Ex-Infinium boss charged with stock scam

SEC accuses Timothy Roberts of misleading investors by implying Phantom console was ready for launch, walking away with $422K.

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Though Infinium Labs' Phantom console has yet to launch, it appears that the company's chairman and former-CEO wanted to begin making money on the machine as quickly as possible. The Securities and Exchange Commission has charged Timothy Roberts with misinforming investors to promote stock growth, then selling his own shares at the inflated price.

Roberts allegedly worked with stock promoter Michael Pickens in 2004 to send out thousands of faxes to investors. According to CNNMoney.com, the SEC claims that the memos were full of false information, including a guarantee of a January 2005 launch. The Phantom has not yet launched, and, true to its name, has disappeared from most radar screens--the console has been a no-show at the past two Electronic Entertainment Expos.

Investors took the bait, and Infinium stock immediately ballooned. Roberts then allegedly sold 1.3 million shares of the company's stock and made $422,500 on the exchange.

This isn't the first time Roberts has been in the news for some questionable dealings. In 2004, a Florida newspaper questioned Infinium's business practices after a stock split left Roberts and another executive with millions in stock.

The Phantom, part console, part gaming service, was designed to give its users on-demand gaming with titles from multiple platforms. Infinium recently revealed news about a product, but it wasn't The Phantom. The Phantom Lapboard is a wireless keyboard with an integrated mousepad. However, just a few months after announcing the peripheral, the company revealed that production on it had been delayed.

Discussion

77 comments
CraigD
CraigD

This is from yesterday's latest 10-KSB 05-19-06: UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ________________________________________ FORM 10-KSB  ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2005 OR  TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 ITEM 1. DESCRIPTION OF BUSINESS General Overview We are developing and seeking to commercialize the Phantom Lapboard, a wireless, rotating custom keyboard/turntable with integrated mousepad. After establishing the Phantom Lapboard, we may seek to develop and commercialize the Phantom Game Service. We have not yet generated any revenue from operations. Our ability to generate revenue in the future is dependent on our ability to successfully develop and commercialize the Phantom Lapboard. The Phantom Lapboard and Game Service, that we hope to re-focus resources on if we are successful with the Phantom Lapboard, may also utilize proprietary firmware and/or software that we develop in order to enhance the gamer

danmp18
danmp18

LOL!!! That stupid console will never launch.

CraigD
CraigD

Well, That's not exactly the case...

marc_man3001
marc_man3001

lol News on tha phantom...why doesnt infinium just give up already

vamroc
vamroc

This ghost is busted!! Everyone should cut there losses and walk away. No one cares about the Phantom. It's never ever coming you have a better chance at Duke Nukem Forever showing up on Xbox 360. Phantom doesn't even have up to date tech behind it. The system can't run anything new only old pc versions of games like Splinter Cell: Pandora Tommorow and Tomb Raider. That means no WOW, no Guild Wars, and no Oblivion ES 4

CraigD
CraigD

Of course there's Timothy Roberts' side of the story: "It kind of caught us by surprise," said Roberts, from his Longboat Key home, "because we had been in settlement talks with them." Roberts, 36, has hired two New York City attorneys to defend himself against the suit. One of them, Michael Ference, said he has not had much time to study the lawsuit, and issued a blanket denial. "Mr. Roberts denies the allegations in their entirety and we intend to defend the matter vigorously and we expect to prevail," Ference said, declining to answer specific questions. Roberts acknowledged hiring Pickens, but denied that he encouraged sending any illicit faxes, or that he personally profited from the sale of Infinium stock. During the time in question in the SEC complaint, says Roberts, "I only sold $60,000 worth of stock, which was my payroll stock. I wasn't being paid in cash, I was being paid in stock. No. 2, the additional stock they said I sold, it was gifts I made out of my private stocks to employees, so nobody profited from that." Infinium did pay employees including Roberts by issuing shares, the price of which was in the pennies. The shares now trade for 1.69 cents per share. With the vast number of outstanding shares, the company still has a market cap of $6 million. Roberts founded Infinium in Sarasota in December 2002, and turned it into a public company through a reverse merger completed in January 2004. Infinium's Phantom gaming system was to consist of two parts: a subscription network to be accessed through the Internet and the Phantom hardware. That included a dedicated game-playing computer plus a wireless keyboard called a lapboard, designed so that you could play computer games from the living room couch. "We raised a lot of money, but we didn't ever get the big chunks of money we needed to launch the service," Roberts said. In July, the SEC charged three men with bilking investors out of $600,000 by promoting Infinium shares in a classic "pump and dump" scheme. New investors are pushed into buying the stock, which raises its price, and then the promoters sell their shares into the market strength. At the time that case was filed, the SEC already was investigating whether to file a case against Roberts. Pickens, the stock promoter hired by Roberts, has been separately charged by the agency for his role in a related scheme to manipulate the stock of Infinium and several other small-cap companies through a series of fraudulent faxes, the federal agency said. Pickens is under criminal indictment by the U.S. Attorney for the Southern District of New York. In a separate action concluded in April, two Sarasota stockbrokers were disciplined by the National Association of Securities Dealers NASD for their trading in Infinium Labs stock. David Michael Rosenberg was barred from working with any NASD member, and Scott Michael Praizner was suspended. Infinium was based in Sarasota until August 2005, when the cash-strapped company was moved to Seattle. Now, Roberts says he is in the process of moving the company back to its old offices in Sarasota. He said Infinium managers hopes to sell its lapboard to consumers through the Internet and through wholesale distribution. At the same time, the company is seeking to market its software system for online gaming through existing networks, such as the Microsoft Windows Media Entertainment Center, Roberts said. http://www.heraldtribune.com/apps/pbcs.dll/article?AID=/20060517/BUSINESS/605170595&Page=3 Please copy and paste to your address field. Thank u.

rl_41
rl_41

what? phantom? wud have sucked anyways

bobreturns
bobreturns

what the hell is that never heard of that console and how come all the new game manufacturers all seem to have criminal streeks it happened with the gizmondo aswell

supercrap1
supercrap1

Well it was called Phantom, after all. They could've called it the Vaporware and peple still would've invested. People are dumb.

crazy_boy166
crazy_boy166

First time i ever hear about the Phantom

Ima_Grey
Ima_Grey

Maybe Timothy Roberts can be Survivor's Richard Hatch cell mate!!

LordAndrew
LordAndrew

People actually invested in that thing? Wow. We all knew this thing didn't exist. Why don't investors?

frankeyser
frankeyser

wonder if this thing is ever going to come out.

faridmon
faridmon

i don't know, this story just reminds me of gizmondo, deitrich, eriksson, ferrari enzo, crash, police............... i can't go an, my brain is hearting.

anamnawshad
anamnawshad

This my 1st time hearing about this console! :o

emadayag
emadayag

...that means I have to step out of the waiting line now that it won't launch? so I've wasted a year and a half on this one... =/

ccintino
ccintino

Obviously, none of those investors have seen Boiler Room or Wall Street. I guess there's a group of VC out there who are kicking themselves on the golf course this week. Morons

videogamr49
videogamr49

...uhh...no-one is going to focus on the Phantom. Everyone is going to want to get a Wii.

starcutter20000
starcutter20000

I didn't even know the "Phantom" existed until now...

lostdogg
lostdogg

I guess this means "Duke Nukem Forever" won't be a launch title.

simon50
simon50

Oh what a crazy bunch of tards they have over at infinium.

G_W_X
G_W_X

The name says it all...The console is a PHANTOM. A vision or a feeling of somthing that is not actually there?

G_W_X
G_W_X

Thats some serious Phantom money for a Phantom promise, er for a console named what again?...

DemonJD138
DemonJD138

I guess it shows that you should know the type of business you're investing in. Any gamer would've known better than to invest in this console, it was obvious vaporware from the beginning. Right up there with the M2! Or was it the 3D0 2? I can't remember...

RockMFR
RockMFR

You mean there were people that didn't immediately realize Phantom was a scam? Hahahaha, suckers.

ShadowRayden
ShadowRayden

The idea for internet gaming and digital downloads I'd say they got the idea from the PC and it too I suppose, wouldn't you?

gatsbythepig
gatsbythepig

This is where the other consoles got the idea for internet gaming and downloading. I almost invested with these guys a few years ago and now I am not surprised this happened.

Seraphim_24
Seraphim_24

I've been saying it from the get go! Phantom never really existed!

ShadowRayden
ShadowRayden

I'll admit Phantom is a better name than the Wii. But man, these guys should just give up. At this point is there even anyone interested in this thing? Anyone at all? Perhaps one fanboy. Can you imagine a Phantom fanboy? "Phantom is going to own the 360, PS3 and the Wii?" Ha Ha Ha.

DevKaz
DevKaz

is this still related to money $oft's dirty bussiness tactics??

ceremiev
ceremiev

The Console is "PHANTOM" or maybe phantom console

sydneylostarot
sydneylostarot

No Phantom?! I just lost my faith, videogames are dead for me without the... already forgot it's name...

blackIceJoe
blackIceJoe

SlickVicJr I was really joking about buying it you would have to be out of your mind to waste it on this. One you would never know if it works or will come out. But I really do feel sad that people where dumb to waste there money.

ewjim
ewjim

I don't think ANY Phantom system shows on "radar" EVER... They just making the money out of it... :twisted:

Autolycus
Autolycus

welcome to americca where the might dollar is all everyone really cares about. oh wait...its not worth crap anymore. thanks bush voters ::roll eyes::

Agulf
Agulf

Kaaaaahn! (Hey - all the witty comments were already taken) :P

SalenStormwing
SalenStormwing

Wow, you mean the Phantom was a scam? *feints shock!* DUH! HardOCP called that one back when they started look at that guy and how shady he was. In other news, the sky is blue. Thats about how obvious this news is.

thekey
thekey

LOL!!!! That's why it was called the Phantom.

S_Pac_316
S_Pac_316

Jeez,I wish this would just DIE already!

fenriz275
fenriz275

Let's be honest, gamers have a habit of getting all excited about hype that is fed to us about something that's still years away if it ever materializes. Roberts figured this out and decided it would be an easy way to scam some morons out of their money. Remember how excited everyone got about Diakatana or Team Fortress 2 or Duke Nukem Forever? At least Diakatana actually got released, suckiness and all.

eckertt001
eckertt001

If this would have come out over 2 years ago when it was supposed to...maybe...but now, no friggin way. The guts of this thing wouldnt even come close to today's technology. And now M$ and Wii have online content, and gametap offers exactly what this thing was trying to sell, and you dont need to have a contract or buy into anything major for that, only subscription fees, and a low end machine. It is just to late for this.

cypher50
cypher50

Let's see...XBox Live Arcade, Nintendo's Virtual Console, Sony has PS1 emulation coming up for the PSP, Direct2Drive & Steam for the PC...yea, the Phantom really took advantage of the direct software model before anybody else established themselves there *snicker*. Oh well, I hope no real gamers actually invested in Infinium or thought that this console would ever see the light of day...

Malten
Malten

Did he buy a ferrari too? :p

FordFairlane
FordFairlane

I'm just waiting for the 'Phantom - Duke Nukem Forever' launch bundle...

fynne
fynne

Just who the heck are the people who fell for this scam. Is it that important to get in on the ground floor ?!?!?

SpookyFish
SpookyFish

That most stink a lot to have wasted your money on this then lose it. I for one could have seen this selling nice and well if it came out on the market I hope this does not get canceled. Because when it comes out I think it will sell out fast and I know I would like to get one. You're joking right? Or are you really that naive? There's no way in hell a nobody-company could even hope to challenge Sony/M$/Nintendo's hold of the console consumer base. Yeah, it'll sell out just as fast as those Nokia N-Gage's... oh wait...

roy_008
roy_008

There is a reason it's called a "Phantom"! :P