The maker of Left Behind-themed video games may have committed fraud by allegedly using a massive stock sale to give investors a false sense of financial stability.
The Securities and Exchange Commission (SEC) alleged last week that Troy Lyndon, CEO of Left Behind Games Inc. (LBG), issued close to 2 billion shares to his friend, Ronald Zaucha. Lyndon claimed the shares were payment for Zaucha's consulting services, but Zaucha's use of the money suggests otherwise.
Zaucha used the stock to boost the video game company's struggling finances by selling millions of unregistered shares in the marketplace, but gave the proceeds back to LBG, Reuters reports.
Both men have been charged with fraud in the SEC complaint, with nearly $5 million purportedly involved in the case.
The SEC lawsuit, which was filed in Hawaii where both Lyndon and Zaucha live, states:
"LBO's quarterly and annual reports were also misleading because they did not disclose that its transactions ...1