State Orders Firms to Remove Online Investment Pitches

State officials have ordered more than a dozen entertainment companies to remove unauthorized investment solicitations from the Internet.

“Some of these companies essentially said they were making the next ‘Titanic,’ ” said Bill McDonald, enforcement director of the Department of Corporations. “Those kind of representations are fraudulent, because entertainment projects are very risky.”

The companies failed to register with state officials and the Securities and Exchange Commission, McDonald said. They also failed to publish the required investment prospectus detailing risks to investors.

One company promised investors huge returns for investing in a low-budget horror film titled “Video Pirates From Mars.” Another sought money to produce a “mystical romance” with the working title of “Beverly Hills Love Story,” state officials said.

Dynamo Bunny Productions of Valley Village tried to raise $75,000 to finish a movie called “Miamsa,” “a hilarious dark comedy about romance and recovery from a man’s point of view,” the Web site says. For $150, producer Ryan Effner offered investors a signed script and a special mention in the film credits.

Effner said he didn’t think that was an illegal offering because he was selling something: the script and the credit.

State officials, however, said the value of Effner’s script is based on the success of the movie. And since risk is a factor, the sale of the scripts should have been registered as a security.

The orders cap a monthlong sweep in which state investigators posed as potential investors, joined chat rooms and downloaded thousands of entertainment-related Web sites looking for unauthorized investment solicitations.

Within the last year, the department has issued 77 desist-and-refrain orders and filed several civil and criminal cases.