SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15839 / August 11., 1998
S.E.C. v. Autocorp Equities, Inc. fka Chariot Entertainment,
Inc. et al., Docket No. 2:98CV 05625 (U.S.D.C., D.Ut.)
The Securities and Exchange Commission announced the
filing of a Complaint in the United States District Court
for the District of Utah, on August 10, 1998, seeking a
permanent injunction and other relief against Autocorp
Equities, Inc. fka Chariot Entertainment, Inc., Michael
Carnicle, Robert Cord Beatty, Amotz Frenkel, Hillel Sher and
Nili Frenkel.
The Commission alleges that in 1994 Diamond
Entertainment, Inc., a privately-held company whose sole
asset was the right to stage live performances of the
American Gladiators at a single location adjacent to the
Imperial Palace Hotel in Las Vegas, merged with Eagle
Automotive, Inc., a company listed on NASDAQ which had just
divested itself of all its assets. It is further alleged
that in order to maintain this NASDAQ listing after the
anticipated merger with Eagle and a change of the company's
name to Chariot, Carnicle, Beatty, Amotz Frenkel and Sher
engaged in a scheme to inflate the assets of Diamond by
acquiring $5 million in certificates of deposit ostensibly
issued by a Russian bank but actually created by Sher at a
Kinko's copy shop in Hollywood, Florida. The Complaint
alleges that to finance the acquisition of these
certificates of deposit, Carnicle, Beatty, Amotz Frenkel and
Sher arranged to have Chariot issue stock, ostensibly in
reliance on Regulation S, to a California corporation
controlled by Amotz Frenkel; those shares were then to be
sold after forty days with $1.5 million of the proceeds used
to pay for the certificates of deposit. It is alleged that
actual sales of the stock were made through Nili Frenkel.
It is also alleged that Chariot, Carnicle and Beatty
misrepresented the status of the company's arrangement to
lease a location from the Imperial Palace on which the
American Gladiators performances would be staged. The
Complaint alleges that almost from the time Chariot entered
into a lease with the hotel, it began to violate the terms
of the lease by failing to secure a performance bond and by
failing to meet other lease requirements.
The Complaint alleges the defendants violated Sections
5(a), 5(c) and 17(a) of the Securities Act of 1933 and
Sections 10(b), 13(a) and 13(b) of the Securities Exchange
Act of 1934 and Rules 10b-5, 12b-20, 13a-13, 13b2-1 and
13b2-2 thereunder. |
