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Hollywood Film Producer Agrees to Settle Multi-Million Dollar Offering Fraud Charges

March 12, 2019

File No. 3-19103

March 12, 2019 - A Los Angeles-based film producer has agreed to pay almost $500,000 to settle fraud charges by the Securities and Exchange Commission for his role in two offering frauds in which he and another individual raised over $6 million from investors.

According to the SEC's order, Kiarash "Kia" Jam and convicted fraudster David R. Bergstein raised approximately $5.6 million from eleven investors between approximately September 2012 and March 2013. The purported purpose of the offering was to take private the publicly-traded auction site Inc. Jam lied about the amounts raised, the number of shares for sale, and the timing of the acquisition of Bidz. Jam also stole $205,443 of investors' proceeds, using the majority of the stolen funds to pay for, among other things, expensive meals out, alcohol, and travel and entertainment.

Jam and Bergstein undertook a second offering fraud from approximately December 2012 through March 2014, when Jam solicited approximately $580,000 from six investors for the stated purpose of spinning off a separate business unit of Bidz. Jam again lied to investors about the amounts raised, the number of shares for sale, and that a large, well-established, broker-dealer would underwrite the transaction. Jam stole $154,400 in investors' proceeds, using the money to pay his office rent, insurance, car expenses, and gym membership, among other things.

The SEC uncovered Jam's frauds during its initial investigation into Bergstein's conduct, which resulted in the SEC filing fraud charges against Bergstein in November 2016. Bergstein was indicted for that same conduct, convicted, and sentenced on June 27, 2018 to an eight-year prison sentence. Bergstein settled the SEC's related charges.

The SEC ordered, and Jam agreed, to: (1) cease and desist from committing or causing violations of Sections 5(a), 5(c), and 17(a) of the Securities Act of 1933 and Sections 10(b) and 15(a) of the Exchange Act of 1934 and Rules 10b-5(a), (b), and (c) thereunder; (2) imposing associational, investment company, and penny stock bars; (3) pay disgorgement and prejudgment interest of $205,443.00 and $86,278.75, respectively; and (4) pay a $185,000 civil penalty.

The SEC's investigation was conducted by John O. Enright, Joseph P. Ceglio, Christopher Ferrante, and Sheldon L. Pollock, and the case was supervised by Lara Shalov Mehraban. The SEC appreciates the assistance of the U.S. Attorney's Office for the Southern District of New York, the Federal Bureau of Investigation and the Internal Revenue Service.


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