Theodore H. Smick, Louis L. Lima and John L. Lima

SECURITIES AND EXCHANGE COMMISSION

LITIGATION RELEASE NO. 16222 / July 27, 1999

FORMER IBIS EMPLOYEE AND TWO BROTHERS SUED FOR
INSIDER TRADING

Securities and Exchange Commission v. Theodore H. Smick, Louis L. Lima and John L. Lima, Civil Action No. 99-CV-11595-PBS (D. Mass. filed July 27,1999)

The Securities and Exchange Commission announced today that it sued a former Ibis Technology Corporation employee and two brothers in a civil fraud action alleging illegal insider trading. Theodore Smick and Louis Lima, residents of Essex, Massachusetts, and John Lima, a resident of Hermitage, Pennsylvania, all were charged with insider trading in advance of an October 2, 1995 announcement that Ibis, an advanced materials corporation headquartered in Danvers, Massachusetts, had entered into an important manufacturing agreement with Motorola, Inc. All three defendants have agreed to settle the Commission's charges by paying disgorgement or civil penalties and by consenting to the entry of permanent injunctions against future securities law violations. Total payments are in excess of $93,000.

In its Complaint, the Commission alleged that Smick, formerly the vice-president of equipment engineering at Ibis, tipped his friend and neighbor, Louis Lima, that Ibis had entered into the agreement. Between September 13, 1995 and October 2, 1995, Louis Lima purchased 10,345 shares of Ibis common stock and 8,000 warrants. The Complaint alleges that, on September 30, 1995, Louis Lima tipped his brother, John Lima, about the agreement between Motorola and Ibis. The next business day, October 2, 1995, hours before the announcement, John Lima purchased 5,500 shares of Ibis common stock. Accordingly, Louis Lima realized profits of $39,233. John Lima realized profits of $12,203.

The Complaint, filed today in federal court in Massachusetts, alleges that Smick, Louis Lima and John Lima violated Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. Smick agreed to settle by paying a civil penalty of $30,000 and by agreeing to the entry of a permanent injunction. Additional penalties were not imposed based on Smick's demonstrated inability to pay. Louis Lima agreed to pay full disgorgement of $39,233, plus prejudgment interest, and to the entry of an injunction; civil penalties were not imposed based on his demonstrated inability to pay. John Lima agreed to pay full disgorgement of $12,203, plus prejudgment interest, and a civil penalty of $12,203, and he agreed to the entry of an injunction. The defendants neither admitted nor denied the allegations in the Commission's complaint.