Litigation Release No. 21203 / September 9, 2009

SEC v. Angel Acquisition Corp., et al, Case No. SACV 08-880 JVS (ANx) (C.D. Cal.)

Richard A. Bailey and Florian R. Ternes Settle SEC Charges

The Securities and Exchange Commission announced today that on September 4, 2009 the United States District Court for the Central District of California entered Final Judgments by consent against defendants Richard A. Bailey and Florian R. Ternes, residents of Las Vegas, Nevada and former officers and directors of Marshall Holdings International, Inc. (Marshall Holdings).

In the complaint filed on August 6, 2008, the Commission alleged that Marshall Holdings, while under the control of Bailey and Ternes, improperly registered shares issued under employee stock option programs on Form S-8 registration statements from 2003 through 2005. Marshall 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 program functioned as public offerings through which Marshall Holdings used its employees as conduits to the market so that it could raise capital without complying with the registration provisions. The complaint further alleged that Bailey and Ternes were the primary decision-makers behind Marshall Holdings' options program and received significant salary increases during the course of the program.

Without admitting or denying the complaint's allegations, Bailey and Ternes 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 $341,001 and $259,000, respectively, plus prejudgment interest and, based upon their financial conditions, waiving payment of all such amounts. With this settlement, the action is fully resolved as to all defendants.

For more information on earlier actions in this case, see LR-20673 (Aug. 7, 2008).