Thursday, September 26, 2013

When You're "Left Behind"

Chief Exec and Financial Officer Troy Lyndon for Left Behind Games, based on the novels that bear the same name, has been charged with fraud and scheming to inflate their stock prices according to the SEC.   He basically created 2 billion shares of stock to a friend, Ronald Zaucha as compensation for consulting services. Which would be fine, except that none of the shares were registered in the marketplace, and said money could be used to help pad the books for Left Behind Games.


The SEC suspended the company’s stock on Wednesday after filing the lawsuit Tuesday night in Hawaii. Last year the company filed for bankruptcy as the company struggled to maintain its niche market hold for the gaming business. Christian action adventure games are not exactly, um, well known. And while many companies supported the premise, such as Fox News, and they had multiple endeavors with proceeds of sales going to support  U.S. troops, and sales were pretty well, considering, the hit of SEC allegations and issues its securing funding are crippling the company.

But then you read Lyndon’s response to the SEC and have to wonder if this guy is really not trying to intentionally throw in a government conspiracy theory or two in there on why he’s being singled out:

"I'm just a video game guy. If any violation occurred, it would never have been intentional - and certainly, never fraudulent. My attorney told me that any person that earned shares could use them for any purpose.

"For more than two years, I've asked SEC to explain how and if I have violated any rule, so that I could self-report it. As I see it, the government has systematically and intentionally conspired to dismantle Left Behind Games and the facts are both true and hard to believe - worthy of a Ron Howard film or John Grisham novel."

Yeah okay buddy. You keep telling yourself that. Using shares as payment is fine. Facebook did it. Lots of companies do it. But you never reported them. And then they magically appear on the stock market out of nowhere, and drove up the pricing each share is worth. That’s the issue. Not a government conspiracy against the books or your company. You just failed at doing basic business stuff. There are additional questions regarding Zaucha and if he ever did provide consulting services to the company, but those are awaiting additional verification by the suits. Needless to say, this is another gaming company that will probably go out of business pretty soon.


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