SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.

LITIGATION RELEASE NO. 16560 / May 22, 2000

SECURITIES AND EXCHANGE COMMISSION v. LARRY W. ELLIS, Civil Action No. 3-00CV1040-P

On May 17, 2000, Judge Jorge Solis granted the Commission's Ex Parte Application for Temporary Restraining Order and Other Equitable Relief against Larry W. Ellis (Ellis) d/b/a ATM Technology Systems. The Commission accuses Ellis of falsely claiming that the ATM investments he offered were safe and would provide lucrative returns. In reality, after making a few payments on these investments, Ellis typically ceased paying investors.

• Ellis, age 47, resides at 6709 Tawny Oak Dr., Plano, Texas. Most recently, Ellis operated under the assumed name ATM Technology Systems.

The complaint alleges that Ellis raised approximately $1 million from investors by representing, among other things, that:

• he had become wealthy through his automated teller machine ("ATM") business, which he purportedly started in the early 1990s;

• he owned an ATM manufacturing company which he would soon take public;

• stock options he offered to recent investors were simply "icing on the cake,"and that through press releases, he could push up the price of the stock; and

• investors would be investing in a specific ATM machine, and would receive a three year promissory note on which they would receive monthly payments comprised of 12 percent interest on the note, and a 20 to 25 percent share in the profits of their ATM.

These representations were false and misleading.

In reality, Ellis' involvement with ATMs was merely an agreement that he entered in 1996 with an established ATM service provider to find lease locations for its machines. Further, Ellis defaulted on this agreement, and in June 1998, a $250,000 default judgement was entered against him.

The Complaint charges that Ellis violated the antifraud provisions found in Section 17(a) of the Securities Act of 1933, Section 10(b) of the Securities and Exchange Act of 1934 and Rule 10b-5 thereunder, and seeks a temporary restraining order, preliminary and permanent injunctions, an asset freeze, accounting, disgorgement with prejudgment interest and civil penalties. The complaint also seeks an order prohibiting the movement, alteration and destruction of books and records and an order expediting discovery. [Securities and Exchange Commission v. Larry W. Ellis, d/b/a ATM Technology Systems, U.S.D.C./Northern District of Texas/Dallas Division Civil Action No. 3-00CV1040-P]

http://www.sec.gov/litigation/litreleases/lr16560.htm