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UNITED STATES DISTRICT COURT
COMPLAINT Plaintiff, the United States Securities and Exchange Commission (the "Commission"), alleges the following: 1. During August and September 1999, defendants Dale J. Blackwell, Christian D. Blackwell, Kelley L. Hughes, Kevin L. Stacy, the Roger Blackwell & Associates Pension Plan Trust (the "Blackwell Pension Plan Trust"), Arnold L. Jack and Black-Jack Enterprises ("Black-Jack") purchased the common stock of Worthington Foods, Inc. ("Worthington") while in possession of, and/or using, material, nonpublic information concerning the Kellogg Company's ("Kellogg") proposed acquisition of Worthington and received total profits of approximately $245,000. 2. Defendant Roger D. Blackwell, who at all relevant times was a member of the Worthington board of directors, disclosed material non-public information concerning Kellogg's proposed acquisition of Worthington to at least his father and son (Dale and Christian Blackwell), his office manager of 10 years (Hughes), his office assistant (Mary Hiser), his friend and business associate of 30 years (Jack) and his investment partnership (Black-Jack) prior to each of their respective purchases of Worthington common stock in August and/or September 1999. 3. Defendant Hughes, an employee of Roger Blackwell & Associates, Inc. ("Blackwell & Associates") and a close confidant of Roger Blackwell, disclosed material nonpublic information regarding the Worthington acquisition to her husband (Stacy), and the Blackwell Pension Plan Trust prior to each of their respective purchases of Worthington common stock in September 1999. 4. Defendant Jack, a friend and business associate of Roger Blackwell, disclosed material non-public information regarding the Worthington acquisition to Black-Jack prior to Black-Jack's purchases of Worthington common stock in September 1999. 5. Defendants, directly and indirectly, have engaged and, unless enjoined, will continue to engage in acts, practices, and courses of business which constitute or will constitute violations of Sections 10(b) and/or 16(a) of the Securities Exchange Act of 1934 (the "Exchange Act") (15 U.S.C. §§78j(b), 78(p)(a)), and Rules 10b-5 (17 C.F.R. §240.10b-5), 16a-2 (17 C.F.R. 240.16a-2), 16a-3 (17 C.F.R. 240.16a-3) and/or 16a-8 (17 C.F.R. 240.16a-8) promulgated thereunder. 6. The Commission brings this action, in part, to enjoin such acts, practices and courses of business pursuant to Sections 21(d) and 21(e) of the Exchange Act (15 U.S.C. §§78u(d) and 78u(e)). JURISDICTION AND VENUE 7. The Court has jurisdiction of this action pursuant to Sections 21 and 27 of the Exchange Act (15 U.S.C. §§78u and 78aa). 8. Defendants, directly and indirectly, have made use of the: (1) means and instruments of transportation and communication in interstate commerce; (2) means and instrumentalities of interstate commerce; (3) mails; or (4) the facilities of a national securities exchange in connection with the transactions, acts, practices, and courses of business alleged herein within the jurisdiction of this Court and elsewhere. THE DEFENDANTS 9. Defendant Roger Blackwell is a resident of Columbus, Ohio. From 1992 to November 29, 1999, defendant Roger Blackwell was a member of the board of directors of Worthington (the "Board"). At all relevant times, he also was: (1) the president and sole owner of Blackwell & Associates, a consulting firm, (2) the trustee of the Blackwell Pension Plan Trust, a pension plan, and (3) a general partner and 50% owner, along with defendant Jack, of defendant Black-Jack, an investment partnership. 10. Defendant Roger Blackwell also is a member of the board of directors of several public companies, including Max & Erma's Restaurants, Inc., a number of private companies, and serves as trustee to the Flex Funds, an investment company registered with the Commission. In addition, defendant Roger Blackwell is a nationally recognized expert in consumer behavior and marketing. Finally, defendant Roger Blackwell is a high-profile marketing professor at Ohio State University ("OSU"). 11. Defendant Dale J. Blackwell is a resident of Upper Arlington, Ohio. He is defendant Roger Blackwell's father, a part-time realtor and a retired Ohio State University professor. 12. Defendant Christian D. Blackwell is a resident of Columbus, Ohio. He is defendant Roger Blackwell's son and is a teacher with the Columbus City School District. 13. Defendant Kelley L. Hughes and defendant Kevin L. Stacy are husband and wife and live in Columbus, Ohio. At all relevant times, defendant Hughes was the office manager and director of marketing for Blackwell & Associates. With regard to the Blackwell Pension Plan Trust, defendant Hughes had dual roles: (1) she was an agent of the trust, authorized to place trades on its behalf, and (2) she was a direct beneficiary of the trust. At all relevant times, defendant Stacy was a surveyor employed by M-E Companies, Inc. 14. The Blackwell Pension Plan Trust was at all relevant times a defined benefit pension plan created for the benefit of employees of Blackwell & Associates, a consulting firm owned by Roger Blackwell, located in Columbus, Ohio. Defendant Roger Blackwell is the sole trustee of the Blackwell Pension Plan Trust. Kristina Blackwell, Roger Blackwell's wife, defendant Kelley Hughes and Mary Hiser are direct beneficiaries of the trust. Blackwell & Associates has a financial interest in the performance of assets in the Blackwell Pension Plan Trust. 15. Defendant Arnold L. Jack is a resident of Columbus, Ohio. Defendant Jack and defendant Roger Blackwell have been close friends and business associates for almost 30 years. Defendant Jack, an attorney and partner at the law firm of Jack & Snyder, has represented defendant Roger Blackwell on several occasions. In addition, defendant Jack and defendant Roger Blackwell are equal partners of defendant Black-Jack Enterprises. 16. Defendant Black-Jack is an Ohio general partnership that invests in real estate and securities. ENTITIES INVOLVED A. Worthington Foods, Inc. 17. Worthington is a wholly owned subsidiary of Kellogg with production facilities in Worthington and Zanesville, Ohio. It produces meat alternative food products made from soy and wheat proteins. Worthington was a publicly traded corporation headquartered in Worthington, Ohio, until November 29, 1999, when it merged with Kellogg. Worthington's securities were registered under Section 12(g) of the Securities Exchange Act of 1934. Its common stock was traded on the Nasdaq National Market and its options were traded on the Philadelphia Stock Exchange. From August 1 to September 30, 1999, Worthington's stock traded in the $11 15/16 to $14 3/8 range. 18. In August and September 1999, Worthington had a policy that prohibited employees and directors from trading in Worthington securities while in possession of material, non-public information. Worthington's policy also prohibited employees and directors from using material non-public information for personal benefit. In addition, Worthington required all executives and directors to seek approval prior to engaging in transactions in Worthington securities. As a member of the Board, defendant Roger Blackwell was bound by, and was aware of, these policies. B. The Kellogg Company 19. Kellogg, a Delaware corporation headquartered in Michigan, and its subsidiaries manufacture and market ready-to-eat cereal and convenience food products. The company's products are generally marketed under the Kellogg name and are sold to the grocery trade for resale to consumers. BACKGROUND 20. On July 8, 1999, Kellogg's representatives approached Worthington's Chairman, President and Chief Executive Officer, Dale Twomley, to discuss the possibility of a business combination. On July 16, 1999, top Kellogg officials met with Twomley and other Worthington officials to execute a confidentiality agreement. On July 20, 1999, during a regularly scheduled Board meeting, Twomley informed the Board of the ongoing discussions with Kellogg. At that meeting, the Board authorized management to engage an investment banker. Defendant Roger Blackwell attended this and all Board meetings in July, August and September, appearing either in person or by telephone. 21. On August 10, 1999, Twomley and Worthington officials discussed pricing the deal at .76 Kellogg share per Worthington share ($26.08 per Worthington share). On August 11, 1999, during a special telephonic meeting, the Board authorized the negotiation of a definitive merger agreement. Soon thereafter, Worthington formally engaged U.S. Bancorp Piper Jaffray as its investment banker. On August 24, 1999, Worthington began its due diligence process. 22. On August 26, 1999, during a special telephonic meeting, the Board authorized management to pursue an all cash transaction. On August 30, 1999, Kellogg delivered to Worthington an initial draft of the merger agreement. On September 8, 1999, the Board met with legal counsel to review the merger agreement. On September 23, 1999, Twomley and Kellogg officials agreed to a price of $24 per share for Worthington stock. The next day, on September 24, 1999, the Board held a special meeting during which the directors authorized management to complete the definitive agreement. Copies of the merger agreement were sent to the Worthington directors on September 27, 1999. On September 29, 1999, the Board met and approved the merger agreement. The parties executed the merger agreement by the end of the day on September 30, 1999. On the morning of October 1, 1999, the parties issued a press release announcing the merger agreement in which Kellogg would pay $24 for each share of Worthington stock. Worthington's stock price closed on October 1, 1999, at $23 1/16, up $8.75 or 61.4% from the prior day's closing. IMPROPER CONDUCT BY ROGER BLACKWELL 23. Defendant Roger Blackwell was aware of Worthington's well-established policy and prohibitions against insider trading. He also knew that as a director of the Board, he was prohibited from providing to others material non-public information about Worthington. As set forth more fully below, defendant Roger Blackwell repeatedly breached his duty of trust and confidence to Worthington and its shareholders by disclosing material non-public information to at least his father, son, employees, friends, and close confidants. Moreover, defendant Roger Blackwell improperly benefited by disclosing that information. Additionally, each of the individuals and/or entities that he tipped improperly benefited by trading on that information. In fact, defendant Hughes and her husband, defendant Stacy, made over $100,000 by trading on that information. In total, the defendants made approximately $245,000 by trading on material nonpublic information about Kellogg's anticipated acquisition of Worthington. IMPROPER TRADING IN WORTHINGTON STOCK A. Dale Blackwell 24. On or around September 8, 1999, defendant Roger Blackwell visited his father's home after a special Board meeting during which the details of the merger agreement had been discussed. During that visit, defendant Dale Blackwell asked his son defendant Roger Blackwell whether he should invest in Worthington and Bank One. 25. Defendants Roger and Dale Blackwell discussed Bank One. They also discussed Worthington. During that conversation, defendant Roger Blackwell disclosed material non-public information concerning the Kellogg's acquisition of Worthington to his father. Shortly thereafter, and as a result of that conversation, defendant Dale Blackwell began purchasing Worthington common stock. In total, in September 1999, defendant Dale Blackwell spent over $25,000 to purchase 2,000 shares of Worthington stock. He spent only $3,900 to buy 100 shares of Bank One stock. The following table summarizes defendant Dale Blackwell's trading in Worthington common stock in September 1999:
B. Christian Blackwell 26. Defendant Roger Blackwell had a long-standing practice to give investment advice and financial assistance to his adult son - defendant Christian Blackwell. In fact, defendant Roger Blackwell had set up and funded his son's brokerage accounts, including the accounts in which defendant Christian Blackwell bought Worthington stock. Indeed, defendant Roger Blackwell has on several occasions advised his son concerning investments, and sometimes even made the decision to purchase securities on behalf of Christian in Christian's accounts. 27. In late August 1999, defendant Christian Blackwell had a telephone conversation with his father defendant Roger Blackwell during which they discussed investing in Worthington and several other companies on whose boards defendant Roger Blackwell served as a director. During that discussion, defendant Roger Blackwell disclosed material nonpublic information to his son concerning Kellogg's proposed acquisition of Worthington. 28. Shortly thereafter, and based on his conversation with his father, defendant Christian Blackwell bought 388 shares of Worthington common stock. He had never before purchased Worthington stock. Nor did he purchase the securities of any other company in September 1999. Of the 388 total shares purchased, Two hundred shares were not filled until September 20 because that purchase was made in a new Roth IRA account and a custodial transfer of funds had to be completed prior to the purchase. In addition, a check he wrote to his broker to help pay for his Worthington stock was returned for insufficient funds, indicating that defendant Christian Blackwell did not even have the funds make his purchases. 29. The following table summarizes defendant Christian Blackwell's trades in Worthington stock in August and September 1999:
C. Kelley Hughes and Kevin Stacy 30. Defendant Hughes has worked for Blackwell & Associates for over ten years and is one of defendant Roger Blackwell's close confidants. In fact, defendant Roger Blackwell relied on defendant Hughes to manage the entire Blackwell & Associates office. Further, defendant Roger Blackwell loaned defendant Hughes $30,000 dollars, interest free, apparently without seeking any security or collateral. Defendant Roger Blackwell even accompanied defendants Hughes and Stacy on their search for a new house. 31. Defendant Hughes and defendant Stacy typically make investment decisions jointly. In the six months prior September 1999, they had not placed a single trade in the stock market. Prior to September 1999, they had made only three small purchases of Worthington stock, the most recent of which was made in February 1999 for 250 shares. In September 1999, defendant Hughes and defendant Stacy invested virtually all of their liquid assets, as well as $30,000 in funds they borrowed from defendant Roger Blackwell, in Worthington stock. Included in the funds used were funds set aside for the purchase of a new home. In total, defendant Hughes and defendant Stacy purchased 10,286 shares of Worthington stock, which cost them $129,655, their largest investment ever in a single stock. Defendant Hughes' and defendant Stacy's investment in Worthington amounted to 150% of their combined annual income. The following table summarizes defendant Hughes' and defendant Stacy's personal trading in Worthington stock follows:
32. On August 31, 1999, defendant Roger Blackwell performed defendant Hughes's year-end performance review. Defendant Roger Blackwell provided material non-public information concerning Kellogg's proposed acquisition of Worthington to defendant Hughes during that and other conversations in September 1999. Shortly after her year-end review, and at various other points during September 1999, defendant Hughes disclosed material non-public information concerning the acquisition to defendant Stacy and the Blackwell Pension Plan Trust. 33. The day after defendant Hughes received her year-end review from defendant Roger Blackwell, on September 1, 1999, defendants Hughes and Stacy began purchasing Worthington stock. As the month progressed, defendants Hughes and Stacy accelerated their purchasing of Worthington to such a degree that by September 22 they had invested virtually all of their available funds in Worthington stock. To make their purchases, they liquidated positions in other securities, money market accounts and bank accounts. Defendant Stacy actually opened a new brokerage account for the purpose of making additional purchases of Worthington Stock. 34. On September 24, 1999, after investing substantially all of their liquid assets in Worthington stock, defendants Hughes and Stacy received a check for $30,000 from defendant Roger Blackwell. Defendants Hughes and Stacy used the $30,000 from defendant Roger Blackwell to buy even more Worthington stock in late September 1999. 35. During the Commission's investigation, defendant Hughes falsely characterized the $30,000 payment as deferred compensation and a bonus that she was owed. In fact, Blackwell & Associates recorded the payment as a loan receivable. Defendants Hughes and Stacy repaid the $30,000 without interest on August 31, 2000. On that same date, defendant Roger Blackwell paid defendant Hughes $30,000. During the Commission's investigation, defendant Hughes mischaracterized the nature of the $30,000 payment by defendant Roger Blackwell in order to mislead the Commission or otherwise misdirect, impede or obstruct the Commission's investigation and to hide evidence of insider trading. 36. Finally, for a short period of time, in late September 1999 defendants Hughes and Stacy went so far as to purchase several thousand dollars worth of Worthington stock on margin. Buying stock on margin is the practice of buying stock with money borrowed from the broker. Defendants Hughes and Stacy had never before purchased stock on margin. 37. Notably, defendants Hughes and Stacy tied up virtually all of their liquid assets, and took on a significant financial liability in the form of a loan, when they were looking to buy a home. They had been in the market for a new home for several months prior to their September 1999 purchases. They were serious about purchasing a home and were touring homes with a realtor. 38. On October 4, 1999, defendants Hughes and Stacy liquidated their positions in Worthington, realizing a profit of $104,954 on their September 1999 purchases. The very next month, they used their ill-gotten profits from trading in Worthington stock to make a $188,000 down payment on a house. D. Mary Hiser 39. Defendant Roger Blackwell also tipped Mary Hiser, his other assistant, about the Worthington acquisition. The day after Worthington's August 26, 1999 special meeting, on August 27, defendant Roger Blackwell met with Hiser for her annual performance review. During that meeting, defendant Roger Blackwell disclosed material, non-public information concerning the Kellogg acquisition of Worthington to Hiser. 40. As an annual bonus, defendant Roger Blackwell gave Hiser a personal check for $1,000 with the payee left blank, encouraging her to set up an IRA brokerage account through E*Trade. Immediately after that meeting, Hiser, who had never invested before, established a new online brokerage account at E*Trade and used the $1,000 to purchase 75 shares of Worthington stock at a price of $12.50, costing her $957.45. 41. On or around September 14, Hiser informed defendant Roger Blackwell that she had in fact opened up a brokerage account with E*Trade. Defendant Roger Blackwell wrote her another personal check for $1,000 with the payee blank, telling Hiser that he was matching her IRA contribution and that with the second check she would have her $2,000 IRA contribution for the year. Shortly thereafter, Hiser sent the check to E*Trade and purchased an additional 25 shares of Worthington stock at a price of $12.00 per share, costing her $319.95. 42. Hiser liquidated her entire position in Worthington on October 4, 1999, selling her shares at a price of $22.875 per share and realizing a profit of $990.07. F. The Blackwell Pension Plan Trust 43. The Blackwell Pension Plan Trust was established as a pension plan for employees of Blackwell & Associates. Defendant Roger Blackwell is the sole trustee of the Blackwell Pension Plan Trust. In September 1999, defendant Roger Blackwell's wife Kristina and defendant Hughes were direct beneficiaries of the Blackwell Pension Plan Trust. Although defendant Roger Blackwell himself was not a direct beneficiary of the Trust, his company, Blackwell & Associates, owns any excess money in the Trust's brokerage accounts by which the plan is over funded (that is, not needed to fund the plan's benefits). Conversely, if the Trust's brokerage accounts are under funded (that is, do not have sufficient funds to fund the plan's benefits), Blackwell & Associates is responsible for coming up with the shortfall. Defendant Hughes, defendant Roger Blackwell and his wife Kristina each had trading authority to make trades on behalf of the Blackwell Pension Plan Trust in the Trust's brokerage accounts during September 1999. 44. In September 1999, defendant Hughes caused the Blackwell Pension Plan Trust to purchase 5,300 shares of Worthington stock. Specifically, on September 27, the Blackwell Pension Plan Trust purchased 5,000 shares at a price of $12.125 per share, for a total cost of $61,028.95. On September 29, 1999, the Blackwell Pension Plan Trust bought 300 shares at a price of $12.0625 per share, for a total cost of $3,691.46. These were the first trades Hughes had ever placed on behalf of the Trust. Upon information and belief, defendant Hughes made these trades on behalf of the Blackwell Pension Plan Trust with defendant Roger Blackwell's knowledge and/or consent, at his direction, or with his subsequent ratification. 45. As a result of these purchases, approximately 21.5% of the Blackwell Pension Plan Trust's assets was invested in Worthington stock. On October 4, the Blackwell Pension Plan Trust sold 5,300 shares of Worthington stock at a price of $23.0625 per share, for a profit of $57,023.29. As a director of Worthington, Roger Blackwell was required, under Section 16(a) of the Exchange Act, and the rules thereunder, to report to the Commission changes in ownership of Worthington stock. Regardless, Roger Blackwell did not disclose these purchases or sales to the Commission. G. Arnold Jack 46. Defendant Arnold Jack and defendant Roger Blackwell have been business associates and friends for over 30 years. Defendant Jack, a lawyer, has represented defendant Roger Blackwell in the past. They also have jointly owned real estate and are partners in defendant Black-Jack. Additionally, defendant Roger Blackwell has lavished expensive gifts on defendant Jack. For instance, defendant Roger Blackwell used frequent flier miles to pay for Jack's and Jack's wife's trip to Europe in September 1999. 47. On September 7, 1999 at 1:43 p.m., defendant Jack made a seven-minute call on his cellular phone to defendant Roger Blackwell's office at Blackwell & Associates. Only defendant Roger Blackwell and Mary Hiser were present at the office at the time of the call. Defendant Jack did not have a relationship with Hiser that would warrant a seven-minute phone discussion. Defendant Roger Blackwell provided material non-public information concerning the Worthington acquisition to defendant Jack during that phone call. Immediately following that call, at 1:50 p.m., defendant Jack placed a five-minute call on his cell phone to his Advest broker. During that call, he placed a buy order for 1000 shares of Worthington stock. Over the next two days, defendant Jack purchased an additional 1500 shares of Worthington stock. 48. In late September 1999, Roger Blackwell used frequent flier miles to buy Jack and his wife a trip to Europe. On September 22 and 23, 1999, defendants Roger Blackwell and Jack were both in Monaco, staying at the same hotel and dining together. Defendant Roger Blackwell again provided material non-public information concerning the Worthington acquisition to defendant Jack during their stay in Monaco. Upon his return from Monaco, defendant Jack purchased an additional 500 shares of Worthington stock. The following table summarizes defendant Jack's September 1999 trading in Worthington common stock:
H. Black-Jack Enterprises 49. Defendant Roger Blackwell and defendant Jack each own 50% of defendant Black-Jack, a general partnership they use for investment purposes. Defendant Roger Blackwell routinely received brokerage account statements and trade confirmations for the defendant Black-Jack brokerage accounts. In addition, defendant Roger Blackwell routinely reported his share of the defendant Black-Jack profits in his tax returns each year. 50. In September 1999, defendant Jack placed two orders on behalf of defendant Black-Jack to purchase 2500 shares of Worthington common stock. Each order was placed shortly after defendant Jack's seven minute phone call to defendant Roger Blackwell's office on September 7 phone call to Roger Blackwell's office. 51. As a director of Worthington, Roger Blackwell was bound by the requirements of Section 16(a) of the Exchange Act, and the rules thereunder, to report to the Commission changes in ownership of Worthington stock. Roger Blackwell received trade confirmations and account statements that reflected trades made on behalf of Black-Jack. Regardless, Roger Blackwell did not disclose these purchases to the Commission. 52. The following table summarizes defendant Black-Jack's September 1999 trades in Worthington stock:
COUNT I Violations of Section 10(b) of the Exchange Act (15 U.S.C. § 78j(b)) and Rule 10b-5 (17 C.F.R. § 240.10b-5) Promulgated Thereunder 53. Paragraphs 1 to 52 are realleged and incorporated by reference herein. 54. By the conduct alleged above, defendants Roger Blackwell, Dale Blackwell, Christian Blackwell, Hughes, Stacy, Jack, the Blackwell Pension Plan Trust and Black-Jack, in connection with the purchase of Worthington securities by the use of the means and instrumentalities of interstate commerce, by the use of the mails, or by the use of the facilities of a national securities exchange, directly and indirectly: employed devices, schemes, and artifices to defraud; made untrue statements of material facts and omitted to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made not misleading; and engaged in acts, practices and courses of business which would and did operate as a fraud and deceit upon the sellers of securities. 55. The defendants acted with scienter when they engaged in the conduct alleged in paragraphs 1 to 52, above. 56. By reason of the activities alleged above, the defendants violated Section 10(b) of the Exchange Act, 15 U.S.C. § 78k(b), and Rule 10b-5, 17 C.F.R. § 240.10b-5, promulgated thereunder. COUNT II Violations of § 16(a) of the Exchange Act (28 U.S. C. § 78(p)(a)) and Rules 16a-2 (17 C.F.R. 240.16a-2), 16a-3 (17 C.F.R. 240.16a-3) and 16a-8 (17 C.F.R. 240.16a-8) Promulgated Thereunder 57. Paragraphs 1 to 52 are realleged and incorporated by reference herein. 58. As a director of Worthington, defendant Roger Blackwell was required to file reports of ownership and changes of ownership with the Commission pursuant to Section 16(a) of the Exchange Act and Rules 16a-2, 16a-3 and 16a-8 thereunder. 59. Defendant Roger Blackwell failed to report changes in his ownership interests as required by Section 16(a) and Rules 16a-2, 16a-3 and 16a-8 thereunder. 60. As a result, defendant Roger Blackwell violated Section 16(a) and Rules 16a-2, 16a-3, and 16a-8 thereunder. PRAYER FOR RELIEF THEREFORE, the Commission respectfully requests that this Court: I. Find that the defendants committed the violations alleged above. II. Grant a Final Judgment Order of Permanent Injunction, Civil Penalties, and Other Equitable Relief, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, enjoining defendant Roger Blackwell, individually and in his capacity as trustee of the Blackwell Pension Plan Trust, his agents, servants, employees, assigns, attorneys, and those persons in active concert or participation with them who receive actual notice of the Final Judgment by personal service or otherwise, and each of them, from, directly or indirectly, engaging in acts, practices, and courses of business in violation of Sections 10(b) and/or 16(a) of the Exchange Act (15 U.S.C. §§78j(b), 78(p)(a)), and Rules 10b-5 (17 C.F.R. §240.10b-5), 16a-2 (17 C.F.R. 240.16a-2), 16a-3 (17 C.F.R. 240.16a-3) and 16a-8 (17 C.F.R. 240.16a-8) promulgated thereunder. III. Grant a Final Judgment Order of Permanent Injunction, Civil Penalties, and Other Equitable Relief, in a form consistent with Rule 65(d) of the Federal Rules of Civil Procedure, enjoining defendants Dale Blackwell, Christian Blackwell, Hughes, Stacy, Jack, the Blackwell Pension Plan Trust and Black-Jack, their agents, servants, employees, assigns, attorneys, and those persons in active concert or participation with them who receive actual notice of the Final Judgment by personal service or otherwise, and each of them, from, directly or indirectly, engaging in acts, practices, and courses of business in violation of Sections 10(b) and/or 16(a) of the Exchange Act (15 U.S.C. §§78j(b), 78(p)(a)), and Rules 10b-5 (17 C.F.R. §240.10b-5), 16a-2 (17 C.F.R. 240.16a-2), 16a-3 (17 C.F.R. 240.16a-3) and 16a-8 (17 C.F.R. 240.16a-8) promulgated thereunder. IV. Grant an Order requiring defendants to pay to the registry of this Court disgorgement of their ill-gotten gains plus prejudgment interest. V. Grant an Order requiring defendants to pay civil penalties pursuant to Section 21A of the Exchange Act (15 U.S.C. §78u-1). VI. Grant and Order barring defendant Roger Blackwell from acting as an officer or director of any issuer whose securities are registered pursuant to Section 12 of the Exchange Act (15 U.S.C. § 78l) pursuant to Section 21(d)(2) of the Exchange Act (15 U.S.C. § 78u(d)(2)), as a result of each of his violation of Sections 10(b) and/or 16(a) of the Exchange Act (15 U.S.C. §§78j(b), 78(p)(a)), and Rules 10b-5 (17 C.F.R. §240.10b-5), 16a-2 (17 C.F.R. 240.16a-2), 16a-3 (17 C.F.R. 240.16a-3) and/or 16a-8 (17 C.F.R. 240.16a-8) promulgated thereunder. VII. Retain jurisdiction of this action in accordance with the principles of equity and the Federal Rules of Civil Procedure in order to implement and carry out the terms of all orders and decrees that may be entered or to entertain any suitable application or motion for additional relief within the jurisdiction of this Court. VIII. Grant an Order for such further relief as the Court may deem appropriate.
Dated: January 21, 2003 Respectfully Submitted,
__________________________________
ATTORNEYS FOR PLAINTIFF Local Counsel:
Mark D'Allesandro http://www.sec.gov/litigation/complaints/comp17944_63.htm
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