Tuesday, December 07, 2010
Lyn Peters, Director of Communications
PH (360) 902-8731, firstname.lastname@example.org
William M. Beatty, Director Division of Securities
PH 360.902.8723, email@example.com
FOR IMMEDIATE RELEASE:
DFI Orders Columbia City Cinema, Inc. To Halt Stock Sales
Securities Division alleges the Seattle company failed to complete the registration process to sell shares and failed to provide full, accurate information to potential shareholders regarding risks
Olympia – The Securities Division of the Washington State Department of Financial Institutions (DFI) entered an order (PDF)* against Columbia City Cinema, Inc. (CCC) and its Chief Executive Officer/Chief Operating Officer, Paul Doyle. CCC operates a three-screen neighborhood cinema in Seattle. The order denies CCC’s application to register its common stock under the Washington Securities Act and gives notice of the Division’s intent to order CCC and Doyle to cease and desist from violating the Securities Act, to impose fines, and to recover investigative costs.
The Securities Division alleges that Columbia City Cinema, Inc. and Paul Doyle offered the company’s stock - which was not registered with the Securities Administrator - through its Website and a story on KING 5 television news. The Securities Division alleges that Columbia City Cinema, Inc. and Doyle violated state securities registration and anti-fraud laws. The Securities Division further alleges that Columbia City Cinema, Inc. and Doyle failed to provide potential purchasers of its stock with material information regarding the offering, such as financial statements to substantiate claims that the cinema has a “successful track record,” specific use of investor funds, and the risks inherent in purchasing the stock.
Columbia City Cinema, Inc. began the process to register its stock for sale to the public but did not complete that process. The Securities Division alleges that the registration statement filed on behalf of Columbia City Cinema, Inc., for an offering of $450,000 worth of the company’s common stock, is incomplete in a material respect or contains statements which are false or misleading. Among other things, Columbia City Cinema, Inc. failed to address more than $150,000 in promissory notes issued by its predecessor company, Columbia City Cinema, LLC. Columbia City Cinema, Inc. also failed to adequately describe the risks involved in its offering.
“The securities registration process protects investors by requiring investors receive the information they need to evaluate the investments offered to them,” DFI Director of Securities Bill Beatty said. “Investors can protect themselves by checking with DFI’s Securities Division to see if companies selling securities are registered to sell those securities.”
Consumers wishing to verify a license may also do so online at www.dfi.wa.gov by clicking on the “Verify License” link or by calling 1.877.RING.DFI (746.4334) and requesting to speak to a Securities staff member in the licensing department.
Columbia City Cinema, Inc. and Doyle have a right to request a hearing on the allegations made by DFI.
www.dfi.wa.gov ▪ 360.902.8700 ▪ 877.RINGDFI (746.4334)
The Washington State Department of Financial Institutions regulates a variety of financial service providers such as banks, credit unions, mortgage brokers, consumer loan companies, payday lenders and securities brokers and dealers. The department also works to improve financial education throughout Washington through its outreach programs and online clearinghouse www.dfi.wa.gov/financial-education. In addition to posting information about licensees and administrative actions, DFI uses the Web and social media to provide financial education information:
www.twitter.com/FinEd4All ▪ www.twitter.com/DFIConsumers ▪ finlit.blogspot.com ▪ www.youtube.com/user/WADFI ▪ www.homeownership.wa.gov
About Division of Securities
www.dfi.wa.gov/sd ▪ 360.902.8760 ▪ 877.RINGDFI (746.4334)
The Division of Securities regulates securities investments, franchises, business opportunities, and off-exchange commodities sold in Washington and the firms and individuals that sell these products or provide investment advice. The Division handles complaints, conducts investigations, and takes appropriate enforcement actions to protect investors and combat fraud.
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