Categories: SEC

Toon Goggles Inc., et al.

The Securities and Exchange Commission today charged Toon Goggles Inc., a Los Angeles-based company that offers on-demand entertainment content for children, and its founder, Ira Warkol, for conducting a $19 million illegal securities offering. The SEC also charged Warkol for acting as an unregistered broker-dealer in connection with the offering.

The SEC’s complaint, filed in the U.S. District Court for the Central District of California, alleges that from at least August 2012 through late 2016, Toon Goggles and Warkol raised over $19 million from approximately 400 retail investors. According to the SEC’s complaint, Warkol, acting as an unregistered broker, set up boiler rooms inside Toon Goggles’ offices and hired sales agents to cold-call investors. Warkol allegedly provided the sales agents with scripts to lure investors into purchasing the offered securities. According to the complaint, Toon Goggles also failed to maintain accurate and complete records of its investors, the number of shares sold to each investor, and the amount of money raised from each investor.

The SEC’s complaint charges Toon Goggles and Warkol with violating the securities registration provisions of Sections 5(a) and 5(c) of the Securities Act of 1933, and Warkol with also violating the broker-dealer registration provisions of Section 15(a) of the Securities Exchange Act of 1934. Without admitting or denying the allegations in the complaint, Warkol has consented to the entry of a final judgment permanently enjoining him from violating the charged provisions, ordering disgorgement plus prejudgment interest of $2 million, and imposing an $189,427 penalty. The settlement is subject to court approval. The SEC’s litigation against Toon Goggles will proceed, with the SEC seeking a permanent injunction, disgorgement plus prejudgment interest, and a civil penalty.

In a separate administrative proceeding, the SEC also charged Toon Goggles’ director of operations, Brendan Pollitz, for facilitating broker-dealer registration violations. Pollitz has consented to the entry of a cease-and-desist order, and agreed to pay disgorgement plus prejudgment interest of $34,117, and civil penalties of $9,472.

The SEC’s investigation was conducted by Yolanda Ochoa and Christopher Conte and supervised by Spencer E. Bendell. The SEC’s litigation will be handled by Douglas Miller and Amy Longo.

IR Press

Share
Published by
IR Press

Recent Posts

Treasury Issues Final Rule Expanding CFIUS Coverage of Real Estate Transactions Around More Than 60 Military Installations

WASHINGTON – Today, the U.S. Department of the Treasury (Treasury), as Chair of the Committee…

2 days ago

U.S. Department of the Treasury’s CDFI Fund and Federal Housing Finance Agency Collaborate to Bolster CDFI Access to Capital

WASHINGTON—Today, the U.S. Department of the Treasury’s Community Development Financial Institutions Fund (CDFI Fund) and…

2 days ago

Report on U.S. Portfolio Holdings of Foreign Securities at Year-End 2023

Washington – The findings from the annual survey of U.S. portfolio holdings of foreign securities…

3 days ago

READOUT: U.S. Department of the Treasury Hosts Roundtable Discussion on the Financial Sector’s Response to Recent Hurricanes

WASHINGTON – The U.S. Department of the Treasury hosted a roundtable on October 30 with…

3 days ago

READOUT: Sixth Meeting of the Financial Working Group Between the United States and the People’s Republic of China

WASHINGTON – The United States and the People’s Republic of China held the sixth meeting…

3 days ago

Treasury Sanctions Key Members of La Linea, a Group Involved in Trafficking Fentanyl into the United States

WASHINGTON — Today, the Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned…

3 days ago