UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16721 / September 22, 2000
Securities and Exchange Commission v. Royal Pictures, Inc., David Olinsky, and Robert Brent, Civil Action No. 00-3557-CIV-HUCK (S.D. Florida, filed September 22, 2000)
The Securities and Exchange Commission ("Commission") announced today that it filed a federal civil action against Royal Pictures Inc. ("Royal"), a New York corporation headquartered in North Miami Beach, Florida, David Olinsky ("Olinsky"), its former CEO, Robert Brent ("Brent") and its former special advisor to the Board of Directors, for securities fraud. Royal is purportedly in the business of developing and producing motion pictures.
Simultaneous with the filing of the Commission's Complaint ("Complaint"), Royal, Olinsky and Brent consented, without admitting or denying the allegations in the Complaint, to the entry of a Final Judgment enjoining them from future violations of Section 10(b) of the Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. In addition, Brent consented to the entry of a permanent bar prohibiting him from acting as an officer or director of a public company. Further, Olinsky and Brent consented to each pay a $10,000 civil penalty.
The Complaint alleges that from approximately August 1998 through June 1999, Royal at the direction of Olinsky and Brent, made false and misleading statements in press releases, in an investor brochure, and on the company's website. Specifically, the Complaint alleges that Royal made false and misleading statements concerning final negotiations that the Company purportedly had with various well-known actors and actresses for parts in Royal-produced films. For example, according to the Complaint, Royal falsely stated that it was in final negotiations with well-known artists such as Paul Newman, Alec Baldwin and Isabella Rossellini, among many others.
In addition, the Complaint alleges that Royal made false claims it was backed by $24 million in film financing with an established film financing company when in fact, Royal had only raised $5 million and the established film financing company was a one-man company that had previously only financed one film. Finally, the Complaint alleges that Royal misrepresented and omitted material information concerning Brent's background and experience in a investor brochure distributed to investors during a road show. For example, the Commission alleges that the brochure failed to disclose that Brent is a twice-convicted felon.