UNITED STATES SECURITIES AND EXCHANGE COMMISSION LITIGATION RELEASE NO. 15925 / October 2, 1998 SECURITIES AND EXCHANGE COMMISSION v. LARRY C. TALLEY, SR., Civil Action No. 3:98-CV-2318-L, USDC, ND/TX (Dallas Division) On September 30, 1998, the Commission filed a civil lawsuit charging fraud in connection with sales of $3.2 million in investments to 200 investors nationwide for the stated purpose of constructing and operating "I Can't Believe its Yogurt" ("ICBIY") stores. The Commission's complaint alleges that investors were misled about, among other things, the estimated return on their investment and the use of their investment funds. The complaint named as a defendant former Dallas resident Larry C. Talley, Sr. ("Talley"), individually and through Hawk Wing International Corporation ("Hawk Wing") and Orchard Hills International Inc. ("Orchard Hills"), neither of which is still in business. According to the complaint, Talley and his companies raised approximately $3.2 million from more than 200 investors nationwide through the fraudulent offer and sale of unregistered securities in the ICBIY store ventures. In connection with such sales, investors were told, among other things, that their monies would be used to construct and operate certain planned ICBIY stores to be located in Spain and that they would receive eighty percent (80%) of the stores' profits. The complaint further alleges that certain investors were promised a "payout" in two years and that other investors were told that they would receive an 18% return in the first year and a 25% one thereafter. In fact, none of the promised returns were ever achieved and Talley had no reasonable basis for making such claims. The complaint further alleges that Talley misapplied investor monies by spending approximately $300,000 for personal expenses and a substantial amount for business expenses of Hawk Wing and Orchard Hills unrelated to the yogurt store ventures. ICBIY was not implicated in the fraudulent activities. In its complaint, the Commission seeks a Court order permanently enjoining Talley from engaging in further violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a)(1) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission also seeks to have Talley disgorge all his ill-gotten gains, with prejudgment interest, and pay a civil monetary penalty for committing the alleged violations. CIVIL ACTION FILED AGAINST LARRY C. TALLEY, SR. IN SCHEME INVOLVING OVERSEAS YOGURT STORES On September 30, the Commission filed a civil lawsuit charging fraud in connection with sales of $3.2 million in investments to 200 investors nationwide for the stated purpose of constructing and operating "I Can't Believe its Yogurt" (ICBIY) stores. The complaint named as a defendant Larry C. Talley, Sr. individually and through Hawk Wing International Corporation (Hawk Wing) and Orchard Hills International Inc. (Orchard Hills), neither of which is still in business.. In connection with the offer and sale of unregistered securities in the ICBIY store ventures, investors were told, among other things, that their monies would be used to construct and operate certain planned ICBIY stores to be located in Spain and that they would receive eighty percent (80%) of the stores' profits. The complaint further alleges that certain investors were promised a "payout" in two years and that other investors were told that they would receive an 18% return in the first year and a 25% one thereafter. In fact, none of the promised returns were ever achieved and Talley had no reasonable basis for making such claims. The complaint further alleges that Talley misapplied investor monies by spending approximately $300,000 for personal expenses and a substantial amount for business expenses of Hawk Wing and Orchard Hills unrelated to the yogurt store ventures. ICBIY was not implicated in the fraudulent activities. In its complaint, the Commission seeks to permanently enjoin Talley from further violations of the securities registration and antifraud provisions of the federal securities laws. The Commission also seeks to have Talley disgorge all his ill-gotten gains, with prejudgment interest, and pay a civil monetary penalty for committing the alleged violations. [Securities and Exchange Commission v. Larry C. Talley, Sr., Civil Action No. 3:98-CV-2318-L, USDC, ND/TX (Dallas Division) (LR- ) Joseph C. Matta Trial Counsel Fort Worth District Office 817/978-6435)