UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16917 / February 28, 2001
SECURITIES AND EXCHANGE COMMISSION V. SMART-MART, INC., TIMOTHY A. MCMURRAY AND BRADLEY D. WOY Civil Action No. 3:01-CV-0397 (BL) (N.D. Texas, Dallas Division)
The Securities and Exchange Commission filed a civil action on February 28, 2001, against Smart-Mart, Inc., Timothy A. McMurray and Bradley D. Woy for an alleged fraudulent securities offering. The Complaint, filed in the United States District Court for the Northern District of Texas, alleges that from March 1998 through February 1999, Smart-Mart raised approximately $2.4 million from approximately 720 investors located nationwide and in Canada through the sale of common stock in a purported private placement offering.
In connection with these sales, Smart-Mart, McMurray and Woy knowingly made false and misleading statements to investors regarding an impending initial public offering ("IPO"), the business prospects of the company, the use of investor funds, and the liquidity and return on investment. In addition, McMurray failed to disclose critical information regarding his background and experience. Notwithstanding these representations, Smart-Mart never took any significant steps to conduct an IPO and the company had minimal business operations. Moreover, Smart-Mart's financial and other business records reveal that McMurray and Woy used a large portion of investor funds for unauthorized business and personal expenses.
The Complaint charges the defendants with violating the securities registration and antifraud provisions of Sections 5(a), 5 (c) and 17(a) of the Securities Act of 1933, and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The Commission seeks permanent injunctive relief against Smart-Mart, McMurray and Woy, as well as disgorgement with prejudgment interest, an accounting and civil money penalties.
The Commission would like to acknowledge the assistance of the Texas State Securities Board.
This action is brought as part of the SEC's Fifth Internet Fraud Sweep. For tips on how to avoid Internet investment schemes, visit http://www.sec.gov/investor/pubs/cyberfraud.htm. For more information about Internet fraud, visit http://www.sec.gov/divisions/enforce/internetenforce.htm. To report suspicious activity involving possible Internet fraud, visit http://www.sec.gov/complaint.shtml. For a description of other SEC enforcement actions involved in this Internet Fraud Sweep, visit http://www.sec.gov/news/press.shtml.