Litigation Release No. 16630 \ July 17, 2000
Securities and Exchange Commission v. Larry W. Ellis, Civil Action No. 3-00CV1040-P
On June 30, 2000, Judge Jorge Solis issued an Order of Permanent Injunction against Larry W. Ellis, the former operator of a Dallas-based business known as ATM Technology Systems. The Order enjoined Ellis from future violations of the antifraud provisions of the federal securities laws. The Court will determine the specific amount of disgorgement and whether a civil penalty should be imposed at a later date.
On May 17, 2000, the Commission accused Ellis of raising approximately $1 million from investors with false representations about his automated teller machine business. The complaint alleged, among other things, that Ellis misrepresented to investors that they would receive a secured interest in a specific ATM in return for an initial investment of $10,000. Ellis promised to repay the investors their principal investment with interest over a three year period, and also promised a profit-share interest in the ATM in which they invested. Ellis further claimed that he owned an ATM manufacturing company. These representations were false and misleading.
The complaint charged Ellis with violations of the antifraud provisions of Section 17(a) of the Securities Act of 1933, Section 10(b)(5) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. [Lit. Rel. 16560, May 22, 2000.]