Monday November 1, 6:29 pm Eastern Time
SEC gets injunction against Yes Entertainment
By Jeremy Pelofsky
WASHINGTON, Nov 1 (Reuters) - The Securities and Exchange Commission said on Monday it had won an emergency
injunction against Yes Entertainment LLC, two related entities and two of its employees to halt the alleged sale of unregistered
securities in the company.
The regulator accused Ronald Mulhall, president and chief executive of Yes Entertainment Network Inc., Eugene Carriere and entities they control of raising $8.8
million from more than 600 investors in a scheme for Yes Entertainment, which operates Internet-based channels.
The two allegedly directed sales agents to tell potential investors that the funds raised would be used to finance and operate a series of channels through which
Nevada-based Yes Entertainment would receive substantial advertising revenue, according to the SEC complaint.
The SEC charged that the defendants diverted 'substantial sums for personal use and have wired almost $3.2 million to Hong Kong.'
The injunction ordered the defendants, including Yes Entertainment LLC, Yes Entertainment Network LLC, Yes Entertainment Inc., Mulhall and Carriere, to cease
their activities and placed a 10-day freeze on their assets pending a hearing to determine the extent of their alleged conduct.
The SEC said Mulhall and Carriere were allegedly selling the unregistered securities of Yes Entertainment through at least two so-called 'boiler rooms' of sales
agents, one in Beverly Hills, Calif. called the Satellite Capital Group and one in Lake View Terrance, Calif. called the Amherst Group.
They allegedly provided potential investors with misleading information, including that sales commissions on investor funds were 12 percent when in reality the boiler
room owners, managers and sales representatives received commissions amounting to 45 percent of the funds raised, the SEC said.
Additionally, the agency accused the defendants of falsely suggesting to potential investors that Yes Entertainment had received potential buyout offers from
interested third parties, including Intel Corp. (NasdaqNM:INTC - news).
Plus, Mulhall described himself as a 'highly successful lawyer' when, in reality, he has been disbarred by the State Bar of California for misappropriating client
funds, the SEC said.
Attempts to reach the company and the defendants for comment were unsuccessful.
The SEC complaint was filed in the U.S. District Court for the Central District of California on Oct. 28 although wasn't unsealed until Oct. 29 in order to avoid
tipping off the defendants before the Federal Bureau of Investigation and U.S. Postal Inspectors could execute search warrants. |
