National Lampoon’s Laikin Named in Stock Fraud StingBloomberg
By Andy Fixmer and David Scheer
December 15, 2008
Dec. 15 (Bloomberg) -- National Lampoon Inc. Chief Executive Officer Daniel Laikin and six others were charged with stock manipulation as part of a federal crackdown.
Laikin, 46, conspired to pay kickbacks to a stock promoter to boost shares of National Lampoon, the Los Angeles-based media company, according to allegations in an indictment filed by acting U.S. Attorney Laurie Magid in Philadelphia.
Prosecutors allege payments were made by Laikin and the others in four separate schemes to a witness cooperating with the Federal Bureau of Investigation. Laikin faces as many as 25 years, Magid said in a statement.
“When this kind of activity happens, the integrity and credibility of the stock market is undermined,” Magid said today in an interview. “When deception and manipulation are the instruments by which unscrupulous investors extract their fortunes, we all lose.”
The Securities and Exchange Commission also sued Laikin and National Lampoon, maker of the “Vacation” movies starring Chevy Chase and the 1978 fraternity comedy “Animal House.” The SEC asked for an order barring the company and CEO from misconduct. It is also seeking an unspecified fine against Laikin.
The New York Stock Exchange suspended trading of National Lampoon. The shares, down 70 percent this year, last traded on Dec. 12 at 73 cents.
National Lampoon spokeswoman Marcy Goot, who learned of the SEC action from a Bloomberg reporter, declined to comment. Laikin wasn’t in the office at 1 p.m. New York time, she said.
Laikin conspired from March to June with Dennis Barsky, listed on company filings as a consultant, to pay people including the informant to inflate the share price, Magid said in the statement.
Also charged in the National Lampoon case were Eduardo Rodriguez of Livingston, New Jersey, and Tim Dougherty of Webster, New York.
The National Lampoon CEO shared confidential financial information, non-public news releases, and confidential shareholder lists, and coordinated the release of news with the illegal purchases in the stock, the prosecutor said. Barsky helped direct the purchases and facilitated the kickback payments, Magid said.
“There are rules that govern how stocks are bought and sold,” Magid said. “There are rules about the disclosing and releasing of information. There are rules about manipulating stock. But in this case, in these schemes, to borrow a line from ‘Animal House,’ ‘the rules lost.’”
Rodriguez faces as many as 80 years in prison if convicted on all charges. The others face up to 25 years, the prosecutors said.
-- With reporting by Christopher Yasiejko in Philadelphia. Editor: Gregory Mott, Anthony Palazzo
To contact the reporter on this story: David Scheer in New York at firstname.lastname@example.org; Andy Fixmer in Los Angeles at email@example.com.
Last Updated: December 15, 2008 18:50 EST