U.S. Securities and Exchange Commission
Litigation Release No. 19491 / December 9, 2005
Securities and Exchange Commission v. M&A West, Inc., et al., Civil Action No. 01-3376 VRW (Northern District of California)
On November 28, 2005, United States District Judge Vaughn R. Walker signed the Order of Final Judgment against Defendant Stanley R. Medley ("Final Judgment"), in which the Court issued a five-year injunction against future violations by Medley of Sections 5(a) and 5(c) of the Securities Act of 1933, and ordered Medley to pay within 30 days disgorgement plus prejudgment interest of $2,647,964.29, and a $165,000 civil monetary penalty. The Court's Final Judgment follows the Order entered on October 31, 2005, granting the Securities and Exchange Commission's request for disgorgement and civil penalties, and granting in part the Commission's request for an injunction, based on Medley's liability for selling securities to the public in unregistered transactions. As the Court found earlier this year, Medley was liable for unregistered sales of securities he received as payment for his role in so-called "reverse mergers" and the ensuing public distributions of the securities of three issuers, M&A West, Inc., Virtual Lender.Com, Inc. and Digital Bridge, Inc.
In determining in its October 31, 2005 Order that Medley should pay second-tier civil penalties, the Court found that Medley had used shell companies he had established and another individual's name to shield his own involvement in the illegal securities transactions. The Court further found that civil penalties would make Medley think twice before pursuing a questionable business practice and may deter others from similarly breaking the law. The Court also relied upon this evidence of Medley's purposeful conduct, as well as his repeated violations, in determining to enter a five-year injunction against Medley.
The Commission continues to litigate its case against the other defendants.
Related Litigation Releases Nos. 17118 and 19233