SEC v. McGhan, Civil No. 2:11-CV-74 (D. Nev. Filed Jan 14, 2011); SEC v. Maloney, Civil No. 2:11-CV-75 (D. Nev. Filed Jan. 14, 2011) are two actions centered on an alleged financial fraud at MedCor, Ltd. The first, which is settled, names as defendants Donald McGhan, the founder of the company and former Chairman, and Jimmy McGhan, its former COO. The latter, which is in litigation, names as a defendant Theodore Maloney, the former CEO of the company. The complaint against Mr. Maloney alleges violations of Exchange Act Sections 10(b), 13(b)(5) and 14(a) and aiding and abetting violations of Exchange Act Sections 13(a) and 13(b)(2)(A). Both complaints are based on allegations that the defendants misrepresented the source of funds for the company as being Don McGhan or one of his affiliates when it fact it was transfers from Southwest Exchange Corporation, a private company that held deposits for taxpayers seeking to defer capital gains taxes on like kind exchanges. The illegal transfers from that company are alleged to have been concealed by false documents. By 2006 about $54 million in illegal transfers had been made. In 2007 the company collapsed, owing about $97 million to clients. Subsequently, the company filed for bankruptcy. Don and Jim McGhan each settled, consenting to the entry of permanent injunctions prohibiting future violations of Exchange Act Sections 10(b) and 14(e) and from aiding and abetting MediCor’s violations of Section 13(a). In addition, Don McGhan agreed to an officer and director bar while Jim McGhan consented to the entry of a five year officer and director bar.