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U.S. Securities and Exchange Commission

U.S. Securities and Exchange Commission

LITIGATION RELEASE NO. 18699 / May 7, 2004



SECURITIES AND EXCHANGE COMMISSION v. BRUCE HILL, ET AL., (United States District Court for the District of Massachusetts, Civil Action No. 02-11244 (EFH), filed June 21, 2002)

UNITED STATES v. GRAHAM MARSHALL and BRUCE HILL, (United States District Court for the District of Massachusetts, Criminal Action No. 03-10344 (DPW), filed November 12, 2003)

The Securities and Exchange Commission (ACommission@) announced today that on May 5, 2004, Bruce Hill, of Belmont, Massachusetts, was indicted on criminal charges brought by the United States Attorney for the District of Massachusetts. Hill, age 40, the former General Counsel of Inso Corporation, Inc. (later known as eBT International, Inc.), a now defunct software company headquartered in Boston, Massachusetts, was named in a nine count superseding indictment charging him with securities fraud, wire fraud, false statements to accountants and perjury in connection with a Commission investigation. The charges against Hill were added to a previously existing indictment returned in November, 2003 that charged Graham Marshall, age 56, formerly of Lexington, Massachusetts, with securities fraud, wire fraud, circumventing internal accounting controls and perjury in connection with a Commission investigation. If convicted, Hill and Marshall each face penalties that range from 5 to 20 years= imprisonment on each count of the indictment, to be followed by 3 years of supervised release and fines up to $1 million.

The superseding indictment alleges that at the end of September 1998, Marshall, then-vice president of Inso, arranged a sham transaction whereby a Malaysian software distributor signed a purchase order for roughly $3 million, upon assurances that Inso would actually sell the software to another customer within a few days or weeks. It is alleged that at the end of 1998, Hill, then-General Counsel of Inso, played a pivotal role in arranging a series of deals that were designed to create the appearance that the Malaysian software distributor had paid Inso $3 million for the software products that Inso had reported as sold during the third quarter of 1998. The indictment charges that Hill arranged for Inso to provide the Malaysian distributor with $4 million in financing for the $3 million payment. The reported third quarter sale represented roughly 15% of Inso=s quarterly earnings and enabled Inso to meet internal and public targets for revenue growth. Share prices for Inso=s stock tumbled in January of 1999, when the company publicly announced that it would need to restate its revenues for the first three quarters of 1998. The perjury charges against Marshall and Hill arise from their testimony before the Commission about the transactions with the Malaysian software distributor.

On June 21, 2002, the Commission filed related civil enforcement actions against Hill, Marshall and certain other senior officers of Inso. The Commission=s action against Marshall and Hill remains pending.

For more information see Litigation Release No. 18467 (November 17, 2003), Litigation Release No. 18394 (October 4, 2003) and Litigation Release No. 17578 (June 21, 2002).



Modified: 05/07/2004