UPDATE: National Lampoon CEO, Others, Charged In Fraud Cases
By Dinah Wisenberg Brin
Of DOW JONES NEWSWIRES
PHILADELPHIA -(Dow Jones)- National Lampoon Inc. (NLN) Chief Executive Daniel Laikin and six others were charged Monday with conspiracy and securities fraud related to alleged schemes to artificially inflate the prices of publicly traded stocks, Acting U.S. Attorney Laurie Magid said Monday.
In addition to criminal charges, the defendants also face civil fraud charges filed by the Securities and Exchange Commission. The charges arose from a federal sting operation, so the stocks weren't inflated to the extent the alleged conspirators had hoped, according to Magid.
A federal grand jury indicted Laikin on charges he schemed to manipulate the stock of National Lampoon, which owns interests in the Animal House and Vacation films. Laikin and four other individuals were arrested Monday; two other defendants are to turn themselves in this week, authorities said.
Laikin, 46, of Los Angeles, controlled more than 40% of National Lampoon's stock, Magid said during a press conference. "Obviously he has significant financial incentive to drive up the price of the stock," she said.
Federal authorities accuse Laikin of arranging to pay someone a kickback to drive up the stock's price from $2 to $5. Had that occurred, the value of Laikin's holdings would have increased by $15 million, said Magid.
From March to June of this year, Laikin allegedly conspired with another individual to pay illicit kickbacks in a scheme to drive up National Lampoon's stock price, federal authorities said.
Other individuals were charged in separate schemes to manipulate the over-the- counter shares of Advatech Corp. (ADVA) and Swedish Vegas Inc. (SWDV).
The SEC ordered a suspension of trading in National Lampoon and Advatech stock Monday morning. Such suspensions typically last 10 days before being lifted, an SEC official said at the news conference. Trading in Swedish Vegas shares was suspended in July.
Although none of the defendants lives in Pennsylvania, some acts related to the alleged schemes, such as mailings or the wiring of funds, took place in the state, said Magid.
-By Dinah Wisenberg Brin, Dow Jones Newswires; 215-656-8285; dinah.brin@ dowjones.com
(END) Dow Jones Newswires
12-15-081440ET
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