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Thomas M. Melton (Bar No. # 4999)
UNITED STATES DISTRICT COURT
INTRODUCTION Plaintiff, Securities and Exchange Commission and Exchange Commission ("Commission") for its complaint against Intelliquis International, Inc., ("Intelliquis") and Mark W. Tippets ("Tippets"), David A. Jones ("Jones"), and Kevin E. Orton ("Orton") alleges as follows: 1. Intelliquis is a Nevada corporation headquartered in Draper, Utah. Intelliquis began filing reports with the Commission pursuant to Section 12(g) of the Exchange Act in 1984. Intelliquis' common stock was quoted on the OTC Bulletin Board until December 2001 when it was removed for failing to keep current its filings with the Commission. Intelliquis stock is currently quoted in the Pink Sheets at less than $.01 a share. 2. From May 1999 until May 2001, Intelliquis, in its 1998 and 1999 Forms 10-KSB and its 1999 Forms 10-QSB, overstated revenues, income, and accounts receivable by recording certain consignment transactions of software product to Ingram Micro Systems, Inc. ("Ingram"), a California based, world-wide distributor of computer hardware and software, as sales. Intelliquis' improper accounting treatment resulted in material overstatements of revenue, income, and accounts receivable in the company's financial statements that were filed with the Commission. False and misleading financial statements were also contained in a Form SB-2 registration statement which was filed with the Commission. 3. Jones, Intelliquis' Chief Financial Officer, prepared the inaccurate year-end financial statements for the 1998 and 1999 Forms 10-KSB which were audited by Orton. The 1998 audited financial statement was included in the Form SB-2 registration statement that was filed with the Commission in January 2000. In June 2000, Intelliquis amended the January 2000 Form SB-2 registration statement to include Orton's 1999 audited financial statements. In addition, Jones prepared the inaccurate financial statements that appeared in the Forms 10-QSB for 1999 which also were filed with the Commission. 4. Tippets, Intelliquis' Vice-President for Marketing and Sales and a director of the company, was responsible for negotiating and signing the marketing agreements with Ingram. Tippets knew, or was reckless in not knowing, that the financial statements for Intelliquis improperly recognized revenue from consignment transactions with Ingram. 5. Orton was engaged by Intelliquis to audit its year-end financial statements that were included in its Form 10-KSB for 1998 and 1999 which were filed with the Commission. Orton failed to conduct a proper audit of the above financial statements and therefore he assisted the company in filing materially misleading financial statements with the Commission which were made available to both public and private investors. Orton also assisted Intelliquis by issuing audit reports for the 1998 and 1999 audits which represented that the audits had been conducted in accordance with GAAS and the financial statements were prepared in conformity with GAAP. These representations are false. STATUTES AND RULES ALLEGED TO HAVE BEEN VIOLATED 6. Defendant Intelliquis has engaged and, unless enjoined, will continue to engage, directly or indirectly, in transactions, acts practices, and courses of business which constitute violations of Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77q(a)], and Sections 10(b), 13(a) and 13(b)(2)(A) and (B) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78j(b), 78m(a) and 78m(b)(2)(A) and (B)] and Rules 10b-5, 12b-20, 13a-1, 13a-13 and 13b2-1 thereunder [17 C.F.R. §§ 240.10b-5, 240.12b-20, 240.13a-1, 240.13a-13 and 240.13b2-1]. 7. Defendants Tippets, Jones, and Orton have engaged, and unless restrained and enjoined, will continue to engage, directly or indirectly, in transactions, acts, practices, and courses of business which constitute violations of Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)], and Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. Further, Tippets and Jones aided and abetted and assisted Intelliquis to violate Section 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. [15 U.S.C. § 78m(a)] [17 C.F.R. §§ 240.12b-20, 240.13a-1 and 240.13a-13]. Orton aided and abetted and assisted Intelliquis to violate Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13. 8. Defendants' conduct occurred in connection with the purchase and sale of Intelliquis' securities. JURISDICTION AND VENUE 9. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)] and Sections 21(d)(3), 21(e) and 27 of the Exchange Act [15 U.S.C. §§ 78u(d)(3), 78u(e) and 78aa]. 10. The defendants, directly or indirectly, have made use of the mails, means or instruments of transportation or communication in interstate commerce, or means or instrumentalities of interstate commerce in connection with the transactions, acts, practices and courses of business described in this Complaint. 11. Venue over this action is proper pursuant to Section 22(a) of the Securities Act and Section 27 of the Exchange Act [15 U.S.C. §§ 77v(a) and 78aa]. 12. Certain of the transactions, acts, practices and courses of business constituting violations alleged herein occurred within the state of Utah. Intelliquis' headquarters is located in Draper, Utah. Tippet, Jones and Orton engaged and transacted business within the state of Utah during the time the financial statements were prepared and filed with the Commission. Moreover, all the defendants with the exception of Orton reside or may be found with in the District of Utah. Prior to his incarceration in a federal penitentiary, Orton lived in the District of Utah. AUTHORITY FOR PROMULGATED RULES CITED HEREIN 13. Plaintiff Commission brings this action pursuant to Sections 20(b) and 20(d) of the Securities Act [15 U.S.C. §§ 77t(b) and 77t(d)] and Sections 21(d) and 21(e) of the Exchange Act [15 U.S.C. §§ 78u(d)(3) and 78u(e)], to restrain and enjoin the defendants from engaging in, or aiding and abetting, the transactions, acts, practices and courses of business described herein which violate the federal securities laws, and transactions, acts, practices and courses of business of similar purport and object, to order defendants Tippets and Jones to disgorge gains, with prejudgment interest, from the sales of Intelliquis' securities, to impose civil money penalties pursuant to Section 20(d) of the Securities Act and Section 21 of the Exchange Act against Tippets, Jones and Orton, and to bar Tippets and Jones from serving as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 78l] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)]. 14. Plaintiff Commission, pursuant to the authority granted to it by Section 10(b), 13(a) and 13(b) of the Exchange Act [15 U.S.C. §§ 78(j)(b), 78m(a) and 78(b)], has promulgated Rules 10b-5, 12b-20, 13a-1, 13a-13, 13b2-1. These rules were in effect at all times relevant hereto and are still in effect. DEFENDANTS 15. Intelliquis International, Inc.("Intelliquis") is a Nevada corporation headquartered in Draper, Utah. Intelliquis is a republisher, marketer, and supporter of utility, productivity, and communication software products for the retail market. 16. Mark W. Tippets ("Tippets"), age 49, is a resident of Orem, Utah. Tippets, was one of the initial incorporators of Intelliquis and is currently serving as its President. He has also served as a director and Vice-President of Marketing and Sales since the company's inception. Since October 2000, Tippets also began serving as Intelliquis' Chief Financial Officer ("CFO"). Tippets, claims to have an extensive background in developing and marketing software to major retail distributors throughout the country and has been responsible for the daily operations of the company and marketing its products since the company's incorporation. 17. David A. Jones ("Jones"), age 39, is a resident of Orem, Utah and has been licensed as a Certified Public Accountant ("CPA") since February 1993. He served as CFO of Intelliquis from November 1998 until October 2000 when he resigned. 18. Kevin E. Orton ("Orton"), age 50, is a former resident of Salt Lake City, Utah, and is currently serving a nine-year sentence at Safford, Arizona Federal Corrections Facility after being convicted of securities fraud, wire fraud and racketeering. U.S. v. Orton, CR-S-96-288-PMP-(RJJ)(USDC D.Nev.) Orton had been licensed as an accountant in Utah until June 20, 2002, when he voluntarily surrendered his license to practice as a CPA. Orton was engaged as the auditor of Intelliquis' financial statements which were included in the Forms 10-KSB for the calendar years ended December 31, 1998 and December 31, 1999. BACKGROUND 19. In October 1997, Intelliquis entered into a one-year Start-up Agreement ("the Agreement") with Ingram to market Intelliquis software products throughout the United States. Under the terms of this agreement, Intelliquis consigned its software to Ingram for sale and did not receive revenues until Ingram sold the product. The Agreement also specifically provided that Intelliquis would retain title to products shipped to and distributed by Ingram, until the products were sold to a retail end user. It also provided that Ingram had an unrestricted right to return product to Intelliquis, at Intelliquis' expense, and this right was to survive the term or termination of the Agreement. 20. In November of 1999, the Agreement was replaced by what was referred to as a Distribution Agreement. While both Ingram and Intelliquis described the Distribution Agreement as being a new agreement, the essential terms remained the same as the October 1997 Start-Up Agreement. Under the terms of the Distribution Agreement, Ingram was still not obligated to pay Intelliquis for any of its product until Ingram's customer had resold the product to a retail end-user. Ingram also retained its unfettered right to return Intelliquis' products at any time, at Intelliquis' expense. Tippets, on behalf of Intelliquis, negotiated and signed both the October 1997 and November 1999 agreements on behalf of the company and provided copies of both agreements to Jones and Orton. 21. Intelliquis, through the actions of Tippets and Jones knew that the company was operating on a consignment basis with Ingram and that Intelliquis would not receive payment for its products until Ingram's retail customers bought Intelliquis'software. All the defendants also knew that Ingram had an unlimited right to return products to Intelliquis at any time and at Intelliquis's expense. 22. Intelliquis, with the knowledge of Tippets, Jones and Orton, filed inaccurate financial statements with the Commission that improperly recognized revenue in its 1998 and 1999 year-end Forms 10-KSB. Intelliquis, with the knowledge of the other defendants, also recognized revenue improperly in its 1999 Forms 10-QSB by recording consignment transactions as sales in each quarter. The inaccurate 1998 and 1999 audited financial statement was also included in a Form SB-2 registration statement filed by Intelliquis with the Commission. 23. An overstatement of both revenues and accounts receivable resulted from recording a sale when Intelliquis shipped product to Ingram, rather than when Intelliquis's product was ultimately sold to a retail customer. 24. In the 1998 Form 10-KSB, this revenue recognition gimmick caused sales to be overstated by approximately $469,000 or 32%, and net income was overstated by approximately $355,000, which resulted in the transformation of a loss of approximately $279,000 into a "profit" of $75,921. In addition, on the company's balance sheet accounts receivable were overstated by $497,124 or 80%, and total assets were overstated by the same dollar amount, or 43%. 25. In the 1999 Form 10-KSB, revenues were overstated by $2,762,827 or 37% and the reported net loss of $52,627 was understated by $1,381,414 or 2,625%. This recognition error also caused accounts receivable to be overstated by $3,259,951 or 79%, total assets to be overstated by approximately 22%, and stockholders equity to be overstated by 49% on Intelliquis' balance sheet for the year ending December 31, 1999. 26. In February 1999, a former Intelliquis board member told Tippets and Jones that Intelliquis was recognizing revenue improperly. After examining Intelliquis' books and records, the former board member informed both Tippets and Jones that Intelliquis was recognizing revenue improperly. A copy of the board member's resignation letter containing this information was provided to Orton as well. 27. Orton knew or should have known that Intelliquis had improperly recognized revenue in the 1998 and 1999 Forms 10-KSB and in the 1999 Form 10-QSB. His audit work papers contained copies of both the October 1997 and November 1999 Agreements which described Intelliquis' arrangement with Ingram as a consignment. Orton also had notice that there was a huge difference between the amount Ingram represented it owed Intelliquis and the amount Intelliquis had recorded as receivables due from Ingram. As part of the December 1999 Intelliquis audit, Orton sent an accounts receivable confirmation request to Ingram asking Ingram to verify it owned Intelliquis $3,276,186. Ingram's written response was that it only owed $7,236 to Intelliquis. Despite these facts, neither Jones, Tippets nor Orton adjusted sales or accounts receivable to reflect the confirmation from Ingram nor did they research the basis for the discrepancy. 28. Orton's audits of the financial statements which were included in Intelliquis' 1998 and 1999 Form 10-KSB and the Form SB-2 registration statement and its amendments were not conducted in conformity with Generally Accepted Auditing Standards ("GAAS"). In conducting the audits of the Intelliquis' financial statements, Orton failed to follow GAAS guidelines, which include gathering sufficient competent evidential matter to form a reasonable basis for an opinion regarding the accuracy of Intelliquis' financial statements. 29. Orton failed to review and understand the agreements between Intelliquis and Ingram. Consequently he failed to detect Intelliquis' overstatement of revenue and accounts receivables on its financial statements by improperly recording consignment transactions with Ingram as sales. Orton failed to consider red flags raised by correspondence which drew into question the accuracy of Intelliquis' financial statements and revenue recognition procedures. 30. Jones prepared the false and misleading financial statements contained in Intelliquis' 1999 Form 10-QSB, Form 10-KSB, and the Form SB-2 registration statement. 31. Under the terms of the 1997 Start-Up and the 1999 Distribution Agreement, Ingram was not obligated to pay Intelliquis until Ingram's customer sold the software product to a retail end-user. Since Ingram always operated under a consignment marketing agreement with the right to return product to Intelliquis, Jones ignored generally accepted accounting principles promulgated in FASB Statement of Accounting Standards No. 48. Jones' failure resulted in false information regarding Intelliquis' operations and financial condition being disseminated to the public. 32. In April 2001, Ingram terminated its business relationship with Intelliquis and returned all of the remaining product to Intelliquis. 33. While permitting false information to be disseminated, Jones sold all his shares of Intelliquis stock. Similarly, Tippets sold a significant amount of his stock in Intelliquis while knowing Intelliquis' financial statements were false. Both Jones and Tippets sold stock despite their knowledge that Intelliquis' publically filed financial statements contained materially false information concerning its revenues, income, receivables, and retained earnings. FIRST CAUSE OF ACTION EMPLOYMENT OF DEVICE, SCHEME, OR ARTIFICE TO DEFRAUD Violation of Sections 17 (a) (1) of the Securities Act [15 U.S.C. § 77q(a)] 34. Plaintiff Commission repeats and realleges Paragraphs 1 through 33 above. 35. Defendants Intelliquis, Tippets, Jones, and Orton, and each of them, by engaging in the conduct described in paragraphs 1 through 33 above, directly and indirectly in the offer or sale of securities, by the use of means or instruments of transportation or communication in interstate commerce or of the mails, with scienter, employed devices, schemes, or artifices to defraud. 36. By reason of the foregoing, defendants, Intelliquis, Tippets, Jones, and Orton, directly or indirectly, violated, and unless restrained and enjoined will continue to violate 17 (a) (1) of the Securities Act [15 U.S.C. § 77q(a)]. SECOND CAUSE OF ACTION FRAUD IN THE OFFER AND SALE OF SECURITIES Violations of Sections 17(a) (2) and (3) of the Securities Act [15 U.S.C. § 77q (a)] 37. Paragraphs 1 through 33 are realleged and incorporated herein by reference. 38. Defendants Intelliquis, Tippets, Jones and Orton, and each of them, by engaging in the conduct described in paragraphs 1 through 33, directly and indirectly, in the offer and sale of securities of Intelliquis, by the use of means or instruments of transportation or communication in interstate commerce or of the mails, obtained money or property by means of untrue statements of material fact or by omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading, and engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon purchasers of such securities. 39. By reason of the forgoing, defendants Intelliquis Tippets, Jones, and Orton, directly or indirectly, violated, and unless restrained and enjoined will continue to violate, Sections 17(a)(2) and (3) of the Securities Act [15 U.S.C. § 77q(a)(2) and (3)]. THIRD CAUSE OF ACTION FRAUD IN CONNECTION WITH THE PURCHASE AND SALE OF SECURITIES Violations of Section 10 (b) of the Exchange Act [15 U.S.C. §78j(b) and Rule 10b-5] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5] 40. Paragraphs 1 through 33 are realleged and incorporated herein by reference. 41. Defendants, Intelliquis, Tippets, Jones, and Orton by engaging in the conduct described in paragraphs 1 through 33 above, directly or indirectly, in connection with the purchase and sale of securities, by the use of means or instrumentalities of interstate commerce or of the mails, directly or indirectly, with scienter: (1) employed devices, schemes or artifices to defraud; (2) made untrue statements of material facts or omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (3) engaged in acts, practices or courses of business which operated or would operate as a fraud or deceit upon other persons. 42. By reason of the foregoing, defendants Intelliquis, Tippets, Jones, and Orton, directly or indirectly, violated, and unless restrained and enjoined, will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and Rule 10b-5 thereunder [17 C.F.R. § 240.10b-5]. FOURTH CAUSE OF ACTION FALSE FILINGS WITH THE COMMISSION Violations of Section 13(a) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a-1, and 240.13a-13] promulgated thereunder 43. Paragraphs 1through 33 are hereby realleged and incorporated by reference herein. 44. Section 13(a) and Rules 12b-20, 13a-1 and 13a-13 require companies filing registration statements and periodic reports with the Commission to file truthful reports that do not omit information and would otherwise make the information contained in the filings not misleading. 45. Intelliquis violated Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 by filing materially misleading Forms 10-KSB for the years ended December 31, 1998 and 1999, and Forms 10-QSB for the quarters ended March 31, 1999, June 30, 1999 and September 30, 1999. The misleading financial statements contained in Intelliquis' Forms 10-KSB for 1998 and 1999 were included in the Form SB-2 registration statement which was filed with the Commission. 46. Intelliquis' filings were materially inaccurate and contained misstatements and omissions in that, among other things: (a) The financial statements accompanying Intelliquis' filings improperly reported sales from consignment transactions based on the shipment of products to Ingram, rather than from Ingram's customers' retail sales to end-users. (b) Intelliquis' filings with the Commission did not disclose that the financial statements contained in its filings were not prepared in accordance with GAAP nor were they audited in accordance with GAAS. 47. As a result of the conduct set forth in paragraphs 1 through 33 above, Intelliquis directly and indirectly, violated Section 13(a) of the Exchange Act [15 U.S.C. §78m(a)] and Rules 12b-20, 13a-1 and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a-1, and 13a-13] promulgated thereunder. FIFTH CAUSE OF ACTION FALSE BOOKS AND RECORDS, NO INTERNAL CONTROLS Violations of Sections 13(b)(2)(A) and (B) of the Exchange Act [15 U.S.C. § 78m(b) (2)(A) and (B)] and Rule 13b2-1 [17 C.F.R. § 240.13b2-1] promulgated thereunder 48. Paragraphs 1 through 33 are hereby realleged and incorporated by reference herein. 49. Section 13(b)(2)(A) of the Exchange Act requires companies to keep accurate books, records and accounts which reflects fairly the transactions entered into by companies and the disposition of its assets. Rule 13b-2-1 also requires that a companies books and records not be falsified by any individual. 50. Section 13(b)(2)(B) requires companies to devise and maintain a system of internal accounting controls sufficient to provide reasonable assurances that transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting principles or any other criteria applicable to such statements, and to maintain accountability for such assets. 51. Intelliquis failed to make and keep accurate books, records and accounts that provided reasonable assurance that transactions it had entered into with Ingram had been accounted for correctly and not falsified. Intelliquis also did not devise or maintain a system of internal accounting controls that assured that sales were being properly recorded on its financial statements. 52. As a result of the conduct set forth in paragraphs 1 through 33 above, Intelliquis directly and indirectly violated Section 13(b)(2)(A) and (B) of the ExchangeAct and Rule 13b2-1. [15 U.S.C. § 78m(b)(2)(A) & (B)][17 C.F.R. § 240.13b2-1]. SIXTH CAUSE OF ACTION AIDING AND ABETTING FALSE BOOKS AND RECORDS VIOLATIONS AND FALSE FILINGS Violations of Section 13(a) and 13(b)2(A) and (B) of the Exchange Act [15 U.S.C. 78m(a)] and Rules 12b-20, 13a-1 and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a1, and 240.13s-13] promulgated thereunder 53. Plaintiff Commission repeats and realleges Paragraphs 1 through 33 above. 54. Aiding and abetting liability arises when there is: (1) a violation of the securities laws by some other party; (2) a general awareness by the aider and abettor that his role is part of an overall activity that was improper; and (3) substantial assistance by the aider and abettor in the achievement of the primary violation. Either willfulness or a reckless indifference to a known obligation or set of facts will satisfy the scienter requirement to held liable as an aider and abettor. 55. Tippets and Jones aided and abetted Intelliquis in violating Section 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 in that they were aware that the company was recognizing revenue improperly since they all had a copy of both the 1997 Start-up and 1999 Distribution agreements which provided that product shipped to Ingram was effected on a consignment basis and that Ingram had the right to return product at its discretion. In addition, Tippets and Jones knew, or were reckless in not knowing, that Ingram was not obligated to pay Intelliquis for any of its software product until Ingram's customer had sold the product to a retail end user. 56. Orton aided and abetted Intelliquis in violating Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 by not conducting an audit in accordance with GAAS and in certifying financial statements which he knew or was reckless in not knowing were materially misleading. 57. Both Tippets and Jones were also told directly, and in writing by a former director of Intelliquis that after his examination of the company's books, he knew the company was recognizing revenue improperly. Orton's own audit work papers disclosed that there was a material discrepancy between what Ingam claimed it owed Intelliquis and what was being recorded as accounts receivable from Ingram on Intelliquis' balance sheet. Orton's work papers also included a copy of the resignation letter from a prior board member wherein he stated that Intelliquis was practicing improper accounting. Nevertheless, Orton issued an unqualified opinion stating that the company's financial statement were presented fairly in conformity with GAAP and the audit had been conducted in accordance with GAAS, when neither of which was true. 58. Tippets and Jones aided and abetted Intelliquis' violations by causing its books and records to improperly record consignment transactions as sales on the company's financial statements in the 1998 Form 10-KSB and the quarterly 10-QSB and the 10-KSB for 1999. Tippets, Jones and Orton also allowed Intelliquis' falsified financial statement to be included in the Form SB-2 registration statement and its subsequent amendments. 59. By reason of the forgoing, Tippets and Jones, directly or indirectly, aided and abetted Intelliquis, and unless restrained and enjoined will continue to aid and abet Intelliquis, to violate Section 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a-1, and 240.13a-13] 60. By reason of the forgoing, Orton, directly or indirectly, aided and abetted Intelliquis, and unless restrained and enjoined will continue to aid and abet Intelliquis, to violate Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 [17 C.F.R. §§ 240.12b-20, 240.13a-1, and 240.13a-13] PRAYER FOR RELIEF WHEREFORE, the Commission respectfully requests that this Court: I. Issue findings of fact and conclusions of law that the defendants committed the violations charged and alleged herein. II. Issue in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, orders permanently enjoining defendants Intelliquis, Tippets, Jones, Orton, and their officers, agents, servants, employees, attorneys, and accountants, and those persons in active concert or participation with any of them, who receive actual notice of the order by personal service or otherwise, and each of them, from engaging in the transactions, acts, practices and courses of business described herein, and from engaging in conduct of similar purport and object in violation of Section 17(a) of the Securities Act, and Section 10(b) of the Exchange Act and Rules 10b-5 thereunder. III. Issue in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, orders permanently enjoining defendant Intelliquis, and its officers, agents, servants, employees, attorneys, and accountants, and those persons in active concert or participation with any of them, who receive actual notice of the order by personal service or otherwise, and each of them, from engaging in the transactions, acts, practices and courses of business described herein, and from engaging in conduct of similar purport and object in violation of Section 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13 and 13b2-1. IV. Issue in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, orders permanently enjoining defendants Tippets and Jones, and their officers, agents, servants, employees, attorneys, and accountants, and those persons in active concert or participation with any of them, who receive actual notice of the order by personal service or otherwise, and each of them, from engaging in the transactions, acts, practices and courses of business described herein, and from engaging in conduct of similar purport and object that would aid and abet Intelliquis, in violations of Section 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. V. Issue in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, orders permanently enjoining defendant Orton, and his officers, agents, servants, employees, attorneys, and accountants, and those persons in active concert or participation with him, who receive actual notice of the order by personal service or otherwise, and each of them, from engaging in the transactions, acts, practices and courses of business described herein, and from engaging in conduct of similar purport and object that would aid and abet Intelliquis, in violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder. VI. Permanently bar the defendants Tippets and Jones from serving as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Securities Exchange Act, as amended [15 U.S.C. §78l] or that is required to file reports pursuant to Section (d) of the Securities Exchange Act of 1934, as amended [15 U.S.C. § 78o(d)]. VII. Enter an order directing defendants, Tippets and Jones, to disgorge all sums unjustly realized in the transactions identified in this Complaint, together with prejudgment interest on disgorgement amounts. VIII. Enter an order directing the defendants, Tippets, Jones, and Orton to pay civil money penalties pursuant to Section 20(d) of the Securities Act and Section 21(d)(3) of the Exchange Act and specifically, directing Orton to pay a civil penalty in the amount of $110,000. IX. Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered, or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court. Dated this ____ day of July, 2002. _________________________________________
http://www.sec.gov/litigation/complaints/comp17611.htm
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