Officials with publicly-traded Rick’s Cabaret International said last Friday that they have no knowledge of any investigation by the U.S. Attorney’s office into the alleged manipulation of stocks by organized crime.
Last Thursday, the Dow Jones News Service, the Wall Street Journal and the New York Post and others reported that the government was investigating allegations of stock manipulation by Mob figures involving more than a dozen companies, including Rick’s Cabaret, which is listed on the NASDAQ stock exchange.
But in a statement issued Friday, company president and CEO Eric Langan said that his company knows nothing of the allegations and has had no contact with the Department of Justice regarding the matter.
Langan complained that his company forced the Associated Press to correct its Thursday story that initially indicated that Rick’s Cabaret was under investigation.
“We have never heard of any of the people named in this reported Justice Department indictment. We have no relationship with them and we know nothing of these allegations,” Langan said.
On March 16, ten members and associates of the Luchese and Colombo crime families were indicted in a stock swindling case. The indictment alleges that the suspects controlled 15 branch offices of brokerage houses and used false and misleading tactics to persuade investors to invest in house stocks. Crime figures allegedly threatened stock brokers with physical harm if they did not protect their financial stakes.
The company’s stock dropped by 43 cents or 7.3 percent to close at $5.75 a share following the initial news report a day earlier linking the company to the federal investigation.
Rick’s Cabaret operates five strip clubs under the Rick’s Cabaret name, including one in New York, and four others under the XTC name in Texas. It also operates Club Onyx and the Hummers’ Sports Bar & Grill, both located in Houston.
