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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
COMPLAINT INVESTORS FRANKEL COMPLAINT ALLEGES INFOMERCIALS ACT EXCHANGE VIOLATIONS BROADCAST PROMOTERS EXCHANGE COMMISSION CIVIL PENALTY OFFERED SECURITIES WCT SMR PURCHASE FILING DISTRICT CALIFORNIA ANTIFRAUD SECURITIES REGISTRATION PROVISIONS FEDERAL SECURITIES LAWS THEREUNDER CONDUCTING PROSPECTIVE INVESTORS TOLL-FREE ARRANGEMENTS CLIENTS |
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 14820 / February 22, 1996
SECURITIES AND EXCHANGE COMMISSION v. DOUGLAS FRANKEL.,
Civil Action No. 96-1221 JMI (SHx)(U.S.D.C., C.D. Cal.)
The Securities and Exchange Commission ("Commission")
announced the filing on February 21, 1996, of a Complaint in the
United States District Court for the Central District of
California against Douglas Frankel ("Frankel") of Santa Monica,
California. The Complaint alleges that Frankel violated the
antifraud, antitouting and securities registration provisions of
the federal securities laws by creating and ordering the
broadcast of fraudulent infomercials that touted investments in
wireless cable television ("WCT") and specialized mobile radio
("SMR") securities. The Complaint seeks a permanent injunction
against future violations of Sections 5(a), 5(c), 17(a) and 17(b)
of the Securities Act of 1933 ("Securities Act") and Section
10(b) of the Securities Exchange Act of 1934 ("Exchange Act"),
and Rule 10b-5 thereunder, and a civil penalty.
The Complaint alleges that Frankel, conducting his business
under the name United Broadcast Sales, produced and repeatedly
ordered the broadcast of four half-hour infomercials during 1993
and 1994. The Complaint alleges that the infomercials resembled
a financial news report, featuring a moderator conducting a
question and answer session with a purported industry "expert" or
"analyst". The Complaint further alleges that the infomercials
offered prospective investors an opportunity to invest in
securities, and urged viewers to telephone a toll-free number for
additional information on how to become a part owner of a WCT or
SMR system. The Complaint alleges that Frankel arranged for
operators to obtain the name, address, and telephone number of
persons who called the toll-free number.
The Complaint further alleges that Frankel sold investor
"leads" generated by broadcasting the infomercials to
approximately 30 promoters of WCT and SMR investments. The
Complaint alleges that the promoters used the information
purchased from Frankel to contact the persons who responded to
the infomercials and to solicit them to purchase the promoters'
securities. To date, at least thirteen of Frankel's clients are
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