Deals
wine.com

VC Firm Gives Up on Wine.com

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New York-based venture capital firm Baker Capital is dumping its failed investment in struggling online national wine retailer Wine.com. Credit Suisse was hired as the exclusive banker to sell the company but first-look buyers have failed to show any interest.  Despite $70 million of annual revenue the online wine business, beset by high marketing and shipping costs and burdened by a Byzantine web of state distribution laws, remains unprofitable after decade, so bankers are left with little more than a nifty domain name to sell. A decade ago Silicon Valley entrepreneur Chris Kitze scooped up the wine.com URL and customer list from Sand Hill Capital after the venture capitalist forced the previous founders into bankruptcy. Kitze paid only $3.3 million.

Legal
NIR Group

NIR Head Says Good Intentions Paved Way to Wrongdoing

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Some of the very misdeeds NIR Group chief Corey Ribotsky stands accused of in the bankruptcy of his AJW funds show that he had the funds' best interest in mind, according to documents his attorneys filed in a bankruptcy case. "Indeed, the liquidators' complaint is replete with factual allegations in which the liquidators concede that defendants' conduct served to benefit the AJW funds primarily by representing the appearance of a successful fund, an thereby maintaining its continued success," the filing says. The funds imploded and, the Securities and Exchange Commission is suing Ribotsky for misleading investors, inaccurately valuing investments and conducting sham transactions to hide losses. The suit was filed in March of this year by AJW liquidators PwC Corporate Finance and Recovery in the New York State Supreme Court. The liquidators had already obtained Chapter 15 status from a U.S. District Court in February.

Legal
IMGGQ

Imaging3 Lied about FDA Disapproval, SEC Says

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Imaging3 (IMGGQ) management concealed negative FDA information from investors, according to a lawsuit filed by the Securities and Exchange Commission. In a November 2010 conference call, the SEC alleges, the company's CEO Dean Janes  avoided discussing serious FDA criticisms that were later disclosed in 2011 by an investor who obtained a copy of the Oct. 22, 2010 FDA letter and posted it on his blog. Imaging3 is a Burbank, Calif.-based medical imaging device maker that filed for Chapter 11 bankruptcy protection in September 2012. The conference call took place on Nov.

Legal

China MediaExpress Charged with Fraudulent Financial Reporting by SEC

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The Securities and Exchange Commission is charging China-based reverse merger company China MediaExpress (CMEE) and its CEO with fraudulently misleading investors about its financial condition. China MediaExpress claimed that their cash balances were millions of dollars higher than actual amounts. The charges come more than two years after reports in the financial media and from short-biased research firms began suggesting the company, once named by Forbes China as the country's top "up-and-comer," was actually a massive fraud. China MediaExpress operates a television advertising network on airport express and inner-city public transit. The June 20 complaint charges CEO Zheng Cheng and China MediaExpress with violations of multiple antifraud provisions of federal securities laws, which could result in financial penalties, permanent injunctions, disgorgement, and an officer and director bar against Zheng.