http://www.nypost.com/technology/31862.htm
June 5, 2001 -- By Xenu! Reed Slatkin's out of the investment game for
good - but he may not be out of the woods.
Earthlink founder and alleged Ponzi scheme operator Slatkin has cut a
deal with the SEC.
He convinced hundreds of California bigwigs - including celebrities and
fellow Scientologists who believe in Xenu - to let him invest up to $230
million of their money. He allegedly paid old investors with new
investors' money instead of actually investing it.
Slatkin signed a "consent to entry of judgment and permanent injunction"
decree with the Securities and Exchange Commission last Thursday. He
agreed not to violate federal securities laws in the future, but neither
denied nor admitted any wrongdoing.
The agreement says the SEC can fine him if he is found guilty of
swindling investors, and it can force him to repay them.
SEC spokesman Kelly Bowers said yesterday that the penalties would be
applied "only once the investors are made whole." The situation is
similar to bankruptcy: If Slatkin has a spare $230 million, he will pay
back his investors, such as "Boiler Room" star Giovanni Ribisi, plus
penalties to the SEC. If not, they will get a portion of what they are
owed.
Lawyers for both sides are currently thrashing out the numbers.
Slatkin's EarthLink assets are just over $19 million.
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Earthlink founder settles with SEC
By Joseph Gallivan
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