UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MISSOURI

COMPLAINT

Plaintiff, United States Securities and Exchange Commission (Commission), alleges:

NATURE OF THE CASE

1. This case concerns the offer and sale of unregistered securities by an unregistered investment company in violation of the registration provisions of the federal securities laws. From in or about 1987 to in or about September 2000, defendant Jawsh Corporation (Jawsh) publicly offered and sold $16 million in unregistered securities to at least 250 investors in at least 11 states. In addition, from 1987 to the present, Jawsh operated as an unregistered investment company. Although investors are owed more than $10 million, Jawsh's assets have declined in value to about $2 million. The Commission brings this action to preserve Jawsh's assets and protect investors by enjoining Jawsh from further violations of the registrations provisions of the federal securities law provisions it violated.
    
2. Jawsh engaged in, and is about to engage in, acts and practices that constitute violations of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. § 77e(a) and (c), and Section 7(a) of the Investment Company Act, 15 U.S.C. § 80a-7(a).
    
3. The Commission brings this action to enjoin acts and practices by Jawsh that violate Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and (c), and Section 7(a) of the Investment Company Act, 15 U.S.C. § 80a-7(a), and for other ancillary relief, pursuant to Sections 20(b) and 20(d) of the Securities Act, 15 U.S.C. §§ 77t(b) and (d) and Section 42(d) of the Investment Company Act, 15 U.S.C. § 80a-41(d).

JURISDICTION

4. The Court has jurisdiction over this action pursuant to Section 22(a) of the Securities Act, 15 U.S.C. § 77v(a), and Section 42(d) of the Investment Company Act, 15 U.S.C. § 80a-41(d).
    
5. Jawsh, directly and indirectly, made use of the means and instruments of transportation and communication in interstate and of the mails in the Eastern District of Missouri, and elsewhere, in connection with the acts and practices alleged herein.
6. Jawsh will, unless enjoined, continue to engage in the acts and practices set forth in this complaint and in acts and practices of similar purport and object.

DEFENDANT

7. Jawsh is a corporation formed in or about 1984 by William L. Bates (Bates) under the laws of the State of Missouri. Its principal place of business is located in St. Louis, Missouri. From in or about 1987 until the present, Jawsh has held itself out as an investment company. Neither Jawsh nor its securities are registered with, or have been registered with, the Commission in any capacity.

RELATED PERSON

8. Bates, age 52, is a resident of St. Louis, Missouri. From 1987 to the present, Bates was Jawsh's sole officer, director, shareholder and investment adviser.

OFFER AND SALE OF UNREGISTERED SECURITIES
BY UNREGISTERED INVESTMENT COMPANY

9. From in or about 1987 to in or about September 2000, Jawsh, through Bates, using the instruments of transportation and communication in interstate commerce and the mails, offered and sold at least $16 million in unregistered securities to at least 250 investors in at least 11 states.
    
10. The securities Jawsh offered and sold were promissory notes that: (a) had a minimum term of three years; (b) paid investors a prescribed interest rate, and after the first year, but at Bates' discretion, a prescribed share of the gains on Jawsh's investments; and (c) were neither collateralized nor secured.
     
11. Bates described the notes as investments and represented to prospective investors, orally and in written marketing materials sent through the mails, that any funds they committed would be pooled with money from other investors and used to invest in and trade securities, solely at his discretion, through Jawsh.
     
12. Investors purchased securities from Jawsh solely with the expectation of sharing in Jawsh's profits based solely on Bates' and Jawsh's efforts to invest their funds.
     
13. From 1987 to the present, through the means and instruments of transportation and communication in interstate commerce and the mails, Jawsh engaged primarily in the business of investing, reinvesting and trading in securities. Specifically, Jawsh invested primarily in securities issued by small, privately held, start-up and early stage technology and manufacturing companies.
     
14. At no time was a registration statement in effect, or on file, with the Commission as to Jawsh or its securities.
     
15. As of October 24, 2002, Jawsh had notes outstanding of approximately $10.3 million, but assets worth only about $2 million.

COUNT I
Violations of Section 5(a) of the Securities Act

16. Paragraphs 1 through 15 are re-alleged and incorporated by reference as though fully set forth herein.
     
17. From 1987 to in or about September 2000, Jawsh, directly and indirectly, made use of the means and instruments of transportation and communication in interstate commerce and the mails, to sell securities without a registration statement being in effect as to those securities.
     
18. By reason of the activities described in paragraphs 17 and 18 above, Jawsh violated Section 5(a) of the Securities Act, 15 U.S.C. § 77e(a).

COUNT II
Violations of Section 5(c) of the Securities Act

19. Paragraphs 1 through 15 are re-alleged and incorporated by reference as though fully set forth herein.
     
20. From 1987 to in or about September 2000, Jawsh, directly and indirectly, by the use of the means and instruments of interstate commerce and the mails, offered to sell securities without a registration statement being in effect as to those securities.
     
21. By reason of the activities described in paragraphs 20 and 21 above, Jawsh violated Section 5(a) of the Securities Act, 15 U.S.C. § 77e(a).

COUNT III
Violations of Section 7(a) of the Investment Company Act of 1940

22. Paragraphs 1 through 15 are re-alleged and incorporated by reference as though fully set forth herein.
     
23. From in or about 1987 to the present, Jawsh held itself out as, and was, an investment company.
     
24. From in or about 1987 to in or about September 2000, while acting as investment company, Jawsh offered, purchased and sold, redeemed or retired securities by the use of the mails and the means and instrumentalities of interstate commerce and engaged in business in interstate commerce.
     
25. At no time was Jawsh registered with the Commission as an investment company.
     
26. By reason of the activities described in paragraphs 23 through and 26 above, Jawsh violated Section 7(a) of the Investment Company Act, 15 U.S.C. § 80a-7(a).

WHEREFORE, the Commission requests that this Court:

I.

Find that Jawsh committed the violations alleged herein.

II.

Enter an order of permanent injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 65(d), enjoining Jawsh and its officers, agents, servants, employees and attorneys, and those persons in active concert or participation with any of the foregoing who receive actual notice of such order, by personal service or otherwise, from directly or indirectly engaging in the acts and practices described above, or in conduct of similar purport and object, in violation of Sections 5(a) and 5(c) of the Securities Act, 15 U.S.C. §§ 77e(a) and (c).

III.

Enter an order of permanent injunction, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, Fed. R. Civ. P. 65(d), enjoining Jawsh, and its officers, agents, servants, employees and attorneys, and those persons in active concert or participation with any of the foregoing who receive actual notice of such order, by personal service or otherwise, from directly or indirectly engaging in the acts and practices described above, or in conduct of similar purport and object, in violation of Section 7(a) of the Investment Company Act, 15 U.S.C. § 80a-7(a).

IV.

Enter an order, pursuant to Section 42(d) of the Investment Company Act, 15 U.S.C. § 80a-41(d), for this Court to immediately take exclusive jurisdiction and possession of Jawsh and its books, records and assets, and appoint a trustee to operate Jawsh and dispose of any or all of Jawsh's assets in the best interests of investors, in compliance with the federal securities laws and subject to such terms and conditions as the Court may prescribe.

V.

Enter an order enjoining Jawsh, its officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of such orders, by personal service or otherwise, until such time as a trustee is appointed by further order of the Court, from directly or indirectly:

A.   transferring, selling, assigning, pledging, dissipating, concealing or otherwise disposing of, in any manner, any funds, assets, accounts or other property belonging to, or directly or indirectly in the possession, custody or control of Jawsh, or in which Jawsh has a beneficial interest, wherever located, including but not limited to the assets of Jawsh;

B.   transferring, selling, assigning, pledging, dissipating, concealing or otherwise disposing of, in any manner, any funds, assets, accounts or other property into which the funds of Jawsh's investors were deposited; and

C.   destroying, mutilating, concealing, altering or disposing of in any manner, any of the books, records, documents, correspondence, brochures, manuals or obligations, belonging to, or directly or indirectly in the possession, custody or control of Jawsh, in whatever form, including electronic, and wherever located.

VI.

Enter an order requiring Jawsh its officers, agents, servants, employees, attorneys and those persons in active concert or participation with them who receive actual notice of such orders, by personal service or otherwise, to:

A. provide the trustee, within five days of the entry of this order, or the trustee's appointment, whichever is later, with an accounting of the receipt, use and disposition of all funds directly or indirectly received from individuals for investment in Jawsh, and the amounts and location of any remaining funds held by Jawsh;

B.   turn over to the trustee, within five days of the entry of this order or the trustee's appointment, whichever is later, Jawsh's assets and all of Jawsh's books, records and other documents supporting or underlying the accounting provided to the Commission pursuant to paragraph VI.A. above; and

C.   produce to the trustee, within five days of the entry of this order or the trustee's appointment, whichever is later, all current accountant's reports, bank statements and any other documents indicating title to real or personal property, and any other indicia of ownership or interest in property of Jawsh, which indicia of ownership or interest are now in Jawsh's actual or constructive possession.

VII.

Retain jurisdiction of this action in accordance with the principles of equity and of the Federal Rules of Civil Procedure, in order to implement and carry out the terms of all orders and decrees that may be entered, or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court.

VIII.

Grant orders for such further relief as the Court deems appropriate.

Dated:   October 28, 2002