National Lampoon CEO charged in stock-fraud case
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No joke: The CEO of Los Angeles-based entertainment firm National Lampoon Inc., best known for the comedy and parody films produced under its brand name, was charged today with securities fraud in an alleged scheme to artificially boost the company’s stock price.
Daniel S. Laikin, 46, was named in a criminal case filed by the Justice Department in Philadelphia, and was arrested in L.A. today, prosecutors said. He and the company also were named in a civil suit filed by the Securities and Exchange Commission.
The case is part of a broader crackdown on alleged stock manipulation that led to civil and criminal charges against a total of seven people in three separate schemes, all of which have the same Livingston, N.J. stock promoter -- Eduardo Rodriguez, 49, of Cheetah Consulting Group -- as a central figure.
National Lampoon calls itself ‘the leading brand in comedy,’ but it’s a tiny operation. Most of its $7.4 million in revenue in the fiscal year ended in July came from licensing and publishing fees on previous productions, including the 1978 hit ‘Animal House.’ The company lost $1.7 million in the last fiscal year.
The stock, about 40% of which is owned by Laikin, has mostly languished under $2 a share since 2005 as the company has continued to bleed red ink while searching for a sustainable business strategy.
The government alleges that Laikin, along with a Las Vegas consultant named Dennis Barsky, sought to artificially inflate the price of National Lampoon stock by paying kickbacks to promoters for buying the shares in the market.
The scheme, according to the government: Laikin and Barsky paid at least $68,000 to Rodriguez, another stock promoter named Tim Dougherty and a government informant from March to June of this year to induce the purchase of at least 87,500 shares of National Lampoon.
They wanted to drive the market price up to at least $5 a share to maintain minimum listing standards on the American Stock Exchange (now called the NYSE Alternext market) ‘and to increase National Lampoon’s ability to enter into possible ‘strategic partnerships’ and acquisitions,’ the SEC said.
They set their goals way too high: Despite the arranged stock purchases, the market price of the shares never closed above $2.13 a share in the period, and by late June was at $1.60.
Rodriguez also was charged in the National Lampoon case and was named in two other alleged stock-manipulation cases: One involving Advatech Corp. of West Palm Beach, Fla., and the other a restaurant startup company called SwedishVegas Inc., supposedly based in Arcadia.
The SEC and Justice Department also brought charges against two other stock promoters in the SwedishVegas case: Alex Kanakaris of Newport Beach and Richard Epstein of Parkland, Fla. The SEC suspended trading in SwedishVegas shares in July, when the stock was trading for 3 cents a share.
None of the defendants could be reached for comment. A National Lampoon spokesman declined to comment.
The SEC today suspended trading in National Lampoon. The stock last traded Friday at about 73 cents.
For the Justice Department press release, go here. The SEC cases are here.
-- Tom Petruno