U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 19795 / August 8, 2006

SEC v. Peter D. Kirschner and Media Magic, Inc., U.S. District Court for the District of Columbia, Civil Action No. 06-1403RMU, filed August 8, 2006

SEC Sues Consultant Peter Kirschner for Fraudulent Sales of Prematurely Issued Stock Dividend Shares

The Securities and Exchange Commission announced today that it charged consultant Peter D. Kirschner with fraudulently procuring stock dividend shares in advance of the date on which they were to be publicly distributed and selling those shares into an uninformed market at prices that did not yet reflect the increase in the total number of outstanding shares. In addition, the Commission charged Kirschner and Media Magic, Inc., formerly GLUV Corp., with offering and selling these shares in violation of the registration provisions of the federal securities laws.

The Commission's complaint, filed in the United States District Court for the District of Columbia, alleges that Kirschner arranged for GLUV's transfer agent to prematurely issue him 3,000,000 dividend shares in advance of the time at which dividend shares were to be distributed to GLUV's other shareholders. There was no publicly available information indicating that Kirschner's dividend shares had been issued in advance of the payment date. Kirschner sold 19,500 of these prematurely issued shares into the uninformed market at prices ranging from $5.50 to $7.95 per share, realizing net proceeds of $109,400. Had Kirschner sold the same quantity of shares hours later, he would have realized gross proceeds of less than $20, as these shares were then trading at less than a penny, reflecting the adjustment by the market to the issuance the stock dividend.

Specifically, the Commission charged Kirschner with violating Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 ("Securities Act") and Section 10(b) of the Securities Exchange Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder, and charged Media Magic with violating Sections 5(a) and 5(c) of the Securities Act. Without admitting or denying the Commission's allegations, Kirschner consented to the entry of an order permanently enjoining him from violating the registration and antifraud provisions of the federal securities laws. Kirschner also consented to disgorge $109,400 in ill-gotten gains, plus prejudgment interest, and pay a $55,000 civil penalty. In a related Administrative Proceeding, Kirschner consented to the entry of an order barring him from association with any broker or dealer with the right to reapply for association after five years to the appropriate self-regulatory organization. Media Magic, without admitting or denying the Commission's allegations, consented to the entry of an order permanently enjoining it from violating the registration provisions of the federal securities laws, and will pay a $55,000 civil penalty.

SEC Complaint in this matter