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UNITED STATES DISTRICT COURT

DISTRICT OF MASSACHUSETTS
___________________________________________
SECURITIES AND EXCHANGE COMMISSION, )
)
Plaintiff, )
)
v. ) Case No. 1:12-cv-12334-IT
)
SPENCER PHARMACEUTICAL INC., )
J EAN-FRANOIS AMYOT, )
MAXIMILIEN ARELLA, )
IAN MORRICE, )
IAB MEDIA INC. and )
HILBROY ADVISORY INC., )
)
Defendants. )
___________________________________________ )

ASSENTED-TO MOTION OF PLAINTIFF SECURITIES AND EXCHANGE
COMMISSION FOR ENTRY OF FINAL JUDGMENTS AS TO DEFENDANTS
MAXIMILIEN ARELLA AND IAN MORRICE

The Securities and Exchange Commission (SEC or Commission) filed its complaint
in this matter on December 17, 2012. During the course of discovery conducted by the parties,
the Commission discussed settlement with both Maximilien Arella (Arella) and Ian Morrice
(Morrice), both of whom are proceeding pro se in this litigation. Both Arella and Morrice
have independently agreed to proposed settlements in this matter. Following the process for
review and approval of proposed settlement terms by the Commission, the parties now submit
those proposed terms to the Court and request entry of final judgments as to both defendants.
Attached as exhibits to this motion are signed and notarized consents for both defendants as well
as proposed final judgments for both.
A. The Allegations in the Complaint.
The Complaint alleges that, beginning in or about 2009, defendant J ean-Franois Amyot
(Amyot) led a classic pump-and-dump scheme involving the shares of defendant Spencer
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Pharmaceutical, Inc. (Spencer), a penny stock traded on the domestic over-the-counter
securities market OTC Link. The pump was accomplished through the dissemination of
false and misleading information about Spencers business and about a purported unsolicited
$245 million buyout offer. The dump was done through at least two funds Amyot controlled.
The scheme grossed Amyots funds in excess of $5 million and was orchestrated by Amyot
individually and through two companies he controlled, IAB Media Inc. and Hilbroy Advisory
Inc., both of which are defendants in this civil action.
As Spencers officers, Arella and Morrice are alleged to have participated in the creation
and dissemination of the false and misleading information and are charged in the Complaint with
violating certain anti-fraud provisions of the federal securities laws. They have now separately
agreed to proposed settlements of the negligence-based Section 17(a)(2) and (3) claims under the
Securities Act of 1933 (Securities Act), with Arella also agreeing to settle the Commissions
Section 5(a) and (c) claims under the Securities Act for registration violations related to Spencer
shares that were transferred to accounts controlled by Amyot.
1
The settlements are on a neither
admit nor deny basis.
B. Proposed Settlements.
For Arella the proposed settlement terms are: (a) injunctive relief that permanently
restrains and enjoins Arella from violating Section 17(a)(2) and (a)(3) of the Securities Act of
1933 (the Securities Act) as well as from violating Sections 5(a) and 5(c) of the Securities Act;
(b) payment of a civil penalty in the amount of $50,000; (c) entry of a five-year bar preventing
Arella from acting as an officer or director of any issuer that has a class of securities registered

1
Defendants Arella and Morrice answered the Complaint on March 11, 2013 (Dkt. ##7, 8).
Defendant Spencer has not responded to the Complaint, and the Commission intends to seek default
judgment against it.
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pursuant to Section 12 of the Exchange Act [15 U.S.C. 78l] or that is required to file reports
pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]; and (d) entry of a five-year
bar preventing Arella from participating in an offering of penny stock,
2
including engaging in
activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of any penny stock.
For Morrice the proposed settlement terms are: (a) injunctive relief that permanently
restrains and enjoins Morrice from violating Section 17(a)(2) and (a)(3) of the Securities Act; (b)
payment of a civil penalty in the amount of $50,000; (c) entry of a five-year bar preventing
Morrice from acting as an officer or director of any issuer that has a class of securities registered
pursuant to Section 12 of the Exchange Act [15 U.S.C. 78l] or that is required to file reports
pursuant to Section 15(d) of the Exchange Act [15 U.S.C. 78o(d)]; and (d) entry of a five-year
bar preventing Morrice from participating in an offering of penny stock, including engaging in
activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or
attempting to induce the purchase or sale of any penny stock.
The proposed settlement terms for Arella and Morrice are appropriate and in the public
interest. The proposed civil monetary penalties are substantial, as is appropriate given the
seriousness of the conduct alleged, but are not at the upper end of the applicable statutory range,
since the defendants are settling to non-scienter-based charges.
3
There is no request for
disgorgement because the SEC is unable conclusively to establish unjust enrichment associated

2
A penny stock is any equity security that has a price of less than five dollars, except as provided
in Rule 3a51-1 under the Exchange Act [17 C.F.R. 240.3a51-1].
3
For violations that involve fraud, deceit or manipulation, and that directly or indirectly result in,
or create a significant risk of, substantial losses to others, the applicable statute authorizes a third-tier
penalty in an amount up to the greater of $150,000 for each violation (as determined by the Court) or the
defendants gross pecuniary gain. See 15 U.S.C. 77t(d)(2); 17 C.F.R. 201.1004 (applying $150,000
figure to violations occurring after March 3, 2009).
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with Messrs. Arella and Morrice. Injunctive relief is an appropriate sanction as a deterrent for
future conduct. Finally, given that the alleged conduct (a) occurred while Arella and Morrice
were serving as high-level officers of a publicly traded company, and (b) involved the issuance
of, and trading in, the penny-stock shares of that company, the proposed time-limited officer and
director bars and penny stock bars are appropriate.
Accordingly, the parties respectfully request that this Court enter final judgment on the
terms set forth in the proposed draft J udgments, which are attached as exhibits to this motion.
Respectfully submitted,

Dated: September 12, 2014 /s/ Rua M. Kelly
Rua M. Kelly (Mass. Bar No. 643351)
Frank C. Huntington (Mass. Bar No. 544045)
Amy Gwiazda (Mass. Bar No. 663494)
J ames R. Drabick (Mass. Bar No. 667460)
SECURITIES AND EXCHANGE COMMISSION
Boston Regional Office
33 Arch Street, 23
rd
Floor
Boston, Massachusetts 02110
(617) 573-8941 (Kelly)
KellyRu@sec.gov

CERTIFICATE OF COMPLIANCE WITH LOCAL RULE 7.1

Counsel for the SEC hereby certifies that she has conferred with defendants Arella and
Morrice, both of whom are proceeding pro se, in connection with this motion and that the
defendants assent to the relief requested herein.

/s/ Rua M. Kelly

CERTIFICATE OF SERVICE

I, Rua M. Kelly, hereby certify that this document filed on this date through the ECF
system will be sent to the registered participants as identified on the Notice of Electronic Filing
(NEF) and that paper copies will be sent to those indicated as non-registered participants as of
the date of this filing.

/s/ Rua M. Kelly
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