Ex-N.Y. Gov. Paterson, exec fined by U.S. securities regulators (updated)
23/09/2016 22:43
(Recasts headline; adds comments from attorneys)
By Sarah N. Lynch and Suzanne Barlyn
WASHINGTON, Sept 23 (Reuters) - Former New York Governor
David Paterson and entertainment industry executive Charles
Koppelman were charged by U.S. regulators on Friday for failing
to report in a timely manner their stock trades in a startup
film company that is now at the heart of an alleged fraud
scheme.
The U.S. Securities and Exchange Commission said that
Paterson and Koppelman, who were directors of Moon River Studios
MDNT.PK , each agreed to pay a $25,000 penalty to settle the
case without admitting or denying the charges.
The SEC separately charged a third director, former New York
Republican Party Finance Committee Chairman Matthew T. Mellon
II, for failing to file timely reports on his stock trades.
Mellon plans to litigate the case in the SEC's in-house court.
"Matt Mellon was an outside director who resigned in protest
over what was happening at the company," said his attorney
Edward Little. "We are disappointed that the SEC would pursue
such a ridiculous claim."
Michael Ference, an attorney for Paterson and Koppelman,
said his clients never sold a share of company stock and were
not complicit in any wrongdoing. "They're happy to have it
behind them," he added.
The SEC said the three directors were not participants in
the alleged fraud at Moon River Studios.
The regulator alleges that the former CEO, Manu Kumaran, and
his successor Jake Shapiro, misled investors by claiming the
company was constructing its touted "Studioplex" - a project
that never materialized and was shuttered without producing a
single film.
The SEC also charged Kumaran, Shapiro and Roger Miguel, the
CEO of a separate successor public company called Fonu2
FONU.PK which the SEC said operated under the name Moon River
Studios, with backdating and falsifying promissory notes.
Miguel has settled the case and will be barred from serving
as a public company director for five years. Kumaran and Shapiro
will litigate the case in court.
Shapiro's attorney declined to comment on the case.
Attorneys for Miguel and Kumaran were not immediately available
for comment.
(Reporting by Sarah N. Lynch, additional reporting by Suzanne
Barlyn in New York, editing by Alan Crosby, G Crosse)
((sarah.n.lynch@thomsonreuters.com; +1-202-354-5831))
Keywords: SEC MOVIE/FRAUD