Securities Commissioner Seeks to Intervene in Suit

Arkansas Securities Commissioner Michael Johnson has filed a motion to intervene in a controversial lawsuit involving Golf Entertainment Inc. of Springdale and an organization called Genesis Trust.

The motion was filed March 10 in U.S. District Court in Fayetteville in a case styled The Genesis Trust v. Golf Entertainment Inc.

Among other things, Johnson’s motion alleges that “there is no ‘case or controversy'” and “there is no ‘bona fide’ claim” between Golf Entertainment, a penny stock that operated a low power Spanish-language television station, and Genesis Trust, which its officers have described as a charitable organization.

Genesis Trust originally filed the suit on April 30, 2002, and it was settled six days later — with court approval — with an agreement that Golf issue 15 million new shares of stock and transfer ownership of the shares to the Genesis Trust.

After a package of in-depth stories on Golf Entertainment was published in August by the Northwest Arkansas Business Journal, the Arkansas Securities Department opened an investigation. The result was a cease-and-desist order, issued by Johnson on Sept. 10, instructing Golf and Genesis to stop trading shares issued under the settlement agreement because they were not properly registered with the state.

Golf Entertainment appealed the order, but Johnson reaffirmed it in October. Genesis and Golf subsequently received permission from district court to amend the settlement agreement, which apparently prompted Johnson’s motion to intervene.

Shares of the company are publicly traded over the counter under the symbol GECC and were recently valued at three-tenths of a cent.