The Atlanta office of the Securities and Exchange Commission has filed a lawsuit against wireless software company Mobile Ready Entertainment Corp. and its former CEOs, alleging they ran a "micro-cap pump-and-dump" scheme using false press releases.

The suit claims Michael H. Magolnick and Craig A. Mora sent 16 separate press releases with false revenue projections, made-up contracts for future business and fake new profitable business relationships to boost the price of Alpharetta, Ga.-based Mobile Ready's stock.

In one example from January 2007, a press release from the company claimed the launch of a new text messaging service that would let Mobile Ready business clients market directly to mobile phones through text messaging.

"Mobile Ready subsidiary, Complete Identity has already been working closely with companies in the Direct Selling Association" and "company executives are confident that the industry relationship will yield several million dollars in new business," the release said.

Mobile Ready's (Pink Sheets: MRDY) stock trading volume jumped 300 percent the day after the release, giving Mora and Magolnick a better market in which to sell their restricted shares, the SEC said. But the SEC argues the defendants knew the company had no relationship with the Direct Selling Association and no reason to claim several million collars in new business.

In another release in February 2007, the company said it was projecting $10.1 million in revenue for 2007 and $14.8 million in 2008. The day after that release, the company's stock trading volume skyrocketed 550 percent, while the stock's value rose 57 percent to 11 cents a share.

The suit alleges that as the price of the stock increased following the fraudulent releases, Magolnick and Mora obtained bogus Rule 144 Opinion letters and improperly sold Mobile Ready shares for their personal gain.

Between April and July 2007, Magolnick sold about 2.1 million shares for $69,949. In the same period, Mora sold about 2.2 million shares for $72,589.

Magolnick was co-CEO of the company from December 2006 until his resignation in December 2007. Mora was co-CEO with Magolnick, but is now the company's chairman and CEO.

The SEC complaint wants antifraud injunctions against Mobile Ready, Magolnick and Mora, and registration injunctions, disgorgement, prejudgment interest, and O&D and penny-stock bars against Magolnick and Mora.