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SEC Charges Promoters of Desilu Studios Offering Fraud

The Securities and Exchange Commission today announced that it has filed an injunctive action against Manhattan Beach, California-based Desilu Studios, Inc. and its founder, Charles B. Hensley, from Torrance, California for an alleged offering fraud that raised at least $596,360 from investors.

The SEC’s complaint alleges that from June 2017 through at least July 2018, Desilu Studios and Hensley raised approximately $596,360 from at least 21 individual investors through the offer and sale of Desilu Studios stock. The SEC alleges that Hensley falsely claimed to investors that he had obtained the rights to the Desilu brand, made famous by Desilu Productions, Inc. co-founders and spouses Desi Arnaz and Lucille Ball, and their long-running television show, “I Love Lucy.” According to the SEC complaint, Hensley lured investors by claiming that he was reviving the Desilu brand through Desilu Studios, which was supposed to be a modern entertainment company engaged in film and television production, merchandising, content streaming, theme parks, and cinemas. The SEC further alleges that contrary to the investment pitch, Desilu Studios never got off the ground as a working studio and did not use investor proceeds for business purposes. The SEC alleges that Hensley actually misappropriated investor funds for his personal use.

The SEC’s complaint, which was filed in the Central District of California, charges Desilu Studios and Hensley with violating the antifraud provisions of Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The complaint seeks permanent injunctions, conduct based injunctions, disgorgement with prejudgment interest, and civil penalties, against Desilu Studios and Hensley, and an officer-and-director bar against Hensley.