U.S. Securities and Exchange Commission

Litigation Release No. 18377 / September 30, 2003

, Civil Action No. 8 03-cv-2768 (D. Md.)

Commission Sues John J. Lawbaugh For Fraud, Embezzlement And Other
Prohibited Conduct With Regard To Two-Face Amount Certificate Companies

   The Securities and Exchange Commission ("Commission") announced that,
   on September 29, 2003, it filed a civil action in the United States
   District Court for the District of Maryland, against John J. Lawbaugh,
   age 38, of Maryland, the former majority shareholder, Chief Executive
   Officer, and Chairman of the Board of both 1st Atlantic Guaranty
   Corporation ("1st Atlantic") and SBM Certificate Company ("SBM"),
   face-amount certificate companies registered with the Commission. The
   complaint seeks a permanent injunction; disgorgement of ill-gotten
   gains; the imposition of civil penalties; a bar from acting as an
   officer or director of a public company; a bar pursuant to section
   36(a) of the Investment Company Act, from serving as an officer,
   director, member of an advisory board, investment adviser, or
   depositor of any registered investment company, or as a principal
   underwriter for any registered open-end investment company, unit
   investment trust, or face-amount certificate company; as well as
   penalties pursuant to Section 49 of the Investment Company Act.

   The Commission alleges that Lawbaugh made material misrepresentations
   and omissions in 1st Atlantic's and SBM's annual and periodic filings
   with the Commission by overstating assets and failing to disclose
   transfers, thereby hiding the fact that Lawbaugh had misappropriated
   approximately $2 million in corporate funds for his personal use. The
   Complaint also alleges that Lawbaugh stole and willfully converted to
   his own use funds of 1st Atlantic and SBM.

   The Commission's complaint also alleges that Lawbaugh misappropriated
   approximately $1 million from investors by promising to invest their
   money in 1st Atlantic's face-amount certificates. Lawbaugh never
   invested the money, and instead deposited the money into his personal
   accounts.

   The complaint charges the defendant with violating Section 17(a) of
   the Securities Act of 1933, Section 10(b) of the Securities Exchange
   Act of 1934 and Rule 10b-5 thereunder, and Sections 17(e)(1), 34(a),
   34(b) and 37 of the Investment Company Act of 1940.

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Modified 09/30/2003