REBECCA Update: Investigation Into Hotton Began in 2009
As BroadwayWord previously reported, following REBECCA's cancellation on Broadway and the news that financier and stock broker Mark C. Hotton was arrested last Monday and called 'a considerable threat' to the community, he is now being held without bail, if convicted, Hotton, 46, could face 40 years in jail.
Today, the Wall Street Journal reports that the stock broker has been under investigation since 2009 by the Financial Industry Regulatory Authority, in 12 different cases.
According to the AP "Prosecutors say he flimflammed the musical's producers with an elaborate scheme. Authority spokesman Nancy Condon said the investigation into his profession conduct was ongoing. It was expected to be wrapped up soon. Hotton's attorney declined to comment on the investigation. He said Hotton didn't set out to defraud the show."
Last week, according to the New York Post, producers of the show will file a $100 million lawsuit against Hotton, for taking 'tens of thousands of dollars in advances on commissions for bringing in non-existent backers.'
As reported in a criminal complaint filed in Manhattan federal court against Mark Hotton, REBECCA has already spent $6 million in production costs. Producers have until December 31 to raise the remaining $4.5 million to get the show up, or they will face having to return the spent funds to the show's investors.
Hotton was arrested for defrauding the show’s producers of $60,000 and for an unrelated $750,000 real estate scheme which prosecutors said featured some of the same deceptions used in the REBECCA fraud. To read the full 19-page criminal indictment on Hotton, click here.
Two weeks ago, Ben Sprecher and Louise Forlenza, producers for Rebecca, the Musical, announced that they were left with no option but to postpone the show. They released a statement at that time, noting that "After Paul Abrams, a major investor, passed away in London, on August 5th, 2012, and who, with three other colleagues, represented the last portion of $4.5 million of the full capitalization for the production... On September 28th, Sprecher and Forlenza were informed that an extremely malicious e-mail, filled with lies and innuendo, had been sent directly to a new investor that morning from an anonymous third party. The e-mail was designed to scare this investor away and it succeeded. The investor withdrew."
Ronald Russo, lawyer for producer Ben Sprecher has now said that "Sprecher had been led to “Abrams” by shadowy Long Island businessman, Mark Hotton, who told him Abrams died before he could hand over the dough, sources have said. There also were three other investors Hotton told Sprecher about who supposedly promised another combined $2 million for the show, the sources have said. But “following an extensive search over the last week, I can now confirm that there is no evidence whatever that “Paul Abrams” or any of the other three investors brought to this production by Mr. Hotton, ever existed,” said Sprecher’s lawyer, Ronald Russo. The lawyer said they conducted an investigation in both the US and England."
REBECCA, the new musical based on the classic novel by Daphne Du Maurier novel, previously delayed the start of its rehearsals by two weeks due reportedly to the death of a key investor responsible for a $4.5 million investment pool in the production. REBECCA was scheduled to begin rehearsals Monday, September 10 prior to an October 30 first preview and November 18 premiere at the Broadhurst Theatre.
REBECCA had its world premiere in 2006 at Vereinigte Buhnen Wien in Vienna, where it played to sold-out houses for more than three years. Vastly successful productions of REBECCA have also played Budapest, Hungary; Bucharest, Romania; Helsinki, Finland; Stuttgart, Germany; St. Gallen, Switzerland and at the Imperial Theatre in Tokyo.