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SEC CHARGES PENNY STOCK COMPANY AND CANADIAN CITIZEN WITH ILLEGAL STOCK DISTRIBUTION THROUGH CORPORATE SPINOFFS
SEC CHARGES PENNY STOCK COMPANY AND CANADIAN CITIZEN WITH ILLEGAL STOCK DISTRIBUTION THROUGH CORPORATE SPINOFFS.
About this update from Blackout Media Corporation
[{"type":"text","content":"U.S. SECURITIES AND EXCHANGE COMMISSIONLitigation Release No. 21083 / June 12, 2009Accounting and Auditing Enforcement Release No. 2990 / June 12, 2009Securities and Exchange Commission v. Blackout Media Corporation and Sandy Winick, United States District Court for the Southern District of New York, Civil Action No. 09 CV 5454 (GBD)SEC CHARGES PENNY STOCK COMPANY AND CANADIAN CITIZEN WITH ILLEGAL STOCK DISTRIBUTION THROUGH CORPORATE SPINOFFSThe Securities and Exchange Commission today filed a complaint in the United States District Court for the Southern District of New York against penny stock company Blackout Media Corporation, formerly known as First Canadian American Holding Corporation (\"First Canadian\"), and its former principal Sandy Winick, a resident of Toronto, Canada. The SEC alleges that First Canadian and Winick engaged in a scheme to create publicly traded companies through illegal distribution of the securities of more than 50 First Canadian subsidiaries.The SEC's complaint alleges that from April 2002 to May 2004, First Canadian spun off 59 subsidiaries through unregistered distribution of their securities to shareholders. As alleged in the complaint, these spinoffs had no legitimate business purpose and were instead a means to create publicly traded companies without providing the disclosure required by registration. According to the complaint, while conducting the spinoffs, First Canadian never filed periodic reports with the Commission, and made no meaningful disclosure about the financial and business operations of First Canadian or any of the subsidiaries. The complaint alleges that while First Canadian \"reported\" the spinoffs on Forms 8-K and proxy statements on Schedule 14A, these filings failed to disclose the true nature of the spinoff transactions and that Winick had control over 16.5% of First Canadian's stock through his wife, his friends, and affiliated entities.The complaint further alleges that, as a result of the spinoffs, Winick assembled an inventory of public company shells for sale and later sold many of them. In addition, the complaint alleges that Winick traded in the shares of some of these companies and profited by at least $3.2 million from 2004 through 2007.The SEC's complaint charges Blackout Media and Winick with violating Sections 5(a) and 5(c) of the Securities Act of 1933 and S...