Of the 51 actions taken, Pennsylvania has already initiated proceedings against fourteen of the ventures. During the last two years, Pennsylvania has brought 27 actions involving entertainment-based offerings. The Pennsylvania Securities Commission acted to protect Pennsylvania investors by issuing more actions than any other jurisdiction. This type of fraud is on the increase, according to Lam. The recent bull market on Wall Street has helped spawn a bull market in fraud on Main Street.
Con artists follow the headlines.
For example, Pennsylvania ordered Capital Funding and Financial Group, Inc. of Lakewood, Colorado, the parent of KidZtime TV, Inc., to halt sales of unregistered securities and for overstating potential financial returns to investors. The Internet figured prominently in several securities offerings where state regulators acted against the issuers or promoters. For example, Pennsylvania took action against several companies to stop selling unregistered securities to finance Internet gambling, including Internet Sports Gaming of Studio City, CA, and Virtual Gaming Partners of Nevis, West Indies. Other investments played off the success of theme restaurants and the boom in micro breweries. Pennsylvania ordered SoftNet Venture Capital, Inc. to cease and desist from offering investments in Holoworld, a Pasadena, CA entertainment center.