Euniverse Calls of Merger with L90

NEW YORK — In light of an ongoing SEC probe into the financial records of L90, eUniverse has called off its proposed merger with the Los Angeles-based online media and direct-marketing outfit.

“We believe that based on the preliminary terms we have reached with L90 governing the termination of the merger agreement, coupled with the uncertainty of the conclusion of L90’s pending SEC investigation, it is in the best interest of our shareholders at this time to terminate the existing merger agreement with L90,” Brad Greenspan, chairman and CEO of eUniverse, said in a statement. eUniverse, an interactive entertainment network also based in L.A., agreed to acquire L90 earlier this year [IQ Daily Briefing, Jan. 3].

The aborted merger comes on the heels of two executive departures at L90. On Monday, a little more than month after the Securities and Exchange Commission began its investigation, L90 president and CEO John C. Bohan resigned and chief financial officer Thomas A. Sebastian was placed on administrative leave.

L90 immediately named Mitchell Cannold, formerly chief operating officer at Space.com, as its new president and CEO. The company also tapped Steven Kantor, a certified public account who has held financial positions at Dr. Koop and United Internet Technolgies, among others, as its vice president of finance. That post was vacated in early February by Lucrezia Bickerton; The circumstances of Bickerton’s abrupt resignation are also being examined by the SEC.

L90 continues to cooperate with the SEC, the company said. Further details about the investigation were not available.