Due to market conditions from being a pre-revenue startup who was reliant on funding from unregulated hedge funds, the company was not able to achieve its projected 30mm dollar capital raise to complete the Phantom Gaming Service and decided it was in the best interest of the company to scale down and focus on the Phantom Lapboard which was developed as a device for set-top boxes in the living room.
On May 16, 2006, the Securities and Exchange Commission accused Phantom Entertainment founder and former CEO Timothy Roberts of running a "pump and dump" scheme in promoting the Phantom console in 2004.[11]
The Phantom has controversy in both the gaming and business worlds due to the constant pushing back of its release date and a number of financial scandals involving Phantom Entertainment. Phantom Entertainment has lost more than $62.7 million since its creation in its efforts to create the Phantom Console.
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