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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
INVESTORS THURMAN SECURITIES FIENE OFFERING FRAUD COMPLAINT INTERNET COMPLAINT ALLEGES SOUTHERN DISTRICT OFFERING MATERIALS EXCHANGE COMMISSION DEFENDANTS UNITED STATES FLORIDA PURPORTS SUBSCRIBERS INVESTOR FUNDS TBN EXCESS PROFESSIONAL BACKGROUND INVESTOR ALERT AFFINITY FRAUD SALE CUSTOMER BASE BUSINESS PLAN AFFILIATION STATING PROSPECTUS |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16930 / March 9, 2001
SEC SUES INTERNET COMPANY AND TWO OFFICERS FOR OFFERING FRAUD
TARGETING FUNDAMENTALIST CHRISTIANS. U.S. ATTORNEY'S OFFICE
SIMULTANEOUSLY UNSEALS INDICTMENTS AGAINST THE TWO OFFICERS FOR
SECURITIES FRAUD.
SECURITIES AND EXCHANGE COMMISSION V. FAMILIES ON LINE CORPORATION,
MARK C. THURMAN, AND ROBERT D. FIENE, Case No. 01-6369-CIV-LENARD
(S.D. Fla., filed March 9, 2001)
The Securities and Exchange Commission (SEC) announced that on March
9, 2001, it filed a complaint against a company and two individual
defendants for allegedly fraudulently raising $3.9 million in an
unregistered securities offering. The SEC's complaint alleges that
Families On Line Corp. (FOL), Mark Thurman, and Robert Fiene conducted
an affinity fraud designed to raise money from fundamentalist
Christian investors. Along with its complaint, the SEC sought and
obtained an asset freeze against FOL, Thurman, and Fiene. At the same
time, the United States Attorney's Office for the Southern District of
Florida announced that it had indicted the two individuals sued by the
SEC for securities fraud and other criminal conduct.
According to the SEC's complaint, FOL is a Ft. Lauderdale, Florida
based company that purports to offer subscribers "filtered" access to
the Internet. FOL claims that its subscribers receive access to the
Internet in a manner that filters out content involving, among other
things, sexual or violent material or gambling. FOL, through Thurman
and Fiene, raised $3.9 million from approximately 410 investors during
the period from about July 1999 through December 2000, through
unregistered sales of FOL stock and warrants. During that period,
Thurman was FOL's Chief Executive Officer and Fiene was the company's
Chief Operating Officer. Both Thurman and Fiene reside in Ft.
Lauderdale.
The SEC's complaint alleges that the defendants used false and
misleading information in FOL's private placement memoranda and on
FOL's Internet web site to raise investor funds. Among other things,
the SEC's complaint alleges that
* FOL falsely claimed that it was affiliated with the Trinity
Broadcasting Network (TBN) and provided investors with a purported
letter from the President of TBN stating that TBN was committed to
helping FOL build its customer base and had over 322,000 "signed
requests" by people willing to switch to FOL. In fact, FOL had no
affiliation with TBN and the letter was a forgery.
* FOL distributed a prospectus and business plan to prospective
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