Brian Lee and Todd DiRoberto, et al.

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 20242 / August 14, 2007

SEC v. Brian Lee and Todd DiRoberto, et al., Civil Action No. 03-CV-1957-JAH(CAB) (S.D. Cal.)

The Securities and Exchange Commission announced that on August 8, 2007, the United States District Court for the Southern District of California entered final judgments against Defendants Todd DiRoberto and Brian Lee, based on their consents.

DiRoberto, without admitting or denying the allegations of the complaint, consented to a final judgment which permanently enjoins him from violating, directly or indirectly, the securities laws, including Sections 10(b) (and Rule 10b-5 thereunder) and 15(a) of the Securities Exchange Act of 1934 ("Exchange Act"), and Sections 5 and 17(a) of the Securities Act of 1933 ("Securities Act"). The judgment also bars DiRoberto from acting as an officer or director of a public company and from participating in an offering of penny stock. Further, the judgment requires DiRoberto to pay disgorgement of $94,000, pre-judgment interest of $41,348 and a civil penalty of $30,000, for a total of $165,348.

Lee, without admitting or denying the allegations of the complaint, consented to a final judgment which permanently enjoins him from violating, directly or indirectly, the securities laws, including Exchange Act Sections 10(b) (and Rule 10b-5 thereunder) and 15(a), and Securities Act Sections 5 and 17(a). The judgment also bars Lee from acting as an officer or director of a public company and from participating in an offering of penny stock. Further, the judgment requires Lee to pay disgorgement of $66,524, pre-judgment interest of 29,262 and a civil penalty of $25,000, for a total of $120,786.

In the complaint, the Commission alleged that between November 1998 and March 2000, DiRoberto and Lee, with others, raised more than $5 million from a private placement offering in the stock of Zandria Entertainment Networks, Inc. The complaint also alleged that Lee participated in a private placement offering involving the stock of Level Red Investments, Inc. The complaint alleged that the private offerings violated the securities laws because, among other things, the offering materials failed to accurately disclose commissions and sales fees paid to the individuals selling stock to investors. The complaint further alleged that the securities sold to investors were unregistered and not exempt from registration.