Saturday, October 10, 2009

Sponge Bob Stock Scam


You would think that a company with a brand as valuable as the delightfully goofy Sponge Bob Square Pants would be argus-eyed when it came to protecting the integrity of their brand.

If they decided to license the image to, say, a pump-and-dump stock scam run by career criminals you might expect them to do minimal due diligence on the licensee, particularly if they were alerted several times by a pesky blogger of their lapse in judgment.

If you thought that of Viacom you would, of course, be dead wrong.

Spongetech, a criminal enterprise disguised as a penny-stock, has made much of their license to produce and market Sponge Bob children's bath sponges pre-filled with soap, so much in fact that they went to the trouble of lying about the product's inclusion in the special WalMart 10th anniversary Sponge Bob product display. Since WalMart does not carry SpongeTech products, the product was a no-show.

Bath and carwash sponges are not the only sponge fixation of Sponge Tech President Steven Moscowitz. He also owns Vanity Events, which featured in a now-scrubbed website, sponges pre-loaded with male desensitizing creme, and a variety of other sexual aids, not products normally associated with the Nickelodean demographic.

The long and short of it is that Viacom allowed its Sponge Bob brand to play a starring role in a sleazy penny stock promotion that by any reasonable estimate sold over $200 million in worthless shares to the investing public. Spongetech is now suspended from trading, is under investigation for fraud by the Securities and Exchange Commission, and faces a class action shareholder lawsuit alleging theft by deception.

But I guess as long as the licensing fees and royalties are paid on time, that isn't Viacom's problem. Call it the Mr. Crab approach to money.







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