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Editor: Eric C. Chaffee
Univ. of Toledo College of Law

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Wednesday, March 11, 2009

iBiz Technology and Officers Settle "Pump and Dump" Charges

On February 20, 2009, the United States District Court for the District of Arizona entered judgments by consent against iBIZ Technology Corp. formerly based in Phoenix, Arizona, its Chief Executive Officer Kenneth W. Schilling and its Executive Vice President H. Mark Perkins, also of Phoenix, and a company consultant, Jerrold B. McRoberts, who resides in Santa Fe, New Mexico. In its complaint, the SEC alleged that iBIZ Technology, Schilling, and Perkins made false and misleading statements in press releases, online interviews, investor correspondence, proxy solicitations, and Commission filings regarding the company's involvement with a development-stage product called the "Virtual Keyboard." While these statements were being disseminated, Schilling and Perkins sold over $1 million of their own iBIZ Technology shares into a falsely inflated market. In addition, the SEC alleged in its complaint that the inflated stock price allowed iBIZ Technology to retire approximately $2.8 million of convertible debt that it otherwise lacked the resources to repay. The complaint also alleged that all of the defendants engaged in a scheme to raise money for themselves by improperly using Form S-8 registrations statements. The complaint also alleged that iBIZ Technology, Schilling and Perkins illegally distributed shares through its consultants, Jeffery Firestone, Jerrold B. McRoberts, and Doyle Scott Elliott, who then sold the shares into the public market.  The judgments permanently enjoin iBIZ Technology, Schilling and Perkins from violating, or aiding and abetting violations of, the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933 ("Securities Act"), the anti-fraud provisions of Section 10(b) and Rule 10b-5, and the periodic reporting requirements. The defendants, in consenting to the orders of permanent injunction, neither admitted nor denied the allegations of the Commission's complaint.

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