U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19098 / February 24, 2005

Securities and Exchange Commission v. Hubert A. Jeffreys, a/k/a Hugh Jeffreys, Earthboard Sports USA, Inc., Timothy F. Bell and Tracy A. Edwards, Civil Action No. 1:05CV00372 (RWR) (D.D.C.).

S.E.C. Files Charges Against Earthboard, its Founder and President, and Two Stock Brokers for Fraudulent Sales of Earthboard Stock

The United States Securities and Exchange Commission announced today that it has filed a securities fraud lawsuit in the United States District Court for the District of Columbia against Earthboard Sports USA, Inc., Hubert A. Jeffreys, Timothy F. Bell and Tracy A. Edwards. The Commission's complaint alleges that Jeffreys, the founder and then-president, CEO, and CFO of Earthboard, a privately held, Costa Mesa, California-based manufacturer of all-terrain skateboards and Bell and Edwards, two former registered representatives, fraudulently offered and sold stock of Earthboard Sports USA, Inc. From April 1998 to March 2003, Earthboard, in an unregistered offering, raised approximately $5.1 million from at least 66 individuals and entities. Jeffreys, Bell and Edwards enticed investors to purchase Earthboard shares using a number of materially false statements including the claim that Vans Inc., a Nasdaq-traded footwear company, planned to acquire Earthboard in a one-for-one share exchange that would generate a windfall of as much as $24 for each dollar invested in Earthboard stock. In reality, Vans never had any intention to acquire Earthboard and had never expressed any interest in acquiring Earthboard.

The complaint alleges that, in one instance, Jeffreys, Bell and Edwards defrauded an elderly couple of at least $455,000. Bell and Edwards went as far as arranging for the couple to mortgage their paid-off home to buy Earthboard stock; the couple ultimately lost their home when the promised profits from their Earthboard investment failed to materialize and they could not afford to make the mortgage payments.

The complaint further alleges that Jeffreys misappropriated at least $1.9 million of investor funds, using stock sale proceeds to buy a waterfront home in Newport Beach, three undeveloped plots in a residential community in Lake Havasu, Arizona, a house in his girlfriend's name, and a thirty-foot fishing boat and accompanying mooring on Santa Catalina Island.

The Commission's action seeks permanent injunctions, orders of disgorgement and civil penalties against Earthboard and Jeffreys for violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, as well as an officer and director bar against Jeffreys. The Commission also seeks permanent injunctions, orders of disgorgement, and civil penalties against Bell and Edwards for violating Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

SEC Complaint in this matter