The complaint states that Mr. Pixler and Mr. Huff used their control over a Certified controlling shareholder, Midwest Merger Management, LLC, to "improperly divert money out of Certified's coffers and into their own pockets by having Midwest enter into bogus agreements with Certified."

It also notes that Mr. Huff had his insurance license revoked in Kentucky in 1998 in connection with a $113,000 insurance premium theft. In 2004, he pled guilty to three counts of mail fraud in federal court in connection with a "multimillion-dollar fraud," and he paid $180,000 in restitution.

The SEC said it is seeking permanent injunctive relief against all defendants, and disgorgement and a court-ordered sworn accounting from all defendants except Mr. McCartha and Mr. Spinelli.

Christopher Martin, senior trial counsel at the SEC, said that Mr. Spinelli and Mr. McCartha had settled monetary penalties as part of a separate criminal case. Additionally, as part of that ruling, Mr. Spinelli and Mr. McCartha will serve 21 and 24 months, respectively, in prison.

"With the criminal action, they are going to jail and there are sizable restitution orders against them," said Mr. Martin.

He noted that the civil proceedings will include Mr. Spinelli and Mr. McCartha in the nonmonetary actions against the defendants, such as an officer and director bar, and an order barring the defendants from participating in any offering of a penny stock.

The charges were filed on March 6, and Mr. Martin said the defendants will have to answer the complaint within approximately 20 days.

"Their answers are due approximately 20 days from now, so they would have to answer the complaint, or file a motion to dismiss, or if they didn't, we would move to default. It's just the normal litigation on the civil side. There's no deadline or court date right now, but the general rule of thumb is they have about 20 days to answer the complaint," Mr. Martin said.