U.S. Securities and Exchange Commission
Litigation Release No. 21979 / May 26, 2011
SEC v. PCSEdventures!.com, Inc., Anthony A. Maher, and Shannon M. Stith, Civil No. 1:10-cv-00433 (USDC Idaho, Filed August 27, 2011).
COURT ENTERS JUDGMENT AGAINST FORMER CHIEF FINANCIAL OFFICER OF PCSEDVENTURES!.COM, SHANNON M. STITH PURSUANT TO SETTLEMENT
On May 24, 2011, the United States District Court for the District of Idaho entered judgment against Shannon M. Stith (Stith), the former chief financial officer of PCSEdventures!.com, Inc., enjoining her from future violations of Section 13(a) of the Securities Exchange Act of 1934 and Rules 12b-20, 13a-1, 13a-11, and 13a-14 thereunder. The judgment also provides for the payment of a civil penalty, with the amount to be determined by the court in subsequent proceedings. Stith consented to the entry of the judgment without admitting or denying the allegations in the Commission’s Complaint.
The complaint previously filed in this matter alleges that in March 2007, PCS publicly announced that it had obtained a $7.15 million contract with PCS Middle East and that PCS repeated this announcement in a Form 8-K filed with the Commission. The complaint alleges that the announcement was false because it failed to disclose that payment under the purported contract was contingent upon PCS Middle East first obtaining a contract and funds from the government of the Kingdom of Saudi Arabia and that neither PCS nor PCS Middle East had a contract with Saudi Arabia. It is further alleged that PCS repeated its false claims in additional press releases and filings with the Commission and that PCS did not disclose the nonexistence of a contract with Saudi Arabia for several months, during which time the false information caused the price of PCS stock to be artificially inflated.
The terms of the settlement reflect credit given to Stith by the Commission for her substantial assistance in the investigation and the fact that she has entered into a cooperation agreement to assist the Commission in the ongoing related enforcement action against PCSEdventures!.com, Inc. and Anthony A. Maher.