SEC Charges Attorneys for Fraudulent Legal Opinions Used by Promoters in Pump-and-Dump Scheme

FOR IMMEDIATE RELEASE
2009-103

Washington, D.C., May 5, 2009 — The Securities and Exchange Commission today charged two California-based attorneys as well as a California corporation and its owner for preparing and issuing fraudulent legal opinions involving unregistered stock that enabled promoters and others to sell shares in an illegal pump-and-dump scheme.

The SEC alleges that attorneys Albert J. Rasch, Jr. and Kathleen R. Novinger together with Sandra B. Masino and her company 144 Opinions, Inc. drafted and executed at least 24 legal opinion letters that fraudulently induced the removal of restrictive legends on unregistered shares of Mobile Ready Entertainment Corp. As a result, certificates representing more than 22 million shares of Mobile Ready were sold to the public in violation of Rule 144, which governs the conversion of restricted stock that otherwise cannot be sold to the public. The SEC previously charged Mobile Ready and two of its officers in connection with the fraudulent pump-and-dump scheme that was made possible, in part, by the bogus opinion letters.

"The market relies on lawyers to act as gatekeepers who exercise their function in good faith," said Katherine S. Addleman, Regional Director of the SEC's Atlanta Regional Office. "As alleged in our complaint, these defendants disregarded the investing public by operating a legal opinion mill of fraudulent letters that misrepresented critical facts and cited to non-existent documents."

The SEC's complaint, filed in U.S. District Court for the Northern District of Georgia, alleges that after the fraudulent letters were prepared and issued, Masino and 144 Opinions made further false statements to a transfer agent to induce the removal of the restrictive legends on the respective shares of Mobile Ready. The fraudulent legal opinion letters contained false and misleading statements about the origin of the securities at issue, the existence of adequate public information concerning Mobile Ready, the existence of agreements between Mobile Ready and the relevant shareholders, and the applicability of Rule 144 promulgated under the Securities Act of 1933 to the restricted shares identified in each of the Mobile Ready Legal Opinions.

Mobile Ready, headquartered in Alpharetta, Ga., is a non-reporting, publicly-traded company that claims to market software applications for mobile devices and was previously quoted on the Pink Sheets under the symbol MRDY. Rasch and Masino each reside in Costa Mesa, Calif., Novinger resides in Cypress, Calif., and 144 Opinions was formerly headquartered in Newport Beach, Calif., before it became administratively dissolved.

The SEC's complaint alleges that the defendants violated the registration and antifraud provisions of the federal securities laws, Sections 5(a), 5(c) and 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 SEC's complaint also seeks permanent injunctions against future violations; disgorgement of ill-gotten gains plus prejudgment interest from Rasch and Masino; imposition of financial penalties against Rasch, Novinger and Masino; and an order permanently prohibiting defendants from participating in any offering of penny stock.

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For more information, contact:

Katherine S. Addleman, Regional Director
William P. Hicks, Regional Trial Counsel
M. Graham Loomis, Assistant Regional Director
SEC's Atlanta Regional Office
404-842-7600