SEC: Former NY Gov. David Paterson violated securities laws

Former New York Governor David Paterson will pay $25,000 to settle charges of violating federal securities laws, U.S. regulators said Friday.

Paterson along with Charles Koppelman and Matthew Mellon, who all served as directors of a now-defunct movie production company, failed to timely report their stock transactions in the startup studio while on its board, the Securities and Exchange Commission (SEC) said in a statement.

Paterson, a Democrat who served as New York’s governor for two years starting in 2008 after Eliot Spitzer resigned, and music producer Charles Koppelman each agreed to pay a quarter of the $100,000 settlement without admitting or denying the findings, according to the SEC.

An administrative proceeding was started against Mellon, a businessman and former chairman of the New York Republican Party Finance Committee, said the regulatory agency. 

Three others, who were executives of the company, first called Medient Studios and later Moon River Studios, were charged by the SEC with defrauding investors in a purported project to construct outside Savannah, Georgia, what would have been the biggest movie studio in North America. 

The trio -- Roger Miguel, Jake Shapiro and Manu Kumaran -- allegedly claimed construction had begun and had projected dates when the studio would be operational, all the while knowing they didn’t have the funds to begin building the touted “Studioplex,” the SEC said. 

Miguel agreed to settle the charges against him, while litigation continues against Shapiro and Kumaran, with the latter accused of spending $1,700 a day of company funds while publicly claiming he didn’t draw a salary. Shapiro allegedly misappropriated company funds for personal use, living in a house worth nearly a million dollars that the company paid for.