‘Sober Pill’ Costs Marketer $2-Million Fine

The former head of a Colorado company that marketed a “sober pill” has been ordered to pay more than $2.2 million in restitution and interest for securities fraud.

The order, by U.S. District Judge Thomas Penfield Jackson, came in February after the Securities and Exchange Commission charged that William M. Mulderig, the former head of Unioil, an Evans, Colo.-based oil and gas development company, had launched a fraudulent publicity campaign about the pill’s effectiveness to drive up Unioil’s stock price.

Unioil, which had acquired the rights to the pill, allegedly claimed in meetings with stock brokers that the pill would reduce blood-alcohol levels and make an inebriated person sober.

The SEC’s complaint did not specify whether the pill worked but said Mulderig had failed to disclose pertinent information in documents filed with the SEC.

“They failed to disclose that the sole ingredient was activated charcoal,” said Karen Matteson, an enforcement division attorney in the SEC’s Los Angeles office.

She said the SEC sued Mulderig and Unioil in federal court in the District of Columbia in September, 1988, alleging that “the purpose of the publicity campaign was to manipulate the stock price. They did some press releases, held meetings with stock brokers and did demonstrations with off-duty cops and Breathalyzers.”

In its filing with the SEC, which requires full disclosure of pertinent information to the investing public, Unioil also did not note that it had not received approval to market the pill from the Food and Drug Administration.

When Mulderig failed to respond to the SEC allegations, Jackson ruled in favor of the federal agency in 1989. On Feb. 1, Jackson ordered Mulderig, a Tallman, N.Y., attorney to pay $1.6 million in restitution to investors plus more than $585,338 in interest.

The larger sum represented the difference between the better than $1-per-share Unioil stock was trading at on the Boston Stock Exchange after the publicity campaign, and the 25 cents-per-share price Mulderig had paid for 3 million shares in a 1986 option agreement.

An option is the right, but not the obligation, to buy stock at a set price by a certain date.

There was no indication in the SEC’s court papers that Mulderig sold the stock to realize a profit.

Reached at his office, Mulderig, who said he left Unioil almost a year ago, said he was seeking to vacate the 1989 judgment and introduce evidence to vindicate himself. Mulderig is representing himself in court.

He also claimed that the pill had been marketed under another name as a digestive aid and was still only in the research phase as a “sober pill.”