The founders of Medient Studios told investors and the public they'd flip the script on Hollywood, creating the nation's biggest movie studio campus. And Medient would do it on a site not in California, but on swampy land near Savannah.
There, in a complex that would blend the wonder of Oz and Willy Wonka’s factory, the founders said in 2013 they’d build a powerhouse for sci-fi and horror films and video games, creating at least 1,000 local jobs. But like much that comes out of Tinseltown, Medient’s promises were fiction.
On Tuesday, the Securities and Exchange Commission announced it won a default judgment this month in federal court ordering the defunct movie studio and its successor companies to pay $1.8 million in fines and other restitution.
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The SEC sued Medient, several executives and its successor companies in September 2016 for an alleged scheme to make false statements in press releases and its corporate filings to induce investors to buy stock.
Medient burst onto Georgia’s burgeoning movie scene in early 2013 with an audacious plan: create a juggernaut turning effects-driven films in multiple languages that could be sold around the globe.
The plan came as other deep-pocketed studio groups, such as Pinewood and EUE/Screen Gems, opened sprawling campuses in metro Atlanta.
But Medient, a publicly traded company, had few resources. A May 2013 investigation published by The Atlanta Journal-Constitution showed the company had virtually no money in the bank and a warning from its auditor that expressed doubts about its ability to stay afloat.
Still, the company’s plans created a buzz, and shares of the “penny stock” soared to $2.33 per share.
A promoter of the stock touted it as a can't-miss investment, including one paid for by a company shareholder who called founder Manu Kumaran a "magician" who could spin a dud into "movie gold."
Medient flooded the market with hundreds of millions of shares, diluting its value as the stock price waxed and waned. But little more than press releases and some tree cutting happened on the site in Effingham County near I-16.
When the stock price ultimately tanked, the new investors were left holding the bag.
By June 2015, Medient's founding CEO Manu Kumaran had been fired, and trading of its stock was suspended by the SEC.
Credit: JOHN SPINK / AJC
Credit: JOHN SPINK / AJC
Later, a new publicly traded firm called FONU2 stepped in to reboot the movie studio concept under the name Moon River Studios. Jake Shapiro, who stepped in as CEO, told the AJC that prior plans were too ambitious. The new company also touted two film projects with Penny Marshall, director of the movie "Big."
But Moon River soon failed.
Medient and Moon River no longer operate, and investors who poured money into the project hoping to strike it rich in the movie business long ago lost out on their investments.
In a news release, the SEC said Shapiro settled with the agency in January for nearly $100,000, but did not admit or deny any wrongdoing. Shapiro is also barred from serving as an officer or director of a public company for five years.
Litigation against Kumaran is ongoing, as is a case against FONU2 founder Roger Miguel.
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