U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 21345 / December 22, 2009

Securities and Exchange Commission v. William Jacobson, Case No. 2:09-cv-00669-EJL (D. Idaho filed December 22, 2009)

SEC Charges Idaho Mining Company and Former CEO with Illegal Stock Scheme

The Securities and Exchange Commission today filed settled charges against an Idaho mining company and its former CEO for improperly financing their struggling operations through the illegal distribution of millions of shares of stock to investors.

According to the SEC, Atlas Mining Company, a publicly-traded company, and former CEO, Chairman and President William Jacobson, used various means to sell stock in contravention of the federal securities laws, and concealed the improper sales by filing false documents with the SEC.

The SEC's complaint, filed in federal district court in Idaho, alleges that, from 2002 to 2005, Jacobson caused Osburn, Idaho-based Atlas Mining to sell millions of shares of stock to the public while evading the disclosure and registration requirements of the federal securities laws. Among other things, the SEC alleges that Jacobson issued stock to family members and companies he controlled, who then resold the stock to the public and funneled the money back to the company. Similarly, the SEC alleges that when a 2003 public offering failed to raise sufficient funds before expiring, Jacobson unlawfully "parked" nearly 10 million shares with various friends, family members and affiliates so they could be sold at a later date. According to the SEC, these improprieties allowed Atlas Mining to raise financing without providing complete and timely information to investors as required by law.

The SEC further charges that Jacobson caused Atlas Mining to make false statements in its SEC filings concerning the improper stock sales, coupled with additional financial irregularities.

The SEC's complaint charges Jacobson with violations of the antifraud and registration provisions of the federal securities laws, as well as reporting, internal control and certification provisions. Without admitting or denying the Commission's allegations, Jacobson consented to settle the charges and agreed to a permanent injunction against future violations of the federal securities laws, a $50,000 penalty, an order barring him from serving as an officer or director of any issuer for a period of five years, and an order barring him from participating in any offering of penny stock for a period of five years.

In a separate administrative proceeding, Atlas Mining, now known as Applied Minerals, Inc., consented to the entry of a cease-and-desist order barring violations of certain registration and reporting provisions of the federal securities laws.

SEC Complaint