Good DD from RB :-)
Thursday September 27, 3:41 pm Eastern Time
Brandmakers and its CEO settle SEC charges
(UPDATE: adds SEC lawyer quotes)
WASHINGTON, Sept 27 (Reuters) - Brandmakers Inc. (OTC BB:BMKS.OB - news) and its chief executive have settled charges that they issued false press releases, including one that allegedly said the vending-machine and coin-operated game manufacturer made a laser-like pool cue.
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The Securities and Exchange Commission said on Thursday that Brandmakers, based in Lawrenceville, Georgia, and CEO Geoffrey Williams, 56, agreed to cease and desist from the alleged illegal activity.
They were not fined because ``we felt that a fine was not necessary in order to resolve the case,'' SEC attorney Rich Murphy said.
Williams and Brandmakers' lawyer did not immediately return telephone calls seeking comment. Neither the executive nor the company admitted or denied any wrongdoing in settling the case.
Brandmakers' stock is currently trading for less than a penny on the Bulletin Board, down from a 52-week high of 15 cents.
The SEC claimed that on March 15, 2000, Brandmakers issued a press release claiming it exclusively made Laser Q, a pool cue that projects a red dot on a cue ball to show players where the tip of the cue will strike.
In fact, the SEC said, a company in Taiwan manufactured the product. Brandmakers had not sold any Laser Qs despite its claim in the press release that the entire May shipment was sold out, the agency said.
The press release, which Williams approved, also said Brandmakers had hoped to sell $8 million to $12 million worth of the cues in its fiscal year beginning July 1, 2000, but there was no reasonable basis from which to make that prediction, according to the SEC.
Williams also approved an Aug. 21, 2000, press release announcing that Brandmakers had reached a binding agreement to sell a controlling interest to a public company in exchange for shares in another company.
``Although Brandmakers claimed that the agreement was binding, the public company only signed a letter of intent, not a definitive agreement,'' the regulatory agency said.
Moreover, Brandmakers itself was not a part of the proposed transaction since Williams, his wife, and a third person were to tender their Brandmakers shares to the public company to complete the deal, the SEC alleged.
Williams has been CEO since he founded the company in 1992. He and his wife control 50.8 million shares, or about 41 percent of Brandmakers' stock, according to regulators.
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