Jonah Ansell, Et Al. V. Daniel S. Laikin, Et Al. 10-CV-09292-Class

L? ft3 URIGINAL

IDISTRICTCOOTIT 1 THE ROSEN LAW FIRM P.A. 3D LAURENCE ROSEN (CSB# 219683) 2 333 South Grand Avenue, 25th Floor DEC 2010 Los Angeles, -5 3 Ar21g)le;826?80" Fax: ‘213). 226-4684 1,1 ''VF 1E: 4 Emai : lrosenrosenlegal.com vp, 5 Counsel for Plaintiff 6 UNITED STATES DISTRICT COURT CENTRAL DISTRICT OF CALIFORNIA 7 8 JONAH ANSELL, individually and on Case N behalf of all others similarly situated, 9 V "'?. 0 c' 2 q 2 ( Plaintiff, CLASS ACTION 10 v. 11 COMPLAINT FOR DANIEL S. LAIKIN,JIMOTHY S. VIOLATION OF THE 12 DURHAM; PAUL SKJODT; ROBERT FEDERAL SECURITIES LEVY; JAMES P. JEVIWRO; DUNCAN LAWS 13 MURRAY; JAMES TOLL; LORRAINE EVANOFF- and NATIONAL 14 LAMPOO1, INC., JURY TRIAL DEMANDED 15 Defendants, 16 17 18 Plaintiff Jonah Ansell ("Plaintiff'), individually and on behalf of all persons 19 similarly situated, by his undersigned attorneys, alleges in this Complaint the 20 21 following upon personal knowledge with respect to his own acts, and upon

) 41 22 information and facts obtained through an investigation conducted by his counsel,

23 which included, inter alia: (a) review and analysis of relevant filings made by 24 25 National Lampoon, Inc. ("National Lampoon" or the "Company") with the United

26 States Securities and Exchange Commission (the "SEC"); (b) review and analysis 27 of Defendants' public documents, conference calls and press releases; (c) review 28

Class Action Complaint Page 1

1 and analysis of securities analysts' reports and advisories concerning the 2 Company; (d) information readily obtainable on the Internet; and (e) interviews of 3 4 several witnesses with personal knowledge of the relevant facts.

5 Attached hereto are exhibits 1 through 4, which include an indictment, a 6 superseding information, an SEC complaint, and a plea agreement upon which the 7 8 allegations of wrongdoing herein are based. Each of exhibits 1 through 4 are

9 incorporated by reference into, and form a part of, the complaint. 10 Plaintiff believes that further substantial evidentiary support will exist for 11

12 the allegations set forth herein after a reasonable opportunity for discovery. Most

13 of the facts supporting the allegations contained herein are known only to 14 Defendants, or are exclusively within their control. 15 16 NATURE OF THE ACTION 17 1. This is a federal securities class action on behalf of a class consisting 18 19 of all persons and entities who are not Defendants, who purchased securities of

20 National Lampoon between March 1, 2008 and December 15, 2008, inclusive (the 21 "Class Period"), and who are seeking to recover damages caused by Defendants' 22 23 violations of federal securities laws (the "Class").

24 JURISDICTION AND VENUE 25 2. The claims asserted herein arise under and pursuant to Sections 10(b) 26

27 and 20(a) of the Exchange Act (15 U.S.C. § 78j(b) and 78t(a)), and Rule 10b-5

28 promulgated thereunder (17 C.F.R. § 240.10b-5).

Class Action Complaint Page 2

1 3. This Court has jurisdiction over the subject matter of this action 2 pursuant to Section 27 of the Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 3

4 1331.

5 4. Venue is proper in this Judicial District pursuant to Section 27 of the 6 Exchange Act (15 U.S.C. § 78aa) and 28 U.S.C. § 1391(b) because a substantial 7 8 part of the conduct complained of herein occurred in this District.

9 5. In connection with the acts, conduct, and other wrongs alleged 10 herein, Defendants either directly or indirectly used the means and 11 12 instrumentalities of interstate commerce, including, but not limited to, the United

13 States mails, interstate telephone communications, and the facilities of the national 14 securities exchange. 15 16 PARTIES 17 6. Plaintiff Jonah Ansell purchased National Lampoon stock during the 18

19 Class Period, as set forth in his certification filed herewith, and has suffered

20 damages as a result. 21 7. Defendant National Lampoon is a Delaware corporation whose 22 23 principal executive offices are located at 8228 Sunset Boulevard, West

24 Hollywood, California 90046. The Company produces and distributes National 25 Lampoon-branded comedic content in the theatrical, home entertainment and 26

27 digital markets; licenses its name and comedic content for a wide variety of uses,

28 including movies, television programs, radio broadcasts, recordings, electronic

Class Action Complaint Page 3 Q 0

1 games and live events; hosts approximately 60 intern& websites through which it

2 sells advertising and products; maintains a network of approximately 200 3 4 affiliated college and other television stations; and develops material for the

5 publication of books. National Lampoon is named as a defendant in the SEC

6 Complaint. During the Class Period, its stock traded publicly on the 7

8 AMEX/NYSE Alternext under the symbol "NLN."

9 8. Defendant Daniel S. Laikin ("Laikin") has been a director of the 10 Company (or its predecessor) since January 13, 2000 and until December 17, 2008 11

12 served as its Chief Executive Officer ("CEO") and President. Laikin served as the

13 Company's Chief Operating Officer ("COO") from May 17, 2002 until February 14 1, 2005, when he became the CEO. Until 2000, Laikin served along with 15

16 Defendant Paul Skjodt as Co-Chairman of the Board of Directors of Biltmore

17 Homes, Inc. ("Biltmore Homes"), an Indiana-based home building and real estate 18 19 development company. He also served as Managing Partner of Four Leaf

20 Partners, LLC, a closely held investment company that concentrates on the startup

21 and financing of high-tech and internet-related companies. Laikin is a member of 22

23 the Board of Directors of Obsidian Enterprises, Inc. ("Obsidian Enterprises"),

24 which was a public company until March 17, 2006. In addition, Laikin is a 25 financier and is, or has been, a shareholder of Red Rock Pictures Holdings, Inc. 26

27 ("Red Rock"), a public company and business partner of National Lampoon in

28 which the Company has held a substantial interest. He is also the founder and an

Class Action Complaint Page 4 1 advisor of Studio Store Direct, Inc. ("Studio Store Direct"), a private company 2 that Red Rock acquired in June 2008 while Defendant Robert Levy ("Levy") was 3 4 Red Rock's Chairman and CEO.' As of October 15, 2008, Laikin beneficially

5 owned 35.36% of the Company's stock and, together with certain of the 6 Individual Defendants, controlled a majority of such stock. As of that date, Laikin 7 8 also beneficially owned 48.44% of the Company's Series B Preferred Shares and

9 49.78% of its Series C Preferred Shares. On September 23, 2009, Laikin pleaded 10 guilty to conspiracy to commit securities fraud in a criminal case pending against

12 him in the Eastern District of Pennsylvania. He is currently serving a 45 month 13 prison sentence in the U.S. Bureau of Prisons, Taft Correctional Institution in Taft, 14 CA. 15 16 9. Defendant Timothy S. Durham ("Durham") has been a director of 17 the Company since May 2002 and, upon Laikin's resignation as the Company's 18 19 CEO and President, was appointed to those positions. During the Class Period, he

20 was the Chief Executive Officer and Chairman of the Board of Directors of 21 22 Other connections between National Lampoon, Red Rock, Studio Store Direct 23 and their respective constituents and employees also exist. For example, Reno R. Rolle ("Rolfe"), Red Rock's President, CEO and a director, is Studio Store 24 Direct's CEO and was a founding principal of the National Lampoon Acquisition Group, LLC, an investment group that orchestrated the acquisition of J2 25 Communications, Inc. ("J2 Communications"), which owned the National Lampoon brand name. In 2002, Rolle founded National Lampoon Home 26 Entertainment to produce and distribute National Lampoon branded DVDs. In addition, Lorraine Evanoff ("Evanoff'), National Lampoon's "Interim" Chief 27 Financial Officer ("CFO") since September 2007, has served as Red Rock's CFO since January 4, 2008. From April- 2005 to March 2006, she served as National 28 Lampoon's Vice President of Finance and Chief Accounting . Officer and was a key participant in the Company's 2005 secondary public offenng and registration with the AMEX. Class Action Complaint Page 5 1 Obsidian Enterprises, which has listed National Lampoon as an "affiliate" on its 2 website,2 and he has held such positions since June 2001. Since April 2000, he 3 4 has served as a Managing Member and the Chief Executive Officer of Obsidian

5 Capital Company LLC, which is the general partner of Obsidian Capital Partners 6 LP. Durham has also held an interest in Red Rock, a public company with which 7 8 both Laikin and Levy have had, and continue to have, dealings. In 1998, Durham

9 founded and has since maintained a controlling interest in several investment 10 funds, including Durham Capital Corporation, Durham Hitchcock Whitesell and 11 12 Company LLC, and Durham Whitesell Associates LLC. Durham was also a 13 substantial investor in Brightpoint Inc. ("Brightpoint"), a public company that 14 Laikin's brother runs as Chairman and CEO and which yielded millions of dollars 15 1 6 in profit for Durham and his constituents. Durham is the partner of Lampoon 17 director Mr. Tornek in several business ventures, including at least two restaurants 18 19 located in Miami, Florida, and an investment in a public company. As of October

20 15, 2008, Durham beneficially owned 18.23% of the Company's common stock, 21 28.54% of its Series B Preferred Shares, and 35.41% of its Series C Preferred 22 23 Shares. The Federal Bureau of Investigations ("FBI") raided the offices of Fair

24 Finance Co., another business owned by Durham, in November of 2009. Currently 25 the FBI is investigating Durham and Fair Finance Co. in connection with 26 27

28 2 See http://www.obsidianenterprises.com/page2.php?section=nationallampoon (visited on January 22, 2009). Class Action Complaint Page 6

C 0

1 investors' allegations that Durham used Fair Finance Co. to operate a $200 2 million ponzi scheme. 3

4 10. Defendant Paul Skjodt ("Skjodt") served as a director of the

5 Company from May 2002 until December 2008, when he resigned after the illegal 6 scheme described herein came to light. He is actively involved in a variety of 7 8 companies, including as Managing Member of Four Leaf & Associates, a venture

9 capital fund that provides seed money to a host of technology companies. He is 10 President of Oakfield Development, a land development company based in 11

12 Indianapolis, Indiana, and owner of the Indiana Ice, an ice hockey team in the

13 United States Hockey League. He served along with Laikin as Co-Chairman of 14 Biltmore Homes, a company for which he also served as CEO. As of October 15, 15 16 2008, Skjodt beneficially owned 8.25% of the Company's common stock and 17 10.51% of its Series B Preferred Shares. 18

19 11. Defendant Levy has been a director of the Company since September

20 13, 2006, the date of his appointment. From September 13, 2006 until June 6, 21 2008, Levy served as the President and CEO of Red Rock and thereafter was 22 23 appointed as the Chairman of its Board of Directors. He has also held an interest

24 in Red Rock. Levy writes and produces motion pictures and is a principal partner 25 in Tapestry Films. As of October 15, 2008, Levy beneficially owned 4.25% of the 26

27 Company's common stock.

Class Action Complaint Page 7

1 12. Defendant James P. Jimirro ("Jimirro") is the Company's Chairman 2 of the Board and has been a director of the Company since 1986. He served as the 3

4 Company's CEO and President from 1990 until January 2005. From 1980 to

5 1985, Jimirro served as the President of Walt Disney Telecommunications 6 Company ("Disney Telecommunications"), and as the Corporate Executive Vice 7 8 President of Walt Disney Productions. In addition, from 1983 to 1985, he served

9 as the first President of the Disney Channel, a national cable pay-television 10 channel that he conceived of and implemented. Jimirro continued in a consulting 11 12 capacity for The Walt Disney Company ("Disney") through July 1986, and served

13 in various other executive positions from 1973 to 1980. Prior to 1973, he directed 14 international sales for CBS, Inc. and later did the same for Viacom International. 15 16 Jimirro also served as a member of the Board of Directors of Rentrak Corporation 17 between January 1990 and September 2000. As of October 15, 2008, Jimirro 18

19 beneficially owned 15.48% of the Company's common stock.

20 13. Defendant Duncan Murray ("Murray") has been a director of the 21 Company since October 19, 2006. From 1998 until his retirement in 2004, 22 23 Murray served as Vice President of Business and Legal Affairs for Transactional

24 Marketing Partners, Inc., a direct response television consulting firm. From 25 August 1986 through January 2003, Murray served as National Lampoon's Vice- /6

27 President of Marketing, during which time he oversaw shareholder relations,

published the final three issues of National Lampoon Magazine, and managed

Class Action Complaint Page 8

1 negotiations with Artisan Entertainment for attachment of the Company's name to 2 the feature film National Lampoon's Van Wilder. Prior to that period, Murray 3 4 worked at Disney for 14 years in a variety of capacities, including as Vice

5 President of Sales Administration for the Disney Channel, and Director of Sales 6 for Disney Telecommunications. 7 8 14. Defendant James Toll ("Toll") has been a director of the Company

9 since• September 18, 2006. He initially joined J2 Communications as its CFO in 10 1986, and continued in that position at National Lampoon until June 16, 2005. 11 12 Toll served as head of operations for J2 Communications' video distribution, and 13 was involved in all merger and acquisition activity, including J2 Communications' 14 acquisition of National Lampoon. 15 16 15. Defendant Lorraine Evanoff, served as Chief Financial Officer of 17 National Lampoon from September 2007 through the end of the Class Period. 18 19 Ms. Evanoff had been Vice President of Finance and Chief Accounting Officer of

20 the Company from April 2005 until March 2006. Evanoff as Chief Financial 21 Officer knew of the payments to Barsky, who was a Company consultant. 22 23 16. Defendants Daniel S. Laikin, Timothy S. Durham, Paul Skjodt,

24 Robert Levy, James P. Jimirro, Duncan Murray, James Toll and Lorraine Evanoff 25 are referred to herein as the "Individual Defendants". 26 27 17. Each of the Individual Defendants were aware of the payments to 28 Barsky from the Company. Laikin as well as Barsky was a consultant to the

Class Action Complaint Page 9

1 Company and was hired to prop the Company's stock price. The board of 2 directors was required to approve the hiring of Barsky as a consultant to the 3 4 Company.

5 FACTUAL ALLEGATIONS 6 The Illegal Stock Manipulation Scheme 7 8 18. Laikin, while CEO, President, and a director of the Company,

9 masterminded and perpetrated an illegal scheme to manipulate the Company's 10 stock price. The purpose of the scheme was to inflate the price of the Company's 11 12 stock so that the Company a) could avoid removal from the American Stock 13 Exchange ("AMEX," now known as the "NYSE Alternext," used 14 interchangeably herein), for failure to meet the minimum price-per-share 15 16 requirement; and b) could more easily and inexpensively acquire other 17 companies and attract business partners. 18 19 19. In furtherance of the scheme, Laikin paid kickbacks, from at least

20 March 2008 through late June 2008, to Dennis S. Barsky ("Barsky"), a Company 21 consultant and significant stockholder, and to other conspirators, in exchange for 22 23 their purchase of National Lampoon stock. The purpose of the conspirators'

24 fraudulent purchases was to create the illusion of an active and liquid market in

the Company's shares, which would in turn drive up the price, make the stock 26 27 appear attractive and the company successful, and thereby induce the purchase of 28 Company stock by unsuspecting investors at an unknowingly inflated price,

Class Action Complaint Page 10 1 further supporting the inflated stock price.

The Exposure of the Illegal Stock Manipulation Scheme 3

4 20. Laikin's scheme came to light only after the conclusion of a lengthy

5 investigation conducted by the FBI, the United States Attorney's Office for the 6 Eastern District of Pennsylvania (the "U.S. Attorney's Office"), and the United 7 8 States Securities and Exchange Commission ("SEC"). First, on December 11,

9 2008, the U.S. Attorney's Office filed an indictment ("the Indictment") and a 10 superseding information (the "Information") 3 under seal in the U.S. District

12 Court for the Eastern District of Pennsylvania (the "Eastern District"), charging

13 Laikin and three other individuals with conspiracy, securities fraud, and aiding 14 and abetting securities fraud in connection with an illegal scheme to artificially 15

16 inflate the price of National Lampoon's stock. The individuals named as 17 defendants in the Indictment are Laikin, Barsky, and Tim Dougherty 18 19 ("Dougherty"), a stock promoter who is alleged to have utilized certain entities

20 that he controls to facilitate the scheme. The individual named as a defendant in 21 the Information is Eduardo Rodriguez ("Rodriguez"), a corrupt stock promoter 22 23 who is alleged to have been involved in other securities fraud schemes.

28 Copies of the Indictment and Information are annexed hereto as Exhibits 1 and 2, respectively, and their contents are incorporated by reference herein. Class Action Complaint Page 11

1 21. Then, on December 15, 2008, the SEC filed a complaint (the "SEC 2 Complaint")4 ni the Eastern District against National Lampoon, Laikin, and the 3

4 three other individuals named as defendants in the Indictment and Information.

5 The SEC Complaint charges those defendants with violations of the federal 6 securities laws and seeks various forms of injunctive and monetary relief, 7 8 including, among other things, an order permanently enjoining the defendants

9 from committing further securities law violations; disgorgement of any proceeds 10 generated as a result of the scheme; the imposition of civil monetary penalties;

12 and an order prohibiting Laikin from serving as an officer or director of a public

13 company. 14 22. According to the U.S. Attorney's Office and the SEC, the scheme 15 16 was uncovered with the assistance of the FBI and the cooperation of a confidential 17 witness who, unbeknownst to Laikin and the other perpetrators, was involved in 18

19 the scheme at the request of the authorities. As detailed in the aforementioned

20 criminal and civil filings, Laikin and Barsky actively perpetrated the scheme from 21 at least March 2008 through June 2008. During that time they are alleged to have 22 23 paid an aggregate of at least $68,000 in kickbacks to Rodriguez, Dougherty and

24 the confidential witness, who, in exchange, arranged and executed purchases of

National Lampoon stock. 26

27 4 28 A copy of the SEC Complaint is annexed hereto as Exhibit 3 and its content is incorporated by reference -herein.

Class Action Complaint Page 12

1 23. Additionally, Laikin is alleged to have shared confidential 2 information about the Company with his co-conspirators to facilitate their 3 4 purchases; the illicitly shared data include non-public financial information,

5 shareholder lists, and corporate information prior to being issued publicly. 6 24. Laikin and National Lampoon are also alleged to have made 7 8 materially misleading statements "regarding the fair market value and trading

9 range of the company's stock" in a July 17, 2008 self-tender offer (the "Tender 10 Offer") because they failed to disclose the illegal scheme. 5 All told, the illicit 11 12 scheme is believed to have resulted in the purchase of at least 87,500 shares of 13 stock. Laikin admitted in his plea agreement that he intended for the scheme to 14 cause a loss to investors of between $2,500,000 and $7,000,000. 15 16 25. Aside from directly profiting from their fraud as significant 17 shareholders, Laikin and Barsky are alleged to have perpetrated the scheme "for 18 19 the purpose of creating the appearance of an active and liquid market" with the

20 intent of "inducing other investors to purchase stock, and ultimately increasing the 21 stock's trading price." According to the SEC, Laikin disclosed to Rodriguez and 22 23 the confidential witness that he and Barsky "sought to artificially push National

24 25 5 Ai-ccordinTo t the SEC Complaint, in connection with the Tender Offer "certain warrant ho ders were offered a two-year extension on the exercise date of their 26 warrants [in exchange] for purchasing no less than ten percent of the common shares covered by their warrants. National Lampoon proposed this offer to raise 27 cash for its operations and as part of its plan that it submitted to the AMEX to regain compliance with its continued listing standards." In addition, "Laikin, and 28 three other board members, together controlling a majority of the shares of National Lampoon, took advantage of this offer as well and exercised warrants."

Class Action Complaint Page 13 1 Lampoon's stock price from under $2.00 a share to at least $5.00 a share, to 2 prevent the stock from being delisted for failure to comply with the AMEX's 3 4 minimum listing requirements and to enable the Company to engage in "strategic

5 transactions" and "acquisitions."6 6 26. To accomplish this objective, Laikin is alleged not only to have 7 8 committed the misconduct described above, but is also alleged to have

9 coordinated the release of news about the Company with the illegal stock 10 purchases so as to create the illusion of an increase in interest in the stock and to 11

12 make the purchases appear to be legitimate. Had Laikin's plan continued

13 undetected, governmental authorities estimate that the value of his 40% ownership 14 stake in the Company could have increased by up to $15 million.' 15 16 27. On December 15, 2008, the U.S. Attorney's Office announced the 17 unsealing of the Indictment and the Information, and the SEC announced the 18 19 commencement of enforcement proceedings. Both organizations detailed the

20 charges levied against Laikin and his accomplices — and, in the case of the SEC 21 Complaint, against National Lampoon — arising out of the stock manipulation 22

23 6 As noted herein, the Company's common stock was in danger of being delisted 24 from the AMEX at or about the time that Laikin perpetrated the scheme. 25 7 Laikin's plan succeeded at least in part. As disclosed in the 2008 Annual Report, on February 27, 2008, National Lampoon received a letter from the AMEX 26 indicating that the Company did not meet the minimum listmg requirements. On March 27, 2008, at the mception of Laikin s illegal stock manipulation scheme, 27 the Company submitted a plan to achieve compliance with the minimum listing standards. On May 16, 2008, while the scheme wason cr, omg, the AMEX 28 communicated its acceptance of the plan. Ultimately, the AlVffiDC further extended the Company's deadline to regain compliance with the listing standards.

Class Action Complaint Page 14

CI)

scheme. In addition, the SEC announced that it had suspended trading in National 2 Lampoon's common stock, a measure that was initially supposed to last until 3 4 December 29, 2008.8 5 28. On December 16, 2008, the Company issued a press release 6 acknowledging the charges and the suspension of trading in its shares. In the 7 g wake of these announcements, the news media picked up the story and reported

9 that Laikin had been arrested as a result of his involvement in the scheme. 10 29. On December 18, 2008, National Lampoon announced that Laikin 11 12 had resigned as the Company's CEO and President (effective December 17,

13 2008), and that the Board had appointed Durham to serve in those positions "on 14 an interim basis." The Company also announced, however, that Laikin remained 15 16 a member of the Board (a position he still holds). In addition, the Company 17 indicated that the Board had formed a "Special Committee," comprised of 18 19 Durham and Jimirro, to investigate the charges brought against Laikin and the 20 Company. 21 30. On September 23, 2009, Laikin pleaded guilty to one charge of 22 23 conspiracy to commit securities fraud in violation of 18 U.S.C. § 371, 15 U.S.C.

24 §§ 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5. A copy of Laikin's Guilty Plea 25 Agreement is attached hereto as Exhibit 4. Laikin is awaiting sentencing. 26 27 8 28 The Company's stock closed at 73 cents per share on December 12, 2008, the last trading day prior to the SEC's suspension of trading.

Class Action Complaint Page 15 1 The Deterioration of the Company's Prospects And Losses Caused to

2 Shareholders As a Result of the Scheme 3

4 31. Following these announcements, Skjodt, a director and substantial

5 shareholder, resigned from the Board. In addition, on January 13, 2009, the Board

6 announced that it had decided voluntarily to delist the Company's common stock 7

8 from the NYSE Alternext and that it intended to register the Company's shares on

9 the Over-the-Counter Bulletin Board. As a direct result of these developments, 10 and of the public disclosure of the illicit stock manipulation scheme and the SEC's 11

12 charges against Laikin and the Company, Envit Capital Group Incorporated

13 ("Envit") announced that it had rescinded its agreement to fund a slate of selected 14 projects with National Lampoon, and that it was abandoning their strategic 15

16 relationship.

17 32. Envit's decision to sever its ties to National Lampoon was especially 18 19 damaging to the Company's shareholders because Envit was perhaps the only

20 lifeline available to the Company to ensure that its operations could continue. The

21 Company's financial outlook after the disclosure of the scheme was bleak, and 22

23 Envit's departure raised the possibility of National Lampoon's collapse.

24 33. In its 2008 Annual Report, National Lampoon had reported that its 25 independent auditor had "express[ed] doubt about [the Company's] ability to 26

27 continue as a going concern in. . . audit reports for the fiscal years ended July 31,

Class Action Complaint Page 16 1 2008 and 2007."9 In fact, as of July 31, 2008, the Company had an accumulated 2 deficit of $42,944,258. 3 4 34. In an effort to improve its precarious financial situation, the

5 Company set out to raise additional capital. Envit was one potential source of 6 desperately needed funding. 7 8 35. On October 30, 2008, Envit issued a press release announcing the

9 formation of a strategic relationship with National Lampoon pursuant to which it 10 had agreed to "fund a slate of approved selected projects with National Lampoon, 11 12 including moderate budget feature films, P&A financing, video productions, and 13 possible television development and production." 14 36. Less than two months later, Envit reversed course. On December 16, 15 16 2008, one day after public disclosure of the scheme and the Company's public 17 acknowledgment of the criminal and civil charges, Envit issued a press release 18 19 announcing that it had elected to dissolve its relationship with National Lampoon

20 as a result of Laikin's misconduct, and that it had declared "void" its agreement to 21 fund certain of National Lampoon's projects. As the press release makes clear, 22 23 Envit's decision to terminate its business relationship with National Lampoon

24 stemmed solely from its desire to disassociate itself with Laikin: 25

26 9 According to a press release that the Company issued on January. 8, 2009, the 27 Company inadvertently excluded this going concern _qualification from its November 11, 2008 earnings release in violation of AMEX rules. This omission 28 could have had the effect of misleading investors to believe that such qualification no longer applied.

Class Action Complaint Page 17

1 Chairman and CEO Edward M. Laborio said today "We are sorry to 2 hear about the unfortunate SEC investigation into National Lampoon 3 4 stock price. I would just like to inform shareholders of ENVIT

5 Capital that no transactions have taken place between National 6 Lampoon and ENVIT Capital. The tentative agreement of ENVIT 7 8 Capital to fund National Lampoon will now be void. We would also

9 like to inform ENVIT Capital shareholders that the SEC investigation 10 into National Lampoon does not involve ENVIT Capital." 11 12 37. Thus, as a result of Laikin's misconduct, National Lampoon lost the 13 prospect of having Envit Capital fund future projects. 14 38. On January 23, 2009, National Lampoon filed with the SEC a Notice 15 16 of Removal from Listing on Form 25, effectuating the voluntary withdrawal of its 17 shares from the AMEX. 18 19 39. The Company's ability to continue as a going concern appears to

20 remain in jeopardy, and its shareholders continue to lose value as a result of the 21 improprieties alleged herein, since, among other things, the Company's shares no 22 23 longer publicly trade on the AMEX.

24 40. On December 15, 2008, the same day the U.S. Attorney announced 25 the indictments and the SEC announced the filing of its civil complaint, the SEC 26 27 suspended trading in Lampoon stock. 28

Class Action Complaint Page 18

1 41. When trading resumed on February 5, 2009, Lampoon's stock price

2 dropped from $0.73/share, to $0.50/share and then quickly to $0.10/share in the 3

4 following days. The stock continued to drop as additional fallout from the scandal

5 caused business partners to cease doing business with the Company.

6 42. Following news of the scandal, the price of the Company's stock 7

8 continued to drop until finally the Company withdrew its listing as a public

9 company rendering the stock practically worthless for Class Members. 10 43. As set forth in the Guilty Plea Agreement, Laikin pleaded guilty to 11

12 conspiracy to commit securities fraud. Laikin's guilty plea establishes that he

13 acted with scienter when he committed the actions over which Plaintiff sues. 14 Laikin's scienter may be imputed to the Company because Laikin executed the 15

16 scheme for the benefit of the Company.

17 Durham's Questionable Conduct 18

19 44. Durham, the acting CEO of National Lampoon, has been the

20 chairman and secretary for CLST, Holdings ("CLST"), an investment company, 21 since September 2009. Tornek, a current board member of National Lampoon, has 22

23 been a board member of CLST Holdings since January 2009.

24 45. Durham is also the CEO of Fair Finance Co. 25 46. In November 2009, the FBI raided the office of Fair Finance Co., an 26

27 investment company based in Akron, Ohio. The office has remained closed since

28 the raid.

Class Action Complaint Page 19 1 47. On November 30, 2009, CLST filed an 8K with the SEC stating in

2 part: 3

4 On November 24, 2009, the United States Attorney for the Southern

5 District of Indiana filed a civil complaint (the "Civil Complaint") in

6 federal district court in the Southern District of Indiana, Indianapolis 7

8 Division, seeking seizure of assets and accounts held by Timothy

9 Durham and certain of his affiliates, including Fair Finance Co. 10 ("Fair"). At the same time, agents from the Federal Bureau of 11

12 Investigation exercised a warrant and took documents and computers

13 from Mr. Durham's offices, and those of two of his affiliates, Fair and 14 Obsidian Enterprises. Mr. Durham is Chairman of our Board of 15

16 Directors. The Civil Complaint alleges, among other things, that the

17 assets and accounts sought to be seized are the product of wire fraud 18 19 in violation of Title 18, United States Code, Sections 1345 and 1355.

20 48. Additionally, the November 30, 2009 8K states in part:

21 Also, on November 24, 2009, we received a subpoena from the 22

23 Division of Enforcement of the Securities and Exchange Commission

24 ("SEC") entitled "In Re Fair Finance." The subpoena requires us to 25 produce a variety of documents relating to our portfolio transactions, 26

27 including transactions with Fair, and also seeks documents relating to

Class Action Complaint Page 20

4;)

1 several individuals, including our directors, Mr. Durham, Robert 2 Kaiser, and David Tornek. 3 4 49. In order to learn more about the information the government had on 5 Durham and his companies, on December 17, 2009, Akron Beacon Journal and 6 the Indianapolis Star commenced In the Matter of the Search of Fair Finance, 7 8 Fair Financial, Obsidian Enterprises and Timothy S. Durham, Case No. 5:09-mc-

9 00117-SL in the Northern District of Ohio by filing a motion to unseal search 10 warrant documents. On January 4, 2010, additional movants, Indianapolis 11 12 Business Journal and The Wall Street Journal, were including in the matter. The

13 issue of potentially unsealing the search warrant documents is still pending. 14 50. In the December 23, 2009 article "Indiana Political Donor Face Suits, 15 16 Ponzi Probes" written by Bob Van Voris, and published on Bloomberg, "U.S.

prosecutors said Durham falsely told investors that one of his companies, Fair 18 19 Finance, Co., was selling certificates backed by low-risk, high-yield consumer 20 debt." 21 51. The civil complaint was dismissed on November 30, 2009. AccordinN 22 23 to the aforementioned article, "prosecutors voluntarily withdrew the papers seekinN

24 to seize Durham's assets, after they 'became confident' that the assets wouldn't b: 25 transferred." 26 27 52. CLST filed an 8K with the SEC on June 29, 2010 discussing mor: 28 legal troubles stating in part:

Class Action Complaint Page 21 1 Ron Phillips and Scott Moorehead, as putative plaintiffs, filed a

2 derivative lawsuit against Robert A. Kaiser, Timothy S. Durham, and 3

4 David Tornek in the 298th District Court of Dallas County, Texas.

5 The shareholder derivative petition (the "Petition") alleges that

6 Messrs. Kaiser, Durham, and Tornek entered into self-dealing 7

8 transactions at the expense of CLST Holdings, Inc. (the "Company")

9 and its stockholders and violated their fiduciary duties of loyalty, 10 independence, due care, good faith, and fair dealing. 11

12 53. According to the February 8, 2010 article written by Tiffany Kary for

13 Bloomberg: 14 Fair Finance's owner, Indiana businessman Timothy S. Durham, a 15

16 Republican political contributor whose holdings include National

17 Lampoon, Inc., has been targeted in lawsuits and investigations over 18 19 claims he funded a luxurious lifestyle with the proceeds of a Ponzi

20 scheme. The involuntary petition, filed by three creditors in

21 bankruptcy court in Akron today, seeks for the company to enter into 22

23 bankruptcy and appoint a trustee to oversee the return of funds.

24 54. On August 3, 2010 the Indiana Business Journal reported the the 25 Bankruptcy Trustee overseeing the liquidation of Fair Finance identified about 26

27 $54 million of improper loans to Durham. The trustee also said that Durham

28 improperly spent $2.8 million on gambling and at resorts, $3.3 million on interior

Class Action Complaint Page 22 1 decorating, $14 million on real estate and $1 million spent on contributions, many 2 of them to Indiana politicians. The FBI investigation of Durham is continuing. 3

4 55. As described in the SEC Complaint, from at least March 2008

5 through June 2008, Laikin and Barsky coordinated purchases of the Company's 6 stock with the release of positive news and other events to "generate positive 7 8 trading momentum." These purchases resulted in unusual trading volumes and

9 accounted for an extraordinary percentage of the shares traded at any given time, 10 all of which should have placed the Board on notice that an insider had engaged in 11

12 market manipulation.

13 56. Moreover, Laikin controlled an overwhelming majority of the 14 Company's shares through his substantial beneficial ownership and his control 15 16 over other shareholders, including the members of the Board themselves. In fact, 17 according to the SEC Complaint, Laikin acknowledged during a conversation with 18

19 the confidential witness "that he controlled the public float of the stock and that

20 there were less than one million shares for which he could not account." The SEC 21 Complaint also alleges that Barsky, a Company consultant since August 2006, 22

23 "controlled more than three million shares through a group of investors he

24 advised." In addition, according to the Company's Form 10KSB, filed with the 25 SEC on November 29, 2007 for the year ended July 31, 2007, Barsky received 26

27 stock-based compensation in exchange for his services as a consultant. For

28 example, during the year ended July 31, 2007, the Company issued 44,000 shares

Class Action Complaint Page 23 1 of restricted common stock to him, worth a total of $79,230. Given that the Board 2 was aware of and most likely approved Barsky's consulting contract, these 3 4 collective facts should have alerted the Board to the substantial likelihood that the

5 unusual trading resulted from market manipulation, most likely at the hands of 6 Laikin. 7

8 57. Consequently, although the members of the Board had a reasonable

9 basis to believe that market manipulation had occurred, their failure to investigate 10 or otherwise address the crime speaks to their scienter. The very same facts 11

12 established a reasonable basis for the Board to believe that the offering documents

13 associated with the Tender Offer contained omissions of material fact concerning 14 the trading characteristics of National Lampoon stock, also giving rise to an 15 16 inference of scienter. 17 58. As noted above, the illegal purchases at issue resulted in unusually 18 19 high trading volumes that coincided with the release of positive news and other

20 information. By failing to investigate whether any market manipulation had 21 occurred as a result of this suspicious trading activity, the directors failed to 22 23 adequately discharge their duties. Moreover, the Board's failure to ensure that

24 management had proper protections in place to prevent the release of confidential 25 information provided Laikin with the opportunity to commit securities fraud. This

27 failure also resulted in the Company's disclosure of false and misleading

28 statements in the Tender Offer. Further, to the extent that Laikin utilized

Class Action Complaint Page 24

1 Company or readily traceable funds to pay Barsky (a consultant), or others, in 2 order to facilitate the stock manipulation scheme, the Board — and, in particular, 3

4 the Audit Committee — should have confirmed that proper protocols were

5 followed. 6

7 PLAINTIFF'S RELIANCE

8 59. Plaintiff need not demonstrate reliance in order to prevail on the 9 10 claims arising out of Defendants' deliberate scheme to manipulate the price of

11 National Lampoon's stock. See Count I infra. 12 Applicability of Affiliated Ute Presumption of Reliance 13

14 60. In order to prevail on the claims arising out of Defendants' material

15 omissions of fact, see Count II infra, Plaintiff need not prove reliance either 16 individually or as a class because under the circumstances giving rise to this 17

18 claim, which primarily involve a failure to disclose, positive proof of reliance is

19 not a prerequisite to recovery. Affiliated Ute Citizens of Utah v. United States, 406 20 U.S. 128; 92 S. Ct. 1456; 31 L. Ed. 2d 741; 1972 U.S. LEXIS 163; Fed. Sec. 21 22 (1972). All that is necessary for the presumption of reliance to attach is that the 23 facts withheld be material in the sense that a reasonable investor might have 24 considered them important in the making of his decision.

Class Action Complaint Page 25

1 61. Because Laikin and the Company were trading in the Company's 2 stock, they had a duty to disclose to investors that Laikin was creating an artificial 3 4 market price for Lampoon stock.

5 PLAINTIFF'S CLASS ACTION ALLEGATIONS 6 62. Plaintiff brings this action as a class action pursuant to Federal Rule 7 g of Civil Procedure 23(a) and (b)(3) on behalf of a Class, consisting of all persons

9 who purchased the stock of National Lampoon during the Class Period, and who 10 were damaged thereby. Excluded from the Class are Defendants, the officers and 11

12 directors of the Company at all relevant times, members of their immediate

13 families, their legal representatives, heirs, successors or assigns, and any entity in 14 which Defendants have or had a controlling interest. 15 16 63. The members of the Class are so numerous that joinder of all 17 members is impracticable. Throughout the Class Period, National Lampoon's 18 19 securities were actively traded on the AMEX. While the exact number of Class

20 members is unknown to Plaintiff at this time and can only be ascertained through 21 appropriate discovery, Plaintiff believes that there are at least hundreds of 22 23 members in the proposed Class. According to the Company's Annual Report filed

24 with the SEC on February 29, 2008, the Company had approximately 9,456,427 25 shares outstanding as of December 31, 2007. Members of the Class may be 26

27 identified from records maintained by National Lampoon or its transfer agent and

Class Action Complaint Page 26

1 may be notified of the pendency of this action by mail, using a form of notice

customarily used in securities class actions. 3

4 64. Plaintiff's claims are typical of the claims of the members of the

5 Class, as all members of the Class are similarly affected by Defendants' wrongful 6 conduct in violation of federal law that is complained of herein. 7

8 65. Plaintiff will fairly and adequately protect the interests of the

9 members of the Class and has retained counsel competent and experienced in class 10 and securities litigation. 11

12 66. Common questions of law and fact exist as to all members of the

13 Class and predominate over any questions solely affecting individual members of 14 the Class. Among the questions of law and fact common to the Class are: 15

16 (a) whether the federal securities laws were violated by Defendants'

17 acts as alleged herein; 18

19 (b) whether statements or omissions made by Defendants to the

20 investing public during the Class Period omitted material facts about the 21 Defendants' fraudulent stock trading in National Lampoon; and 22

23 (c) to what extent the members of the Class have sustained damages,

24 and the proper measure of damages. 25 67. A class action is superior to all other available methods for the fair 26

27 and efficient adjudication of this controversy since joinder of all members is

28 impracticable. Furthermore, as the damages suffered by individual Class members

Class Action Complaint Page 27

1 may be relatively small, the expense and burden of individual litigation make it 2 impossible for members of the Class to redress individually the wrongs done to 3

4 them. There will be no difficulty in the management of this action as a class

5 action. 6 COUNT I 7 Failing to Disclose Material Facts To Investors in Violation Of Rule 10b-5(b) 8 Promulgated Under Section 10(b) Of The Exchange Act as Against Laikin, 9 Durham and National Lampoon

10 68. Plaintiffs repeat and re-allege each and every allegation 11 contained above as if fully set forth herein. 12 13 69. This claim is alleged against Laikin, Durham and National Lampoon.

14 70. Throughout the Class Period, defendant National Lampoon acted 15 through Laikin, the Company's chief executive officer and director. The 16 17 misconduct, willfulness, motive, knowledge, and recklessness of Laikin is 18 therefore imputed to National Lampoon, rendering the Company primarily liable 19

20 for the securities law violations of Laikin committed while performing in his

21 official capacity as a Company representative. In the alternative and additionally, 22 National Lampoon is liable for the acts of the Laikin under the doctrine of 23

24 respondent superior.

25 71. Throughout the Class Period, defendants knowingly or recklessly 26 omitted stating certain material facts which were necessary in order to make

28 statements that they made not misleading to plaintiff and the other members of the

Class Action Complaint Page 28 1 Class in connection with the purchase and sale of National Lampoon stock. 2 72. The purpose and effect of defendants' omitting to state material facts 3 4 concerning their trading in Company stock was to artificially inflate and maintain

5 the price of National Lampoon's stock. 6 73. Laikin, who was the top officer of the Company, and Durham, a 7 8 director, had actual knowledge of the material omissions set forth above, and

9 intended to deceive plaintiffs and the other members of the Class, or, in the 10 alternative, acted with reckless disregard in that they were likely misleading 11

12 investors when they failed to ascertain and disclose the true facts in the statements

13 made by them or other National Lampoon personnel to members of the investing 14 15 public, including plaintiff and the Class.

16 74. As a result of the omission of material facts described above, the 17 market price of National Lampoon's stock was artificially inflated during the 18

19 Class Period.

75. In ignorance of the misleading nature of the defendants' statements,

plaintiff and the other members of the Class purchased National Lampoon stock at 22 23 prices which were artificially inflated as a result of defendants' misleading

24 statements. 25 76. Had plaintiffs and the other members of the Class known of the 26

27 material adverse information which defendants did not disclose, they would not

28 have purchased National Lampoon stock at artificially inflated prices.

Class Action Complaint Page 29

1 77. By virtue of the foregoing, defendants have violated Section 2 10(b) of the Exchange Act, and Rule 10b-5(b) promulgated thereunder. 3

4 78. As a direct and proximate result of defendants' wrongful conduct,

5 plaintiffs and the other members of the Class suffered damages in connection 6 with their respective purchases and sales of the Company's securities during the 7 8 Class Period.

9 79. This action is being brought within two years after the discovery of 10 the untrue statements and omissions and within five years after their issuance.

12 Count Two

13 Engaging in a Deceptive Stock Manipulation Scheme and Course of Conduct to Deceive and Defraud Violation Of Rule 10b-5(a) and Rule 10b-5(c) 14 Promulgated Under Section 10(b) Of The Exchange Act as Against Laikin, 15 Durham and National Lampoon 16 80. Plaintiffs repeat and reallege each and every allegation contained in 17

18 the foregoing paragraphs as if fully set forth herein.

19 81. This claim is against defendants National Lampoon, Laikin and 20 Durham based upon Rule 10b-5(a) and Rule 10b-5(c) promulgated under Section 21 22 10(b) of the Exchange Act, 15 U.S.C. §78j(b), for using and employing a

23 manipulative and deceptive device in connection with the purchase and sale of 24 Company securities. 25

26 82. Throughout the Class Period, defendant National Lampoon acted

27 through Laikin, the Company's chief executive officer and director. The 28 misconduct, willfulness, motive, knowledge, and recklessness of Laikin is

Class Action Complaint Page 30

1 therefore imputed to National Lampoon, rendering the Company primarily liable

2 for the securities law violations of Laikin committed while performing in his 3

4 official capacity as a Company representative. In the alternative and additionally,

5 the Company is liable for the acts of the Laikin under the doctrine of respondent 6 superior. 7

8 83. During the Class Period, defendants directly engaged in a common

9 plan, scheme, and unlawful course of conduct, pursuant to which they knowingly 10 or recklessly engaged in a stock manipulation scheme to artificially drive up the 11

12 price of National Lampoon stock which operated as a fraud and deceit upon

13 plaintiffs and the other members of the Class. 14 84. The purpose and effect of said scheme, plan, and unlawful course of 15

16 conduct was, among other things, to induce plaintiffs and the other members of

17 the Class to purchase Company stock during the Class Period at artificially 18 19 inflated prices.

20 85. As a result of the manipulative and deceptive scheme and course of 21 conduct as set forth above, the market price of National Lampoon stock was 22

23 artificially inflated during the Class Period.

24 86. Plaintiff and the Class were unaware of the defendants' stock

manipulation scheme described above and the deceptive and manipulative devices 26

27 and contrivances employed by said defendants. Had plaintiffs and the other

28 members of the Class known the truth, they would not have purchased said shares

Class Action Complaint Page 31 1 or would not have purchased them at the inflated prices that were paid. 2 87. Plaintiffs and the other members of the Class have suffered 3 4 substantial damages as a result of the wrongs herein alleged in an amount to be

5 proved at trial. 6 88. By reason of the foregoing, defendants directly violated Section 7 8 10(b) of the Exchange Act and Rule 10b-5(a) and (c) promulgated thereunder in

9 that they employed manipulative devices, schemes, and artifices to defraud; and 10 engaged in acts, practices, and a course of business which operated as a fraud and

12 deceit upon plaintiffs and the other members of the Class in connection with their

13 purchases of National Lampoon securities during the Class Period. 14 89. This action is being brought within two years after the discovery of 15 16 the unlawful deceptive scheme and within five years of their National Lampoon 17 stock purchases for which they seek recompense. 18

19 COUNT III

Violation of Section 20(a) of the Exchange Act

21 Against All of the Individual Defendants

22 90. Plaintiff repeats and realleges each and every allegation contained 23 above as if fully set forth herein. 24

25 91. As alleged herein, the Individual Defendants acted as controlling

26 persons of National Lampoon within the meaning of Section 20(a) of the 27 Exchange Act, 15 U.S.C. §78t(a). By virtue of their executive positions, Board 28

LlasaActio.n_Lomplainl Rage 32_ 1 membership, and stock ownership, as alleged above, these individuals had the 2 power to influence and control and did influence and control, directly or 3 4 indirectly, the decision-making of the Company, including the illegal stock

5 manipulation scheme. 6 92. According to its 2008 proxy statement, National Lampoon is a 7 8 "controlled company" as that term is defined in Section 801(a) of the Rules of the

9 American Stock Exchange. Three of the defendants and directors, Daniel S. 10 Laikin, Timothy S. Durham and Paul Skjodt, control over 50 0% of the voting 11 12 power of National Lampoon, Inc. The defendants also have a voting agreement 13 that solidifies Laikin's, Durham's and Skojdt's control over the Company. 14 93. As set forth above, the Individual Defendants and National Lampoon 15 16 committed a primary violation of Section 10(b) and Rule 10b-5 of the Exchange 17 Act by the acts and omissions alleged in this Complaint. By virtue of their 18 19 positions as controlling persons of National Lampoon, the Individual Defendants

20 are liable pursuant to Section 20(a) of the Exchange Act. 21 REQUEST FOR RELIEF 22 23 WHEREFORE, Plaintiff prays for relief and judgment, as follows:

24 (a) Determining that this action is a proper class action, designating 25 Plaintiff as Lead Plaintiff, and certifying Plaintiff as a class representative under 26 27 Rule 23 of the Federal Rules of Civil Procedure and Plaintiff's counsel as Lead 28 Counsel;

Class Action Complaint Page 33 4;)

1 (b) Awarding compensatory damages in favor of Plaintiff and the other 2 Class members against all Defendants, jointly and severally, for all damages 3 4 sustained as a result of Defendants' wrongdoing, in an amount to be proven at

5 trial, including interest thereon; 6 (c) Awarding Plaintiff and the Class their reasonable costs and expenses 7 8 incurred in this action, including counsel fees and expert fees; and

9 (d) Such other and further relief as the Court may deem just and proper. 10 JURY DEMAND 11 Plaintiff demands a trial by jury. 12 13 DATED: December 3, 2010 Respectfully submitted,

14 THE ROSEN LAW FIRM P.A. 15 16 17 LAURENCE ROSEN 18 Laurence Rosen (CSB# 219683) 19 333 South Grand Avenue, 25th Floor Los Angeles, CA 90071 20 Tel: (213) 785-2610 21 Fax: (213) 226-4684 22 Counsel for Plaintiff 23 24 25 26 27 28

Class Action Complaint Page 34 12/08 2010 17.30 #4007 P 002/003 _

CERTIFICATION

The individual or institution listed below (the "Plaintiff') authorizes the Rosen Law Firm, PA. to file an action or amend a current action under the federal securities laws to recover damages on behalf of purchasers of the securities of National Lampoon, Inc. ("NLN"). The Rosen Law Firm, P.A. agrees to prosecute the action on a contingent fee basis not to exceed one-third of any recovery and will advance all costs and expenses. Any legal fees and expenses will be determined by, and payable, only upon order of the U.S. District Court.

Plaintiff declares, as to the claims asserted under the federal securities laws, that:

1, I have reviewed the complaint and authorized its filing. I retain the Rosen Law Firm, P.A. as counsel in this action for all purposes.

2. I did not engage in transactions in the securities that are the subject of this action at the direction of plaintiffs counsel or in order to participate in this or any other litigation under the securities laws of the United States.

3. I am willing to serve as a lead plaintiff either individually or as part of a group. A lead plaintiff is a representative party who acts on behalf of other class members in directing the action, and whose duties may include testifying at deposition and trial.

4. The following is a list of all of the purchases and sales I have made in NLN securities during the Class Period set forth in the complaint. I have made no transactions during the class period in the securities that are the subject of this lawsuit except those set forth below.

Number of Date(s) Price Paid Date(s) Sold Price Sold Shares Purchased Purchased Per Share (if applicable) Per Share or Sold 1,500 December 19, 2007 $2.00 14,840 May 23, 2008 $1.46

is $ $ is $ (

PLEASE FAX CERTIFICATION TO ROSEN LAW FIRM; (212) 202-3827

12/08 2010 17.30 #4007 P.003/002 0 (3

, 5. I have not, within the three years preceding the date of this certification, sought to serve or served as a representative party on behalf of a class in an action involving alleged violations of the federal securities laws, except: for the following company(ies):

6. I will not accept any payment for serving as a representative party beyond my pro rata share of any recovery, except reasonable costs and expenses, such as travel expenses and lost wages directly related TO the class representation, as ordered or approved by the court pursuant to law.

I declare under penalty of perjury that the foregoing is true and correct. Executed this - 1 1 61 day of August, 2010.

Signaturg-17 . 6------(22 Name: Jo Anse11 Address:

Phone: E-mail:

Item. 4 (continue from prior page if needed)

Number of Date(s) Price Paid Date(s) Sold I Price Sold Shares Purchased Purchased Per Share (if applicable) Per Share or Sold $ ____ I $ $ $ $ $ $ $ $ $ $ $ _ . _$ $ $ $ _ $ . . S $ $ $ $ $ $

. . .. . $ $•

PLEASE FAX CERTIFICATION TO ROSEN LAW EIRM at (212) 202-3827 2 OR MAIL. TO THE ROSEN LAW FIRM PA 350 FIFTH AVENUE, SUITE 5508 NEW YORK, NY 10118 . .

EXHIBIT 1 IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA CRIMINAL NO. 08-

v. DATE FILED: December 11, 2008

DANIEL LAIKIN VIOLATIONS: DENNIS BARSKY 18 U.S.C. § 371 (conspiracy - 1 count) TIM DOUGHERTY • 15 U.S.C. §§ 78j(b), 78ff, and 17 C.F.R. § 240.10b-5 (securities fraud - 1 count) 18 U.S.C. § 2 (aiding and abetting)

INDICTMENT

COUNT ONE

THE GRAND JURY CHARGES THAT:

BACKGROUND

At all times material to this indictment:

1. National Lampoon, Inc. ("National Lampoon") was a company based in Los Angeles, California, that was involved primarily in media projects including feature films, television programming, online and interactive entertainment, home video, and book publishing.

National Lampoon owned interests in all major National Lampoon properties, including the movies Animal House and the Vacation series. National Lampoon also operated a college television network and humor website. National Lampoon was publicly traded under the symbol

"NLN" on the American Stock Exchange.

2. Defendant DANIEL LAIKIN was the chief executive officer of National

Lampoon. Defendant LAIKEN also owned, alone and with partners, the majority of National

Lampoon stock. 3. Defendant DENNIS BARSKY, according to National Lampoon SEC filings, was a "consultant" to National Lampoon and was compensated primarily in National

Lampoon stock.

4. Defendant TIM DOUGHERTY was a stock promoter based in the

Rochester, New York, area who was associated with the following entities: Clear Stock. Inc.

("Clear Stock"), Expedite Ventures, Inc. ("Expedite Ventures"), and Expedite Holdings, Inc.

("Expedite Holdings").

5. The United States Securities and Exchange Commission ("the SEC") was an independent agency of the United States which was charged by law with the duty of protecting investors by regulating and monitoring, among other things, the purchase and sale of publicly traded securities. One of the national securities markets regulated by the SEC was the American

Stock Exchange.

THE CONSPIRACY

6. From in or about March 2008 through in or about June 2008, in the

Eastern District of Pennsylvania, and elsewhere, defendants

DANIEL LAIKIN, DENNIS BARSICY, and TIM DOUGHERTY conspired and agreed, together and with others known and unknown to the grand jury, to commit an offense against the United States, that is, to willfully and knowin gly, directly and indirectly, by use of the means and instrumentalities of interstate commerce, and the facilities of national securities exchanges, use and employ manipulative and deceptive devices and contrivances, in violation of Title 17, Code of Federal Regulations, Section 240.10b-5, by: (a) employing

2 (11411/

devices, schemes, and artifices to defraud; (b) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices, and courses of business which operated and would operate as a fraud and deceit upon any person, in connection with the purchase and sale of a security, in violation of Title 15, United States

Code, Sections 78j(b) and 78ff, and Title 17, Code of Federal Regulations, Section 240.10b-5.

MANNER AND MEANS

7. It was a part of the conspiracy that defendants DANIEL LAIKIN, DENNIS

BARSKY, TIM DOUGHERTY, and their co-conspirators sought to artificially inflate the price of National Lampoon stock by causing manipulative market activity in National Lampoon stock that was designed to appear to be the product of free and fair market forces. They did this in various ways, including the following:

a. Agreeing to engage in manipulative and deceptive securities transactions to artificially increase the price of National Lampoon stock.

b. Entering into illegal agreements to orchestrate their trading activity to create the false impression of increased market demand for National Lampoon stock.

c. Coordinating trading activity with issuing National Lampoon press releases to provide a false pretext for the increased trading volume in National Lampoon stock.

d. Agreeing to secretly bribe brokers and other individuals to purchase and hold, and cause their retail customers to purchase and hold, National Lampoon stock.

2 OVERT ACTS

8. In furtherance of the conspiracy and to accomplish its objects, defendants

DANIEL LAIKIN, DENNIS BARSKY, and TIM DOUGHERTY committed the following overt acts, among others, in the Eastern District of Pennsylvania and elsewhere:

a. In or about March 2008, defendant LAIKIN agreed to pay Eduardo

Rodriguez, charged elsewhere, approximately $60,000 to help create artificial volume in National

Lampoon stock. Defendant LAIKIN understood that Rodriguez would keep a portion of the payment as a fee and would use the balance of the payment to bribe brokers and/or stock promoters to cause their clients and others to purchase National Lampoon stock.

b. In or about March 2008, defendant DOUGHERTY agreed to cause volume purchases of National Lampoon stock in exchange for a kickback from Rodriguez of approximately ten percent of the purchases.

c. On or about March 14, 2008, defendant LAIKIN caused National

Lampoon's Depository Trust Company Reports ("DTC Reports") to be emailed to Rodriguez.

These reports contained lists of the investment houses that held the securities on behalf of their customers and are not generally available to the investing public. These reports are valuable to participants in stock manipulation schemes to help them keep track of the entities that hold a stock at any given point in time.

d. On or about March 19, 2008, defendant LAIKIN caused approximately $60,000 to be wire transferred from a bank account in Indianapolis, Indiana, to a

4 (;)

bank account in Blue Bell, Pennsylvania, for the benefit of Rodriguez as payment for generating volume purchases in National Lampoon stock.

e. On or about March 19, 2008, Rodriguez caused approximately

$40,000 to be wire transferred from Blue Bell, Pennsylvania, to an account controlled by defendant DOUGHERTY in New York, New York, as payment for generating volume purchases in National Lampoon stock.

f. On or about March 20. 2008, defendant DOUGHERTY purchased approximately 5,000 shares of National Lampoon stock for approximately $9,354 in an Expedite

Holdings account.

g. On or about March 24, 2008, defendant DOUGHERTY purchased approximately 5,000 shares of National Lampoon stock for approximately $9,659 in a Clear

Stock account.

h. On or about March 25, 2008, defendant DOUGHERTY sold 5,000 shares of National Lampoon stock for approximately $9,611 from his Expedite Holdings account and purchased 5,000 shares of National Lampoon stock for approximately $10,475 in his Clear

Stock account.

i. On or about March 26, 2008, defendant DOUGHERTY purchased approximately 5,000 shares of National Lampoon stock for approximately $10,544 in an

Expedite Ventures account.

j. On or about March 27, 2008, defendant DOUGHERTY purchased approximately 10,000 shares of National Lampoon stock for approximately $20,624 in an

Expedite Holdings account.

5 k. On or about March 28, 2008, defendant DOUGHERTY purchased

approximately 2,500 shares of National Lampoon stock for approximately $5,343 in an Expedite

Ventures account.

1. On or about March 31, 2008, defendant DOUGHERTY purchased

approximately 5,000 shares of National Lampoon stock for approximately $10,577 in an

Expedite Holdings account.

m. On or about April 2, 2008, defendant DOUGHERTY purchased

approximately 10,000 shares of National Lampoon stock for approximately $21,619 in an

Expedite Ventures account.

n. On or about April 7, 2008, defendant DOUGHERTY purchased

approximately 10,000 shares of National Lampoon stock for approximately $20,420 in an

Expedite Holdings account.

o. On or about April 7, 2008, Rodriguez emailed defendant

DOUGHERTY to complain that defendant DOUGHERTY had not delivered enough buying of

National Lampoon stock.

p. On or about April 8, 2008, defendant DOUGHERTY responded to

Rodriguez by email the following day, stating that he was doing his "best to round up" purchases of 10,000 shares per day but that he was "not buying them all personally so they wont all be at one firm." Defendant DOUGHERTY further stated that he was looking for more "budget" to do the deal and complained that Rodriguez had told him that there was an average daily volume of

20,000 shares, but, according to defendant DOUGHERTY, there would be no trading activity in

National Lampoon stock without defendant DOUGHERTY's purchases.

6 411)

q. On or about April 8, 2008, Rodriguez emailed defendant

DOUGHERTY to say that his "intentions were never just to have a couple of guys buy but more about getting [National Lampoon's] name out there." Rodriguez stated that his

"recommendation is that we try to blow this out this week instead of over the next 2 weeks. [W]e just need 3 big days. . . ."

r. On or about April 8, 2008, defendant DOUGHERTY responded by email to Rodriguez's April 8, 2008 email by stating that the "truth is your intentions may not have been to have a couple of guys buy but that is what you asked for. If I spent your budget just getting the word out you would not have seen trades. You told me straight out that our goal is

[$2.50] and you think 5k-10K a day would get us there. . . ."

s. On or about April 8, 2008, defendant LAIKIN emailed Rodriguez to inform him that the non-public press release that defendant LAIKIN had previously sent to

Rodriguez was fine and that Rodriguez would "have to get some buyers in here ASAP."

t. On or about April 11, 2008, Rodriguez emailed defendant

DOUGHERTY to complain that defendant DOUGHERTY had failed to deliver on his promise to purchase 10,000 shares of National Lampoon stock each day for four weeks.

u. Defendant DOUGHERTY responded to Rodriguez by email that "I bought for more then 2 weeks, I told you 10K would be my goal. Lets be honest do you know anyone who gets your 400k worth of buying for 40 grand . . . . I would never commit to a 10 for

1 its unheard of. you told me this had 20k in real avg buying . . . . Thats a lie. . . ."

v. On or about April 15, 2008, defendant LAIKIN emailed Rodriguez a non-public National Lampoon press release dated April 17, 2008. w. On or about April 15, 2008, defendant DOUGHERTY emailed

Rodriguez and stated that "I bought the shit out of NLN for what I was paid. . . ."

x. On or about April 22, 2008, Rodriguez met in Newtown,

Pennsylvania with an individual who was secretly cooperating with the government (identified here as the "CW"). At this meeting, Rodriguez stated that he was being paid by defendant

LAIKIN and others to artificially inflate the trading volume in National Lampoon stock in exchange for a fee. Rodriguez proposed that the CW join this effort and share the fee.

Defendant LAIKIN joined the meeting by conference call and agreed to set up a time for all of them to meet in person.

y. On or about April 22, 2008, defendant LAIKIN emailed the

National Lampoon DTC Reports to Rodriguez.

z. On or about April 22, 2008, Rodriguez emailed the National

Lampoon DTC reports to the CW.

aa. On or about April 28, 2008, defendant DOUGHERTY purchased approximately 5,000 shares of National Lampoon stock for approximately $7,775 in an Expedite

Holdings account.

bb. On or about May 1, 2008, defendant LAIKIN, Rodriguez, and the

CW met in Los Angles, California to discuss artificially inflating National Lampoon stock.

During this meeting, defendant LAIKIN said, among other things, that he was working with defendant BARSKY to inflate the stock price and that defendant LAIKIN and his partners owned approximately 70 percent of the company. Defendant LAI:F(1N explained that he wanted to get

National Lampoon's stock price up to $5 per share from approximately $2 per share so that it

8 would be more attractive for "strategic partnerships" and "acquisitions." Defendant LAIIUN agreed to pay Rodriguez and the CW approximately 17 percent or "one for six" of the value of

National Lampoon stock that they caused to be purchased and held with further stock incentives if the stock price hit certain benchmarks. Defendant LALK1N stated that defendant BARSKY likely would send the fee by a wire transfer. Defendant LAIKIN also improperly provided

Rodriguez and the CW with non-public information regarding National Lampoon's financial performance. Defendant LAKIN never publicly disclosed this agreement with Rodriguez and the CW.

cc. On or about May 14, 2008, defendant LAIKIN sent Rodriguez the

National Lampoon non-objecting beneficial owners list ("NOBO list"). A NOBO list is a record containing the names of all the owners of a stock at a given point in time and is regularly updated to reflect shifts in ownership. This list generally is not available to the public and is valuable to participants in stock manipulation schemes to keep track of who owns the stock at any given time.

dd. On or about May 14, 2008, Rodriguez emailed the National

Lampoon NOBO list to the CW.

ee. On or about May 19, 2008, defendant LAIK1N shared with

Rodriguez the confidential contents of an upcoming National Lampoon press release. Defendant

LALKIN had arranged for the press release to be made public on the following day to coordinate the timing of the release with the stock purchases that Rodriguez and the CW caused as part of their conspiracy to manipulate National Lampoon stock.

ff. On or about May 19, 2008, Rodriguez provided the non-public

9 press release information to the CW.

gg. On or about May 20, 2008, at the direction of defendant LAIKIN.

Rodriguez and the CW caused purported retail purchases to be made of approximately 25,000 shares of National Lampoon stock at approximately $2.03 per share, for a total of approximately

$50,750. In reality, the Federal Bureau of Investigation ("FBI") made those purchases with its undercover funds.

hh. On or about May 21, 2008, defendant BARSKY, Rodriguez, and the CW discussed by telephone manipulating National Lampoon stock, including manipulating the bid price for the stock and coordinating buying with the company's financial reporting in

June.

On or about May 22, 2008, defendants LAIKIN and BARSKY caused approximately $8,333 to be wired from a Las Vegas bank account to a bank account for

Rodriguez's benefit in Blue Bell, Pennsylvania, as payment for the May 20, 2008 purchase of

25,000 shares of National Lampoon stock. That same day, Rodriguez caused approximately

$6,625 to be wired an undercover account in Philadelphia that Rodriguez believed to be for the benefit of the CW, but which actually was maintained by the FBI.

On or about June 2, 2008, defendant LAIKIN caused updated confidential National Lampoon DTC Reports to be emailed to Rodriguez.

klc. On or about June 24, 2008, defendant BARSKY discussed by telephone with Rodriguez manipulating the price of National Lampoon stock.

All in violation of Title 18, United States Code, Section 371.

10 COUNT TWO

THE GRAND JURY FURTHER CHARGES THAT:

1. Paragraphs 1 through 5 and 7 and 8 of Count One are incorporated here.

2. From in or about March 2008 through in or about June 2008, in the

Eastern District of Pennsylvania and elsewhere, defendants

DANIEL LAIKIN, DENNIS BARSICY, and TIM DOUGHERTY willfully and knowingly, by the use of the means and instrumentalities of interstate commerce and the facilities of national securities exchanges, directly and indirectly, used and employed manipulative and deceptive devices and contrivances, and aided and abetted the use and employment of manipulative and deceptive devices and contrivances, in violation of Title 17,

Code of Federal Regulations, Section 240.10b-5, by: (a) employing devices, schemes, and artifices to defraud; (b) making untrue statements of material fact and omitting to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and (c) engaging in acts, practices, and courses of business which operated and would operate as a fraud and deceit upon other persons in connection with purchases and sales of National Lampoon stock.

ii In violation of Title 15, United States Code, Sections 78j(b) and 78ff. Title 17.

Code of Federal Regulations, Section 240.10b-5. and Title 18, United States Code, Section 2.

A TRUE BILL:

GRAND JURY FOREPERSON

LAURIE MAGID Acting United States Attorney

12 EXHIBIT 2 IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA CRIMINAL NO. 08-

v. DATE FILED: December 11, 2008

EDUARDO RODRIGUEZ • VIOLATIONS: 15 U.S.C. §§ 78j(b), 78ff, and 17 C.F.R. § 240.10b-5 (securities fraud - 4 counts) 18 U.S.C. § 2 (aiding and abetting)

SUPERSEDING INFORMATION

COUNT ONE

THE UNITED STATES ATTORNEY CHARGES THAT:

BACKGROUND

At all times relevant to this information:

1. Defendant EDUARDO RODRIGUEZ was a New Jersey resident and a stock promoter who, in exchange for a fee, facilitated organized retail sales of a publicly traded stock with the objective of manipulating the stock's price by artificially creating demand in the stock.

2. An individual known to the grand jury and identified here as the cooperating witness ("the CW") was secretly cooperating with the government. In this capacity, the CW agreed to help defendant EDUARDO RODRIGUEZ and other individuals who were involved in manipulating the price of a stock by arranging for securities brokers and other individuals to make purchases in a publicly traded stock and then "park," or hold, the stock to artificially inflate the stock's price. The CW charged a fee for his services, a portion of which he Q (;)

purportedly used to secretly bribe brokers to purchase stock in their clients' accounts.

3. Defendant EDUARDO RODRIGUEZ and the CW agreed to split fees

generated through illegal agreements to manipulate stock in publicly traded companies.

4. The United States Securities and Exchange Commission (the "SEC") was

an independent agency of the United States which was charged by law with the duty of protecting

investors by regulating and monitoring, among other things, the purchase and sale of publicly traded securities. Among the national securities markets regulated by the SEC were the New

York Stock Exchange, the American Stock Exchange, and the Pink OTC Markets Inc., an inter- dealer electronic quotation and trading system in the over-the-counter ("OTC") securities market

commonly referred to as the "Pink Sheets."

5. National Lampoon, Inc. ("National Lampoon") was a company based in

Los Angeles, California, that was involved primarily in media projects including feature films, television programming, online and interactive entertainment, home video, and book publishing.

"NLN" on the American Stock Exchange.

THE SECURITIES FRAUD

6. From in or about March 2008 through in or about June 2008, in

Philadelphia, in the Eastern District of Pemisylvania, and elsewhere, defendant

EDUARDO RODRIGUEZ willfully and knowingly, by the use of the means and instrumentalities of interstate commerce

2 and the facilities of national securities exchanges, directly and indirectly, used and employed manipulative and deceptive devices and contrivances, and aided and abetted the use and employment of manipulative and deceptive devices and contrivances, in violation of Title 17,

MANNER AND MEANS OF THE SECURITIES FRAUD

It was part of the securities fraud that:

7. Defendant EDUARDO RODRIGUEZ and others known and unknown to the United States Attorney attempted to artificially inflate the price of National Lampoon stock by causing manipulative market activity in National Lampoon stock that was designed to appear to be the product of free and fair market forces. They did this in various ways, including the following:

a. Agreeing to engage in manipulative and deceptive securities transactions to artificially increase the price of National Lampoon stock.

b. Entering into illegal agreements to orchestrate their trading activity to create the false impression of market demand for National Lampoon stock.

c. Coordinating trading activity with issuing National Lampoon press releases to provide a false pretext for the increased trading volume in National Lampoon stock.

3 d. Agreeing to secretly bribe brokers and other individuals to purchase and hold, and cause their retail customers to purchase and hold, National Lampoon stock.

All in violation of Title 15, United States Code, Sections 78j(b) and 78ff. Title 17,

Code of Federal Regulations, Section 240.10b-5, and Title 18 United States Code, Section 2.

4 COUNT TWO

THE UNITED STATES ATTORNEY FURTHER CHARGES THAT:

1. Paragraphs 1 through 4 of Count One are incorporated here.

2. At all times relevant to this information, Advatech Corporation

("Advatech") was a West Palm Beach, Florida corporation that described itself as an early-stage biotechnology company engaged in the research and development and the commercialization of non-invasive electrical therapies. Advatech stock was publicly traded under the ticker symbol

"ADVA" on Pink OTC Markets Inc., an inter-dealer electronic quotation and trading system in the over-the-counter ("OTC") securities market commonly referred to as the "Pink Sheets."

THE SECURITIES FRAUD

3. From in or about May 2008 through in or about June 2008, in the Eastern

District of Pennsylvania and elsewhere, defendant

EDUARDO RODRIGUEZ willfully and knowingly, by the use of the means and instrumentalities of interstate commerce and the facilities of national securities exchanges, directly and indirectly, used and employed manipulative and deceptive devices and contrivances, and aided and abetted the use and employment of manipulative and deceptive devices and contrivances, in violation of Title 17,

5 purchases and sales of Advatech stock.

MANNER AND MEANS OF THE SECURITIES FRAUD

It was part of the securities fraud that:

4. Defendant EDUARDO RODRIGUEZ and others known and unknown to the United States Attorney sought to artificially inflate the price of Advatech stock by causing manipulative market activity in Advatech stock that was designed to appear to be the product of free and fair market forces. They did this in various ways, including the following:

a. Agreeing to engage in manipulative and deceptive securities transactions to artificially increase the price of Advatech stock.

b. Entering into illegal agreements to orchestrate their trading activity to create the false impression of market demand for Advatech stock.

c. Coordinating trading activity with issuing Advatech press releases to provide a false pretext for the increased trading volume in Advatech stock.

d. Agreeing to secretly bribe brokers and other individuals to purchase and hold, and cause their retail customers to purchase and hold, Advatech stock.

All in violation of Title 15. United States Code, Sections 78j(b) and 78ff, Title 17,

Code of Federal Regulations, Section 240.10b-5, and Title 18 United States Code, Section 2.

6 COUNT THREE

THE UNITED STATES ATTORNEY FURTHER CHARGES THAT:

1. Paragraphs 1 through 4 of Count One are incorporated here.

2. At all times relevant to this information, Swedish Vegas, Inc. ("Swedish

Vegas") was a Delaware corporation based in Arcadia, California that described itself as a

company "building a global brand name with a website, a line of microbrewed beer and a

restaurant/bar concept." Swedish Vegas was publicly traded under the ticker symbol "SWDV"

on the Pink OTC Markets Inc., an inter-dealer electronic quotation and trading system in the

over-the-counter ("OTC") securities market commonly referred to as the "Pink Sheets."

THE SECURITIES FRAUD

3. From in or about June 2008 through in or about July 2008, in the Eastern

District of Pennsylvania and elsewhere, defendant

EDUARDO RODRIGUEZ

willfully and knowingly, by the use of the means and instrumentalities of interstate commerce

and the facilities of national securities exchanges, directly and indirectly, used and employed

manipulative and deceptive devices and contrivances, and aided and abetted the use and

employment of manipulative and deceptive devices and contrivances, in violation of Title 17,

Code of Federal Regulations, Section 240.10b-5, by: (a) employing devices, schemes, and

artifices to defraud; (b) making untrue statements of material fact and omitting to state material

facts necessary in order to make the statements made, in light of the circumstances under which

they were made, not misleading; and (c) engaging in acts, practices, and courses of business which operated and would operate as a fraud and deceit upon other persons in connection with

7 (110

purchases and sales of Swedish Vegas stock.

MANNER AND MEANS OF THE SECURITIES FRAUD

It was part of the securities fraud that:

4. Defendant EDUARDO RODRIGUEZ and others known and unknown to the United States Attorney sought to artificially inflate the price of Swedish Vegas stock by causing manipulative market activity in Swedish Vegas stock that was designed to appear to be the product of free and fair market forces. They did this in various ways, including the following:

a. Agreeing to engage in manipulative and deceptive securities transactions to artificially increase the price of Swedish Vegas stock.

b. Entering into illegal agreements to orchestrate their trading activity to create the false impression of market demand for Swedish Vegas stock.

c. Coordinating trading activity with issuing Swedish Vegas press releases to provide a false pretext for the increased trading volume in Swedish Vegas stock.

d. Agreeing to secretly bribe brokers and other individuals to purchase and hold, and cause their retail customers to purchase and hold, Swedish Vegas stock.

All in violation of Title 15, -United States Code, Sections 78j(b) and 78ff, Title 17,

Code of Federal Regulations. Section 240.10b-5, and Title 18 United States Code, Section 2.

8 (i)

COUNT FOUR

THE UNITED STATES ATTORNEY FURTHER CHARGES THAT:

1. Paragraphs 1 through 4 of Count One are incorporated here.

2. At all times relevant to this information, a company known to the United

States Attorney and identified here as "Company A" was publicly traded on the Pink OTC

Markets Inc., an inter-dealer electronic quotation and trading system in the over-the-counter

("OTC") securities market commonly referred to as the "Pink Sheets."

THE SECURITIES FRAUD

3. From in or about June 2008 through in or about July 2008, in the Eastern

District of Pennsylvania and elsewhere, defendant

9 purchases and sales of Company A stock.

MANNER AND MEANS OF THE SECURITIES FRAUD

It was part of the securities fraud that:

4. Defendant EDUARDO RODRIGUEZ and others known and unknown to the United States Attorney sought to artificially inflate the price of Company A stock by causing manipulative market activity in Company A stock that was designed to appear to be the product of free and fair market forces. They did this in various ways, including the following:

a. Agreeing to engage in manipulative and deceptive securities transactions to artificially increase the price of Company A stock.

b. Entering into illegal agreements to orchestrate their trading activity to create the false impression of market demand for Company A stock.

c. Coordinating trading activity with issuing Company A press releases to provide a false pretext for the increased trading volume in Company A stock.

d. Agreeing to secretly bribe brokers and other individuals to purchase and hold, and cause their retail customers to purchase and hold, Company A stock.

All in violation of Title 15, United States Code, Sections 78j(b) and 78ff, Title

17,Code of Federal Regulations, Section 240.10b-5, and Title 18 United States Code, Section 2.

LAURIE MAGID Acting United States Attorney

10 EXHIBIT 3 4;1

. . IN THE UNITED STATES DISTRICT COURT FOR 1.111; EASTERN DISTRICT OF PENNSYLVANIA

SECURITIES AND EXCHANGE COMMISSION,

• Civil Action No. v. os---Crctb- • NATIONAL LAMPOON, NC., • DANIEL S. LAIKIN, • DENNIS S. BARSKY, • EDUARDO RODRIGUEZ and • TIM DOUGHERTY, •

Defendants. •

COMPLAINT

Plaintiff Securities and Exchange Commission (the "Commission") alleges as follows:

SUMMARY

I. From at least March 2008 through June 2008, National Lampoon, Inc. ("National

Lampoon"), its Chief Executive Officer ("CEO") Daniel S. Lailcin, Dennis S. Barsky, Eduardo

Rodriguez and Tim Dougherty (collectively the "Defendants") engaged in a fraudulent scheme to manipulate the market for the common stock of National Lampoon.

2. Specifically, Lailin, along with Barsky, a National Lampoon consultant and significant stockholder, paid kickbacks in exchange for generating or causing purchases of National

Lampoon stock to Rodriguez, a corrupt stock promoter, and the Cooperating Witness ("CVV"), an individual whom they believed had connections to corrupt registered representatives. In reality, the

CW was, at all times, cooperating with the Federal Bureau of Investigation ("FBI"). As part of this scheme, Dougherty generated purchases of National Lampoon stock in exchange for a portion of the kickbacks. 3. Laikin and Barsky paid at least $68,000 to Rodriguez, Dougherty, and the CW collectively to cause the purchase of at least 87,500 shares of National Lampoon stock for the purpose of creating the appearance of an active and liquid market, inducing other investors to purchase stock, and ultimately increasing the stock's trading price. Through these efforts, Lakin and Barsky sought to artificially push National Lampoon's stock price from under $2.00 a share to at least $5.00 a share, in part, to keep the company's stock price above the minimum listing requirements of the American Stock Exchange ("AMEX," now known as NYSE Altemext), and to increase National Lampoon's ability to enter into possible strategic transactions and/or acquisitions.

4. National Lampoon and Lakin never publicly disclosed this manipulative scheme, and made materially misleading statements in a July 17, 2008 tender offer.

VIOLATIONS

5. As a result of the conduct described in this Complaint, defendant National Lampoon violated, and unless reshained and enjoined by the Court will continue to violate, Section 17(a) of the Securities Act of 1933 ("Securities Act") [15 U.S.C. § 77q(a)], and Sections 9(a)(2), 10(b), and

13(e) of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78i(a)(2), 78j(b), and

78m(e)], and Rules 10b-5 and 13e-4 [17 C.F.R. §§ 240.10b-5 and 240.13e-43, thereunder.

6. As a result of the conduct described in this Complaint, defendant Lakin violated, and unless restrained and enjoined by the Court will continue to violate, Section 17(a) of the

Securities Act, and Sections 9(a)(2) and 10(b) of the Exchange Act and Rule 10b-5, thereunder, and aided and abetted violations of Section 13(e) of the Exchange Act and Rule 13e-4, thereunder.

7. As a result of the conduct described in this Complaint, defendants Barsky,

Rodriguez, and Dougherty violated, and unless restrained and enjoined by the Court will continue to violate, Sections 9(a)(2) and 10(b) of the Exchange Act and Rule 10b-5, thereunder.

2 (1)

JURISDICTION AND VENUE

8. The Commission brings this action pursuant to the authority conferred upon it by

Section 20(b) of the Securities Act [15 U.S.C. § 77t(b)] and Section 21(d) of the Exchange Act [15

U.S.C. § 78u(d)], seeking permanently to enjoin the Defendants from engaging in the acts, transactions, practices and courses of business alleged in this Complaint.

9. The Commission seeks a final judgment ordering Laficin, Barsky, Rodriguez and

Dougherty to disgorge their ill-gotten gains, together with prejudgment interest thereon.

10. The Commission seeks a final judgment ordering Lailcin to pay civil money penalties pursuant to Section 20(d) of the Securities Act [15 U.S.C. §77t(d)], and Section 21(d)(3) of the Exchange Act [15 U.S.C. § 78u(d)(3)].

11. The Commission seeks a final judgment ordering Barsky, Rodriguez and Dougherty to pay civil money penalties pursuant to Section 21(dX3) of the Exchange Act.

12. The Commission seeks a final judgment barring Lailcin from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange

Act [15 U.S.C. § 78/] or that is required to file reports pursuant to Section 15(d) of the Exchange

Act [15 U.S.C. § 78o(d)].

13. This Court has jurisdiction over this action pursuant to Sections 20(b), 20(d) and

22(a) of the Securities Act [15 U.S.C. §§ 77t(b), 77t(d) and 77v(a)], and Sections 21(d) and 27 of the Exchange Act [15 U.S.C. §§ 78u(d) and 78aa].

14. Venue in this District is proper pursuant to Section 22(a) of the Securities Act and

Section 27 of the Exchange Act, because certain of the transactions, acts, practices, and courses of business constituting the violations alleged herein occurred within the Eastern District of

Pennsylvania. For example, the CW was present within the Eastern District of Pennsylvania for

3 some, if not all of the telephone calls described below, and certain defendants wired kickback payments to bank accounts within the Eastern District of Pennsylvania.

15. The Defendants, directly or indirectly, have made use of the means or instruments of transportation or communication in interstate commerce, or of a means or instrumentality of interstate commerce, or of the mails, or of the facilities of a national securities exchange, in connection with the transactions, acts, practices and courses of business alleged in this Complaint.

DEFENDANTS

16. National Lampoon, Inc. is incorporated in Delaware, with its headquarters in Los

Angeles, California_

17. Daniel S. Laildn, age 46, is a resident of Los Angeles, California and has been the

CEO of National Lampoon since 2005. He previously served as National Lampoon's Chief

Operating Officer from 2002 until he became the CEO.

18. Dennis S. Barsky, age 60, is a resident of Las Vegas, Nevada. In National

Lampoon's Form 10-KSB for the fiscal year ended July 31, 2007, the company disclosed that in

August 2006, it entered into an agreement with Barsky to provide consulting services and that

Barsky was compensated through the issuance of 44,000 shares of restricted common stock which had a value of $79,230.

19. Eduardo Rodriguez, age 49, resides in Livingston, New Jersey. He owns and operates an entity named Cheetah Consulting Group LLC. Rodriguez is a stock promoter.

20. Tim Dougherty, age 29, resides in Webster, New York. He is a stock promoter and principal of OTC Advisors, Inc., a stock promotion company. Dougherty is associated with the following entities: Clear Stock, Inc., Expedite Ventures, Inc., and Expedite Holdings, Inc.

4 Q

FACTS

Background

21. At all times relevant to the facts alleged in this Complaint, defendant National

Lampoon acted by and through defendant Laikin.

22. National Lampoon is a media and entertainment company that develops, produces and distributes media projects including feature films, television programming, online and interactive entertainment, home video, and book publishing. The company produced such widely known films as National Lampoon's Animal House, and the National Lampoon Vacation series.

National Lampoon also operates a college television network and humor website. National

Lampoon's common stock is registered with the Commission pursuant to Section 12()) of the

Exchange Act and the company files periodic reports. National Lampoon's common stock is listed on the NYSE Aliemext, a national securities exchange, under the ticker symbol "NLN." National

Lampoon is also listed on the Berlin Stock Exchange. According to National Lampoon's public filings, as of May 16, 2008, there were approximately 8.6 million shares of common stock outstanding. National Lampoon's fiscal year ends July 31st.

National Lampoon's Financial Situation in Early 2008

23. In early 2008, several factors influenced Laikin to embark on a scheme to manipulate the market for National Lampoon stock.

24. National Lampoon's financial health was not good. In its Form 10-QSB filed with the Commission on March 17, 2008, National Lampoon reported that "The Company's current net loss of $2,016,290 for the six months ended January 31, 2008 along with the prior two years net losses of $2,504,170 and $6,859,085 as well as negative working capital of $8,490,642 and

5 shareholders' deficiency of $4,644,014 at January 31, 2008, raises substantial doubt about its ability to continue as a going concern."

25. National Lampoon's financial difficulties had also threatened its ability to remain listed on the AMEX. On February 27, 2008, National Lampoon received a letter from the AMEX indicating that the company did not meet certain continued listing standards and could be subject to delisting proceedings if did not become compliant by August 27, 2008.

26. According to Laikin, National Lampoon's stock price was preventing the company from engaging in strategic transactions or acquisitions that could have helped the company.

27. National Lampoon's financial situation also personally impacted Laikin and his partners. Laficin owned or controlled approximately 40 percent of National Lampoon's voting stock. Together, with partners, he owned or controlled significantly more. For example, according to Laikin, Barsky controlled more than three million shares through a group of investors he advised.

Thus, Lailtin had a significant personal financial stake tied to National Lampoon's stock price and continued viability.

28. Faced with the financial difficulties of National Lampoon, Laildn sought to artificially inflate the price of National Lampoon stock.

The Manipulative Scheme

29. Together with Barsky, and ultimately engaging the services of Rodriguez,

Dougherty, and the CW, Lain and the other Defendants orchestrated a scheme to manipulate the market for National Lampoon stock. They did this in various ways, including: a) entering into illegal agreements to orchestrate trading activity to create the false impression of increased market activity and demand for National Lampoon stock; b) engaging in, directing, or causing manipulative and deceptive securities transactions through the payment of illicit kickbacks to artificially increase

6 National Lampoon's stock price and trading volume; and c) causing National Lampoon to issue press releases coordinated with the fraudulent trading activity to provide a false pretext for the increased trading volume and to induce public investors to also make purchases of National

Lampoon stock.

30. Through these activities, Defendants created artificial trading activity in National

Lampoon stock, injected artificial information into the marketplace, and created a false impression of supply and demand for National Lampoon stock.

The March 2008 Manipulation

31. In March 2008, Laildn and Barsky engaged the services of Rodriguez to manipulate

National Lampoon stock through purchases of the stock in an effort to increase share price.

32. Rodriguez is a stock promoter who, in exchange for a fee, facilitated purchases of publicly traded stock with the objective of illegally manipulating the market for that stock by artificially creating demand.

33. Laikin and Barsky agreed to pay Rodriguez an advance cash kickback payment of

$60,000 in exchange for generating future purchases of National Lampoon stock. Laikin, Barsky, and Rodriguez agreed that Rodriguez would use most of the money to pay bribes to others to generate or cause purchases of National Lampoon stock and that Rodriguez would retain a portion of the money as his fee. The parties agreed to a "1-for-6" deal in which Rodriguez was supposed to generate purchases equal to roughly six times the amount of the kickback payment

34. On or about March 19, 2008, Laildn and Barsky paid Rodriguez the $60,000 kickback. These funds were transferred by wire from a bank account in Indianapolis, Indiana to

Rodriguez's bank account in Blue Bell, Pennsylvania.

7 C

35. Lailcin also emailed Rodriguez National Lampoon's Depository Trust Company

Reports ("DTC Reports") so they could use them in the future to corroborate that Rodriguez

generated the agreed upon amount of purchases of National Lampoon stock. DTC Reports contain

information that reflects ownership positions of the issuer's securities in DTC accounts at the moment in time the report was produced. DTC does not make the reports publicly available as they

are only provided to issuers upon request.

36. Around the same date, Rodriguez contacted Dougherty, a principal of Rochester,

New York based OTC Advisors. Dougherty agreed to generate or cause purchases of National

Lampoon stock in exchange for a fee.

37. Rodriguez sent Dougherty's kickback payment in advance of the purchases.

Rodriguez wired $40,000 of the $60,000 he had received from Laikin and Barsky from an account in Blue Bell, Pennsylvania to Dougherty's account in New York, New York. Rodriguez kept

$20,000 as his fee.

38. The very next day, March 20, 2008, Dougherty began purchasing or causing the purchase of National Lampoon stock through various accounts he controlled.

39. As detailed in the following chart, on ten trading days between March 20, 2008 and

April 28, 2008, Dougherty purchased, or caused to be purchased, approximately 62,500 shares through at least ten separate transactions. Dougherty spread the purchases among different accounts that he controlled:

(;)

Purchase 4)/0 Total Date Name Price Quantity Amount Volume 3/20/2008 Expedite Holdings Inc. $ 1.80 5,000 $ 9,000 12 % 3/24/2008 Clear Stock Inc. $ 1.89 5,000 $ 9,450 23 % 3/25/2008 Clear Stock Inc. $ 2.05 5,000 $ 10,250 24 % 3/26/2008 Expedite Ventures Inc. $ 2.03 5,000 $ 10,150 38 % 3/27/2008 Expedite Holdings Inc. $ 2.02 10,000 $ 20,200 27 % 3/28/2008 Expedite Ventures Inc. $ 2.05 2,500 $ 5,125 5 % 3/31/2008 Expedite Holdings Inc. $ 2.07 5,000 $ 10,350 40 % 4/2/2008 Expedite Ventures Inc. $ 2.09 10,000 $ 20,850 41 % 4/7/2008 Expedite Holdings Inc. $ 2.00 10,000 $ 20,000 59 % 4/28/2008 Expedite Holdings Inc. $ 1.55 5,000 $ 7,750 , 5 %

40. On March 25, 2008, in connection with the 5,000 share purchase by the Clear Stock

account, Dougherty also caused the sale of 5,000 shares of National Lampoon stock from an

Expedite Holdings account.

41. As reflected in the above chart, Dougherty purchased, or caused to be purchased,

these shares at prices ranging from $1.55 to $2.09 per share. Each day's purchases represented from

five to 59 percent of that day's total trading volume. In the 90 days prior to March 20, 2008, the

average trading volume of National Lampoon stock was 21,500 shares per day.

42. These transactions, made as a direct result of the payment of the kickback by Laikin,

Barsky, and Rodriguez, injected artificial information into the marketplace and created a false

impression of supply and demand for National Lampoon stock.

43. However, according to Rodriguez, these purchases were insufficient He claimed

that Dougherty fell well short of generating the volume of purchases Dougherty originally promised

to deliver in exchange for the $40,000 kickback.

44. In April 2008, Rodriguez and Dougherty engaged in a series of contentious email

exchanges in which they argued over the volume of National Lampoon stock that Dougherty agreed

to purchase, as well as the terms of the kickback agreement. During the exchange Dougherty

9 (;)

explicitly acknowledged his role in the kickback scheme. For example, he wrote to Rodriguez that

"I bought the shit out of NLN for what I was paid for."

45. Laikin was similarly not satisfied with the amount of purchases generated from the kickback he had paid. He wanted more. Thus, Lailcin began to put pressure on Rodriguez to seek others who would generate purchases of National Lampoon stock.

46. On April 8, 2008, Lailin emailed Rodriguez and told him that he would "have to get some buyers in here ASAP." As a result of Laikin's email, Rodriguez contacted the CW, whom he knew from previous business deals, to engage him to generate more purchases in National Lampoon stock in exchange for kickback payments.

The May 2008 Manipulation

47. On or about April 22, 2008, Rodriguez met with the CW, an individual whom he believed had connections to corrupt registered representatives, in Newtown, Pennsylvania, to recruit him to join in the manipulative buying campaign in National Lampoon stock. Rodriguez explained that he was being paid by LaBcin and others to artificially inflate the trading volume in National

Lampoon stock in exchange for a fee. He proposed that the CW join the effort and share in the kickback. Later that day, Lail:in emailed the National Lampoon DTC Reports to Rodriguez, who emailed them on to the CW.

48. The following day, on or about April 23, 2008, Rodriguez and the CW spoke with

Laikin about entering into a kickback arrangement for generating purchases of National Lampoon stock.

49. During this conversation, Laikin explained some of his motivation for manipulating the stock price. He told the CW that he needed two things — "revenue for my business" and "a stock

10 that actually trades and at a value I'm happy with." This agreement with Rodriguez and the CW was supposed to take care of the latter.

50. Laikin specifically discussed his need to have the stock trading at higher levels, stating that "there are some small acquisitions that I want to make and I can make those with stock and they will drive revenue and profitability." He also told the CW that he had turned down acquisition offers by every major media company because he did not think that National Lampoon would get a fair public valuation based on the current stock price.

51. Laildn also told the CW that he controlled the public float of the stock and that there were less than one million shares for which he could not account. The float is the total number of shares publicly owned and available for trading.

52. On or about May 1, 2008, the CW and Rodriguez met Lailin at National Lampoon's corporate offices in California. During this meeting, Laikin again proposed making kickback payments to the CW in exchange for generating purchases of National Lampoon stock.

53. Laikin also further explained his reasons for wanting to drive up National

Lampoon's stock price. He expressed his concern that National Lampoon had fallen below AMEX listing standards due to the decline in its stock price and insufficient market capitalization. Lailin explained that he wanted to push National Lampoon's stock price (then trading at $1.86 per share) to $3.00 and then eventually to $5.00. Laikin also claimed that if they were able to manipulate the stock price higher, it could be more attractive for strategic partnerships or acquisitions.

54. Also during the meeting, Laikin shared confidential information with the CW about

National Lampoon's yet undisclosed revenues and recent business developments for National

Lampoon's fiscal quarter ended April 30, 2008. He said that on June 15, 2008, the company was going to report a "big jump" in revenue for the recent quarter on sales of movies released on video

11 along with the announcement that National Lampoon had reached an agreement with Warner

Brothers' studios on movie royalty payments. Laildn explained how they could coordinate the upcoming positive press announcements with the generated purchases in order to induce trading momentum in the stock.

55. Before the meeting ended, Laikin confirmed the details of the agreement. Laikin and the CW agreed that the CW would make a $50,000 purchase of National Lampoon stock very soon and that Laikin would pay a "1-for-6" kickback ($8,333) for the purchase, with several

$100,000 buys thereafter, each with the same "1-for-6" kickback ($16,666). Laikin also discussed the possibility of further stock incentives if the stock price hit certain benchmarks. Laikin repeatedly expressed a desire for the CW to start buying immediately.

56. Although Barsky was not present during this meeting, he was working in conjunction with Laikin and was involved in the manipulative scheme involving the May purchases.

Laildn told the CW that the kickback payment would come from Barsky or one of Laildn's other partners. LaIin also claimed that, if necessary, he could contact Barsky to ensure that none of the three million shares of National Lampoon that Barsky controlled would trade when the CW began purchasing shares.

57. On or about May 14, 2008, Laikin, through Rodriguez, emailed a Non-Objecting

Beneficial Owner's List ("NOBO List") to the CW so that they could corroborate that the CW generated the agreed upon amount of purchases of National Lampoon stock in the future. A non- objecting beneficial owner means a person with beneficial ownership in a security who gives permission to a financial intermediary (usually a broker-dealer or bank) to release his name and address to the issuer of the security. NOBO Lists, similar to DTC Reports, disclose to the issuer the

12 names of beneficial owners who are not otherwise known to the issuer because these investors are not directly registered on the issuer's records.

58. On or about May 19, 2008, Rodriguez and the CW confirmed the details of the kickback arrangement and that a $50,000 trade would be placed the next day. Rodriguez also told the CW that Lafidn intended to have National Lampoon issue a press release announcing the premier of the company's online show "Lemmings" before the market opened in the morning. As

Laikin promised in the May 1, 2008 meeting with the CW, he intended to coordinate positive news with the planned purchases, and, in turn, generate positive trading momentum.

59. On or about May 20, 2008, National Lampoon did issue a press release announcing the premier of "Lemmings." Shortly thereafter, in accordance with the agreement with Laildn.

Barsky and Rodriguez, and in what appeared to them to be purchases caused or generated by the

CVV, the FBI placed a market order to purchase 25,000 shares of National Lampoon stock.

60. The FBI's order was executed that day through 16 separate transactions for an average purchase price of $2.03 and total sale price of $50,715. The trade represented 60 percent of

National Lampoon's reported volume of 41,500 shares on May 20th.

61. The following day, the CW, Rodriguez and Barsky discussed the trade and other details concerning the kickback arrangement.

62. Barsky confirmed his involvement in the kickback scheme and also that he and

Lailcin were "looking for volume" in the stock through the CW's purchases. Barsky proceeded to discuss National Lampoon's upcoming news, business plans, and the public float of the stock.

63. Barsky, however, told the CW that he was disappointed with the execution of the trades because Barsky and Laikin could not see the purchases when they were reported to the market. Barsky told the CW that if he wanted to proceed with future manipulative trading in

13 National Lampoon they would have to "flatten out the procedure." Barsky indicated that he wanted future orders to end in "8" so he would know it was "them" when it was reported to the market.

64. Barsky told the CW that he did not want to pay the kickback for the trade until the

CW executed another trade in accordance with the new procedure. When the CW insisted that the payment be made in accordance with the original agreement, Barsky told the CW that if he paid him now, then Lailin would not want to go through with any additional trading.

65. On or about May 22, 2008, the day after this conversation, Barsky, at Laikin's direction, caused approximately $8,333 to be paid to Rodriguez as a kickback for the May 20, 2008 purchase of 25,000 shares. Barsky wired $8,333 from a Las Vegas bank account to the account in

Blue Bell, Pennsylvania. That same day, Rodriguez wired $6,625 to an account in Philadelphia that

Rodriguez believed to be for the benefit of the CW, but which actually was maintained by the FBI.

Rodriguez kept the remainder of Barsky's payment as his fee.

66. Approximately a month after the May 20, 2008 purchase, Barsky contacted

Rodriguez and discussed the possibility of again manipulating the price of National Lampoon stock through the payment of kickbacks. During this conversation, Barsky expressed frustration with how much time and money he had spent trying to artificially inflate the price of National Lampoon stock.

67. Neither Laikin nor National Lampoon publicly disclosed any of the above stated efforts of Lalin to manipulate the market for National Lampoon by paying kickbacks in exchange for generating purchases of National Lampoon stock, and coordinating National Lampoon press releases with the requested purchases to further generate trading momentum. These efforts by the

CEO, and his use of company press releases to assist the scheme, would have been clearly material to a reasonable investor.

14 C

Misstatements in the July 17, 2008 Self Tender Offer

68. On July 17, 2008, National Lampoon filed a self tender offer (the "Exchange Offer") pursuant to Rule 13e-4 of the Exchange Act. This Exchange Offer proposed an exchange whereby certain wan-ant holders were offered a two-year extension on the exercise date of their warrants for purchasing no less than ten percent of the common shares covered by their warrants. National

Lampoon proposed this offer to raise cash for its operations and as part of its plan that it submitted to the AMEX to regain compliance with its continued listing standards.

69. Laikin signed the Exchange Offer on behalf of National Lampoon.

70. The majority of the warrant holders accepted the offer and the company issued

522,590 shares of common stock, which resulted in proceeds of $927,598. Laikin, and three other board members, together controlling a majority of the shares of National Lampoon, took advantage of this offer as well and exercised warrants.

71. In the Exchange Offer, National Lampoon made misleading statements regarding the fair market value and trading range of the company's stock.

72. The Exchange Offer indicated that for the third quarter ended April 30, 2008,

National Lampoon stock traded in a range of $1.52 to $2.18 per share, and for the fourth quarter through July 16, 2008, in a range of $1.48 to $2.05 per share. The Exchange Offer also stated that

National Lampoon's common stock "has fluctuated widely in the past and is expected to continue to do so in the future, as a result of a number of factors, some of which are outside our control." As discussed in this Complaint, during each of these quarters, Laikin directed manipulative trading in the stock.

73. The statements pertaining to National Lampoon's common stock were misleading because National Lampoon failed to disclose in the Exchange Offer Laikin's efforts to artificially

15 inflate the price and volume of the company's stock. Specifically, National Lampoon did not disclose that Laikin, National Lampoon's CEO, had caused others to generate purchases of National

Lampoon stock in exchange for at least $68.333 in kickback payments, or that he had used National

Lampoon press releases in an effort to bolster the impact of those purchases.

74. In addition, the Exchange Offer made misleading statements in a section of the filing titled "Questions and Answers About The Offer" where the following question was posed: "Is there any information regarding National Lampoon, Inc. that I should be aware of" The purpose of this questicai was to provide investors with any information they would need to know about the company before deciding whether they should purchase ten percent of the shares covering their warrants. In response to this question, the Exchange Offer directed potential investors to the risks set forth in portions of other public filings, none of which disclosed Laikin's kickback payments or other efforts to artificially inflate the price and volume of the stock.

75. Among other things, the fact that the company's CEO had been engaged in a manipulation of the company's stock based upon the payment of kickbacks and the coordination of

National Lampoon press releases, and the fact that the then current stock price may have been the product of artificial demand, were material. This information needed to be disclosed in order to make the above statements in the Exchange Offer not misleading.

FIRST CLAIM FOR RELIEF

Violations of Section 17(a) of the Securities Act by National Lampoon, Inc. and Daniel S. Lailcin

76. The Commission realleges and incorporates by reference each and every allegation in paragraphs 1 through 75, inclusive, as if the same were fully set forth herein.

77. As described in this Complaint, in connection with the July 17, 2008 Exchange

Offer, National Lampoon and Laikin, directly or indirectly, in the offer and sale of securities, by the

16 use of any means or instruments of transportation or communication in interstate commerce, or by the use of the mails:

(a) employed devices, schemes or artifices to defraud;

(b) obtained money or property by means of any untrue statements of a material fact, or have omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and/or

(c) engaged in transactions, practices, or courses of business which operated, or would operate as a fraud or deceit upon the purchasers of securities.

78. By engaging in the foregoing conduct, National Lampoon and Laikin violated, and unless restrained and enjoined will continue to violate, Section 17(a) of the Securities Act [15

U.S.C. § 77q(a)].

SECOND CLAIM FOR RELIEF

Violations of Section 10(b) of the Exchange Act and Rule 10b-5, thereunder, by All Defendants

79. The Commission realleges and incorporates by reference each and every allegation in paragraphs 1 through 78, inclusive, as if the same were fully set forth herein.

80. From at least March 2008 through June 2008, Defendants knowingly or recklessly, in connection with the purchase or sale of securities, directly or indirectly, by the use of any means or instrumentality of interstate commerce, or of the mails, or of any facility of a national securities exchange:

(a) employed devices, schemes or artifices to defraud;

(b) made untrue statements of material fact, or omitted to state material facts necessary in order to make the statements made, in light of the circumstances under which they were made, not misleading; and/or

17 (c) engaged in acts, practices, or courses of business which operated or would operate as a fraud or deceit upon any person in connection with the purchase or sale of any security.

81. By engaging in the foregoing conduct, Defendants violated, and unless restrained and enjoined will continue to violate, Section 10(b) of the Exchange Act [15 U.S.C. § 78j(b)] and

Rule 10b-5 [17 C.F.R.§ 240.10b-5], thereunder.

THIRD CLAIM FOR RELIEF

Violations of Section 9(a)(2) of the Exchange Act by All Defendants

82. The Commission realleges and incorporates by reference each and every allegation. in paragraphs 1 through 81, inclusive, as if the same were fully set forth herein.

83. From at least March 2008 through June 2008, Defendants directly or indirectly, effected, alone or with one or more other persons, a series of transactions in securities registered on a national securities exchange, creating actual or apparent active trading in such securities, or raising or depressing the price of such securities, for the purpose of inducing the purchase or sale of such securities by others.

84. By engaging in the foregoing conduct, Defendants violated, and unless restrained and enjoined will continue to violate, Section 9(a)(2) of the Exchange Act [15 U.S.C. § 78i(a)(2)].

FOURTH CLAIM FOR RELIEF

Violations of Section 13(e) of the Exchange Act and Rule 13e-4, thereunder, by National Lampoon, Inc.

85. The Commission realleges and incorporates by reference each and every allegation in paragraphs 1 through 84, inclusive, as if the same were fully set forth herein.

86. National Lampoon, Inc. as an issuer of securities registered pursuant to Section 12 of

the Exchange Act [15 U.S.C. § 7811 knowingly or recklessly, directly or indirectly, in connection

with the Exchange Offer described above:

(a) employed devices, schemes or artifices to defraud;

(b) made untrue statements of material fact, or omitted to state material facts

necessary in order to make the statements made, in light of the circumstances under which they

were made, not misleading; and/or

operate as a fraud or deceit upon any person.

87. By engaging in the foregoing conduct, National Lampoon, Inc. violated, and unless

restrained and enjoined will continue to violate, Section 13(e) of the Exchange Act [15 U.S.C.

§ 78m(e)], and Rule 13e-4 [17 C.F.R. § 240.13e-4], thereunder.

FIFTH CLAM FOR RELIEF

Aiding and Abetting Violations of Section 13(e) of the Exchame Act and Rule 13e-4. thereunder, by Daniel S. Laikin

88. The Commission realleges and incorporates by reference each and every allegation

in paragraphs 1 through 87, inclusive, as if the same were fully set forth herein.

89. By engaging in the foregoing conduct, Daniel S. Lailcin knowingly provided

substantial assistance to National Lampoon in its violations of Section 13(e) of the Exchange Act

[15 U.S.C. § 78m(e)] and Rule 13e-4, thereunder [17 C.F.R. §240.13e-4], and thereby aided and

abetted, and unless restrained and enjoined will continue to aid and abet violations of these

provisions of the federal securities laws.

19 (13

WHEREFORE, the Commission respectfully requests that this Court enter a final judgment: I.

Permanently restraining and enjoining National Lampoon, Inc. and Daniel S. Laikin from violating Section 17(a) of the Securities Act [15 U.S.C. § 77q(a)].

Permanently restraining and enjoining National Lampoon, Inc., Daniel S. Laikin, Dennis

S. Barsky, Eduardo Rodriguez and Tim Dougherty from violating Section 10(b) of the Exchange

Act [15 U.S.C. § 78j(b)], and Rule 10b-5 [17 C.F.R.§ 240.10b-5], thereunder.

Permanently restraining and enjoining National Lampoon, Inc., Daniel S. Laikin, Dennis

S. Barsky, Eduardo Rodriguez and Tim Dougherty from violating Section 9(a)(2) of the

Exchange Act [15 U.S.C. § 78j(b)j.

Permanently restraining and enjoining National Lampoon, Inc. from violating Section

13(e) of the Exchange Act [15 U.S.C. § 78m(e)], and Rule 13e-4 [17 C.F.R. § 240.13e.-4], thereunder.

Permanently restraining and enjoining Daniel S. Laikin from aiding and abetting violations of Section 13(e) of the Exchange Act [15 U.S.C. § 78m(e)], and Rule 13e-4 [17 C.F.R.

§ 240.13e-4], thereunder.

20 Ordering Daniel S. Laildn, Dennis S. Barsky, Eduardo Rodriguez and Tim Dougherty to disgorge any and all ill-gotten gains, together with prejudgment interest, derived from the activities set forth in this Complaint.

VII.

Ordering Daniel S. Laikin to pay civil money penalties pursuant to Section 20(d) of the

Securities Act [15 U.S.C. § 77t(d)] and Section 21(d)(3) of the Exchange Act [15

U.S.C.§ 78u(d)(3)].

Ordering Dennis S. Barsky, Eduardo Rodriguez and Tim Dougherty to pay civil money penalties pursuant to Section 21(d)(3) of the Exchange Act [15 U.S.C.§ 78u(d)(3)].

Prohibiting Daniel S. Laildn, pursuant to Section 20(e) of the Securities Act [15 U.S.C.

§ 77t(e)] and Section 21(d)(2) of the Exchange Act [15 U.S.C. § 78u(d)(2)], from acting as an officer or director of any issuer that has a class of securities registered pursuant to Section 12 of the Exchange Act [15 U.S.C. § 781] or that is required to file reports pursuant to Section 15(d) of the Exchange Act [15 U.S.C. § 78o(d)J.

Granting such other and further relief as the Court may deem just and appropriate.

21 Respectfully submitted,

s/ Scott A. Thompson Daniel M. Hawke Elaine C. Greenberg David S. Horowitz Brendan P. McGlynn Scott A. Thompson (PA #90779) Jennifer L. Crawford

Attorneys for Plaintiff:

SECURIT/ES AND EXCHANGE COMMISSION Philadelphia Regional Office 701 Market Street, Suite 2000 Philadelphia, PA 19106 Telephone: (215) 597-3100 Facsimile: (215) 597-2740

Dated: December 15, 2008

22 EXHIBIT 4 Case 2:08-cr-O3-JHS Document 96-1 Filed 09/299 Page 1 of 9

IN THE UNITED STATES DISTRICT COURT

FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA

v. CRIMINAL NO. 08-733

DANIEL LAIKIN

GUILTY PLEA AGREEMENT

Under Federal Rule of Criminal Procedure 11, the government, the defendant, and

the defendant's counsel enter into the following guilty plea agreement. Any reference to the

United States or the government in this agreement shall mean the Office of the United States

Attorney for the Eastern District of Pennsylvania.

1. The defendant agrees to plead guilty to Count One of the indictment

charging conspiracy to commit securities fraud, in violation of 18 U.S.C. § 371, 15 U.S.C.

§§ 78j(b) and 78ff, and 17 C.F.R. § 240.10b-5.

2. The defendant agrees to pay the special victims/witness assessment in the

amount of S100 before the time of sentencing and shall provide a receipt from the Clerk to the government before sentencing as proof of this payment.

3. The defendant agrees to pay a fine as directed by the Court. The

defendant further agrees that any payments in this case do not constitute extraordinary acceptance of responsibility or provide any basis to seek a downward departure or variance from the applicable Sentencing Guidelines range.

4. Defendant waives any claim under the Hyde Amendment, 18 U.S.C.

Case 2:08-cr-O3-JHS Document 96-1 Filed 09/2909 Page 2 of 9

§ 3006A (Statutory Note), for attorney's fees and other litigation expenses arising out of the

investigation or prosecution of this matter.

5. At the time of sentencing, the government will:

a. Move to dismiss Count Two of the indictment; comment on the

evidence and circumstances of the case: bring to the Court's

attention all facts relevant to sentencing including evidence

relating to Count Two, and to the character and any criminal

conduct of the defendant; address the Court regarding the nature

and seriousness of the offense; respond factually to questions

raised by the Court; correct factual inaccuracies in the presentence

report or sentencing record; and rebut any statement of facts made

by or on behalf of the defendant at sentencing.

b. Make whatever sentencing recommendation as to imprisonment,

fines, forfeiture, restitution and other matters which the

government deems appropriate.

c. Nothing in this agreement shall limit the government in its

comments in, and responses to, any post-sentencing matters.

6. The defendant understands, agrees and has had explained to him by

counsel that the Court may impose the following statutory maximum sentence: Count One

(conspiracy to commit securities fraud), 5 years imprisonment, 3 years of supervised release, a

$250.000 fine, and a $100 special assessment. Case 2:08-cr-093-JHS Document 96-1 Filed 09/299 Page 3 of 9

The defendant further understands that supervised release may be revoked if its terms and conditions are violated. When supervised release is revoked, the original term of imprisonment may be increased by up to 5 years per count of conviction in the case of Class A felonies, 3 years per count of conviction in the case of Class B felonies, 2 years per count of conviction in the case of Class C and D felonies, and 1 year per count of conviction in the case of Class E felonies and misdemeanors. Thus, a violation of supervised release increases the possible period of incarceration and makes it possible that the defendant will have to serve the original sentence, plus a substantial additional period, without credit for time already spent on supervised release.

7. The defendant may not withdraw his plea because the Court declines to follow any recommendation, motion or stipulation by the parties to this agreement. No one has promised or guaranteed to the defendant what sentence the Court will impose.

8. Pursuant to USSG § 6B1.4, the parties enter into the following stipulations under the Sentencing Guidelines Manual. It is understood and agreed that: (1) except as provided below, the parties are free to argue the applicability of any other provision of the

Sentencing Guidelines, including offense conduct, offense characteristics, criminal history, and adjustments: (2) these stipulations are not binding upon either the Probation Department or the

Court; and (3) the Court may make factual and legal determinations that differ from these stipulations and that may result in an increase or decrease in the Sentencing Guidelines range and the sentence that may be imposed:

(a) The parties agree and stipulate that under USSG § 2B1.1(a)(2), the base offense level for the defendant's conduct is 6; that under USSG § 2B1.1(b)(1)(J) the fraud

3 Case 2:08-cr-0(03-JHS Document 96-1 Filed 09/299 Page 4 of 9

loss intended to be caused in furtherance of the criminal activity jointly undertaken by the defendant and his co-conspirators for which the defendant is responsible was between

$2,500,000 and $7,000,000; this amount was within the scope of the defendant's agreement; this amount was reasonably foreseeable to the defendant in connection with the conspiracy; and the defendant's Guideline range should be calculated based on this amount pursuant to USSG

§ 1B1.3, increasing the base offense level by 18 levels.

(b) The parties agree and stipulate that the defendant's offense involved a violation of securities law and, at the time of the offense, the defendant was an officer and director of a publicly traded company, increasing the base offense level by 4 levels pursuant to

USSG §2B1.1(b)(16)(A)(i).

(c) The parties agree and stipulate that, as of the date of this agreement, the defendant has demonstrated acceptance of responsibility for his offense making the defendant eligible for a 2-level downward adjustment under USSG § 3E 1.1(a).

(d) The parties agree and stipulate that, as of the date of this agreement, the defendant has assisted authorities in the investigation or prosecution of his own misconduct by timely notifying the government of his intent to plead guilty, thereby permitting the government to avoid preparing for trial and permitting the government and the court to allocate their resources efficiently, resulting in a 1-level downward adjustment under USSG § 3E 1.1(b).

(e) The parties agree and stipulate that they will not seek either an upward or a downward departure under the Sentencing Guidelines; the parties reserve their rights to seek a variance under 18 U.S.C. [s] 3553(a), United States v. Booker, 543 U.S. 220 (2005), United

States v. Gall, 128 S. Ct. 586 (2007), and United States v. Kimbrough, 128 S. Ct. 558 (2007)

4 Case 2:08-cr-093-JHS Document 96-1 Filed 09/299 Page 5 of 9

(collectively "Booker"). Thus, the parties are free to seek a sentence outside of the advisory

Guidelines range for any of the reasons permitted under Booker, including, but not limited to, any reason that might otherwise be considered a basis for a Departure under the Sentencing

Guidelines. This includes, but is not limited to, an argument from the defense (to which the government would object) that the applicable offense level overstates the seriousness of the offense. The parties further agree that the Court's discretion in imposing a sentence outside of the advisory Guidelines range is unaffected by the fact that the request is made for reasons permitted under Booker where there may exist a similar basis for a Departure under the

Sentencing Guidelines.

9. In exchange for the undertakings made by the government in entering this plea agreement, the defendant voluntarily and expressly waives all rights to appeal or collaterally attack the defendant's conviction, sentence, or any other matter relating to this prosecution, whether such a right to appeal or collateral attack arises under 18 U.S.C. § 3742, 28 U.S.C.

§ 1291, 28 U.S.C. § 2255, or any other provision of law. This waiver is not intended to bar the assertion of constitutional claims that the relevant case law holds cannot be waived.

a. Notwithstanding the waiver provision above, if the government

appeals from the sentence, then the defendant may file a direct

appeal of his sentence.

b. If the government does not appeal, then notwithstanding the

waiver provision set forth in this paragraph, the defendant may file

a direct appeal but may raise only claims that:

(1) the defendant's sentence on any count of conviction

5 Case 2:08-cr-O3-JHS Document 96-1 Filed 09/299 Page 6 of 9

exceeds the statutory maximum for that count as set forth

in paragraph 6 above;

(2) the sentencing judge erroneously departed upward pursuant

to the Sentencing Guidelines; and

(3) the sentencing judge. exercising the Court's discretion

pursuant to United States v. Booker, 543 U.S. 220 (2005),

imposed an unreasonable sentence above the final

Sentencing Guideline range determined by the Court.

If the defendant does appeal pursuant to this paragraph, no issue may be presented by the defendant on appeal other than those described in this paragraph.

The defendant also waives all rights, whether asserted directly or by a representative, to request or receive from any department or agency of the United States any records pertaining to the investigation or prosecution of this case, including without limitation any records that may be sought under the Freedom of Information Act, 5 U.S.C. § 552, or the

Privacy Act, 5 U.S.C. § 552a.

10. The government agrees that it will not bring any criminal charges against the defendant for conduct relating to any attempt to manipulate the stock price of Red Rock

Picture Holdings, Inc. This paragraph does not preclude the government from investigating or prosecuting the defendant for any conduct occurring after the date of the execution of this plea agreement.

11. By entering this plea of guilty, the defendant also waives any and all rights the defendant may have, pursuant to 18 U.S.C. § 3600, to require DNA testing of any physical

6 Case 2:08-cr-093-JHS Document 96-1 Filed 09/299 Page 7 of 9

evidence in the possession of the government. The defendant fully understands that, as a result

of this waiver, any physical evidence in this case will not be preserved by the government and

will therefore not be available for DNA testing in the future.

12. The defendant is satisfied with the legal representation provided by the

defendant's lawyer; the defendant and this lawyer have fully discussed this plea agreement; and

the defendant is agreeing to plead guilty because the defendant admits that he is guilty.

13. It is agreed that the parties' guilty plea agreement contains no additional

promises, agreements or understandings other than those set forth in this written guilty plea

agreement, and that no additional promises, agreements or understandings will be entered into

unless in writing and signed by all parties.

MICHAEL L. LEVY United States Attorney

DANIEL LAIKIN PETER F. SCHENCK Defendant Chief, Criminal Division Assistant United States Attorney

LAURENCE S. SHTASEL DEREK A. COHEN JOSEPH G. POLUKA LOUIS D. LAPPEN Counsel for Defendant Assistant United States Attorneys

Date: September , 2009

7 Case 2:08-cr-093-JHS Document 96-1 Filed 09/299 Page 8 of 9

Attachment

IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF PENNSYLVANIA

UNITED STATES OF AMERICA •

V. • CRIMINAL NO. 08-733

DANIEL LAIKIN •

ACKNOWLEDGMENT OF RIGHTS

I hereby acknowledge that I have certain rights that I will be giving up by pleading guilty.

1. I understand that I do not have to plead guilty.

2. I may plead not guilty and insist upon a trial.

3. At that trial, I understand

a. that I would have the right to be tried by a jury that would be selected from the Eastern District of Pennsylvania and that along with my attorney, I would have the right to participate in the selection of that jury;

b. that the jury could only convict me if all twelve jurors agreed that they were convinced of my guilt beyond a reasonable doubt;

c. that the government would have the burden of proving my guilt beyond a reasonable doubt and that I would not have to prove anything;

d. that I would be presumed innocent unless and until such time as the jury was convinced beyond a reasonable doubt that the government had proven that I was guilty;

e. that I would have the right to be represented by a lawyer at this trial and at any appeal following the trial, and that if I could not afford to hire a lawyer, the court would appoint one for me free of charge;

f. that through my lawyer I would have the right to confront and cross examine the witnesses against me;

g. that I could testify in my own defense if I wanted to and I could subpoena witnesses to testify in my defense if I wanted to; Case 2:08-cr-O3-JHS Document 96-1 Filed 09/299 Page 9 of 9

h. that I would not have to testify or otherwise present any defense if I did not want to and that if I did not present any evidence, the jury could not hold that against me.

4. I understand that if I plead guilty, there will be no trial and I would be giving up all of the rights listed above.

5. I understand that if I decide to enter a plea of guilty, the judge will ask me questions under oath and that if I lie in answering those questions, I could be prosecuted for the crime of perjury, that is, for lying under oath.

6. I understand that if I plead guilty, I have waived my right to appeal, except as set forth in appellate waiver provisions of my plea agreement.

7. Understanding that I have all these rights and that by pleading guilty I am giving them up, I still wish to plead guilty.

DANIEL LAIKIN Defendant

LAURENCE S. SHTASEL JOSEPH G. POLUKA Counsel for Defendant ,- ../ , o ,. ! UNITED STATES DISTRICT COURT, CENTRAL D/STRICT OF CALIFORNIA CIVIL COVER SHEET

I (a) PLAINTIFFS (Check box if you are representing yourself a DEFENDANTS JONAH ANSELL. Individualiy and on behalf of all others similarly situated. DANIEL S. LAIKIN: TIMOTHY S. DURHAM: PAUL SKJODT: ROBERT LEVY, JAMES P. JIMIRR.0: DUNCAN MURRAY: JAMES TOLL: LOR.LAINE EVANOFF, and NATIONAL LAMPOON, INC..

(b) Attorneys (Firm Name. Address and Telephone Number, If you are representin g Attorneys (If Known) yourself, provide same.) Laurence M. Rosen, Esq. (SBN 219683). The Rosen Law Firm. P.A.. 333 South Grand Avenue. 25th Floor, Los An geles, CA 90071 (213) 785-2610 1

/I. BASIS OF JURISDICTION (Place an X in one box only.) III. CITIZENSHIP OF PRINCIPAL PARTIES - For Diversity Cases Only (Place an X in one box for plaintiff and one for defendant.)

0 1 U.S. Government Plaintiff i3 Federal Question (U.S. PTF DEI PTF DEF Government Not a Party) Citizen of This State 011 0 1 Incorporated Or Principal Place 04 04 of Business in this State

7 1 L'S. Government Defendant 0 4 Diversity (Indicate Citizenship Citizen of Another State 0 2 0 2 incorporated and Principal Place 0 5 0 5 of Parties in liens III) of Business in Another State Citizen or Subject of a Foreign Country 0 3 0 3 Foreign Nation 0 6 0 6

IV. ORIGIN (Place an X in one box only.) V1 Original 0 2 Removed from 0 3 Remanded from 04 Reinstated oi 0 5 Transfemed front another district (specify): 06 Multi- 0 7 Appeal to District Proceeding State Court Appellate. Court Reopened District Judge from Litigation Magistrate Judge

V. REQUESTED IN COMPLAINT: JURY DEMAND: W Yes 0 No (Checi: 'Yes' only if demanded in complaint.) CLASS ACTION under F.R.C.P. 23: M(Yes 0 No 0 MONEY DEMANDED IN COMPLAINT: S VI. CAUSE OF ACTION (Cite the U.S. Civil Statute under which you are filing and write a brief statement of cause. Do not cite _jurisdictional statutes unless diversity,) Securities Fraud Class Action. 15 USC 781(b) and 78t(a) VII. NATURE OF SUIT (Place an X in one box only.) . . , . .. OTHER STATUTES - • - ',CONTRACT -. - - -,. • TORTS - - . . :TORTS : .- 'PRISONER- . --:, - - ,, -LABOR - • - - ' - 0 400 State Reapportionment 0 110 Insurance PERSONAL INJURY PERSONAL -. . ,,PETITIONS i , 0 710 Fair Labor Standards 0 410 Antitrust 0 120 Marine 0 310 Airplane PROPERTY L.7 510 Motions Li, Act 0 430 Banks and Banking 0 130 tvlilier Act 01 315 Airplane Producl 0 370 ()the: Francl Vacate Sentence 0 720 Labor/M nmt:. • 0 450 Commerce/ICC 0 140 Negotiable Instrument Liability E 371 Truth in Lending Habeas Corpus Relations Rates/etc. 0 150 Recovery of 0 320 Assault, Libel A 0380 Other personal 7 530 General 0730 Labor/Mgmt. 0460 Deportation Overpayment A Slander Property Damage 0 535 Death Penalty Reporting & 3 30 Fed. EmployersEm lo ers 470 Racketeer Influenced Enforcement of 7 385 Property Dama_ge 0 540 Mandamus! Disclosure Act Liability and Corrupt Judgment . Product Liability Other 0 740 Railway Labor Act L7 340 Marine 0 151 Medicare Act - --BANKRUPTCY • 0 550 Civil Ri ghts 0 790 Other Labor Organizations E 345 Marine Product — -- --1422eal App 28 USC 0 555on PrisCondition Litigation O 480 Consumer Credit _..1.52 Recovery of Defaulied Liaility. b — 158 0 490 CabielSa: TV Student Loan (Excl. 0 350 Motor Vehicle . 'FORFEITURE/ . 0 791 Empl. Ret. Inc. 0 81(1 Selective Service Veterans) 0 423 Withdrawal 28 - •. 'PENALTY Security Act 7 355 Motor Vehicle 0 850 Securities/Commodities/ 0 153 Recovery of Product Liability USC, 157 0 610 Agriculture :PROPERTY RIGHTS Exchan ge Overpayment of 0 360 Other Personal CIVIL RIGHTS . 0 620 Other Food & 0 820 Copyrionts 0 875 Customer Challen ge 12 Veteran's Benefits Injury 01 441 Voting Drug ,0 830 Patent USC 3410 0 160 Stockholders' Suits 77 362 Personal Injury- 0 442 Employment 0 625 Drug Related 0 840 Trademark 1k1890 Other Statutory Actions 0 190 Other Contract Med Malpractice 0443 Housin giAcco- Seizure of 'SOCIAL SECURITY.. 0 891 Agricultural Act 0 195 Contract Product 0 365 Personal Injury- mmodations Property 21 USC 0 861 H1A (1395ff) 0 892 Economic Stabilization Liability Product Liability 0 444 Welfare 881 0 862 Black Lung (923) Act 0 196 Franchise 0 368 Asbestos Personal 0 445 American with Li 630 Liquor Laws 0 863 D1WC/DI1VW 0 893 Environmental Matters REAL PROPERTY Minn, Product Disabilities - 0 640 R.R. ,S:. Truck (405(g)) 0 894 Enemy Allocation Act 0 210 Land Condemnation Liability Employment 0 650 Airline Ke gs 0 864 SSID Title XVI 0 895 Freedom of Info. Act 0 220 Foreclosure -IMMIGRATION 0 446 American with 0 060 Occupational 0 865 RS1 (405(6)) 0 900 Appeal of Fee Determi- 0 230 Rent Lease & Ejectment 0 462 Nannalization Disabilities - Safety /Health FEDERAL TAX SUITS nation Under Equal 0 240 Torts to Land Application Other 0 690 Other 0 870 Taxes (U.S. Piaintiff Access to Justice 0 745 Tort Product Liability 0 463 Habeas Corpus- LT 44(1 Other Civil or Defendant) 0950 Constitutionali ty of 0 290 All Other Real Property Alien Detainee Rights 0 871 IRS-Third Parry 26 0 465 Other Immigration 1 State Statutes USC 7609 Actions

....- ...i, -- 1 .' I/: FOR OFFICE USE ONLY: Case Number: ,d, AFTER COMPLETING THE FRONT SIDE OF FORM CV-71. COMPLETE THE IN -FORMAT1ON REQUESTED BELOW.

C11-71 (05/08i CI VI L COVER SHEET Page 1 of 2 •

UNITED STATES DISTRICT COURT, CENTRAL DISTRICT OF CALIFORNIA CIVIL COVER SHEET

VIII(a). IDENTICAL CASES: Has this action been previously filed in this court and dismissed, remanded or close& 'No :11\ies If yes, list case number( s):

VIII(b), RELATED CASES: Have any cases been previously filed in this court that are related to the present case': k 'No C Nes If yes, list case number(s):

Civil cases are deemed related if a previously filed case and the present case: (Check all boxes that apply C A. Arise from the same or closely related transactions, happenings, or events: or LI B. Call for determination of the same or substantially related or similar questions of law and fact; or C. for other reasons would entail substantial duplication of labor if heard by different jud ges: or C D. Involve the same patent. trademark or copyright, and one of the factors identified above in a, bore also is present.

IX. VENUE: (When completing tile followin g infonnation, use an additional sheet if necessary.)

(a) List the County in this District: California County outside of this District; Stale if other than California: or Foreign Country, in which EACH named plaintiff resides. Check here if the government. its agencies or employees is a named plaintiff. If this box is checked. go to item (b).

County in this District:* California County outside of this District: State, if other than California, or Forei gn Country Los Angeles

(b) List the County in this District; California Couury outside of this District; State if other than California: or Foreign Country. in which EACH named defendant resides. Check here if the government, its agencies or employees is a named defendant. If this box is checked, go to item let.

County In this District:" California County outside of this District: State, if other than California: or Foreign Country Los Angeles Indiana, Florida

(c) List the County in this District: California County outside of this District: State if other than California; or Forei gn Country, in which EACH claim arose. , Note: In land condemnation cases, use the location of the tract of land involved.

County in this District* California County outside of this District, State, if other than California; or Foreign Country

Los Angeles

* Los Angeles, Orange, San Bernardino, Riverside, Ventura. Santa Barbara, or San Luis Obispo Counties Note: In land condemnation cases. use the location of the tract of land involved

X. SIGNATURE OF ATTORNEY (OR PRO PER): Da„. December 3. 2010

Notice to Counsel/Parties: The CV-7I (IS-44) Civil Cover Sheet and the information contained herein neither replace nor supplement the filing and service of pleadings or other papers as required by law. This form, approved by the Judicial Conference of the United States In September 1974, is required pursuant to Local Rule 3-1 is not filed but is used by the Clerk of the Court for the purpose of statistics, venue and initiating the civil docket sheet. (For more detailed instructions, see separate instructions sheet.)

Key to Statistical codes relating to Social Security Cases:

Nature of Suit Code Abbreviation Substantive Statement of Cause of Action

861 HIA All claims for health insurance benefits (Medicare) under Title 18. Part A. of the Social Secunty Act, as amended, Also, include claims by hospitals, skilled nursin g facilities. etc., for certification as providers of services under the program. (42 U.S.C. 1935FF(b))

862 BL All claims for "Black Luna - benefits under Title 4. Pan B, of the Federal Coal Mine Health and Safety Act of 1969. (30 U.S.C. 923)

863 DIWC All claims filed by insured workers for disability insurance benefits under Title 2 of the Social Securit yAc:. as amended; plus all claims filed for child's insurance benefits based on disability. (42 L.S.C. 405(g))

863 D1WW Al) claims filed for widows or widowers insurance benefits based on disability under Title 2 of the Social Security Act, as amended. (42 C.S.C. 405(g))

864 SSID All claims for supplemental secunry3ncome payments based upon disability flied under Title 16 of the Social Security Act, as amended.

863 RS1 Al) claims for retirement (old a ge) and survivors benefits under Title 2 of the Social Security Act. as amended. (4' (g))

CV-7I (05/08) CIVIL COVER SHEET Page 2 of 2