The Securities and Exchange Commission (the "Commission") announced that on January 30, 2004, it filed an amended complaint in the United States District Court for the Middle District of Georgia, charging two additional defendants, Donald N. Ellis ("Ellis") and D&E Acquisitions, Inc. ("D&E"), with violating the registration provisions of the federal securities laws. Ellis, age 59, is a resident of Union Point, Georgia and the sole owner of D&E, a Georgia corporation headquartered in Union Point. The Commission alleges that D&E raised approximately $6 million from investors in an unregistered, non-exempt offering of securities.
The Commission's action amends the Commission's complaint, filed on May 9, 2003, against John Benjamin Stewart, Jr. ("Stewart"), Stewart Finance Company ("Stewart Finance") and Stewart National Finance Company ("Stewart National"). The amended complaint alleges that Stewart and his companies, Stewart Finance and Stewart National, previously engaged in a series of unregistered offers and sales of securities, without an exemption from registration, in violation of the federal securities laws. According to the amended complaint, Stewart, for his own benefit, caused D&E to be formed through Ellis, a straw man, for the purpose of allowing securities previously issued by Stewart Finance and Stewart National to be rolled over and issued through D&E. The offering through D&E constituted an unregistered offering of securities, which is integrated with the earlier unregistered, non-exempt offerings.
The amended complaint alleges that Stewart owned and controlled Stewart Finance and Stewart National. Stewart Finance, Stewart National and D&E were all engaged in the consumer finance business of making small, short-term loans to borrowers. The amended complaint further alleges that by their conduct, the defendants violated the registration provisions set forth in Sections 5(a) and 5(c) of the Securities Act. The Commission seeks, with respect to each defendant, permanent injunctions, disgorgement, prejudgment interest and civil penalties pursuant to Section 20(d) of the Securities Act. The Commission also seeks sworn accountings from Stewart and Ellis.
[See Litigation Release No. 18141 (May 16, 2003)]