The Securities and Exchange Commission has obtained an emergency asset freeze in a California courtroom against a company that raised $3.2 million from investors to fund TV and film post-production work by using the name of a well-known post-production company.
The SEC filed a complaint on Sept. 14 in the U.S. District Court for the Central District of California against Atlanta-based LADP Acquisition, Inc. and its principals, Atlanta residents William A. Goldstein and Marc E. Bercoon. The SEC alleges that LADP Acquisition, Goldstein and Bercoon are perpetrating an ongoing $3.2 million entertainment investment fraud. The court entered an order halting the alleged fraud and freezing the assets of LADP Acquisition, Goldstein and Bercoon.
The SEC charged LADP Acquisition, Goldstein and Bercoon for allegedly misappropriating investor funds in a bait-and-switch scheme. The SEC's complaint alleges that LADP Acquisition, Goldstein and Bercoon misrepresented that investors would be investing in L.A. Digital Post Inc., a legitimate television and film post-production company with offices in Los Angeles and New York.
The SEC's complaint alleges that prospective investors were provided offering materials listing prominent motion picture studios and television networks that had been clients of L.A. Digital and a "client list" setting forth well-known television shows and movies for which L.A. Digital provided post-production services.
In reality, according to the SEC's complaint, investors received worthless certificates representing "shares" in LADP Acquisition, an entity with no business operations. The SEC's complaint further alleges that the defendants represented to potential investors that L.A. Digital is "going public" or going to be the subject of an initial public offering within a short period of time, such as 60 or 90 days, and that its shares would be traded on the American Stock Exchange, or some other public exchange such as the New York Stock Exchange or NASDAQ. However, no public offering of L.A. Digital stock has occurred.
United States District Court Judge R. Gary Klausner issued an order on Sept. 16 freezing the assets of LADP Acquisition, Goldstein and Bercoon. The SEC's complaint alleges that since at least mid-2009 the defendants have raised approximately $3.2 million from more than 100 investors nationwide. The complaint further alleges that, undisclosed to investors, the defendants have misappropriated over $800,000 of the investor funds raised for their own use.
In its lawsuit, the SEC obtained an order freezing the assets of LADP Acquisition, Goldstein and Bercoon; preventing the destruction of documents; requiring an accounting from LADP Acquisition, Goldstein and Bercoon; and temporarily enjoining LADP Acquisition, Goldstein and Bercoon from future violations of the registration and antifraud provisions of the federal securities laws.
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