National Lampoon Inc. executives and consultants, including Chief Executive Daniel Laikin, were charged Monday by the Securities and Exchange Commission and federal investigators in connection with an alleged stock manipulation scheme.
The SEC alleges that Laikin and a company consultant paid kickbacks of around $68,000 for the purchase of shares of the West Hollywood comedy media company in order to inflate the stock price. Two outside stock promoters also were charged.
The U.S. Attorney for the Eastern District of Pennsylvania has filed a separate criminal complaint following an FBI investigation of the same allegations. Laikin was arrested Monday in Los Angelels and released after posting a $50,000 bond.
The complaints allege that from March through June of this year, Laikin and Dennis Barsky, a consultant and a large stockholder, paid kickbacks to stock promoters and a witness in Philadelphia who was cooperating in a federal sting operation.
The conspirators allegedly were engaged in a “1-for-6” deal, in which the stock promoters would get paid one-sixth of the dollar amount of shares they convinced someone to buy. The purchases were made over a number of days and designed to give the impression of a steady demand for the stock, the complaint said.
Laikin and his wife Judy directly hold more than 18 percent of National Lampoon according to most recent SEC filings, but prosecutors say Laikin had controlled as much as 40 percent of shares.
National Lampoon shares, listed at 73 cents before the SEC suspended trading on Monday, are down 67 percent from the first of the year and the company is facing delisting from the American Stock Exchange.
A National Lampoon spokeswoman did not return calls for comment on Monday. The company, wihch holds rights to the “Animal House” and Chevy Chase “Vacation” movie franchises, reported in its most recent fiscal year a $1.7 million net loss on $7.4 million in revenue, mostly from licensing fees.
The SEC said Laikin and others wanted to push National Lampoon’s stock price to at least $5 per share, to keep the price above the minimum listing requirements of the AMEX, and to put the company in a better position to enter into strategic partnerships and acquisitions.
If convicted of all charges in the federal criminal case, Laikin, Barsky, and other defendants could face up to 25 years in prison.
One of the stock promoters to which Laikin allegedly paid kick-backs, New Jersey-based Eduardo Rodriguez, was charged not only in the Lampoon case but in manipulating stock of two other small companies.
One of the companies named is an restaurant start-up called SwedishVegas Inc., whose shares are listed at 1 cent on the Pink Sheets. Prosecutors say the company is based in Arcadia, but recent news releases from the company use a Las Vegas dateline. Company representatives could not be reached for comment.
