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U.S. Securities and Exchange Commission


Litigation Release No. 20426 / January 10, 2008

Accounting and Auditing Enforcement Release No. 2767 / January 10, 2008

Securities and Exchange Commission v. Chancellor Corporation, et al., (United States District Court for the District of Massachusetts, C.A. No. 03-10762-PBS)

Final Judgment Entered Against Brian M. Adley, Former Chairman and CEO of Boston-Based Chancellor Corporation, Imposing Permanent Injunction, Officer and Director Bar, and Ordering $930,000 in Disgorgement

The Securities and Exchange Commission announced that on January 3, 2008, the Honorable Patti B. Saris, United States District Court Judge for the District of Massachusetts, entered a Final Judgment against Brian M. Adley, the former Chairman, Chief Executive Officer and controlling shareholder of Chancellor Corporation, a now defunct Boston, MA transportation equipment-leasing company, for his role in a multi-faceted financial fraud. The Court ordered that Adley be enjoined from future violations of the federal securities laws, that he pay $930,000 in disgorgement and that Adley is barred from acting as an officer or director of a public company for twenty-years.

On November 26, 2007, after a three week trial, a jury found Adley liable for violating the antifraud and record-keeping provisions of the federal securities laws, for making false statements to Chancellor's accountants, and for aiding and abetting Chancellor's reporting and recordkeeping provisions of the federal securities laws. The Commission's complaint alleged that Adley caused Chancellor to file false financial statements in 1999 and 2000 by directing the wholesale fabrication of corporate documents, by instructing that the fabricated documents be given to the company's auditors, and by coordinating the filing of false financial statements with the Commission. The Final Judgment followed a jury verdict in the SEC's favor on all securities fraud charges against Adley, and permanently enjoins Adley from violating Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B) and 13(b)(5) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-1, 13a-11, 13a-13, 13b2-1 and 13b2-2.

The Commission had previously settled with ten other defendants, including: Chancellor Corporation; the company's former President and Chief Operating Officer; the company's former acting Chief Financial Officer; the company's former treasurer; two former Chancellor directors and audit committee members; Chancellor's outside auditing firm and three members of its audit team.

For further information, see Litigation Release Nos. 18104 (April 24, 2003), 19177 (April 11, 2005), 20177 (July 2, 2007) and 20370 (November 26, 2007).



Modified: 01/10/2008