U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 23092 / September 25, 2014

Securities and Exchange Commission v. Spencer Pharmaceutical Inc., et al., Civil Action No. 1:12-cv-12334

Court Enters Final Judgments Against CEO and Executive Vice President of Company Involved in Pump-And-Dump Scheme Involving Fictitious Buyout Offer

The Securities and Exchange Commission (the "Commission") announced today that on September 25, 2014, the United States District Court for the District of Massachusetts entered final judgments in a previously filed enforcement action against defendants Maximilien Arella and Ian Morrice, the CEO and Executive Vice President, respectively, of Spencer Pharmaceutical Inc. ("Spencer"), a microcap pharmaceutical company with addresses in both Boston and Canada. Among other relief, the final judgments impose permanent injunctions against future violations of certain antifraud provisions of the federal securities laws and order Arella and Morrice to each pay $50,000 penalties.

According to the Commission's complaint, filed on December 17, 2012, Spencer, its officers and directors, and other associated parties were involved in a "pump-and-dump" scheme in 2010 and 2011 involving Spencer's stock. The scheme was orchestrated by co-defendant Jean-FranĤois Amyot, a Canadian resident who controlled Spencer. Amyot worked with Arella and Morrice, Canadian residents who were Spencer's officers and directors, to create and disseminate false and misleading press releases and to otherwise promote Spencer's stock, including via Internet websites and newsletters. Among the false and misleading press releases were a series of releases that claimed that Spencer had received an unsolicited buyout offer from a Mideast company for $245 million when, in fact, the purported buyout offer was not real. The promotional campaign significantly pumped up the price of Spencer's stock - at one point causing the price to more than double in two days - and consequently enabled Amyot to dump tens of millions of shares into the market at artificially inflated prices for gross proceeds in excess of $5 million. The complaint further alleged that Spencer, Amyot, and Arella violated certain registration provisions of the federal securities laws for transfers of millions of Spencer shares done to evade registration requirements.

Arella and Morrice each consented to the entry of the final judgments against them without admitting or denying the charges. The final judgments permanently enjoin both Arella and Morrice from violating Sections 17(a)(2) and 17(a)(3) of the Securities Act of 1933 ("Securities Act") and bar both Arella and Morrice for a period of five years from serving as a director or officer of a public company and from participating in a penny stock offering. The final judgments also require Arella and Morrice to each pay $50,000 penalties. The final judgment against Arella also permanently enjoins Arella from violating Sections 5(a) and 5(c) of the Securities Act.

The Commission's action against Spencer, Amyot, and two companies controlled by Amyot (Hilbroy Advisory Inc. and IAB Media Inc.) is still pending. The Commission acknowledges the assistance of the Quebec Autorit© des March©s Financiers in connection with this matter.

The Commission suspended trading in Spencer securities on December 17, 2012 (Release 34-68447). Securities of Spencer were quoted on OTC Link operated by OTC Markets Group Inc.

For further information, see Litigation Release 22574 (December 17, 2012).