A California movie production company was sanctioned by the Colorado Division of Securities after violating the state’s security regulations provisions.
Poker Junkies Productions, Abundance Entertainment and their principal manager John Hermansen of Los Angeles were all given a cease-and-desist order from Securities Commissioner Fred Joseph.
The staff alleges that the company cold-called Colorado investors to invest in the production of a movie to be called Poker Junkies. According to the staff, the company told potential investors that it was raising $15 million to fund the production. Investors were given materials that promised 110 percent of their initial investment from the first 80 percent of the proceeds. One investor was told that if he bought in, he would go to the premiere, have dinner and “sit next to Gene Hackman.”
The problem arose from the company’s failure to register the offering.
“Cold calling investors for private offerings of securities is a violation of the law when those securities have not been registered,” Joseph said. “Investors should always be wary of stock offerings promoted through the use of cold calling.”
The company agreed to permanently stop offering or selling unregistered securities in Colorado.