Media Technologies, Inc. (MDTC)

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S.E.C. v. Intelliquis International, Inc., Mark W. Tippets, David A. Jones and Kevin E. Orton, Docket No. 2:02 CV-0674 TC (U.S.D.C., D.Ut.)

U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 17611 / July 12, 2002
Accounting and Auditing Enforcement Release No. 1592 / July 12, 2002

S.E.C. v. Intelliquis International, Inc., Mark W. Tippets, David A. Jones and Kevin E. Orton, Docket No. 2:02 CV-0674 TC (U.S.D.C., D.Ut.)

The Securities and Exchange Commission filed a complaint in the United States District Court for the District of Utah, on July 12, 2002, seeking permanent injunctions against Intelliquis International Inc., Mark W. Tippets, David A. Jones and Kevin E. Orton. The complaint also seeks disgorgement, civil money penalties, and officer-director bars against Tippets and Jones and a civil money penalty of $110,000 against Orton.

The complaint alleges that from May 1999 until May 2001, Intelliquis filed two annual reports, quarterly reports and a registration statement in which it overstated revenues, income and accounts receivable by recording certain consignment transactions, which constituted a significant portion of Intelliquis' retail business, as sales. It is alleged that the inaccurate financial statements were prepared by Jones, Intelliquis' CFO, and were audited by Orton. It is further alleged that Tippets, Intelliquis' Vice President for Marketing and Sales and a director of the company, knew that Intelliquis was improperly recognizing revenues based upon a consignment of product rather than actual sales because he entered into the consignment agreements on behalf of Intelliquis.

It is alleged that by engaging in such conduct Intelliquis, Tippets, Jones and Orton violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. It is also alleged that Intelliquis violated Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1, 13a-13 and 13b2-1 thereunder, that Tippets and Jones aided and abetted Intelliquis' violations of Sections 13(a) and 13(b)(2)(A) and (B) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder, and that Orton aided and abetted Intelliquis' violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 thereunder.

SEC Complaint in this matter.

http://www.sec.gov/litigation/litreleases/lr17611.htm