U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19072 / February 10, 2005

Securities and Exchange Commission v. Spear & Jackson, Inc., et al., Case No. 04-CIV-80354 (S.D.Fla., filed April 15, 2004)

FORMER CEO OF SPEAR & JACKSON, INC. PAYS OVER $6.1 MILLION TO SETTLE SEC FRAUD CHARGES

The Securities and Exchange Commission (SEC) announced that it has settled its pending securities fraud charges against Spear & Jackson, Inc., its former CEO Dennis Crowley, stock promotion firm International Media Solutions, Inc. (IMS), and one of IMS' principals, Yolanda Velazquez. Under the settlement, which are subject to court approval, Spear & Jackson, Crowley, IMS and Velazquez will be enjoined from further violations of the antifraud and other provisions of the federal securities laws, Crowley will be barred from serving as an officer or director of a public company and from receiving securities registered on Form S-8, and Crowley and Velazquez will be barred from participating in penny stock offerings. Moreover, Crowley will be ordered to pay disgorgement, prejudgment interest and penalties totaling more than $6.1 million, IMS will be ordered to pay disgorgement of approximately $2 million, and Velazquez will be ordered to pay disgorgement, prejudgment interest and penalties totaling more than $435,000.

The SEC filed a complaint against Crowley, Spear & Jackson, IMS and Velazquez on April 15, 2004 alleging that Crowley had illegally sold over $3 million in Spear & Jackson stock since early 2002. The complaint also alleged that Crowley hired IMS, a now-defunct Longwood, Florida stock promoting firm, in early 2002 to tout Spear & Jackson stock. The SEC's complaint alleged that Crowley hid his illegal trading through the use of brokerage accounts in the name of British Virgin Islands-based nominee companies that he owned and controlled. According to the SEC's complaint, Crowley obtained that stock through a variety of means, including issuing stock to his nominees through the filing of a fraudulent Form S-8 registration statement.

The SEC's complaint also alleged that Crowley had conducted a similar scheme with the stock of another company he controlled, Celebrity Entertainment Group, Inc., in 2001. According to the SEC's complaint, Crowley used his offshore nominees to illegally sell over $900,000 in Celebrity Entertainment stock.

The settlement orders Crowley to repay all of his ill-gotten gains, as well as all of the salary he received from Spear & Jackson, for a total of $3,765,776, plus prejudgment interest of $304,104. In addition, the settlement orders Crowley to pay a $2 million civil money penalty, which brings the total judgment to $6.1 million. Crowley has also agreed to the entry of orders that permanently bar him from serving as an officer or director of a public company and from participating in penny stock offerings. In his consent, Crowley has also agreed to return to Spear & Jackson all of the 6 million company shares that he owned at the time of the SEC's action. Finally, the proposed final judgment imposes a permanent injunction on Crowley from violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Sections 10(b), 13(a), 13(d) and 16(a) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1, 13a-14, and 16a-3 thereunder, and bars Crowley from owning or receiving shares issued pursuant to a Form S-8 registration statement.

Spear & Jackson has agreed to the entry of an order permanently enjoining it from violating Sections 5(a), 5(c) and 17(a) of the Securities Act and Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 12b-20 and 13a-1 thereunder. IMS and Velazquez have consented to the entry of injunctions against future violations of Sections 5(a), 5(c), 17(a) and 17(b) of the Securities Act and Sections 10(b) and 15(a) of the Exchange Act and Rule 10b-5 thereunder. In addition, the final judgment orders Velazquez to pay $301,581 in disgorgement, plus prejudgment interest, and a $120,000 civil penalty, and bars her from participating in any offering of a penny stock. IMS, which is now defunct, has consented to the entry of an order requiring it to pay $2,032,393 in disgorgement, plus prejudgment interest.

Crowley, Spear & Jackson, IMS and Velazquez all entered into their settlements without admitting or denying the allegations in the SEC's complaint. The moneys collected under the judgments announced today will be placed in a Fair Fund under Section 308(a) of the Sarbanes-Oxley Act of 2002, and will be distributed to defrauded investors.

http://www.sec.gov/litigation/litreleases/lr19072.htm