Frequently Asked Questions
- What is this case about?
- Why did I get a Notice?
- Who is eligible to participate in the Children’s Internet Fair Fund?
- Who is excluded from participating in the Children’s Internet Fair Fund?
- Which are the eligible Securities?
- What is the Relevant Period?
- What do I need to do to participate in the Children’s Internet Fair Fund?
- Who is the Distribution Agent for the Children’s Internet Fair Fund?
- How do I get more information or contact the Distribution Agent?
- Can I dispute the amount of my Recognized Loss if I believe it to be incorrect?
- Am I required to provide a tax form W9 with my claim?
- What is this case about?
On September 27, 2006, the Securities and Exchange Commission (the “Commission") filed a complaint (“Complaint”) against The Children’s Internet, Inc. (“TCI”) and its principals, Nasser Hamedani and Sholeh Hamedani (collectively, the “Hamedanis”) and Two Dog Net, Inc. (“TDN”) and two of its stock promoters, Peter Perez (“Perez”) and Cort Poyner (“Poyner”), (collectively, the “Defendants”). In the Complaint, the Commission alleged that, from February 2002 through June 2005, the Hamedanis purportedly on behalf of TCI, fraudulently obtained approximately $5.5 million from public investors. The Hamedanis diverted a significant amount of the investors’ money to pay personal expenses and hundreds of thousands of dollars in undisclosed commissions to two stock promoters, Perez and Poyner.
On March 19, 2008, the Court entered a Final Judgment against Perez, holding him liable for disgorgement of $538,865 representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $67,715, with all but $85,000 waived.
On October 23, 2008, the Court entered a Final Judgment against Poyner, holding him liable for disgorgement of $413,767 representing profits gained as a result of the conduct alleged in the Complaint, together with prejudgment interest thereon in the amount of $61,118, and a civil penalty in the amount of $120,000 pursuant to 15 U.S.C. § 78u(d)(3)(A), for a total of $594,885.
On October 30, 2008, the Court entered amended final judgments that ordered the Hamedanis to pay, jointly and severally, a total of $4,049,470 in disgorgement and prejudgment interest, disgorge all shares of TDN and TCI owned or controlled by either of them, and for each to pay a $100,000 civil monetary penalty. On May 22, 2012, in related criminal proceedings, the Court entered a Restitution Order directing the Hamedanis to pay restitution in the amount of $2,300,000, and that all payments made shall be credited towards the civil judgment entered in this matter. The Hamedanis have made only a few, partial, monthly restitution payments.
Perez and Poyner have paid a total of $692,265.50 as ordered (the “Fair Fund”). Any additional funds received pursuant to any of the outstanding judgments in this matter, will be added to the Fund.
The Fair Fund has been deposited in an account at the Court Registry Investment System (“CRIS”) for investment.
Top - Why did I get a Notice?
You have received a Notice because you have been identified as a Preliminary Claimant. Based upon records obtained by the Commission during its investigation, the Commission staff has identified those investors, or their lawful successors, who were harmed in connection with the Defendants’ fraudulent sales of securities in TCI. Investors will be compensated for their losses on TCI shares that were purchased between January 1, 2002 - December 31, 2005, inclusive (the “Relevant Period”).
Top - Who is eligible to participate in the Children’s Internet Fair Fund?
You are eligible to participate if you are a Preliminary Claimant, determined by the Commission as having suffered a Recognized Loss, pursuant to the Plan of Allocation, as a result of transactions in the Securities during the Relevant Period, and you are not an Excluded Party or an Unresponsive Preliminary Claimant.
Top - Who is excluded from participating in the Children’s Internet Fair Fund?
Excluded from the Children’s Internet Fair Fund Fair Fund are:
(a) the Defendants, and Defendants’ advisers, agents, nominees, assigns, creditors, heirs, distributees, spouses, parents, children, or controlled entities;
(b) the Distribution Agent, its employees, and those Persons assisting the Distribution Agent in its role as the Distribution Agent; and
(c) any purchaser or assignee of another Person’s right to obtain a recovery from the Fair Fund for value; provided, however, that this provision shall not be construed to exclude those Persons who obtained such a right by gift, inheritance, or devise.
Top - Which are the eligible Securities?
The “Securities” are shares of The Children's Internet (“TCI”) or, in some instances, shares of Two Dog Net (“TDN”) received in place of shares of TCI, purchased from the Defendants between January 1, 2002 and December 31, 2005, inclusive (the “Relevant Period”).
Top - What is the Relevant Period?
The relevant period is between January 1, 2002 and December 31, 2005, inclusive.
Top - What do I need to do to participate in the Children’s Internet Fair Fund?
In order to be considered for eligibility to receive a Distribution Payment under the approved Distribution Plan, you must access the Fair Fund’s website and complete the online Preliminary Claimant Certification Form with the claim number and PIN supplied in your Notice. All submissions must be received by January 6, 2025 in order to participate. If you are unable to access the online Preliminary Claimant Certification Form or would prefer to submit a paper copy of the Certification Form, please immediately contact the Distribution Agent by phone at 1-888-298-1121 or by email to [email protected]. A paper copy of the Certification Form will be provided upon request.
A Preliminary Claimant, as that term is defined in the approved Distribution Plan, whose address the Distribution Agent has not been able to verify and/or who does not timely respond to the Distribution Agent’s attempts to obtain information, including any information sought in the Plan Notice, shall be deemed as unresponsive. Unresponsive Preliminary Claimants will not be eligible for a distribution under the approved Distribution Plan.
Top - Who is the Distribution Agent for the Children’s Internet Fair Fund?
The Court appointed KCC Class Action Services, LLC, (“KCC”) as the Distribution Agent for the Children’s Internet Fair Fund on March 9, 2017. The Distribution Agent will be responsible for administering and distributing the Fair Fund in accordance with the terms of the Distribution Plan and the Court’s orders.
Top - How do I get more information or contact the Distribution Agent?
Additional information regarding the Children’s Internet Fair Fund may be found on this website. You may also call the toll-free number 1-888-298-1121 to ask questions or to update your address, or you may email the Distribution Agent to [email protected]. If you would like to get copies of the relevant documents, including the Distribution Plan, please visit the Case Documents tab on this website.
Top - Can I dispute the amount of my Recognized Loss if I believe it to be incorrect?
Yes, you can dispute your Recognized Loss Amount. When certifying your filing on the Online Portal, check the box to indicate you wish to dispute the calculation of your Recognized Loss. You must explain the reason for disputing the Recognized Loss, the amount you believe the Loss to be and how that amount was calculated. You will also be required to submit documentation of your transactions in the Securities to support your dispute.
Top - Am I required to provide a tax form W9 with my claim?
The interest portion of your ultimate payout may be considered taxable income and, under certain circumstances, could be subject to withholding. Therefore, we require the submission of a W-9 or substitute W-9 tax form to supplement your filing. Upon submission of your filing, please navigate to the W9 Kiosk on the Fair Fund website at www.thechildrensinternetfairfund.com, login using the Claim Number and PIN at the top of your Notice and complete the requested information.
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