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Regulators have charged the company and its CEO with stock manipulation through a kickback scheme.
The SEC claims that from at least March of this year through June, CEO Daniel Laiken paid kickbacks to people in exchange for pushing share purchases.
They allegedly worked in a "1-for-6" deal, meaning crooked stock promoters would get paid one-sixth of the dollar amount of shares they convinced someone to buy. For example, organize the purchase of $50,000 in NLN [NLN
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] stock, get $8,333 in your pocket.
The SEC says the company wanted to create "the appearance of an active and liquid market," inducing others to buy the stock and push its price higher. "National Lampoon's financial health was not good," the complaint reads, also claiming the coordinated press announcements with the manipulated stock purchases to "induce trading momentum in the stock."
All this helped push the stock price above $2 and allowed shares to remain listed on the American Stock Exchange. The SEC identifies one of the alleged crooked stock promoters as Eduardo Rodriguez of Cheetah Consulting Group (is "cheetah" slang for "cheater"?). He, in turn, allegedly recruited another stock promoter named Tim Dougherty of OTC Advisors, who was later criticized for not delivering enough share purchases. "I bought the sh-- out of NLN for what I was paid for" the SEC claims Dougherty wrote in an email. Once again, the email, people. Why not just leave a smoking gun on the table?
Both men were indicted along with National Lampoon's 46-year-old CEO. Daniel Laiken has been running the company since 2005, and before that he was COO.
The alleged scheme began to fall apart after Laikin pushed to expand it, and they eventually contacted a "promoter" who was actually working with the FBI.
Perhaps most distressing to shareholders, the complaint alleges that CEO Laikin told the FBI "cooperating witness" that one reason he wanted to pump up the price of the stock was to get a better deal if the company was acquired. Laikin allegedly claimed he had turned down offers to be acquired "by every major media company" because the stock price wasn't high enough to get him a good deal.
Now, of course, there may never be any deal. Shares have suspended trading, and who knows what will happen to the company.
By the way, today's news comes only days after the company started its first e-commerce venture, called JerkAss Clothing. Talk about an Animal House.
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