SECURITIES AND EXCHANGE COMMISSION
LITIGATION RELEASE NO. 17371 / FEBRUARY 21, 2002
SECURITIES AND EXCHANGE COMMISSION v. MAKE IT REEL PRODUCTIONS, INC., JOSEPH RUBBO, and PETER D. RAGOFSKY, 02 CV 60255 (WDF) (S.D. Fla.) (February 21, 2002)
The Securities and Exchange Commission announced today that it filed a complaint and obtained a temporary restraining order in the federal District Court for the Southern District of Florida against: Make It Reel Productions, Inc. ("MIR"), a purported independent film production company based in Fort Lauderdale, Florida; Joseph Rubbo ("Rubbo"), MIR's Chairman and CEO; and Peter D. Ragofsky ("Ragofksy"), a salesperson who touted investments in MIR.
The Commission's Complaint alleges that from at least June 2001 through the present, the Defendants have been conducting a fraudulent unregistered $90 million offering of MIR securities over the Internet. The complaint alleges that MIR and Rubbo maintained an Internet web-site at www.makeitreelproductions.com, which solicited investors to purchase shares of "Class A Preferred Stock" in MIR. The complaint alleges that the Offering Memorandum 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 addition, the complaint alleges the following:
- The Offering Memorandum falsely states that MIR has entered into an agreement with Tarantino Productions (a production company owned by Tony Tarantino, father of celebrity director Quentin Tarantino) that entitles it to 50% of the profits from the "New Horizons" project. The Offering Memorandum and other portions of MIR's web-site also state that, in addition to starring Tom Cruise and Catherine Zeta-Jones, New Horizons has a "target cast" that includes Al Pacino and Paul Newman. In fact, Tarantino Productions never entered into any agreements with MIR and none of these actors has been formally approached about New Horizons.
- MIR's web-site directs investors to salespersons who solicit them to purchase securities in MIR. One such salesperson, defendant Ragofsky, was contacted by an undercover agent from the Ohio Attorney General's office, posing as an interested investor, in early February 2002. During recorded telephone conversations, Ragofsky made several false and misleading statements in an attempt to convince the agent to purchase MIR shares. Ragofsky made baseless predictions that an investment in MIR would yield returns of 500% in a period of six months, and touted his years of "Wall Street" experience without disclosing the fact that has been barred from the brokerage industry by the NASD.
The Commission's complaint charges all of the defendants with violations of the antifraud and registration provisions of the federal securities laws, specifically 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 obtained a temporary restraining order against the Defendants and an asset freeze against MIR. The Commission's complaint also seeks permanent injunctions prohibiting future violations of the securities laws, disgorgement, and civil penalties. The Commission acknowledges the assistance of the Ohio Attorney General's Office in connection with this matter.