UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION

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1 Securities and Exchange Commission UNITED STATES DISTRICT COURT MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION Plaintiff, v. Case No. 8:09-cv RAL-EAJ John S. Morgan, Marian I. Morgan, Morgan European Holdings ApS a/k/a/ Money Talks, Inc., ApS, Stephen E. Bowman, Bowman Marketing Group, Inc., and Thomas D. Woodcock, Jr., Defendants PLAINTIFF S MOTION FOR ORDER TO SHOW CAUSE WHY DEFENDANTS SHOULD NOT BE HELD IN CONTEMPT Plaintiff, Securities and Exchange Commission, hereby moves for an Order requiring defendants John Morgan, Marian Morgan and Morgan European Holdings ( MEH ) to Show Cause why they should not be held in contempt for failing to comply with this Court s Orders. Background On June 11, 2009, this Court ordered defendants John Morgan, Marian Morgan and MEH to, among other things, cease from violating the securities laws. Docket # 3, Section I - II. In addition, defendants were required to, within five days of the entry of the Order, file with the Court and serve on the Commission sworn accountings providing certain specified information. Docket # 3, Section V. The Order also ordered required defendants to, within three days of the entry of the Order, repatriate any funds held in foreign jurisdictions to the

2 registry of the Court. Docket # 3, Section VI. On June 25, 2009, the Court entered a second Order. The June 25, 2009 Order also required the defendants to cease from violations of the securities laws, provide sworn accountings and repatriate funds. Docket # 18, Sections I, II, V and VII. 1 On July 1, 2009, the Commission notified defendants John Morgan, Marian Morgan and MEH that they were in contempt of certain provisions of this Court s Order and urged compliance. Later that same day defendant Marian Morgan, representing defendant MEH, circulated additional lulling letters to investors in direct violation of this Courts Orders. See Exhibit A. In addition, despite representations to investors by Marian Morgan, representing MEH, that funds controlled by MEH and John Morgan were held in a foreign account, defendants have failed to repatriate any funds. See Exhibit B. Moreover, defendant Marian Morgan has bragged, that investor funds are currently outside the jurisdiction of this Court. See Exhibit C. Finally, defendants John Morgan, Marian Morgan and MEH have failed to file or serve the required accountings. Defendants have expressed an intent to disregard and disobey Orders of this Court. Accordingly, the Commission requests that the Court issue an Order requiring defendants John Morgan, Marian Morgan and MEH to appear and show cause why they should not be held in contempt, and why sanctions should not issue against them until their contempt is purged. 1 As recently as June 21, 2009, defendant Marian Morgan on behalf of defendant MEH was representing to investors that funds controlled by MEH and John Morgan were held in a foreign account. See Exhibit A. 2

3 Legal Argument Courts have inherent power to enforce compliance with their lawful orders through civil contempt. Shillitani v. United States, 384 U.S. 364, 370, 86 S. Ct (1966); Citronelle-Mobile Gathering, Inc. v. Watkins, 943 F.2d 1297, 1301 (11th Cir.1991). This power is essential to the proper conduct of the judicial function, and without it, a Court's authority to issue judgments would be nothing more than "a mere mockery." United States v. United Mine Workers, 330 U.S. 258, 290 n. 56, 67 S.Ct. 677 (1947). Congress codified the courts' contempt powers in 18 U.S.C. 401, which states: A court of the United States shall have power to punish by fine or imprisonment, at its discretion, such contempt of its authority and no other, as... (3) Disobedience or resistance to its lawful writ, process, order, rule, decree, or command. Civil contempt, which the Commission seeks in this case, is a remedial device intended to achieve full compliance with a court order. See Hicks v. Feiock, 485 U.S. 624, 631 (1988); Portland Feminist Women s Health Center v. Advocates for Life, Inc., 877 F.2d 787, 790 (9 th Cir. 1989). To achieve compliance, courts can impose both coercive and compensatory sanctions. Citronelle-Mobile Gathering, 943 F.2d at The coercive sanctions imposed in civil contempt proceedings ordinarily are conditional, and the contemnor may avoid the sanctions by complying with the order. Hicks v. Feiock, 485 U.S. at District Courts have broad equitable power to order appropriate relief in civil contempt proceedings. SEC v. Hickey, 322 F. 3d 1123, 1128 (9 th Cir. 2003); Howard Johnson Company, Inc. v. Khimani, 892 F.2d 1512, 1519 (11 th Cir. 1990). A party commits contempt when it violates a definite and specific order of the Court. Citronelle-Mobile Gathering, 943 F.2d at Intent in failing to comply 3

4 with the order is irrelevant. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499 (1949), Howard Johnson Company, Inc. v. Khimani, 892 F.2d 1512, 1516 (11 th Cir. 1990). To meet its initial burden, the Commission need only show that the defendants have failed to comply with the Court's order. United States v. Rylander, 460 U.S. 752, 755, 103 S. Ct (1983). Once the Commission has met its initial burden, the burden shifts to the defendants to come forward with evidence showing "categorically and in detail" why they should not be held in contempt. Rylander, 460 U.S. at 755. The attached exhibits and the Court files demonstrate that defendants John Morgan, Marian Morgan and MEH have failed to comply with this Court s Order. Conclusion Defendants John Morgan, Marian Morgan and MEH have each failed to file and serve sworn accountings as ordered by this Court and have failed to repatriate assets controlled by them which are currently in foreign jurisdictions. The Commission respectfully requests that the Court issue an order requiring defendants to show cause why they should not each be held in contempt, and have sanctions imposed against them until their contempts are purged. DATED: July 7, 2009 Respectfully submitted, s/ Polly Atkinson Polly Atkinson Zachary T. Carlyle Securities and Exchange Commission 1801 California Street, Suite 1500 Denver, Colorado Telephone: Attorneys for Plaintiff 4

5 CERTIFICATE OF SERVICE I hereby certify that on July 7, 2009, I sent the foregoing MOTION FOR ORDER TO SHOW CAUSE by federal express and to the following: John S. Morgan johnmorgan2005@yahoo.com Marian I. Morgan Morgan European Holdings, ApS a/k/a Money Talks, Inc., ApS Stephen E. Bowman 1511 S. 113 th Plaza Omaha, NE Stephen@bowmanmktg.com Bowman Marketing Group, Inc S. 113 th Plaza Omaha, NE Stephen@bowmanmktg.com David Zisser, Esq. Isaacson Rosenbaum P.C th Street, Suite 2200 Denver, CO dzisser@ir-law.com Attorney for Thomas D. Woodcock, Jr. s/ Marla Pinkston Marla Pinkston 5