Spencer Pharmaceutical (SPPH)

[scion]

REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE (LETTER ROGATORY)

The United States District Court for the District of Massachusetts presents its compliments to the Superior Court of Quebec in the Province of Quebec, Canada, and requests judicial assistance to compel the attendance of witnesses at oral depositions in the Province of Quebec and the production of documents to be used in a civil proceeding before this Court in the above-captioned matter. This Court requests the assistance described herein as necessary in the interests of justice.

I. Summary of Action

The United States Securities and Exchange Commission (the "SEC" or "Commission") filed this action on December 17, 2012, in the United States District Court for the District of Massachusetts against: Spencer Pharmaceutical Inc. ("Spencer"), a Delaware corporation; current and/or former Canadian residents Jean-Frarn;:ois Amyot, Maximilien Arella, and Ian Morrice; and Canadian companies JAB Media Inc. ("JAB"), and Hilbroy Advisory Inc. ("Hilbroy"). In its Complaint, the SEC alleges that the defendants violated the anti-fraud provisions of the federal securities Jaws by orchestrating a "pump-and-dump" scheme involving the shares of Spencer, a penny stock traded on the United States' domestic over-the-counter securities market. The SEC also alleges that defendants Amyot, Arella, and Spencer violated the registration provisions of the federal securities laws by engaging in the sale of unregistered securities in Spencer.

The SEC alleges that Amyot Jed a scheme perpetrated by the defendants to falsely promote Spencer's business activities and a fake buyout offer in order to benefit from selling Spencer's shares at inflated prices. Amyot initiated the scheme by orchestrating a reverse merger to create Spencer in 2009. While Spencer claimed it was a "US-based pharmaceutical company" based in Boston, Massachusetts, its Boston office was nothing more than a virtual office and its officers - Amyot, and then later, AreIla and Morrice - were located in Canada.

Spencer issued millions of shares in November 2009, of which at least 69 million went to entities and funds Amyot controlled.

The SEC alleges that, after creating Spencer, which had large debts and no revenue or legitimate assets, the defendants began a two-stage promotional scheme in 2010. First, between March and November 2010, the defendants misled investors about Spencer's business activities and purported patent portfolio through a false and misleading disclosure statement and false and misleading press releases, as well as through related promotional materials distributed by JAB and third parties paid by Hilbroy. Then, in early November 2010, the defendants' scheme began a new, more aggressive phase when Spencer announced that it had received an unsolicited $245 million buyout offer from a purported Kuwaiti company called Al-Dora Holdings. Spencer proceeded to issue nearl y twenty press releases concerning the offer's progression, leading the public to believe that the extraordinary buyout would be complete in March 2011. But then, two days before the purported closing date, Spencer abruptly announced that it had secured a "mutual extension agreement" with Al-Dora and its purported subsidiary, Hail First Pharma ("Hail First"), so that Spencer could finalize certain scientific studies. Spencer next announced, in September, that negotiations had ceased.

The SEC alleges that, in truth, the transaction never took place because the offer was nothing more than a fiction created to pump up Spencer's stock price. The offer was concocted by Amyot, and each of the defendants knew, or were reckless in not knowing, that it was not real. Amyot orchestrated all aspects of the offer, including the steps taken by Al-Dora and Hail First, and Arella and Morrice never confirmed that Al-Dora was a legitimate company, despite telling the market that due diligence was being conducted and that the offer was real. Based on their false and misleading promotional efforts, Amyot profited handsomely when he dumped approximately 36 million shares of Spencer for gross proceeds in excess of $5.8 million through two funds he controlled. Amyot was able to have so many shares available to him in part because, at an earlier date, he had orchestrated the illegal sale of 12 million purportedly unrestricted Spencer shares to a company for which he was the sole director, then through another company he controlled, and then eventually into one of the funds he controlled.

Based on this conduct alleged in its Complaint, the SEC claims that ( 1) all the defendants engaged in: (a) fraud in the offer or sale of securities, in violation of Sections l 7(a)( 1) and (3) of the Securities Act of 1933 ("Securities Act"), and (b) fraudulent or deceptive conduct in connection with the purchase or sale of securities, in violation of Section 1O(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rules 10b-5(a) and (c) thereunder; (2) Spencer, Amyot, Arella, and Morrice engaged in: (a) fraud in the offer or sale of securities, in violation of Section 17(a)(2) of the Securities Act, and (b) fraudulent or deceptive conduct in connection with the purchase or sale of securities, in violation of Section 1O(b) of the Exchange Act and Rule 1Ob-5(b) thereunder; (3) Arella, Morrice, IAB Media, and Hilbroy aided and abetted Spencer's violations of Section 17(a) of the Securities Act, Section I O(b) of the Exchange Act, and Rule l Ob-5; (4) Amyot had control person liability for Spencer's violations of Section I O(b) of the Exchange Act, and Rule I Ob-5; and (5) Spencer, Amyot, and Arella engaged in the sale of unregistered securities in violation of Sections 5(a) and 5(c) of the Securities Act. The SEC's Complaint seeks permanent injunctions, disgorgement, prejudgment i nterest, and civil monetary penalties against all defendants, as well as officer and director bars and penny stock bars against Amyot, Arella, and Morrice.

Defendants Amyot, Arella, Morrice, Hilbroy, and JAB Media have filed Answers in which they have denied the majority of the allegations of the Commission's Complaint and have denied any wrongdoing or violations of law. Defendant Spencer has failed to respond to the Complaint. Ultimately at issue in the case is whether the Commission can establish its allegations of improper conduct by the defendants under the securities laws.
The Commission brought this action pursuant to the enforcement authority conferred upon it by Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21 (d) of the Exchange Act [15 U.S.C. §§ 78u(d)]. This Court has jurisdiction over this action pursuant to Sections 20(d) and 22(a) of the Securities Act [15 U.S.C. §§ 77t(d), 77v(a)] and Sections 21(d), 2 l(e), and 27 of the Exchange Act [15 U.S.C. §§ 78u(d), 78u(e), 78aa].

II. Assistance Required

A substantial amount of the conduct giving rise to the allegations in the Complaint took place in Canada, and several important witnesses reside in the Province of Quebec. During the relevant time period, defendants Amyot, Arella, JAB, and Hilbroy were each located in the
Provi nce of Quebec, and Mr. Morrice resided in the Province of Ontario. Likewise, a number of witnesses with knowledge of facts relevant to this action also reside in the Province of Quebec. Specifically, the SEC has reason to believe, based on the defendants' Initial Disclosures and its own investigation, that the following nine individuals residing in the Province of Quebec have key information concerning the alleged pump-and-dump scheme:

• Eric Boyd and Jean-Guy Lambert, who are identified in one or more of the defendants' Initial Disclosures as individuals who played key roles in the creation of Spencer;
• Franois Vallet and Marc Gagnon, who are identified in one or more of the defendants' Initial Disclosures as individuals who were responsible for key work undertaken by IAB Media and Hilbroy Advisory, including promotional work for Spencer;
• Rami Ailabouni and Isabelle Papillon, who are identified in one or more of the defendants' Initial Disclosures as individuals involved with the purported buy-out offer from Al-Dora;
• Claude Boulanger, who is identified in one or more of the defendants ' Initial Disclosures as an attorney who advised Spencer about the buyout offer and Spencer's associated press releases (and on whose advice defendant Arella intends to rely as a defense);
• Stephane Goulet, who is identified in one or more of the defendants' Initial Disclosures as an individual who provided proceeds from the sale of Spencer shares to defendants Arella and/or Morrice; and
• Sylvain Amyot, whom the SEC has identified as an individual who may have information concerning defendant Jean-Franois Amyot's al leged il legal transfer of Spencer securities as part of the pum p-and-dump scheme.

This Court has jurisdiction under the Federal Rules of Civil Procedure to order discovery, including depositions of witnesses upon oral examination and production of documents from any person regarding any matter which is relevant to the subject matter of the pending action.

The testimony and documents the SEC is seeking from the aforementioned witnesses who reside in the Province of Quebec are not only relevant to discovery, but are also necessary for the trial of this case and are not otherwise obtainable by this Court at trial through this Court's compulsory process. Thus, the evidence so obtained will be used by the parties at the trial itself. The evidence sought in the Province of Quebec by this Request is necessary in order for this Court to do justice in this case. Therefore, this Court respectfully requests that, in the interest of justice, the proper judicial authorities of the Province of Quebec issue appropriate orders, subpoenas, or other compulsory process necessary to compel the attendance of witnesses listed below for oral depositions and for the production of documents described below concerning any matter relevant to this case.

This Court further requests that the proper judicial authorities of the Province of Quebec cause the depositions to be recorded in writing by a qualified court reporter, to cause the recordings of the depositions to be authenticated, to allow the depositions to be videotaped, and to cause the authenticated records to be delivered to Plaintiff s and Defendants' counsel. It is hereby requested that Plaintiff s representatives be granted the option to have the testimony videotaped by a qualified videographer. The original transcripts of the testimony, and if the testimony is videotaped, the videotapes, should be returned to Plaintiff s representatives for retention and production at the time of trial.
Pursuant to 28 U.S.C. § 1782, this Court stands ready to extend similar assistance to the Courts of the Province of Quebec in like cases.

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