(a), 5© and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctions and civil penalties from ZNext Mining and Gamboa, and seeks from Gamboa an accounting, disgorgement, a penny stock bar, and an order barring her from serving as an officer or director of any public company.

PAIM was formerly a subsidiary of First Canadian American Holding Corporation, now known as Blackout Media Corporation, that was spun off in November 2003. Also today, the Commission sued Blackout Media and its former principal, Sandy Winick, in the Southern District of New York for illegal distribution of stock through such spinoffs. (LR-21083)

The Commission acknowledges the assistance of the Financial Industry Regulatory Authority (FINRA) and the Philippine Securities and Exchange Commission. [SEC v. ZNext Mining Corporation, Inc. and Elvira G. Gamboa, United States District Court for the Northern District of California, Civil Action No. CV 09-2611 (VRW)] (LR-21084)