U.S. Securities and Exchange Commission

Litigation Release No. 21816 / January 14, 2011

Securities and Exchange Commission v. Theodore R. Maloney; Securities and Exchange Commission vs. Donald K. McGhan and Jimmy J. McGhan, Civil No. 2:11-CV-74; Civil No. 2:11-CV-75 (USDC Nevada, filed January 14, 2011)

Securities and Exchange Commission Files Fraud Charges Against Former MediCor CEO, Chairman and COO

The Securities and Exchange Commission today charged Theodore Robert Maloney (“Maloney”), the former chief executive officer of MediCor, Ltd. (“MediCor”), with fraud and other misconduct for concealing the true and precarious source of MediCor’s funding from investors and the company’s auditor. The Commission simultaneously filed related settled civil actions against Donald K. McGhan, MediCor’s founder and former Chairman (“Don McGhan”), and Jimmy J. McGhan, the company’s former chief operating officer (“Jim McGhan”).

The SEC complaints, filed in the Nevada District Court, allege that from 2004 through 2006, MediCor filed false and misleading annual reports, quarterly reports and proxy statements that falsely stated that the company was substantially funded by Don McGhan or one of his affiliates, when in fact a significant source of MediCor’s funding was money illegally transferred from Southwest Exchange Corp. (“Southwest”). Southwest was a private company that held deposits for taxpayers seeking to defer capital gains taxes on like-kind exchanges of property. According to the SEC’s complaint, Maloney and Don McGhan concealed the illegal transfer of Southwest funds by creating a paper trail designed to hide the true source of MediCor’s financing; Maloney and the McGhans also concealed information regarding the true source of MediCor’s funding from MediCor’s auditor. Maloney was the person primarily responsible for preparing MediCor’s misleading public filings; Maloney, Don McGhan and Jim McGhan each signed the filings. The complaint further alleges that by the end of 2006, Don McGhan, with Maloney’s help and Jim McGhan’s knowledge, had transferred over $54 million out of Southwest for MediCor’s benefit. Southwest collapsed in January 2007, owing approximately $97 million to its clients. MediCor declared bankruptcy in June 2007.

The SEC is charging Maloney with violating Sections 10(b), 13(b)(5) and 14(a) of the Securities Exchange Act of 1934 (“Exchange Act”), and Exchange Act Rules 10b-5, 13b2-2 and 14a-9, and with aiding and abetting MediCor’s violations of Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Exchange Act Rules 12b-20, 13a-1 and 13-13. The SEC seeks a permanent injunction, civil penalty and a permanent officer and director bar against Maloney.

Don McGhan and Jim McGhan each has agreed to settle to charges of violating Sections 10(b) and 14(a) of the Exchange Act and Exchange Act Rules 10b-5 and 14a-9, and with aiding and abetting MediCor’s violations of Sections 13(a) of the Exchange Act and Exchange Act Rules 12b-20 and 13a-1. Don McGhan has agreed to consent to a permanent injunction and officer and director bar. Jim McGhan has agreed to consent to a permanent injunction and a 5-year officer and director bar.

Business Contact and Profile for Medicor

Work At Home Offers

Each year the Better Business Bureau receives numerous inquiries on work at home offers. The advertisements usually represents that huge profits can be made by envelope stuffing, watching TV for pay or assembling products.

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