John Benjamin Stewart, Jr., Stewart Finance Company, Stewart National Finance Company, Donald N. Ellis and D&E Acquisitions, Inc.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 18994 / December 7, 2004

Securities and Exchange Commission v. John Benjamin Stewart, Jr., Stewart Finance Company, Stewart National Finance Company, Donald N. Ellis and D&E Acquisitions, Inc., Civil Action No. 3:03-CV-42 (CAR) (M.D. Ga.).

FEDERAL JUDGE ORDERS CIVIL PENALTY AGAINST DONALD N. ELLIS, OWNER OF D&E ACQUISITIONS, INC.

The Securities and Exchange Commission (the "Commission") announced that on December 6, 2004, the Honorable C. Ashley Royal of the United States District Court for the Middle District of Georgia, entered an order directing that Donald N. Ellis ("Ellis") of Union Point, Georgia pay a civil penalty of $6,500 for engaging in an unlawful offering of securities, for which no exemption from registration existed, through his solely owned company D&E Acquisitions, Inc. ("D&E") based in Greene County Georgia. The Court had by earlier order permanently enjoined Ellis from further violating the registration provisions set forth in Sections 5(a) and 5(c) of the Securities Act of 1933. In the recent order, the Court concluded that Ellis did not receive any unjust enrichment in the D&E offering and that disgorgement was not appropriate.

The Commission sued Ellis and D&E along with John Benjamin Stewart, Jr. ("Stewart"), Stewart Finance Company ("Stewart Finance") and Stewart National Finance Company ("Stewart National"). The amended complaint alleged 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, and further alleged that 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, which unlawfully raised approximately $6 million, constituted an unregistered offering of securities, which was integrated with the earlier unregistered, non-exempt offerings.

See also: L. R. 18645 (March 29, 2004); L.R. 18630 (March 19, 2004); L.R. 18565 (February 5, 2004); and L.R. 18141 (May 16, 2003)