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U.S. Securities and Exchange Commission

Jury Rules in SEC's Favor, Finds Former Chairman/CEO of Chancellor Corporation Liable for Securities Fraud


Washington, D.C., Nov. 16, 2007 - The Securities and Exchange Commission announced that a federal court jury returned a verdict today in the SEC's favor on all securities fraud charges against Brian M. Adley, who is the former chairman, chief executive officer and controlling shareholder of Chancellor Corporation, a defunct Boston-based transportation equipment-leasing company.

Adley was found liable for using fabricated documents and fraudulent accounting from 1998 through 2000 to orchestrate a scheme that inflated Chancellor's reported assets, revenue and income, and paid unwarranted fees to entities that he controlled. The verdict followed a three-week trial in Boston before the Honorable Patti B. Saris, U.S. District Court Judge for the District of Massachusetts.

"The positive jury verdict brings closure to this multi-faceted financial fraud that reached the highest level of a public company," said David Bergers, Regional Director of the SEC's Boston Regional Office. "The SEC will continue to vigorously pursue corporate officials who participate in the deception of investors and who attempt to unfairly benefit themselves at the expense of corporate shareholders."

The Commission's complaint alleged that Adley caused Chancellor to file false financial statements in 1999 and 2000 by directing the wholesale fabrication of corporate documents, instructing that the fabricated documents be given to the company's auditors, and coordinating the filing of false financial statements with the SEC.

The jury found Adley liable for violating the antifraud and record-keeping provisions of the federal securities laws, for making false statements to its accountants, and for aiding and abetting Chancellor's reporting and recordkeeping provisions of the securities laws. The district court will determine the appropriate sanctions and remedies at a later date.

The Commission previously settled with 10 other defendants: Chancellor Corporation; the former President and Chief Operating Officer; the former acting Chief Financial Officer; the former treasurer; two former Chancellor directors and audit committee members; Chancellor's outside auditing firm and three members of its audit team.

The case was tried by the SEC's Boston Regional Office trial team of R. Daniel O'Connor, Britt Collins, Stephanie DeSisto and Samantha Harris.

For further information, see Litigation Release Nos. 18104 (April 24, 2003), 19177 (April 11, 2005), and 20177 (July 2, 2007).

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For more information, contact:

David Bergers
Regional Director
SEC's Boston Regional Office
(617) 573-8927

R. Daniel O'Connor
Senior Trial Counsel
SEC's Boston Regional Office
(617) 573-8979



Modified: 11/16/2007