SEC Obtains Final Judgments Against Daniel Adams, Michael Flanders, Spiderworx Media LLC, and An L.A. Minute LLC
On June 16, 2020, the Securities and Exchange Commission (the “SEC”) has obtained final judgments against movie director and convicted felon Daniel Adams, music producer Michael Flanders, and companies under their control for defrauding two investors in connection with financing the movie entitled An L.A. Minute.
The SEC’s complaint, filed on February 26, 2019, alleges that in 2016, Adams and Flanders induced the two individuals to invest $160,000 through two companies, Spiderworx Media LLC and An L.A. Minute LLC, using fabricated documents and misrepresentations. For example, according to the complaint, Flanders sent one investor, who said he would invest only if $200,000 was raised elsewhere, a fictitious wire transfer confirmation and signature page forged by Adams to create the false appearance that the funds had been raised. The complaint alleges that Adams and Flanders personally received $29,000 and $10,000, respectively, from the resulting investment.
The final judgment against Adams, entered December 2, 2019, enjoins him from violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule l0b-5(b) thereunder; enjoins him from participating in the issuance, purchase, offer, or sale of any security in an unregistered offering; and orders him to pay disgorgement of $50,562 plus prejudgment interest of $7,087.99 and a $50,562 civil penalty.
The final judgment against Flanders, entered May 26, 2020, enjoins him from violating the same antifraud provisions, and orders him to pay disgorgement of $28,500 plus prejudgment interest of $4,354.20 and a $28,500 civil penalty.
The final judgments against Spiderworx Media LLC and An L.A. Minute LLC, entered February 27, 2020, enjoin them from violating the same antifraud provisions, and order them to pay civil penalties in the amounts of $60,000 and $100,000, respectively.
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