HARRISBURG, Pa., June 15, 2012 /PRNewswire-USNewswire/ -- To halt the offer and sale of unregistered securities in Pennsylvania, the Pennsylvania Securities Commission (Commission) issued a Summary Order to Cease and Desist against Smack Sportswear, Inc. (Smack), an entity, and Bill Sigler (Sigler), an individual, both with an address in Torrance, California. Smack was purportedly "an apparel and ecommerce company…with primary focus being on the sport of volleyball" and was offering for sale units (Units) of common stock (Stock) in Smack. Sigler was the CEO of Smack.
In or about May 2012, a representative (Representative 1) of Smack cold-called at least one Pennsylvania resident (PA Resident) regarding an investment in the Stock. Representative 1 stated that he [Representative 1] worked for a consulting company that is selling the Stock; that Smack had "done a reverse merger" which would allow investors in Smack to purchase the Stock at $.35 per share and then sell the Stock for $.65 in two weeks when Smack would be a "public company"; and that one-third of the shares of Stock would be "unrestricted" allowing investors to sell those shares the day the Stock went public. Representative 1 further stated that by selling one-third of the Stock they purchase, investors would get back most of their investment in two weeks; that the remaining two-thirds of the shares of Stock purchased by an investor would be restricted from resale for six months; and that he [Representative 1] would send a "prospectus" to the PA Resident.
In or about May 2012, Representative 1 e-mailed offering materials (Materials) to the PA Resident and offered for sale the Stock. In the e-mail, Representative 1 stated that Smack "has merged into the public entity Reshoot Productions (RSPO.OB) and will commence trading within the next 3-5 weeks"; that "We anticipate the stock [Stock] to open at around 65 cents per share"; and that "Currently, the cost per Unit is $9,000 which includes 1 free trading share [of Stock] and 2 restricted shares [of Stock]."
The Materials included a "Confidential Private Placement Memorandum" and a "Smack Sportswear, Inc. Subscription Agreement." The Materials state that Smack is offering for sale 33 Units at a price of $9,000 per Unit; that each Unit is comprised of 30,000 shares of the Stock, made up of 20,000 restricted shares and 10,000 free trading shares at a cost of $.30 per share; that the minimum investment amount is $9,000; and that the total capitalization amount sought is $297,000.
In or about May 2012, the PA Resident received a telephone call from a second representative (Representative 2) of Smack. Representative 2 stated that he works for the same company as Representative 1 and was calling to make arrangements to pick up the check for the investment in Smack. The same month the PA Resident received a telephone call from Sigler and a third representative (Representative 3) of Smack. Sigler and Representative 3 stated that Representative 1 was a "sales rep" for Smack.
The PA Resident had no substantive, pre-existing relationship with Smack, Sigler, Representative 1, Representative 2, or Representative 3. The PA Resident was not an "accredited investor" under Rule 501 of Regulation D, and did not have sufficient knowledge and experience in financial and business matters to be capable of evaluating the merits and risks of the investment.
The Commission ordered Smack Sportswear, Inc. and Bill Sigler to stop offering or selling the Units of Stock in the Commonwealth of Pennsylvania in violation of the Pennsylvania Securities Act of 1972, and in particular Sections 201 thereof.
Any further solicitations or sales made by Smack, Sigler, or their affiliates in Pennsylvania will constitute further violations of the 1972 Act. Any person who is solicited by or has information about Smack or Sigler is asked to immediately notify the Pennsylvania Securities Commission by calling the toll-free line 800-600-0007 (PA only); in Harrisburg: (717) 787-8061; in Pittsburgh: (412) 565-5083; or, in Philadelphia: (215) 560-2088.
SOURCE Pennsylvania Securities Commission (PSC)