U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20368 / November 26, 2007
SEC v. Eric R. Majors and Joshua N. Wolcott, Civil Action No. 1:07-cv-2414-WYD (D. Colo., filed November 16, 2007)
SEC Charges CEO and Former CFO of Maximum Dynamics, Inc. with Fraudulent and Unregistered Distribution of Securities
The Securities and Exchange Commission ("Commission") announced today that it filed charges against Eric R. Majors of South Africa and Joshua N. Wolcott of Denver, Colorado, stemming from the fraudulent offering and sale of more than eight million shares of unregistered stock in Maximum Dynamics, Inc. ("Maximum)", an alleged international projects management company that formerly operated out of Colorado Springs, Colorado, and Cape Town, South Africa.
The Commission's civil injunctive complaint, filed in the U.S. District Court for the District of Colorado on November 16, 2007, alleges that from December 2002 through February 2005, chief executive officer Majors and former chief financial officer Wolcott engaged in the fraudulent, unregistered public distribution of the common stock of Maximum to illegally raise capital for the company and to compensate themselves. According to the complaint, Majors and Wolcott issued millions of Maximum shares in the names of alleged consultants in Mexico using false consulting contracts and false Form S-8 registration statements. The complaint alleges that, in reality, the individuals in Mexico sold their identities to Majors and did not know about the consulting contracts or the Maximum shares issued in their names. The complaint further alleges that Majors and Wolcott deposited the shares in brokerage accounts that they controlled and used the proceeds from the sale of the shares to secretly pay themselves, Maximum, and others. The complaint also alleges that Majors and Wolcott fraudulently certified Maximum's periodic reports with the Commission under the Sarbanes-Oxley Act of 2002.
The Commission's complaint alleges that, as a result of their conduct, Majors and Wolcott violated, and unless enjoined, will continue to violate, Sections 5(a), 5(c), and 17(a) of the Securities Act and 10(b), 13(d), and 16(a) of the Exchange Act and Rules 10b-5, 13a-14, 13d-2, 16a-2, and 16a-3 thereunder and aided and abetted Maximum's violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder. As part of this action, the Commission seeks against Majors and Wolcott an injunction against future violations of the provisions set forth above, officer and director bars, penny stock bars, disgorgement, pre-judgment interest, and third tier civil money penalties.