SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17393 / MARCH 5, 2002
SECURITIES AND EXCHANGE COMMISSION v. MAKE IT REEL PRODUCTIONS, INC., JOSEPH RUBBO, and PETER D. RAGOFSKY, 02 CV 60255 (S.D. Fla.) (WDF)
The Securities and Exchange Commission announced that on March 4, 2002, Defendants Make It Reel Productions, Inc. ("MIR"), Joseph Rubbo ("Rubbo"), and Peter D. Ragofsky ("Ragofksy") consented to preliminary injunctions against future violations of the antifraud and registration provisions of the federal securities laws. MIR, Rubbo, and Ragofsky consented to the preliminary injunctions without admitting or denying the allegations in the Commission's complaint. The preliminary injunction orders also continue an asset freeze that had been issued previously against MIR.
In its Complaint, filed on February 21, 2002, the Commission alleges as follows: From at least June 2001 through the date of the Complaint, the Defendants conducted a fraudulent unregistered $90 million offering of MIR securities over the Internet. In connection with this offering, MIR and Rubbo maintained an Internet web-site that solicited investors to purchase shares of "Class A Preferred Stock" in MIR. MIR's web-site contained numerous false statements concerning, among other things, MIR's rights to a movie project entitled "New Horizons" purportedly starring Tom Cruise and Catherine Zeta-Jones. In fact, MIR never had any rights to "New Horizons" and neither Tom Cruise or Catherine Zeta-Jones had made any commitments to the "New Horizons" project. MIR's web-site also directed investors to salespersons who solicited them to purchase securities in MIR. One such salesperson, Ragofksy, made baseless predictions about the potential returns that investors would receive from MIR and touted his "Wall Street" experience without disclosing that he had been barred from the brokerage industry by the NASD.
The Commission's complaint charges the Defendants with violations of Sections 5(c) and 17(a) of the Securities Act of 1933, Section 10(b) of the Securities Exchange Act of 1934, and Rule 10b-5 thereunder. The Commission's complaint also seeks permanent injunctions prohibiting future violations of the securities laws, disgorgement, and civil penalties. On February 21, 2002, the Commission obtained emergency relief, which included an order temporarily restraining the Defendants from violating the provisions of the federal securities laws described above. (See Litigation Release No. 17371).