SEC Obtains Final Monetary Judgment Against Giga Entertainment Media's Former De Facto CEO
Litigation Release No. 24835 / June 11, 2020
Securities and Exchange Commission v. Giga Entertainment Media Inc. et al., Civil Action No. 1:18-cv-06511 (E.D.N.Y., filed November 15, 2018)
On June 2, 2020, the U.S. District Court for the Eastern District of New York entered a final judgment as to monetary relief against the former de facto CEO of Giga Entertainment Media, Inc., Gary S. Nerlinger, whom the SEC previously charged in connection with a scheme to mislead investors.
According to the SEC's complaint, filed November 15, 2018, between February and August 2016, Giga Entertainment paid outside marketing firms to enhance the profile of the company's mobile app by downloading it from an online vendor. The complaint alleges that when the company stopped paying for downloads in August 2016, Nerlinger falsely told shareholders that the number of downloads continued to grow at the same rate. Further, Nerlinger, who had previously been convicted of mail fraud, allegedly lied and falsified documents to conceal his role with Giga from investors.
When the SEC filed its complaint, all defendants agreed to full or partial settlements. The settlements with Nerlinger and Giga's Treasurer, Lawrence Silver, did not specify the amounts of any monetary remedies against them, which were left to be determined by the court. The court entered a final judgment as to monetary relief against Silver on September 17, 2019, ordering him to pay a penalty of $184,767. The court's final judgment against Nerlinger orders him to pay a penalty of $739,068 and to disgorge $239,807 plus prejudgment interest of $57,710. The final judgment against Nerlinger concludes this litigation.
The SEC's investigation was conducted by Christopher R. Mathews and Edward B. Gerard and supervised by J. Lee Buck, II. Kenneth W. Donnelly served as the trial attorney.