Green Energy Enterprises Inc. (GYOG)

[badbadbad]

Friday, 04/29/11 10:09:52 PM
Re: artfink post# 232252
Post #
232295
of 365629 Go
WHAT??????NEW CEO Joseph C. Canouse????YOU GOT TO BE KIDDING???
IS THIS THE SAME JOE CANOUSE???READ THIS WOW.MAN IF IT IS THE SAME GUY THEN WE ARE COOKED ON QASP.

http://caselaw.findlaw.com/ga-court-of-appeals/1531686.html

(A) The Canouse Defendants. The Canouse Defendants consist of four brothers, Joseph C. Canouse, John C. Canouse, James P. Canouse, Jeffrey Canouse, all of whom are Georgia residents, as well as several companies which they are alleged to own and/or control: J .P. Carey Securities, Inc., J.P. Carey Asset Management LLC, Cache Capital (USA), L.P., and Carpe Diem Ltd. All of the conduct attributed to the Canouse Defendants in this opinion occurred in Georgia, unless otherwise stated. The Canouse Defendants have not challenged personal jurisdiction and are not parties to the instant appeal.




III. The Allegations

(A) The Conspiracy. Hyperdynamics alleges that the resident and nonresident defendants have a longstanding business relationship and have, using the complex multi-tiered offshore financial structure created at the direction of Hicks, conspired to engage in fraud and market manipulation involving toxic convertible financing transactions6 with companies seeking private placement investors. According to Hyperdynamics, the collective Defendants have used this offshore financial structure to conceal both the true identity of, and the relationship between, the Defendants when preying upon unsuspecting businesses seeking financing. The Defendants are alleged to enter into toxic convertible financing agreements with the then-present intent to surreptitiously use short sales7 and naked short sales8 to manipulate the value of the company's stock by driving the price downward, and to then acquire a majority position in the company upon the conversion of the investor's preferred securities to common stock. In support of this allegation, Hyperdynamics points to the undisputed testimony that the transaction involved in this case did, in fact, involve toxic convertible financing. In addition, Valentine admitted that he had been involved in several toxic convertible financing transactions involving the Canouse Defendants. Hyperdynamics also identified at least 35 other companies which Hyperdynamics claims one or more of the Canouse Defendants, one or more of the Hicks Defendants, one or more of the Sims Defendants, and one or more of the Valentine Defendants invested, and claims that they each involved toxic convertible financing. Finally, Hyperdynamics filed sworn affidavits from three separate corporate executive officers who alleged that they had also been subject to a common scheme involving various combinations of these Defendants engaging in unlawful toxic convertible financing transactions. Specifically, the corporate executives stated that their respective companies had entered into financial transactions with the Defendants, and that their respective companies each fell victim to fraud and market manipulation in a fashion similar to that which has been alleged in this case.

(B) The Offshore Structure. The complaint alleges that in or about early 1999, Stephen Hicks concocted a scheme to manipulate the market in thinly capitalized companies. In furtherance of this alleged scheme, Hicks directed the creation of the multi-tiered offshore structure, consisting of numerous layers of Cayman Island and Bahamian entities, designed to both conceal the identities of the parties involved and to undermine the enforcement of U.S. securities laws.9 In support of this allegation, Hyperdynamics has presented documentary evidence produced during discovery that confirmed that the offshore investment structure was “designed to protect [the Hicks Defendants'] respective assets from the risk of certain liabilities that may arise out of their investment in certain [s]ecurities under applicable laws” and that “by implementing a tiered investment structure, [the Hicks Defendants] and their investments may potentially avoid underwriter liability that could arise under the United States securities laws.”10 Further, one of the attorneys involved in creating the offshore entities at Hicks's direction testified that the multi-tiered structure provided “flexibility · in the event that an investment did not perform as expected and in the event that that resulted in litigation, perhaps initiated by the company which issued the security, rather than defend against the litigation, you walk away.”

The Hicks Defendants engaged the Sims Defendants to provide offshore officer and director services for each entity in the multi-tiered offshore structure. Through a series of contractual advisor agreements, subadvisor agreements, and powers of attorney, the offshore officers and directors were then authorized to accept direction from Hicks, generally in his capacity as managing director of Southridge.11

The Canouse Defendants allegedly conspired with the Hicks Defendants and the Sims Defendants to identify and fraudulently induce companies into the predatory investment scheme, and the Valentine Defendants allegedly executed trades and money transfers in furtherance of the scheme.
http://caselaw.findlaw.com/ga-court-of-appeals/1531686.html


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