U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 21131 / July 15, 2009
SEC v. Angel Acquisition Corp., et al, Case No. SACV 08-880 JVS (ANx) (C.D. Cal.)
Marshall Holdings International, Inc. and Mark T. Ellis Settle SEC Charges
The Securities and Exchange Commission announced that on July 6, 2009 the United States District Court for the Central District of California entered Final Judgments by consent against defendants Marshall Holdings International, Inc. (Marshall Holdings) and Mark T. Ellis, a resident of Irvine, California.
In the complaint filed on August 6, 2008, the Commission alleged that Marshall Holdings and Ellis, an officer of Winsted Holdings, Inc. (Winsted Holdings), improperly registered shares issued under employee stock option programs on Form S-8 registration statements from 2003 through 2005. Marshall Holdings and Winsted Holdings then received at least 85% of the proceeds from the shares' sales as payment of the options' exercise price. Form S-8 statements may be used to register shares issued to compensate employees and consultants and have abbreviated disclosure requirements as compared to statements registering shares used to raise capital. According to the complaint, however, the option programs functioned as public offerings through which Marshall Holdings and Winsted Holdings used their employees as conduits to the market so that they could raise capital without complying with the registration provisions.
Without admitting or denying the complaint's allegations, Marshall Holdings and Ellis have consented to the entry of Final Judgments enjoining them from violating Section 5 of the Securities Act of 1933, ordering them to pay disgorgement of $8,974,033 and $1,042,000, respectively, plus prejudgment interest and, based upon their financial conditions, waiving payment of all such amounts. The litigation continues as to two remaining defendants.
For more information on earlier actions in this case, see LR-20673 (Aug. 7, 2008).