wonder what they'll pay for this ipo
-----------------------------------
Maryland Lifts Ban on IPO for Adult
Web Site
By Mark Leibovich
Washington Post Staff Writer
Friday, March 26, 1999; Page E03
Maryland has lifted an order barring in-state sales of shares
from a tiny Bethesda firm that hopes to be among the first
sexually oriented online services to go public. In a deal struck
earlier this week, Efox.net Inc. agreed not to sell shares during
a 120-day "cooling-off period."
Early this month, Efox filed forms with the U.S. Securities and
Exchange Commission to hold an initial public offering, a step
that the company's 28-year-old founder, Joseph Preston, called
a "history-making event."
But on March 9, Maryland Attorney General J. Joseph Curran
Jr. (D) issued a "stop order" on in-state sale of Efox shares.
Curran charged that Preston had illegally promoted the sale of
Efox shares in statements to the media and on the company's
Web site.
Curran said Efox had engaged in a practice known as
"gun-jumping," the marketing of shares in a public forum
during a pre-IPO "quiet period" that is required by the SEC.
Efox obeyed the stop order by eliminating all information
about its stock offering from the Web site. Efox could have
requested a special hearing before an administrative-law
judge on the stop order but chose not to.
"We felt that a cooling-off period would be a most appropriate
remedy and penalty in this case," said Tim Cox, an assistant
Maryland attorney general in charge of securities registration.
"This will give potential investors time to rethink any potential
investment."
"I sincerely apologize to the Maryland Attorney General and
investors and users of the public markets for any
miscommunication that may have occurred," Preston said in a
prepared statement.
Under the terms of the settlement, Efox neither admitted to
nor denied wrongdoing in the matter.
Efox bills itself as a "men's entertainment destination" that
provides "upscale adult content including the most beautiful
ladies in the world." Preston, whose company has no revenue
and who is Efox's sole full-time employee, pays free-lance
models 500 company shares per photo shoot.
In an interview yesterday, Preston said it will be full speed
ahead on the Efox IPO after the cooling-off period.
"We will still make history," he said. "In 120 days."
© Copyright 1999 The Washington Post Company |
