The Associated Press reports that the federal prosecutors in Philadelphia have charged the CEO of National Lampoon (AMEX: NLN) along with six other executives with securities fraud. Prosecutors say that the executives paid kickbacks to investors to buy and hold the stock, thus creating the illusion of interest and artificially inflating the share price.Wow. Given that National Lampoon currently trades on the American Stock Exchange -- universally recognized as the place where sick stocks go to die -- with a market cap of less than $7 million, this is hardly a major bust. It's also another example of regulators throwing resources at low-hanging fish while the former chairman of the NASDAQ cheats investors out of $50 billion while our financial system collapses under the weight of shady debt instruments.
I mean, listen: The allegation is that the National Lampoon executives artificially pumped the company's stock price up to a market cap of less than $30 million at the company's peak. Given National Lampoon's long history and potential brand value, they might want to ask those investors for their kickback money back.
Of course if they broke the law, they deserve whatever punishment the courts mete out. I just question the decision to go after these clowns when there's much bigger stuff going down.
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