Stan Lee Media Confirms SEC Probe

Stan Lee Media Inc., an Encino online media company founded by comic book creator Stan Lee, said the Securities and Exchange Commission is investigating trading in the company’s stock.

The company also said it has uncovered evidence of a possible misuse of corporate funds “by some former members of the company’s management team.”

Stan Lee Media, whose founder created such comic book characters as Spider-Man and the Incredible Hulk, stopped production and fired most of its staff last month. It took those steps, it said, after its shares fell below $1, leaving the company unable to claim $2.2 million that it had expected for short-term financing.

The company said Tuesday that it terminated its agreement with consulting company Paraversal Inc. Through Paraversal, Stan Lee Media said it had retained the services of Peter F. Paul, described by the company as its “co-founder” in a press release last year.

Stan Lee Media also said it had terminated the employment contract of Stephen Gordon, its former executive vice president of operations.

“Management is continuing its discussions regarding strategic alternatives for the company and presently we do not believe that these developments will adversely affect the company’s near-term strategic plans,” Chief Executive Kenneth Williams said in a statement.

He added that Stan Lee Media plans to cooperate with the investigation and turn over any information it has that may be helpful to SEC investigators.

Stan Lee Media, Paraversal, Paul and Gordon could not be reached for comment.

Trading of Stan Lee shares has been halted since Dec. 18, when they fell 69 cents, or 85%, to 13 cents. Nasdaq Stock Market officials said in a statement that they had requested information from the company and its trading would remain halted until the request had been satisfied.

The shares had traded as high as $28.18 in February.