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LA-Based Crypto CEO Pleads Guilty to $21M Fraud
Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
In a 2018 initial offering of his company’s BAR cryptocurrency, Titanium Blockchain CEO Michael Alan Stollery managed to raise $21 million—a successful launch by any measure. On Monday, the 54-year-old Reseda resident pleaded guilty to a single count of securities fraud in the U.S. District Court in L.A. Stollery could face decades in prison.
According to the Dept. of Justice (DOJ), Stollery, A.K.A. Michael Stollaire, bamboozled investors into buying Titanium’s BAR cryptocurrency with “false and misleading statements,” in addition to not registering BAR with the Securities and Exchange Commission (SEC).
Stollery admitted that in efforts to “entice investors, he falsified aspects of TBIS’s white papers, which purportedly offered investors and prospective investors an explanation of the cryptocurrency investment offering,” according to the DOJ.
The faked white papers were just one element of a fairly complex scheme. Stollery used “fake client testimonials” and made false claims of having “business relationships with the Federal Reserve and dozens of prominent companies to create the false appearance of legitimacy,” the DOJ said. Stollery even copped to using investor money for personal expenses, including credit card payments and paying bills for his condo in Hawaii.
The SEC first stopped Titanium Blockchain's initial coin offering—or ICO—with an emergency order in 2018, which froze the firm’s assets and placed them into receivership. The SEC alleged at the time that, in addition to everything else, Stollery was untruthful about his relationships with the Federal Reserve and big-name companies, including PayPal, Verizon, Boeing and Disney.
Stollery’s attorney Andrew Holmes told the Wall Street Journal that his client had legitimate intentions in launching his business but succumbed to “overexuberance that went beyond what he should’ve done.” Holmes said Stollery was “very remorseful and he wants to get as much money as possible back to those that put their money in.”
Andrew Holmes did not immediately respond to dot.LA’s request for further comment about the case.
Fraud is an ongoing problem in cryptocurrency and NFTs and governments worldwide are working to keep up with policing what is essentially a kind of digital Wild West. According to the FTC, investors lost $1 billion to common scams like “rug pulls”—heavily promoting tokens to drive up their price before selling, taking all the invested fiat currency in the process—between 2021 and the first half of 2022 alone.
Stollery is scheduled for sentencing on November 18. He could face up to 20 years in prison.
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Steve Huff
Steve Huff is an Editor and Reporter at dot.LA. Steve was previously managing editor for The Metaverse Post and before that deputy digital editor for Maxim magazine. He has written for Inside Hook, Observer and New York Mag. Steve is the author of two official tie-ins books for AMC’s hit “Breaking Bad” prequel, “Better Call Saul.” He’s also a classically-trained tenor and has performed with opera companies and orchestras all over the Eastern U.S. He lives in the greater Boston metro area with his wife, educator Dr. Dana Huff.
steve@dot.la
Netflix Pushes Further Into Video Games With First-Person Shooter Title
12:01 PM | March 22, 2022
Courtesy of VanDAM/Netflix
Netflix is expanding further into video games with the upcoming release of three new mobile titles, including its first-ever first-person shooter game.
The streaming giant has already released 14 titles since launching video games on mobile devices in November, including some using intellectual property from Netflix originals like “Stranger Things.” The games are free for Netflix subscribers and available on Apple and Android devices.
On Tuesday, Netflix announced three more games dropping this month, including a zombie first-person shooter called “Into The Dead 2: Unleashed.” The title, developed by New Zealand-based developer Pik Pok, features dozens of levels where players can “maim, mow down, and eliminate the Dead,” per Netflix’s description. The company also unveiled a narrative puzzle game titled “This Is A True Story” and a retro-style brick-breaker called “Shatter Remastered.”
The new titles come on the heels of Netflix’s pending $72 million acquisition of Finnish mobile games developer Next Games, announced earlier this month. The deal was the streaming giant’s second acquisition of a video game company in only six months, following its September purchase of Glendale-based gaming studio Night School.
Netflix, which has a huge footprint in Los Angeles, has expanded beyond traditional movies and TV shows in other ways, too. In addition to mobile games, it has released interactive movies and shows that blur the line between TV and video games. It remains to be seen whether the strategy will pay off for the streaming giant, which has seen its subscriber growth slow down in recent quarters.
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Christian Hetrick
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Why a Startup Needs a Board: The Why and How of Constructing a Board Early
05:22 AM | October 28, 2022
Photo by Benjamin Child on Unsplash
If your business is a corporation, you are required by law to have a board of directors. For many startups, it can seem like just an option. However, there are many reasons startups should aim to form their own board of directors early in their lifecycle.
Does Your Startup Need a Board of Directors?
Yes. Even for experienced founders, a new company comes with new challenges — and an opportunity to make all new mistakes. For first-time founders, you don’t know what you don’t know. The best way to avoid many of these mistakes is to surround yourself with experienced counsel, and a board is a way to formalize that. The primary job of a board of directors is to look out for shareholders' interests, oversee corporate activities, assess performance, assess the CEO and senior management and give feedback about the future direction of the company. Your board should help provide advice and mentorship from people who have been there, done that.
When Should Your Startup Form a Board?
As you start to think about your board as founder and/or CEO, the board can initially be as small as just one director: you.
As the startup grows and evolves over funding rounds, you should expand and include more members. The most standard time to form a board is after the Series A funding round, but some startups choose to after the seed round. Typically, the board expands as the company does from two to three directors (including the CEO) around the Series A, to five to seven directors when the company is in the Series C/D stage to seven to nine directors as it is preparing to go public.
I prefer boards on the smaller side because they can be more collaborative and interactive, but as you create board committees, you will need a larger board in order to have two to three directors on each committee.
Who Should Serve On Your Startup's Board?
One of the best ways to fill a board of directors is to find the people you wish you could hire but may be in positions where it’s not really feasible. For a startup, you should aim for a board with three to five directors. This should include one or more in each of the following categories: the founder, an investor in the company and an independent director.
You’ll want to have some of your investors on the board because they are the ones most rooting for and affected by the financial success of the company. This will also allow them a small measure of control and visibility into the company's progress. Keep in mind it’s important to keep cultivating these relationships for when you need to raise capital down the road.
Additionally, it’s important to have one or more independent directors — a person who is neither an employee nor an investor in the company — on the board early. Ideally, you’ll be able to find another founder, peer, colleague or acquaintance who has been in your seat before and can bring a clear, objective perspective to board discussions. A trusted independent director can let you know if you’re missing an opportunity or taking a step in the wrong direction. Plus, most importantly, help navigate the challenges that arise when the investor board directors may have a different perspective from or disagree with the operating board directors.
Lastly, the diversity of your board is also extremely important. Groups from different backgrounds, genders, races and perspectives make better decisions and improve business outcomes. I recently had a conversation with CNBC’s Julia Boorstin at the dot.LA Summit about this very thing.
A Board Success Story
Throughout my countless years working and growing with boards, I’ve had many opportunities to see just how important a good BoD is. A great example of when a board decision aided my company and me more than expected is from my time at Zillow.
Prior to 2008, investors were looking to invest more money into Zillow — which we didn’t need at the time. One of our board members, Bill Gurley, gave the great advice of “take the hors d'oeuvres when they’re being passed” or take the money when it’s being offered. We ended up taking on the new capital and it was good that we did. When the 2008 financial crisis hit, the extra capital allowed Zillow to weather the storm and take advantage of the moment to expand more aggressively when the market was up for grabs.
It’s small moments like this that led to bigger successes down the road and prove the importance of having a board early.
Final Thoughts
Your board of directors should help you navigate challenges and serve as a trusted sounding board (pun intended) when you need advice. Something most, if not all, founders know by now is that startups are dynamic and constantly evolving, so as your startup scales your board will too. And if you build the foundations of your board thoughtfully, it will aid your startup in the years to come.
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Spencer Rascoff
Spencer Rascoff serves as executive chairman of dot.LA. He is an entrepreneur and company leader who co-founded Zillow, Hotwire, dot.LA, Pacaso and Supernova, and who served as Zillow's CEO for a decade. During Spencer's time as CEO, Zillow won dozens of "best places to work" awards as it grew to over 4,500 employees, $3 billion in revenue, and $10 billion in market capitalization. Prior to Zillow, Spencer co-founded and was VP Corporate Development of Hotwire, which was sold to Expedia for $685 million in 2003. Through his startup studio and venture capital firm, 75 & Sunny, Spencer is an active angel investor in over 100 companies and is incubating several more.
https://twitter.com/spencerrascoff
https://www.linkedin.com/in/spencerrascoff/
admin@dot.la
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