8000 Incorporated (EIGH)

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1 PROCEEDINGS g 1 A. Okay. $
2 MR. OBEYESEKERE: We're on the record. 2 Q. Do you recognize these e—mails?
3 It is Wednesday. June 29th. The time is 8:15. 3 A. I don't specifically remember them, but ——
4 We're recommencing the testimony of Mr. Jerry 4 Q. Do you have any reason to believe that you
5 Williams that was adjourned on Tuesday, June 28th. 5 did not send this e—mail that`s dated July 20th,
6 Mr. Williams, a copy ofthe Formal Order l 6 2009, at 8:41 a.m.?
7 and subpoenas are available for you to review. Do 1 7 A. No.
8 you understand that you're still under oath? 8 Q. And it appears to be an e—mail that went
9 MR. WILLIAMS: Yes, sir. 9 out to all the Den members. By "Den members,"
1 0 Whereupon, l 1 0 again, we mean the people who had signed up for Q
1 1 JERRY S. WILLIAMS 1 1 the —- via the —- signed up to receive e—mails from Z
12 was recalled as a witness and, having been previously 1 2 you through the Monk’s Den message board, is that J
1 3 duly sworn, was examined and testified further as 1 3 correct? 1
14 follows: g 1 4 A. It looks like it, yes. I don't
1 5 EXAMINATION J 1 5 specifically —— this looks like a response to me. gi
1 6 BY MR. OBEYESEKERE: l 1 6 It does not look like something that went out from {
17 Q. Okay. Let’s continue. Mr. Williams, I , 17 me since it is from Melanie to me. It's not Y
1 8 want to continue with what we were discussing l 1 8 something I sent. f
1 9 yesterday concerning the promotion of CDIV. Ifyou l 1 9 Q. When you look at —- l
20 could look at the last exhibit that we had. I think 2 0 A. It looks like a reply to this e—mail, so
2 1 I handed it to you. 5 2 1 I'll believe that it went out as such, but I don't _
22 A. I think you took it back. l 22 specifically recall that, but this is a response to I
2 3 Q. Did I take it back? 23 me. L
24 MR. MARGOLIS: 196. l 2 4 Q. When you see on Monday, July 20th, 2009,
2 5 Q. 196. Just take a moment to review that, l 2 5 at 8:45 a.m. ctdaytrader wrote and then there‘s a
Page 269 S Page 271 _
1 please. E 1 message —- _
2 (Reviewing document.) i 2 A. Where are you seeing this? Oh, okay.
3 Q. The annotated —— there is I believe on g 3 Yes, I see it.
4 that a reference to an annotated chart that was -— l 4 Q. So that does appear to be an e—mail that ,2
g 5 appears to be forwarded to the ~— put through the 5 you sent, correct? .
6 Monks Den message board to Den members. Do you see 6 A. It does. .
7 that? 7 Q. All right. In the second line ofthe -— it
8 A. Yes. 8 the third line of the message you refer to Mr. e
9 Q. And was it your understanding that that 9 Bigz' annotations as on the money. Most notably on
1 O was -- that you did, in fact, forward that message 1 0 the —— most notably the Bollinger Bands. What are f
1 1 to the Monk’s Den message board? Through the Monks 1 1 you attempting to communicate there? ss
12 Den message board to Den members. l'm sorry. 1 2 A. I would have to see the annotation ofthe I
13 A. Again, I‘ll state that 1 don’t 1 3 chart to know what I meant at this particular time. i
1 4 specilically remember if I sent it out as an e-mail 1 4 Q. Were you communicating generally that this ~
15 or it`1 posted it on the board. 1 5 individual, Mr. Bigz, charts are generally accurate? Y
1 6 (SEC Exhibit No. 197 was marked 1 6 A. I can't speak to his charting ability but I
17 for identification.) i 17 apparently in this case I was agreeing. I
18 Q. l'm going to show you, Mr. Williams, i 1 8 Q. When you say his annotations are on the I
1 9 whats been marked as Exhibit 197, a document Bates 1 9 money, are you referring to CDIV specihcally or I
2 O stamped WILLIAMS 11549 through 11550. 2 0 Mr. Bigz' charts as a general matter? i
2 1 lt appears to be a series ofe-mail 2 1 A. Well, in accordance with what I'm saying
22 communications between you and Melanie Harvey. If 2 2 here, he has annotated a CDIV chart, and I'm saying
2 3 you could take a moment to review that and let me 2 3 his annotations are on the money, so I would think Q
2 4 know when you’ve had a chance to do so. 2 4 in this particular case I'm referring to that
2 5 (Reviewing document.) 2 5 annotation individually.
2 (Pages 268 to 271)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 4 of 83
Page 272 Page 274 i
1 Q. Okay, thank you. Approximately the fourth 1 A. Apparently. ._
2 paragraph down it states -— you write, 1 would think g 2 Q. And if you would turn to the top ofthe it
3 the breakout we have been holding for is at hand, 3 page, it appears that first paragraph, it says, This
4 especially, since we now control the float and if 4 Consulting Agreement is made and entered into
5 any short squeeze actions come into play". we could 5 effective 6th December 2009 by and between Cascadia
6 literally have a rocket on our hands... Are you 1 6 investments and its principles. The consultant, it
7 indicating through that message that you anticipate 7 whose principal place of business is 17-02 6th Ave., 8
8 a short squeeze happening? 1 8 Tacoma, Washington and Firstinawareness, the client, t .
9 A. T hat's not what I said. 1 9 and it goes on to describe the client's business ij
1 0 Q. When you say I would think the breakout we 1 1 0 address. Did you receive this document on or around
1 1 have been holding for is at hand, what do you mean? 1 1 1 December 6, 2009‘?
12 A. That 1 believe that the chart was in a ' 12 A. I truly do not remember when 1 received fj
1 3 formation as such that it could have a very nice 13 this. Apparently, 1 didn’t sign it until March, so,
1 4 movement in the upper direction. 1 4 again, 1 don't remember when 1 got it.
1 5 (SEC 1ExhibitNo. 198 was marked 1 5 Q. lf you turn to the second page, Page JW
1 6 for identification.) 1 6 2784, in reviewing the middle paragraph it talks
1 7 Q. Did you do any promotional work for CDIV 1 17 about compensation for the consultant.
18 during the late December 2009 through March 2010 1 18 A. Yes.
1 9 time name? 1 9 Q. The second sentence says, consultant i
2 0 A. 1 don't specifically recall. E 2 0 shall -- Client shall pay Consultant for its .
2 1 Q. l’m going to show you what's been marked 1 2 1 services hereunder as follows: To arrange for one
2 2 as Exhibit 198, a document Bates stamped JW 273 1 22 or more third parties to transfer 3,300,000 shares
2 3 through 2787. 1 2 3 of Client's free trading common stock to Consultant Q
2 4 lt appears to be a Consulting Agreement 1 2 4 upon signing ofthis agreement. Did you, in fact, gf
2 5 between you -- well, I'm sorry And Cascadia -— lw.2 5 receive 3.3 million shares of Cascadia pursuant to »
Page 2731 Page 275
1 Firstinawareness and Cascadia. Take a moment to 1 1 this agreement?
2 review that document. _ 2 A. l did. ,
3 And l'll note for the record that there's 1 3 Q. And when did you receive that?
4 some highlights on the second page. 1'll represent ; 4 A. You could check back to the stock log. 1
5 that those are highlights that l made while 1 5 believe it was -— 2.3 million of them were itemized.
6 reviewing these documents electronically. 6 1 did receive 3.3.
7 Unfortunately, they were not removed when they were l 7 Q. And this is in addition to the 14 million
8 printed out as exhibits. 1 8 shares that you received in March of 2009 and the
9 (Reviewing document.) l 9 other additional shares you received in May of2009,
1 0 A. Okay. I 1 0 correct?
11 Q. Do you recognize this document? 1 1 A. No. I received 14 million.
12 A. 1 remember receiving it, but 1 don't even 12 Q. Yes. 4
13 think I read it. 13 A. And then the additional 3.3.
1 4 Q. Would you turn your attention to the last 1 4 Q. Okay.
15 page, JW 2787? 15 A. There were no others.
1 6 A. Yes. 1 6 BY MS. CURTIN
17 Q. There`s a signature at the bottom. Do you 1 7 Q. So the testimony yesterday, just to f
18 recognize that signature? 18 clarify, Mr. Williams, in March of2009, you got the j
1 9 A. 1fyou’re referring to mine, yes. t 1 9 14 million shares which we discussed yesterday, is
2 0 Q. Under the column, under the heading 2 0 that correct? §
2 1 Firstinawareness, LLC, to the left ofthe date 2 1 A. Yes, ma'am.
22 3-23-10, is that your signature? 2 2 Q. Okay. And you don't know who gave you
2 3 A. Yes. 2 3 those shares or you got them from the company, but Q;
2 4 Q. And did you sign that on or about March 1 2 4 you're not sure who held the shares previously, if
2 5 23rd, 20 1 O? 1 2 5 at all, is that correct?
3 (Pages 272 to 275)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 5 of 83
Page 276 Page 278 Vg~
1 A. Correct. 1 different promotional companies that we spoke about
2 Q. Okay. And then I thought you testified 2 yesterday, one with Dave Thomas and the other being
3 yesterday in May of 2009 you got additional shares 3 StockI—Iunter.
4 from Robin Lee, is that correct? 4 I don't remember those specific time g
5 A. I only learned after the fact that they 5 frames, but I know that I specifically hired them,
6 were Robin Lee. At the time, I_i ust assumed they t 6 and I may or may not have used somebody else earlier Q
7 were coming from the company. 7 on that I’m just not remembering.
8 Q. And that was how many shares at that time? 8 Q. Okay. Generally, though, during the
9 A. A total of3.3. 9 specifically December 2009 through March 2010 time
1 0 Q. So it was not 2.3? It was 3.3‘? 1 0 frame, did you hire promotion companies to promote
1 1 A. Correct. 1 1 CDIV?
12 Q. And you got those in May 2009? 12 A. Again, as I said, I know I worked
1 3 A. Approximately. 1 3 specifically with two companies, but I do not
1 4 Q. Okay. 1 4 remember the time Eames.
1 5 A. No. No. That was may 2010, I believe. 15 MR. OBEYESEKERE2 Letsjust @0 off
1 6 Q. It was May 2010. Okay. And that was all 1 6 the record for a second.
17 the shares that you got in CDIV —— 17 (A break was taken from
1 8 A. I believe so. 1 8 8:27 a.m. to 8:30 a.m.)
1 9 Q. -— that were transferred to you‘? 1 9 MR. OBEYESEKERE: Let‘s go back on the
2 0 A. Yes. 20 record. It’s 8:30.
2 1 BY MR. OBEYESEKERE 2 1 Q. Mr. Williams, when we were offthe record,
22 Q. Did you do any work pursuant to this 2 2 was there any conversation between you and the Staff
2 3 Consulting Agreement for Cascadia? g 2 3 regarding the substance of this matter?
2 4 A. As we stated yesterday, I reviewed their 2 4 A. No. sir.
2 5 PR's on occasion and discussed business ideas with 2 5 MR. OBEYESEKERE: And I'Il note for
Page 277 Page 279
1 him, references, integration into the app world. i 1 the record we were off for less than a minute.
2 Q. And what did you do as part of`your review i 2 (SEC Exhibit No. 199 was marked
3 ofthe PR work? And by "PR," you mean press 3 for identification.)
4 releases, correct'? t 4 Q. I’m going to show you, Mr. Williams,
5 A. Yes. I would help him write them in a 5 what's been marked as Exhibit 199. It’s a document
6 proper grammar fashion. His writing was not 6 Bates stamped WILLIAMS 3800.
7 particularly good, so I would make it easier to 7 It’s a series ofe—mails. Directing you
8 read, proofread them and —— what's a good way to put 8 primarily to the second and third e—mails from the
9 this? i 9 top beginning February 2010, ifyou could take a
1 0 Q. Did you have them posted on the Monk‘s Den 1 0 moment to look at that and let me know when_you've
1 1 message board? i 1 1 had a chance to do so.
12 A. When they were released, yes. E 12 A. l read it.
1 3 Q. And did you have them posted on any other 1 3 MR. MARGOLIS: Give me a chance.
1 4 message boards? i 1 4 MR. OBEYESEKERE: Sure.
1 5 A. Possibly. I mean, there’s a whole lot of g 1 5 (Reviewing document.)
1 6 boards on Ihub. I don’t know where all they went. 1 6 MR. MARGOLIS: Okay.
17 Q. And did you send those press releases 1 7 Q. Do you recognize these e—mails?
1 8 through -- to Den members through e—maiIs? 1 8 A. Yes. ;
1 9 A. Maybe. l 1 9 Q. And what do they relate to? I’m again
2 0 Q. Do you consider that part of promotional i 2 0 referring to the February 2010 e·mail.
2 1 work, promotional activity? Q 2 1 A. I’m referring to someone that I had hired
22 A. Kind of. E 2 2 who did not do a particularly good job, and I
2 3 Q. Did you hire anybody to promote CDIV 2 3 discussed with Nazir possibly bringing on penny
2 4 during this December through March 2010 time frame? i 2 4 stock chasers. We did not bring them on.
- 2 5 A. I don't think so. I did work with two i 2 5 Q. And when you say "someone." you hired
4 (Pages 276 to 279)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 6 of 83
Page Page 282 7
1 someone to promote the company? 1 background. You want me to read it? A
2 A. Yes. i 2 Q. I mean, hom your independent ge
3 Q. And the company being CDIV? 3 recollection, what do you understand what this
4 A. Yes. 4 e—mail relates to generally'? _
5 Q. So during March 2010, there were some 5 A. ·General1y, he was talkingto me about the
6 people who you had hired to promote CDIV? I mean, 6 potential of promotionals and thinking that I had
7 February 2010 there were people you had hired to 7 some type of promotion rate sheet that I needed to j
8 promote CDIV. correct? 8 give him. I did no such thing, nor did I follow
9 A. At some point. Again. I don't remember 9 such —— follow up with an e—mail saying I had rates. lg
10 the specihc time frames. 10 Q. Did you at any point hire Mr. Taylor in g
11 Q. But according to this e—mail, it appears 1 1 the September 2010 time name to promote CDIV?
1 2 to be at or around this time frame of February 2010. 12 A. No.
1 3 Would you agree? 1 3 BY MS. CURTIN
14 A. No, I wou1cin't, because I could have been 1 4 Q. Did you hire him to promote 8000, Inc.? jr
15 talking about something that happened a month ago. E 1 5 A. I didn't hire him for anything. Y
1 6 1 simply don't know. E 1 6 Q. What is Emerging Equities? gt
17 Q. Would you agree it would likely be within 1 17 A. Say again? i
1 8 one or two months ofthis e—mai1? l 1 8 Q. What is Emerging Equities? That's the
1 9 A. Yes. 1 9 company that Mr. Taylor's associated with? [
2 0 Q. In this February 7th, 2010, e—mail. you 2 0 A. Apparently.
2 1 discuss about possibly hiring Penny Stock Chasers to 2 1 Q. But what is it?
22 promote CDIV in March, is that correct? 1 22 A. I don’t know.
23 A. Yes. 1 23 Q. Do you know Mr. Taylor? if
2 4 Q. And you testified you did not, in fact, 1 2 4 A. I’ve spoken with him on the phone and I’ve
2 5 hire Penny Stock Chasers in March, is that correct? 1 2 5 met him once in person.
Page 2811 Page 283
1 A. Correct. 1 Q. And what does he do?
2 Q. Did you hire any other company to promote 1 2 A. He does investor relations, as far as I jg
3 CDIV subsequent to this February 7, 2010, e—mail? E 3 know.
4 A. I simply don't remember the times. I’ve t 4 Q. Is he based —- where is he based? Do you l
5 told you the two that I specifically remember. Q 5 know what state?
6 Q. I understand that. l'in just trying to _ 6 A. I don't know. it
7 refresh your recollection with the use of some 7 Q. Is he based in California? Y
8 documents here. 8 A. I don't know. ¥
9 (SEC Exhibit No. 200 was marked 9 Q. You don’t know. Have you ever done
1 0 for identification.) 1 0 business with Mr. Taylor?
1 1 Q. I'm going to show you, Mr. Williams, 1 1 A. I’ve spoken to people via his contacts.
12 what's been marked as Exhibit 200, a document Bates 12 One example would be GRNO. Other than that, no, and
1 3 stamped WILLIAMS 03704. It appears to be an e—mail i 13 that was not "business," but he put me in touch with fi
1 4 from a Stephen Taylor to you on or about September 14 those folks.
1 5 2010. Take a moment to look at that, please. 15 Q. Does he promote companies like you
1 6 (Reviewing document.) 1 6 promotion companies or do promotional work similar
1 7 A. Okay. . 1 7 to yours? j
1 8 Q. Do you recognize this document? 1 8 A. I can't speak to what he does. I simply
19 A. Yes, I do. 19 don't know. G
2 0 Q. And is this an e-mail that Stephen Taylor 20 Q. Okay. Do you know what he meant in the it`i
2 1 sent to you on or about September 2010? t 2 1 second line here? He states in the first line 1 v
2 2 A. Yes. 2 2 have hired three telemarketers that have a cold
23 Q. And what does it relate to? 2 3 calling and financial background. They will be _ it
2 4 A. He’s saying that he's hired telemarketers; t 2 4 calling companies that meet your requirements and
2 5 that he —- that have a cold calling and financial i 2 5 mine. What does he mean by that?
5 (Pages 280 to 2831

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1 A. I simply don't know. This is an 1 such as Cowboy who made large sales and that kind of .
2 unsolicited e-mail that he sent to me. I don't know 2 triggered an effect of what you described as (
3 what he meant. Again, I don't even recall following i 3 undermining the potential for a short squeeze, ( I
4 up on this and I never hired him for anything. 4 correct? ,
5 MS. CURTIN: Okay. 5 A. At certain points on the chart, yes. I
6 BY MR. OBEYESEKIERE 6 would agree with that. he
7 Q. ljust Wzttlt you to go back to the 7 Q. Is it fair to say you did most of your 7
8 Consulting Agreement that was previously marked as 8 sale of CDIV shares through the brokerage of if
9 an exhibit. Do you have that? 9 Gibraltar? E
10 A. Ido. 10 A. I would say yes.
1 1 MR. MARGOLIS: l98? i 1 1 Q. Andjust generally, why did you open ·—
12 MR. OBEYESEKERE: Yes. 12 let me strike that. Gibraltar is located in the si
1 3 Q. How long did this arrangement last? 1 3 Bahamas, correct‘? s
1 4 A. The term of the agreement says six months, 1 4 A. Correct. A
15 but, again, I don‘t even recall specifically reading 15 Q. And why is it that you opened an account .
1 6 it. 1 6 in the Bahamas? I
1 7 Q. How long did you do promotion work for 17 A. They were recommended to meiby someone }
1 8 Cascadia? 1 8 because they were one of the few brokers that would I
1 9 A. I simply don't know. I mean, it was at 1 9 actually clear pinksheet certificates. *
2 0 best a loose arrangement and as I recall, he sent me i 2 0 Q. Were there any brokers in the U.S. who ,
2 1 this saying he needed something on paperjust to E 2 1 would do that? it
2 2 justify sending me shares. r 22 A. l don't know offthe top ofmy head. I
2 3 And, in fact, based on the first paragraph E 2 3 Q. Did any of the brokers that you had
2 4 that you pointed out a few minutes ago, it actually I 2 4 through E*TRADE or Penson, did any ofthose do that
2 5 lists me as the client; not him. 2 5 type ofclearing? {
Page 285i Page 287 .
1 Q. But you understood that-- l 1 A. Well, I don't think Penson is actually a
2 A. Like I said, I mean, I don't even recall 2 broker. 3
3 reading this. l 3 Q. Yes, that's a clearing firm, but who was
4 Q. Apart from the shares that we've discussed i 4 your underlying broker for Penson?
5 that you received from CDIV, the I4 million and the i 5 A. Primarily E*TRADE, and they would not f
6 3.3 million shares, did you receive CDIV shares from 6 accept pinksheet stocks of any kind. Q
7 any other source other than purchases you made on l 7 MR. OBEYESEKERE: l‘ll take a moment. I
8 the market? 8 I apologize. Let'sjust go off the record.
9 A. No. l 9 (A break was taken from
10 Q. I’m going to ask you tojust go back to 10 8:40 a.m. to 8:42 a.m.) E
1 1 the brokerage records with Gibraltar that we 1 1 MR. QBEYESEKERE: Let's get back on
1 2 identified earlier. 2 1 2 the record.
1 3 A. I don't have copies of those handy here. 1 3 Q. Mr. Williams, our records reflect that on ,
1 4 MS. CURTIN: It's l67. i 1 4 or around —— well, let me start again. You started *
1 5 MR. OBEYESEKERE: l67. i 1 5 selling CDIV shares on or about March 20th, 2009, is j
1 6 (Reviewing document.) 1 6 that correct? I
17 Q. I believe yesterday you discussed that you i 17 A. Do you have a specific place you want me {
18 did sell CDIV shares on the web, is that correct? 18 to turn? ;
1 9 A. That's correct. 1 9 Q. Yes. Ifyou could -- ifyou could turn to 1
2 0 Q. I believe you said you took a little off 2 0 Page JW 2370 and if you look about a third ofthe
2 1 the top or you encouraged people if they needed it 2 1 way up on March 20th —— March 23rd -» hold on. l'm if
22 to take a little offthe top, is that correct? 22 sorry.
2 3 A. I always encourage to take a little all l 23 (Reviewing document.) {
2 4 the way up. i 2 4 MR. MARGOLIS: 23707
2 5 Q. But there were other individuals who -— Q 2 5 MR. OBEYESEKERE: Yes. ,
’ 6 (Pages 284 to 287)

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. l
Page 288 E V Page 290 2
1 MR. MARGOLIS: Am I missing —- I don’t 1 Q. And in July of`-- and in July of`2009, did .
2 have March 23rd. 2 you sell about 79,000, 80.000 dollars' worth of CDIV —
3 THE WITNESS; Yes, we do. It's right 3 shares? `
4 here (indicating). 4 A. 1 would assume that's accurate. It I
5 MR. MARGOLIS: Oh, I'm sorry. Yes. E 5 sounds -- R
6 Q. You began selling CDIV shares about March i 6 Q. It sounds about right? And this was about
7 23rd, 2009. Do you see that? l 7 the time that you had hired some companies to .
8 A. I do, yes. 8 promote CDIV, is that fair? X
9 Q. And, actually, you had begun to sell on 9 A. I don’t recall specifically. S
10 March 20th, 2009, which was subsequently reversed? 1 0 Q. Okay. In about October of`2009, did you L,
1 1 A. Yes. I had placed no order. That was not I 1 1 sell about 50,000 dollars’ worth ofCDIV shares?
12 supposed to occur. i 12 A. Sounds about right.
1 3 BY MS. CURTIN £ 1 3 Q. And in December —— I'm sorry. In November
1 4 Q. You had actually placed an order but then g 1 4 of 2009, another 50,000 dollars' worth of CDIV ;
1 5 reversed it or canceled it? § 1 5 shares? _
1 6 A. No. They made a mistake; not me. 1 6 A. lfthat’s what it says. I don‘t remember 7,
17 Q. Not you. They initiated the trade without i 17 specifically. Like I said, l took a little bit all j
1 8 your direction? 2 1 8 the way up.
1 9 A. There was an order that I had, as I recall i 1 9 Q. Okay. And then in January, another ;
2 0 because I semi sort of remember this, that I had put 2 0 $160,000 or so? Q
2 1 in an order for —— I believe there was something 2 1 A. Okay.
2 2 else because they actually manually execute trades. 2 2 Q. Does that sound right? I just want to
2 3 Q. Okay. I 2 3 know if these numbers are in the ballpark or you`re
2 4 A. So they put in the order incorrectly and i 2 4 like, hey, no way.
25 then reversed it. f 25 A. 1 think they're in the ballpark. T
—-—~—»—~— -~———··l-—~»-----~-·--—~—~»-~~~—~~—~e—~——— 3
I Page 289i Page 291 I
1 Q. So they put the trade in —- they mistook i 1 Q. Okay. And then again in January selling E
2 the security that you had actually placed the trade 2 about another 50,000 shares. Does that sound about I
3 for? t 3 right? 5
4 A. I don’t remember specifically. ljust E 4 MR. MARGOLIS: When?
5 remember they did it wrong and then reversed it. i 5 MR. OBEYESEKERE: January 2010. ‘
6 MS. CURTIN: Okay. L 6 A. You just said January a moment ago, I 3.
7 BY MR. OBEYESEKERE 7 believe. Q
8 Q. So I'1ljust summarize for you, and 1 8 Q. I'm sorry. And then in about March of
9 understand you would have to verify these through 9 2010 selling about 650,000 dollars' worth?
10 the records, but l’rn just going to ask you through 1 0 A. Sounds about right. .3
1 1 your independent recollection whether my statements 1 1 Q. Do you consider that taking a little bit
1 2 are generally what you recall. 1 2 ot`f` the top? ii.
13 A. Okay. 1 3 A. Given that 1 still have millions of j
1 4 Q. Did you enerally recall selling about 1 4 shares, yes, that's taking a little bit all the way ‘
8 _
1 5 13,000 dollars' worth ofCD1V shares in March 2009? 1 5 up. _ I
1 6 A. It sounds reasonable. i 1 6 Q. And in March of 2010 you sold another -— f
1 7 Q. And you said you had —— at the time you 5 1 7 A. You just said March. Q
18 received the 14 million shares, that was valued at 1 8 Q. I'm sorry. In February ol'20l 0, it was y.
1 9 about 4,500, is that correct? i 1 9 about 600,000, $650,000? {
20 I A. Actually, by the time I received them, it 2 0 A. lfthat's what it says. {
2 1 was valued at more but when we first spoke about it, 2 1 Q. Sound about right? S
22 the price was in the area of .0004 to 0005, so at 22 A. Okay.
2 3 the time there was about 4,500. 2 3 Q. I'm asking you.
24 Q. Okay. E 24 A. Well, I don’t know. I'm not looking at i y
25 A. Ish. Plus or minus a few bucks. : 25 the records, but I was definitely taking it all the
7 (Pages 288 to 291)

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Page 292 E Rage 294 V
1 way up, yes. 1 A. I would like to make a clarification Y
2 Q. And you were taking -— at certain months i 2 statement there, too. `‘”i
3 you were taking about 600,000 dollars‘ worth. ls I 3 Q. Sure. l
4 that fair to say? i 4 A. Nobody else was disclosing to me that they _
5 A. Yes. 1 5 were selling, either. l don't make any trading j
6 Q. And, again, in March of`20l0, 700,000 i 6 records public. I
7 dollars' worth of`CDI\/? 7 Q. Now, there were other people that ——
8 MR. MARGOLIS: Okay. Now we disavow I 8 sorry. Let me strike that. We talked earlier j
9 all of your numbers because a couple minutes ago you 9 yesterday about how you were able to generally I
10 said March of 20IO. 650. 10 understand how much ofthe float had been if
1 1 MR. OBEYESEKERE: That‘s why I 1 1 accumulated by informal accounts that Mr. Erhard had
12 corrected it just a second ago. I think the record 12 collected, is that correct?
1 3 is clear. I went back. But, look, I’m not —— 13 A. Over general time frames.
1 4 obviously the numbers are going to speak for i 1 4 Q. Okay. And did you ever as part of —-
1 5 themselves. ‘ 1 5 strike that. And you publicized some of those .
1 6 MR. MARGOLIS: Yes. i 1 6 numbers in newsletters and in the lhub post, is that
1 7 MR. OBEYESEKERE: I'm just asking him Q 1 7 correct?
1 8 generally if he recalls these are the numbers 1 8 A. They may have been posted. l don't recall 3
1 9 because if he says yes, we'll just continue on and 1 9 specifically. I know they went out at some point I
2 0 the record will speak for itself. 2 0 via some method, but I don't remember specifically. ]
2 1 lfhe says no, then, you know, we’ll 2 1 Again, though, my numbers were never on there.
22 take a much harder look at these records and see if ¥ 22 Q. Okay. That was my next question. You I
2 3 they’re accurate, and ljust want to make sure —— 2 3 never actually put your numbers on there? I
2 4 MR. MARGOLIS: I‘m just concerned l 24 A. No. I
2 5 because youre going back and forth on some numbers I 2 5 Q. S0 21tHO point during 2009 and 2010 did Q
Page 293 Page 295
1 and —— 1 anybody other than yourself know how many CDIV .$
2 MR. OBEYESEKERE: I mean, at the end 2 shares that you actually had. Is that fair to say?
3 of the day, these numbers l'll represent are based i 3 A. That is correct. Again, one ofthe things
4 on the records that Mr. Williams provided and 4 that I want to clearly iterate here is that with the
5 authenticated earlier today. 5 size ofthe position that I had, if I went into the
6 THE WITNESS: What you're saying 6 Den or to the CDIV board and said, okay, I‘m
7 sounds generally right. 7 selling, it would have been like screaming tire in a ii
8 MR. OBEYESEKERE: Okay. Then l'mjust 8 theater and everybody would have rushed out and the °
9 going to continue on. 9 stock would have crumbled. e
1 0 Q. ln March of20l 0 about 700,000 dollars' 10 Q. And we saw that -- you had indicated that I
1 1 worth of`CDIV‘? 11 in I think April of 2010 there had been a large sale r
12 A. Okay. 12 by somebody, not Cowboy, another individual who you
1 3 Q. And does that generally sound right? 13 believed had ended the short squeeze. i
14 A. I guess. Thereabouts. I mean, like I 14 A. Yes. This person went in and literally in
1 5 said, generally. 1 5 the matter ofa day or two, maybe three, hit the ,`i·
1 6 Q. And again in April of 20l0 about 270,000 1 6 market with a million dollars' worth of sales.
1 7 dollars' worth ofCDlV? . i 17 Q. Okay. But it appears that in February and I
1 8 A. Okay. Sounds about right. § 18 March of"20l0, you actually made over a million I
1 9 Q. At any point did you disclose to any 1 9 dollars in sales? .
20 person you were selling CDIV shares ofthis amount? % 2 0 A. Over the course oftwo months; not three Q
2 1 A. No. 2 1 days. 1
22 Q. Did you disclose to any person you were E 22 Q. You didn't think that would be enough to I
2 3 selling CDIV shares at all? I 2 3 have any significant impact on the short squeeze? I4
2 4 A. No. 24 A. Again, I always state take them on the way *
2 5 Q. Okay. 25 up and when the chart is moving and everything is si
8 (Pages 292 to 295)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 10 of 83
Page 296 Page 298
1 flowing very strong, that`s when you take some off I 1 Q. Our records show, and the records will
2 the top. 2 eventually speak for themselves, but, again, Ijust
3 You don't go in the day that it's sitting 3 want to understand ifyou feel this is accurate.
4 there and not really moving and then just start 4 You said you hold almost 3 million shares ofCDIV?
5 really hitting the bid and dropping the price I5, 20 5 A. Correct. V
6 cents. 6 Q. And our records show that between March of
7 Q. So ifthe person who had taken a million 7 2009 and October of 2010, you sold about 24 million
8 or so offthe top as far as -— in those days, if he 8 shares ofCDIV. Does that —-
9 had done it over a month that would be okay? 9 A. That’s not possible, I don’t think.
10 A. I think so. 10 Q. It's not. How many do you ——
11 Q. Did you ever tell anybody that? 1 1 A. I don't think I ever owned.24 million. I
12 A. I always said take it a little bit all the 12 would check into that a little more thoroughly. I
1 3 way off the top. Ladder-- ladder yourselves. 1 3 don't think I’ve ever owned 24 million shares of
14 Q. Okay. And your testimony is taking about 14 CDIV.
1 5 $700,000 off the top in a month is -- if it's done 1 5 Q. Through the various buys and sells? {
1 6 over a period ofa month is taking a little offthe 1 6 A. Through the various buys and sells, I
1 7 top? I 17 don't think I've ever hit 24 million. g
18 A. Especially given the size of my position, 18 Q. Or 23 million? f
1 9 yes. 1 9 A. I simply don‘t remember but that sounds
20 BY MS. CUR'I`II\I 20 really high. —
2 1 Q. How is that sufiicient —— you testitied 2 1 Q. lt sounds like a lot ofshares to sell? A;
I 2 2 here that you were advocating people to accumulate a 22 A. It does. tz
23 position in CDIV in 2009, early 2010. 23 Q. All right. Thank you.
2 4 Why do you think taking a little offthe I 2 4 A. The records will speak for themselves.
2.5 top is sufficient disclosure to those people of what i 2 5 BY MS. CURTIN
Page 297 Page 299
1 you were doing, which appears to be somewhat 1 Q. Can you estimate how much you think —— you
2 contrary to your —— your recommendation to hold? 2 testihed that you got I7.3 million roughly from the
3 A. I disagree with that. 3 company or its affiliates, is that accurate?
4 Q. And why? I 4 A. Yes.
5 A. I disagree with that because I spoke with ‘ 5 Q. And that you did not get any other CDIV
6 my pocketbook. I mean, I could have easily 6 shares transferred to you from any other person or
7 deposited more shares, sold more shares. I held 7 entity, is that correct?
8 them. I kept a very large chunk. I mean, I still I 8 A. Correct.
9 have almost 3 million shares of CDIV that I didn't 9 Q. And that you acquired additional CDIV
1 0 sell any more of when the stock started looking I 1 0 shares only by purchasing them in the market?
1 1 weak. I didn't sell it as it was going down. I I 1 1 A. Correct. Q
12 added to 1ny position as it was looking weak. As I 12 Q. How much do you estimate you did purchase
1 3 said, take some on the way up when it's strong and I 1 3 in the market?
1 4 running; don’t sell it when it's going to hurt the I 1 4 A. I don’t recall. I also know that —— we’re Q:
1 5 chart. 1 5 talking about me selling at various points. I also
1 6 MR. OBEYIESEKERIE: Let me follow up. 1 6 know I gave shares to promotional companies, as we ,·’y
17 BY MS. CURTIN 17 spoke ofearlier, and I believe I gave away 2.5
1 8 Q. During the period oftime you were talking 1 8 million ofthe I4 that I received. tx?
1 9 with Mr. Obeyesekere about the sales, what was the 1 9 Q. Ofthe I4 —— you mean the I7.3 million you I
2 0 percentage that you sold ofyour holding during that I 2 0 received or the I4?
2 1 period'? 2 1 A. Well, I’m referring to the I4 that I had Q
2 2 A. I have no idea. 2 2 originally received and then, of course, I received Q
23 MR. OBEYESEKERE: Let me try and I 2 3 more later, but ofthe I4 that I had received I gave
2 4 clarify that. I 2 4 shares back out for promotional purposes. Z2
2 5 BY MR. OBEYESEKERE I 2 5 Q. And you estimate how much that to be?
I 9 (Pages 296 to 299)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 11 of 83
Page 300 Page 302 .
1 A. I think I gave 1.3 million or _ 1 Q. You issued them LOA's‘? A
2 approximately thereabouts to the person that 2 A. Letters of authorization.
3 introduced me to Nazir. That was the Wall Street 3 Q. And so you would direct who'? Would you Q
il Bulls company. 41 direct Gibraltar or the transfer agent to transfer
5 Q. And who is Wall Street I3ulls‘? Who are 5 the shares? ·
6 those people? What’s the individuals? t 6 A. Gibraltar. lt was an interagency
7 A. Lauri, and I'm sorry. I don't remember t 7 transfer.
8 her last name. She goes by Rubble Girl on lhub. i 8 Q. So Gibraltar would merely take the shares
9 Any other individuals you recall I 9 from your account, provided they were a street name
1 0 associated with Wall Street Bulls? 1 10 and then transfer them to the other accounts?
1 1 A. Did. t 1 1 A. Correct.
12 Do you know that person's —— is that their t 12 Q. And then did you give any shares ofthe
1 3 lhub name? 1 3 3.3 million that you got directly from the company
1 4 A. Did is the lhub name. Her name is Diane i 1 4 or its affiliates?
1 5 something or Diana something. 1 5 A. Say that again.
1 6 Q. And you gave them 1.3 million shares of 16 Q. You testified that in addition to the I4
1 7 your I4? t 1 7 million you got in March of 2009, you got 3.3
1 8 A, Apprgximgttely begcgtige they wanted 3 " l O 1 8 million in roughly May 2010 from the company BBC1 ltS
1 9 percent referral," so it like was 1.3 or 1.4, 19 aftihates. is that true'?
2 0 thereabouts. t 2 o A. Yes.
2 1 Q. And who else did you give some of your 2 1 Q- And did YOU gh/€ any 0T`th0$€ aW¤Y.d10$€
2 2 shares to? i 2 2 shares?
23 A. A gentleman named Herald Mittleman. I 23 A. I did not use any ofthose shares for
2 4 believe he got one million, I think. lt might have 24 promotion. no.
2 5 been 1.5. 1 simply don't remember. This is, you 25 Q. l‘m going to ask you this because I want
Page 301E page sos
1 know, three years ago. § 1 to clarify. We had been looking at Exhibit 190
2 Q. Did you give that to him to promote CDIV t 2 yesterday, which is the Signature control book and
3 as well? t 3 stock transfer record.
A A. Yes. · h 4 That control book indicates that in May
5 Q. Anybody else? Did you give anybody else t 5 2009, specifically May I lth, 2009, a stock
6 any shares? t 6 certificate was issued in your name. The stock
7 A. The two promoters that we spoke of 7 certificate was 1283 for 10 million shares of`CD1V. $1
. . I
8 earlier, the Stockflunter and Dave Thomas. Ithink 8 A. Okay.
9 Dave Thomas got 1.5 million, I think. Again, this 9 Q. It also indicates that that stock
1 O is from memory, so 1'm not a hundred percent sure t 1 O certificate was subsequently transferred to
1 1 here, and I don't recall ifl gave Stockflunter E 11 Gibraltar Securities. Did you get 10 million shares
12 shares orjust cash, but 1 paid them 1 believe Q 12 ofCDlV fiom anyone, including the company, its
1 3 $10,000, and I think —— again, I can't be sure that t 1 3 affiliates or any other person in May of2009 to
1 A I gave them I think a million shares, but I simply 1 14 your knowledge?
1 5 don't remember. . 15 A. I don't recall that. 1 really don't. If
1 6 Q_ Okay You think -- anybody you else you 1 6 the records say that, then they do, but I sincerely
1 7 gave CDIV shares to that you, yourself, got? You 1 17 do not recall that.
1 8 either purchased in the market or got from the i 1 8 Q- And then the ¤‘€€0tdS also show. tht?
1 9 company or an affiliate? 1 1 9 Signature stock records indicate that in May 2010
2 0 A. I don't think so. l 2 0 when —— you testified that you got roughly 3.3
2 1 Q. And how would you give —- how did you 1 2 1 million shares.
22 transfer these shares to these individuals? 22 A. Mh—hmm.
2 3 A. Most ofthe folks that we'vejust spoke of 23 Q. Okay. And that was based off of Exhibit
2 4 all had accounts at Gibraltar, so l_just issued i 2 4 198, which was the Consulting Agreement which refers
2 5 LQA's for them to make the transfer. 2 5 to the 3.3 million.
10 (Pages 300 to 303)

. - · - - •.: : x I• u rn . 47-1 Filed 07/19/13 Pa e 12 of 83
Page 304 Page 306 I
I
1 A. Yes. I 1 Q. Again, those transfers would have been in f
2 Q. It indicates that you got only 2.3 million 2 connection with promoting CDIV? _
3 shares. 3 A. Yes.
4 A. Correct. 4 Q. And I'm going to go up the page to about I
5 Q. Can you explain that discrepancy? 5 less than a quarter ofthe way down from the top of
6 A. Yes. I sold one million in a private 6 the same page. On 5-29-09 there‘s a million CDIV I
7 transaction. 7 shares transferred in. Do you see that? f
8 Q. And so you sold it before the shares were I 8 A. Yes. I
9 issued to you? 9 Q. What does that relate to?
Y 10 A. Correct. 1 0 A. I simply don't remember. [
1 1 Q. Why did you do that? 1 1 Q. You don't remember getting a million g
12 A. Because I didn‘t think flooding the market I 1 2 shares of CDIV or transferring in a million shares I
1 3 to sell more would be a good idea, and there was a 1 3 ofCDIV? I
14 person that was a member of the Den who had often 1 4 A. No, I don’t. ,
15 told me to consider him a resource, and he wanted to I 1 5 Q. CDIV wasn‘t held in that amount in your I
1 6 participate in large amounts, so I sold him shares 1 6 other brokerage accounts, were they?
17 at a discount ofthe then market price. I 1 7 A. I simply don't recall. I -- I don't I
18 Q. Okay. And who did you sell the one 1 8 recall transferring CDIV shares fiom one account to ,
1 9 million shares to? 1 9 another of my own. I
20 A. I-lis name is Stephen Roth or Steve Roth. 20 Q. Ifyou turn to Page IW 2 -- .
21 I'm not sure ifit’s Steve or Stephen. I 2 1 MR. MARGOLIS: Excuse me. I don't .
22 Q. Okay. And let me ask you this: The 2.3 22 know-- I'm just trying to be helpful. ”
23 million shares that you got from CDIV in May roughly 2 3 MR. QBEYESEKERE: Sure.
2 4 of 20l0, did you -- have you sold those shares? 2 4 MR. MARGOLIS: But the transactions ’
2 5 A. No. I hold them in certificate form. I 2 5 above seem to indicate there was some sort of y
Page 305I Page 307 i
1 Q. So that certificate indicates it’s not I 1 reversals of transactions. That may have been —— I
I 2 been canceled. 2 MR. OBEYESEKERE; But I think those i
3 BY MR. OBEYESEKERE I 3 relate to sales, right? {
4 Q. I'm just going to go briefly back to the I 4 MR. MARGOLIS: I don't know. It may ]
5 Gibraltar brokerage records, and Ijust want to ask 5 have been. There may have been reversals and then I
6 about a couple of different items. I 6 that reversal caused the transfer. I I
7 Ifyou turn your attention to Page IW 2369 7 MR. OBEYESEKERE: It talks about I
8 and at the very last entry from 3-27-09, it states 8 reversed by transaction ID 4025. And if you note, I
9 there was I believe l.5 million shares of CDIV 9 the transfer ofthe shares, million shares, that .st_
1 0 transferred out. Do you see that? I 1 0 transaction 38001, so they don't seem to correlate I
1 1 (Reviewing document.) I 1 1 there. Would you agree? Q
12 A. Yes. i 12 MR. MARGOLIS: I guess. I guess. You 4
1 3 Q. Where did those shares go'? I 1 3 know -— I
1 4 A. Again, at this time I don't remember I 14 A. What page do you want me to go to? Q
1 5 specifically the amounts or to whom they exactly 1 5 Q. The next page is IW 2368. if
1 6 went. I told you that I transferred shares to 1 6 A. Okay.
17 Ilarold Mittleman, and I told you that I transferred 17 Q. Again, ifyou look about a third ofthe A
1 8 shares to this Wall Street Bulls company; whether it I 18 way down from the top on 7-20, 2009, there was about I
1 9 was in a personal name or company name. I don't I 1 9 l.5 million shares ofCDIV transferred out. Do you
2 0 recall, but I made transfers on or about that time. I 20 see that? I
2 1 Q. I'm sorry. Who was Harold Mittleman 2 1 (Reviewing document.) Xi
22 again? 22 A. Yes.
23 A. Harold Mittleman was another member of 2 23 Q. Okay. Does that relate to Harold
2 4 Investors Hub, and he had a promotional company 2 4 Mittleman or the Wall Street Bulls transfer?
2 5 called Premiere Stocks. 2 5 A. I simply don't remember at this time frame
11 (Pages 304 to 307)

. - ‘ . -cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 13 of 83
Rage 308 Page 310 .
t
1 whether this was Harold or Wall Street Bulls or j 1 A. Yes. I
2 whether it was the Dave Thomas or the Stockl-lunter. 2 Q. Was SOOO. Inc., a pinksheet company? I
3 ljust don't remember. ; 3 A. Yes. g
4 I mean, a lot was going on at this time 4 Q. Okay. Why was that different from what
5 fiame. It's three years ago. lj ust don’t 5 you did with CDIV in Gibraltar? j
6 remember. Well, almost three years ago. E 6 A. Because the SOOO, Inc., transfer was a
I 7 Q. Is it your general memory, though, that as 7 DWAC, which stands for Deposit Without a Q
8 far as that transfers out of CDIV, shares of this , 8 Certificate, and thereby they're already in a street I
9 large volume would all relate to one or -— one or I 9 name and cleared and thereby not requiring a
1 O more of these promotional efforts that you just E 1 O certificate transaction. .7
1 1 described, Mittleman, Thomas, Stock Hunters? 1 1 Q. So your understanding was that all the A
12 A. Yes. 12 certificates that you got for 8000, Inc., were in —— ,
1 3 BY MS. CURTIN § 1 3 A. I didn't receive any certificates. Q.
1 4 Q. Who introduced you to Gibraltar? 1 4 Q. But that the shares that were deposited to i
1 5 A. I don't remember specifically. I think —- g 1 5 your E*TRADE account were in street name? I
1 6 I think it was Steve Lane. E 1 6 A. Already cleared and held in street name in
1 7 Q. Who's Steve Lane'? I 1 7 another account, yes. j
1 8 A. He’s one ofthe owners of MEC Promotions. 1 8 Q. l'm trying to understand. When you say .
1 9 Q. Capital M, capital B, capital C —- 1 9 "already cleared," what do you mean by that? I
2 O A. Yes. j 2 O A. They were already held within a brokerage
2 1 Q. -— promotions? And where's he based? 2 1 somewhere. I don't know specifically which one, but I
22 A. I believe he was based in Las Vegas. 22 l’m going to go visual. I'll state, but I'm a
2 3 Q. And you testified earlier that one ofthe { 2 3 visual person. I
2 4 reasons why you had an account at Gibraltar was E 2 4 Q. Okay.
2 5 because they‘re one ofthe few brokers that will Q 2 5 A. Ifthis is, for example, just for general f
Fage 309E Page 311 _
1 trade pinksheet companies, is that correct? 1 purposes we'll say stock trade -—
2 A. No. I said that they were one ofthe few l 2 Q. Okay. I
3 companies that would clear pinksheets. l 3 A. ~— and this is E*TRADE. Ifthey have i
4 Q. You testified earlier that IE*TRADE would 4 shares that have already been deposited and/or
5 not do that? 5 cleared, okay? They can electronically transfer to {
6 A. Correct. 6 E*TRADE with no physical paper.
7 Q. But my understanding based on records I 7 Q. Okay.
8 saw that you did trade 8000, Inc., in E*TRADE, is 8 A. Tliat's what happened, so 2 million shares I
9 that correct? i 9 as I recall of E*TRADE were transferred —- excuse I
1 0 A. Yes. But I never received a certificate 1 0 me —· of 8000, Inc., were transferred into my I
1 1 for it that I deposited. E 1 1 account —· r
12 Q. You didn't? How come? » 12 Q. Okay. W]
13 A. There was no need to. i 13 A. —— without paper. I
14 Q. Were you only purchasing the E*TRADE in i 1 4 Q. Got you. So the shares that ended up in .
1 5 your account in the market? j 1 5 your account at IE*TRADE were done electronically and
1 6 A. Was I only purchasing E*TRADE? 1 6 not on paper?
17 Q. No. Did you purchase SOOO, Inc., in your 17 A. Correct. » `
1 8 E*TRADE account only in the market? 1 8 Q. But your understanding is the shares that .
1 9 A. Did I purchase —— g 1 9 were deposited to your Gibraltar account were P
2 O Q. Right. The trading that) you did in your f 2 O deposited in paper, physical certificate? I
2 1 E*TRADE account in SOOO, Inc., was that only market 2 1 A. Correct. They sent me certificates. l i
2 2 transactions? 2 2 then sent them to Gibraltar after getting the _
23 A. No. 2 3 medallion thing on the back ofthem and signing _ f,
24 Q. So you did get 8000, Inc., transferred i 2 4 them.
2 5 into your E*TRADE account? l 2 5 Q. Okay. Now, here's my concern: The stock
12 (Pages 308 to 311)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Page 14 of 83
Page 312l Page 314 .
1 transfer agent records show that l0 million shares 5 1 regarding the substance of this matter?
2 were issued to you in May 2009. There was a 2 A. No, sir. is
3 certificate issued in your name in May 2009 for l0 g 3 Q. Okay. l'm going to turn your attention .
4 million shares. E 4 just back generally to Gibraltar. How did you I
5 A. Okay. y 5 produce these records? e
6 Q. And that they subsequently went to l 6 A. l went on line and printed off my entire if
7 Gibraltar. i 7 transaction history since opening ofthe account. Q
8 A. Okay. 8 Q. And do you get periodic actual account
9 Q. l'm concerned because that would have 9 statements?
1 0 required Gibraltar to clear those shares as you're i 1 0 A. No. A
1 1 talking. Do you know how they might have done that 1 1 Q. And this is essentially all you have
1 2 without you authorizing that transaction? i 1 2 access to?
1 3 A. l'm not saying l’m not authorizing it. 1 3 A. Correct. E
14 l'm saying l simply don't remember it. 1 4 Q. You had discussed briefly about a sale
1 5 Q. Okay. 1 5 of`-- a private sale of CDIV shares to a gentleman ;
1 6 A. l mean, ifl got them, then I got them. I 1 6 named Stephen Roth, is that correct? ;
1 7 just simply don't remember it. g 1 7 A. Yes. ,
18 Q. Youjust don't remember getting an i 1 8 Q. And when did these sales take place or t
1 9 additional l0 million shares in May 2009? 1 9 this sale, rather?
2 0 A. l truly don‘t. { 2 0 A. The approximate time ofthe issue ofthe Y
21 Q. Okay. 21 certificate. 2
22 A. lfl did, I did. ljust —- l simply don't 22 Q. Do you recall when that was?
23 remember it. j 2 3 A. We can go back and look at the book. l i
24 BY MR. OBEYESEKERE l 2 4 believe it was May of`20l0. Q
2 5 Q. Just one quick question before we take a { 2 5 Q. May of`20 l O?
Page 313 Page 315
1 break. You testified you thought a sale of 24 l 1 A. l believe so. Possibly April but that
2 million shares through April 2010 would be a lot. j 2 general time frame. l believe it was May. YY
. 3 Would you consider 15 -— the sale of l 5 million i 3 Q. What was the amount ofthe shares that you
4 shares a lot during that same time frame? l 4 sold?
5 A. Again, l simply don't remember exactly how 5 A. One million.
6 many I had. 6 Q. And you had indicated that was part ofa Q
7 Q. No. l‘m not asking how many you sold. i 7 larger certificate? .2
8 I‘m just saying, generally, would you consider the 8 A. Correct. j
9 sale of I5 million shares over 3-09 to 4-0] 0 a 9 Q. And what was the total size ofthe
1 0 significant sale -- significant number of shares i 1 0 certificate'?
1 1 during that time? i 1 1 A. 3.3.
12 A. Depends on the price points. l mean, if 12 t MR. KELCQURSE: 3.3 million?
13 you're saying 15 million shares at 70 cents, yes, 1 3 THE WITNESS: Yes.
1 4 that’s a tremendous amount. lfyou're saying I5 1 4 BY MR. QBEYESEKERE
1 5 million shares at a penny to 2 pennies, no, not so g 1 5 Q. Do you have any understanding of -- strike
1 6 much. 1 6 that. And what was the price that Mr. Roth *3
17 MR. OBEYESEKERE: Let`s go offthe 17 purchased the shares for? Y
1 8 record and take a break. We're off the record. 1 8 A. 30 cents. if
1 9 lt‘s 9:l 5. 1 9 Q. $300,000? ·
2 0 (A break was taken from l 2 O A. Yes. fi
21 9:15 a.m. to 9:25 am.) l 2 1 Q. Did you approach Mr. Roth regarding the X
22 MR. OBEYESEKERE: Let’s get back on l 2 2 sale ofthe shares or did he approach you? i
23 the record. It is 9:25. 23 A. Mr. Roth had been speaking with me at that
2 4 Q. Mr. Williams, when we were offthe record, 2 4 point for a month or two via phone calls or an
2 5 was there any conversation between you and the Staff 2 5 original message that he sent to me and l returned
13 (Pages 312 to 315)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 15 of 83
Page 316i Page 318 gy
1 his call. 1 having -— wanted to know where he could clear it,
2 And he had been accumulating large 2 and I believe I told him Gibraltar would be a place I
3 positions in the various plays and always asked me 3 that would clear a pinksheet stock.
4 to consider him a resource so that I didn't have to 4 I believe he ended up depositing somewhere
5 "bear" the entire financial burden. I'm not 5 else after receiving —— I referred him to the
6 entirely sure what he meant by that, but it was the 1 6 company to get a legal opinion to get the _
7 phrase that he used. 7 certificate cleared. is
8 So he said, you know, if he had 1 8 (SEC Exhibit No. 201 was marked .
9 anything -— if] had anything that I thought he 1 9 for identification.) .
1 0 would like to participate in, then give him a call, 10 Q. I'm going to show you, Mr. Williams, I
1 1 so I did. And let me rephrase that. We spoke i 1 1 what's been marked Exhibit 20l, a document of
1 2 frequently, about once a week. f 1 2 approximately three pages which appear to be {
1 3 Q. And why was it you sold it to him in the i 13 printouts of private messages I believe between you 31
1 4 private sale as opposed to through just a regular 1 4 and -— I'm sorry. Well, l’ll tell you what. Why 3
1 5 sale through a brokerage account? 1 5 don't you take a look at that and let me know ifyou 2
1 6 A. Well, again, that would have § 1 6 have any understanding as to what these relate to. if
1 7 required —— at the time, the stock price was E 1 7 (Reviewing document.) (
1 8 substantially higher than that price. Again, I 1 8 A. Yes, I recall this transaction —— or this (
1 9 didn't want to dump shares into the market at an I 1 9 conversation. I,
2 0 extended rate. Q 2 O Q. First of all, these messages refer —— the
2 1 Like I said, I'm all for people taking 2 1 first page there's what appears to be an e—mail t
2 2 some offalong the way, but I thought a sale ofa 2 2 address [e-mail]. Do you see that?
2 3 million shares at the then current price of 1 23 A. I do. I
2 4 approximately 65 to 70 cents would have been an I 2 4 Q. Who is that? Q
2 5 over—hit to the market. 1 25 A. I don't recognize this particular portion
Page 317 f Page 319
1 Q. What about any concern that Mr. Roth would 1 of it because it's not between me or to me. l can
2 simply go out and sell those shares in the market 2 only represent that based on the other portions of
3 immediately? Q 3 this that it would recommend -— be Michael Plasse
4 A. Well, I mean, based on the conversations _ 4 since it says to Michael. I
5 that I had had with him, he wanted to be a "team E 5 Q. Okay. And turn to the —— if you turn to
6 member" along for a longer ride should the short 6 the next page, the first private message states from
7 squeeze occur. And, again, at the time, Mr. Roth 7 Monk. Is that your message? si
8 had represented to me that he had very substantial 8 A. Yes. AT
9 positions in the various plays. 9 Q. And throughout these documents whenever E
1 0 Q. Are you familiar with an individual named 1 10 there's a reference ·— whenever there’s a message ~
1 1 Michael Plasse? 1 1 hom Monk, thats a message from you. Is that fair g
12 A. Yes, I am. 12 to say?
1 3 Q. How do you know him? 13 A. Yes.
1 4 A. Michael Plasse was the software 14 Q. And it goes to an individual ucheckiraise.
1 5 developer/coder. l’ll leave it at that. I don't 1 5 Do you see that?
1 6 know if it's specific to say programmer, coder, 1 6 A. I do. .
1 7 developer, what have you, but he created many ofthe 17 Q. ls that Mr. Plasse?
18 websites that CDIV uses or did use. He has since 18 A. Yes.
1 9 revamped and hired somebody else. 1 9 Q. What do these messages relate to'? }
2 0 Q. And I'm just going to go back earlier to 2 0 A. Mr. Plasse, as I said earlier, was the {
2 1 your discussions with Mr. Roth. Did you ever 2 1 programmer or coder for the CDIV websites, and he was
2 2 suggest to Mr. Roth to use Gibraltar to cash his 2 2 paid for that in the form of a restricted stock Y
2 3 share certificate in? 23 certificate for CDIV. I don't recall how long the
2 4 A. I don't recall specifically. I kind of 2 4 restriction went, but it apparently didn't clear for
2 5 remember him asking about that because he was 2 5 sometime after that.
14 (Pages 316 to 319)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 16 of 83
Page 320 E Page 322
1 So he was upset that at the time that he i 1 A. I paid him for the shares. Nazir
2 received in, the stock was only worth 1,500, $2,000 2 reimbursed me for halfofit.
3 or what have you. I don‘t remember specifically the 3 BY MS. CURTIN
4 amount. And at the time ofthis, the stock price 4 Q. You paid Plasse for the shares?
5 had risen substantially and he felt he deserved to 5 A. Correct.
6 make money off of`that. 6 Q. And then Nazir reimbursed you for half`of
7 Q. Okay. And what was your involvement in 7 what you paid Plasse?
8 this negotiation, transaction? 8 A. Correct.
9 A. My personal involvement was to meet him at 9 Q. How much was that?
10 my bank, buy the certificate off of him and then 1 0 A. I believe it was in the neighborhood of
1 1 send it back to Nazir and have Mr. Plasse sign a 1 1 1 $22,000 that I bought them ot`fof`him for.
12 Nondisclosure Agreement. 12 Q. So you paid Plasse $22,000?
1 3 Q. Why were you negotiating or interacting on 1 3 A. And change or so.
14 behalf`ofCascadia this situation? 14 BY MR. OBEYESEKERE
1 5 A. Because this Mr. Plasse was very close to i 1 5 Q. Why did Mr. —— what's your understanding
1 6 me, and it was just easy for us to meet in person. 1 6 as to why Mr. Maherali only reimbursed you for half`
17 MR. MARGOLIS: Close physically? 17 ofit?
1 8 THE WITNESS: Yes, as in 25 minutes or E 1 8 A. I agreed to split the cost with him
1 9 so away. ; 1 9 because 1 thought it would have been beneficial to
2 0 Q. Just going back to those e-mails, on the 1 2 0 return the shares to the treasury ofthe company.
2 1 third page is a message from you on March 4th, 2010, 2 1 Q. ls there any reason why Mr. Maherali
22 at 12:21 p.m. Do you see that? i 2 2 wouldn't pay for the shares in their entirety? I Q.
2 3 A. Yes. I 2 3 mean, it's his company and his agreement.
24 Q. It says you will have to meet me at my 2 4 A. I don‘t disagree. Again, I wasjust
2 5 bank". the stock power for the cert will have a I 2 5 trying to help the share structure of the company.
Page 321 Page 323
1 medallion signature. Do you see that? 1 (SEC Exhibit No. 202 was marked
2 A. Yes. 2 for identification.)
3 Q. What does that mean? 3 Q. I`m going to show you what’s been marked
4 A. In order to execute a stock power on the 1 4 as Exhibit No. 202, a two—page document which A
5 back ofthe certificate, a medallion signature is i 5 appears to be a Nondisclosure Agreement and it
6 required. And via phone calls with this individual, 1 6 appears to be signed by you. Would you take a
7 I had told him that if I purchased these nom him, 1 7 moment to review that?
8 that I would want to return them to the company, so { 8 (Reviewing document.)
9 he would have to give a power of attorney back to 9 A. I've seen this recently.
1 0 the company. i 1 0 Q. What is that?
1 1 MR. MARGOLIS; There was a misquote. l 1 1 A. This is the ——
1 2 It says quote "the stock power tor the certihcate 1 2 MR. MARGOLIS: Give me a chance to
1 3 will have to have a medallion signature." Not that 1 1 3 take a look at it.
1 4 it has a medallion signature. E 1 4 THE WITNESS: Okay, go ahead.
15 MR. OBEYESEKERE: Thank you. I g 15 (Reviewing document.)
1 6 apologize. 1 1 6 MR. MARGOLIS: Okay.
17 MR. MARGQLIS; Qkay. 1 17 Q. Ijust want to clarify. In some ofthese if
1 8 Q. Did you actually return the shares to the i 1 8 exhibits I've been referring to them as by the
1 9 company? 1 9 physical number of pages but, in fact, some of these
2 0 A. Yes, sir. I believe the amount was 2 0 are double sided and that's just for the record. Do
2 1 approximately 840,000 shares. 2 1 you recognize this exhibit?
22 Q. Were you compensated in any way for that? 1 22 A. Yes. Q
2 3 A. Mr. Nazir Maherali and myself split the 1 23 Q. And what is that? li
2 4 cost. 2 4 A. This is a Nondisclosure Agreement that was
2 5 Q. 1'm sorry. Split the cost? 2 5 sent to me by Nazir to have Mr. Plasse sign.
15 (Pages 320 to 323)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 17 of 83
Page Page 326 1
t ,
1 Q. And ifyou would turn to the last page. 1 friends or colleagues who may have sold stock during §
2 A. Inside or outside last? 2 the time between the 2000 —— March 2009 through
3 Q. The very back page. 3 April 2010 time frame? Q;
4 A. Okay. 4 A. Again, I didn’t know specifically, you [
5 Q. And if you —— is that your signature? i 5 know, what his or any other persons close to him. Y
6 A. Yes. 6 It frankly didn’t even occur to me at the time to I
7 Q. And underneath the title in brackets it 7 think about such a thing, but, again, as the chart {
8 says Chief Executive Officer. Do you see that? l 8 moved pretty easily, it did not appear that there
Q A. I do. 9 was any drastic selling.
10 Q. Do you know why you’re signing for the 10 Q. We had talked about promotions unrelated
1 1 Chief Executive Officer? I 1 1 to yours which involved pumps and dumps, correct?
12 A. Well, I have found out since that I should I 12 A. Say again? 7;
1 3 have signed on behalf ofNazir, but Ijust simply 13 O. You had talked about the concept ofa pump
1 4 wrote for CDIV, as in I was acting as their agent. 14 and dump, correct, --
1 5 Obviously, I’m not their Chief Executive Officer. 1 5 A. Yes. j
1 6 Q. Have you ever held a formal position with 1 6 Q. —— yesterday? And in that one ofthe
1 7 the company? 17 criteria were that a sharp rise in stock price would
1 8 A. No. 18 allow company insiders to dump their shares and make
1 9 Q. Were you ever concerned that Mr. Maherali 1 9 a quick profit, is that right?
2 0 would be selling CDIV shares as people were —— as § 20 A. Well, and/or the promoters. What my
2 1 the team members of the Den were attempting to lock 2 1 thought process behind a pump and dump would be
2 2 up the float? i 22 somebody gets paid an amount of shares or an amount
2 3 A. That was not a concern of mine based on 2 3 of cash, depending, so that a person or a third
2 4 the activity of the chart. It seemed to be moving 2 4 party, some entity can dump shares in the market
2 5 relatively easily, so I didn’t —- it didn't appear i 2 5 pretty much as fast as the price goes up.
. Page 325 Page 327
1 that he was doing any active selling. 1 They typically last for a very short
2 Q. Did you have any discussions with him 2 period oftime. I think a general time statement
3 about whether he should or should not sell as the 3 may be a month, you know, to where the price goes up
4 team member was ~— the team members were 4 rapidly. shares are dumped and then as the price
. . I ‘ . . é
5 accumulating or locking the Iioat? 5 plummets when the promotion is over and all the
6 A. We routinely had discussions on how the i 6 e—mails and PR’s or whatever stop, then the stock is
7 chart looked or that type of thing, and I recall E 7 shotted on the way back down.
8 specifically asking him one time about selling, and i 8 Q. And there were various promotions that you
9 he said that as the —— and I’m paraphrasing. I’m 9 were involved with with CDIV from March °09 through if
1 0 not quoting. Something along the lines he can only r 10 March 2010. Is that fair to say?
1 1 sell one percent over the course of 90 days or 1 1 1 A. Say that one more time. tg
12 something like that anyway. i 12 Q. You were involved with a number of
1 3 Q. And one percent of what? l 13 different promotional campaigns for CDIV between
1 4 A. Of what he held, as I understood it. 1 4 March '09 and March 2010, right?
1 5 Q. Do you have an understanding ofhow much g 15 A. Yes.
1 6 he held? l 1 6 Q. And do you have any concern that during 3;
17 A. I do not know specifically, no. § 17 those promotional campaigns that Mr. I\/laherali would
1 8 O. Did you ever look at the transfer records, I 18 be dumping his shares ofhis stock? he
1 9 transfer agency records to determine how much he may ; 1 9 A. Again, we had frequent conversations about
2 0 have held? 2 0 the chart and where any selling that it looked like
2 1 A. That‘s not available to me. , 2 1 if it occurred or had occurred.
22 Q. Okay. Did you have an understanding 22 I think at one point he relayed to me that
2 3 whether he had any family members who held stock? 23 he had sold 400,000 shares over the course ofa
2 4 A. I do not. 2 4 period oftime. I don't remember specifically, but
2 5 Q. Do you have any concern that he had 2 5 I think that was about right.
16 (Pages 324 to 327)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 18 of 83
Page 328 Page 330 _
1 Again, keep in mind, you know, at this 1 holding the shares in order to kind ofmake ends I
2 point in time, this type of thing was all new to me. ; 2 meet? ls that what you meant? g
3 It never even occurred to me that people would be 3 A. Well, quite frankly, you know. you've {
4 doing the type ofthing that I believe you're 4 itemized some ofmy sales and, you know. life got in i
5 insinuating ofhaving other accounts where there 5 my way, too. My wire and I were in the process of .
6 were shares that they would dump out of. It never 6 divorce.
7 even occurred to ine. 7 My financials included my CDIV shares. and j_
8 Q. You did discuss the float lock down 8 we had an outside agreement that I had to dissolve a i.,/
9 concept with Mr. Maherali, correct? 9 certain portion of that over a certain period of
10 A. l'm sure we did at some point, yes. 1 0 time using my best ability. I
1 1 Q. And he understood then at the time that 1 1 Q. Say that again. You had an outside ri
12 Den members in order to effectively go —— in order i 1 2 agreement? f
I .
13 to effectuate the float lock down concept would have 1 3 THE WITNESS: Can you read that back, I
1 4 to be accumulating shares and locking the float, is 1 4 please, rather than me stating it again? g
1 5 that right? § 1 5 (Answer read back.)
1 6 A. I believe he understood that, yes. 1 6 Q. You mentioned an outside agreement that ji
17 Q. Okay. So he understood during this March , 1 7 you had to dissolve some ofthat. What outside y
1 8 2009 through March 20l0 time frame that Den members i 1 8 agreement are you referring to? 5
1 9 would be accumulating stock? i 1 9 A. There was an agreement between us. For
2 0 A. I believe that would be understood. k 2 0 lack ofa better term, I guess what you would call a <
2 1 Q. And those are understandings that he got 2 1 settlement. i
22 through discussions with you? 22 MR. MARGOLIS: lt`s called a I
23 A. Yes. 2 3 separation agreement. I
2 4 Q. Okay. Are you aware of any Monk‘s Den 2 4 THE WITNESS: That. .
25 employees, and by "employees" I mean people like Msyé 2 5 A. And my financials, when we met with the .1
Page 329 Page 331
1 Harvey and Mr. Patel and Mr. Allen, selling shares l 1 attorneys, CDIV was in my financials. I wasn‘t
2 ofCDlV? i 2 hiding anything, so I had to liquidate a portion of é
3 A. I believe all ofthose persons purchased 3 those within a certain period oftime and provide a Y
4 and/or sold at some point along the way. As to the K 4 portion of those proceeds to her as part of that
5 amount ofshares that they had, I —— I don't know. » 5 agreement.
6 Q. Are you aware of`Mr. Erhard selling CDIV i 6 Q. Okay. Did that agreement specifically
7 shares? g 7 reference CDIV'?
8 A. Mr. Erhard did mention on the boards many 8 A. Very specihcally.
9 times that he had to sell to cover rent or that type 9 Q. Did you produce that agreement to the
1 0 ofthing and that he took some off along the way, as i 1 0 Staff`? L
1 1 well. Again, to reiterate, I always told people, 1 1 A. To your Staff`? ji
12 you know, iflife gets in the way. you've got to do 1 2 Q. Yes.
1 3 what you've got to do. i 1 3 A. No. That agreement, I don‘t have a copy
14 Q. What do you mean by "wlien life gets in the 1 4 ofit at this point.
1 5 way"? t 1 5 Q. Can you obtain a copy? I
1 6 A. Well, Mr. Erhard was a mason in California E 1 6 A. Possibly. }
17 and had four general contractors go bankrupt on him, i 17 MR. MARGOLIS: You know, I didn't
1 8 so he was pretty close to without income. 1 8 think that fell within the parameters ofthe if
1 9 So every now and then, you know, his I 1 9 subpoena. We gave you a lot of personal stuff. I
2 0 trading account was pretty much his only source of E 2 0 We gave you stuff that indicated —- YL
2 1 income at that point, so he sold shares every now I 2 1 that indicates he was going through a separation.
22 and then. I mean, if you've got to cover rent, i 22 The details ofthe separation agreement, it's a g_
2 3 you’ve got to cover rent. I 2 3 fairly typical kind of situation. if
2 4 Q. So when a hardship kind of gets in the § 2 4 MR. OBEYESEKERE: We can talk about
2 5 way, it's okay to depart from accumulating and 2 5 that off the record. 6,
17 (Pages 328 to 331)

. · ‘ -cv- •• ' k ocument 47- - Filed 07/19/13 Pa e 19 of 83
Page 332 Page 334
1 MR. MARGOLIS: Okay. 1 would need that, let me take a look at it and if —
2 MR. OBEYESEKERE: We might have a 2 there are portions ofit that she will agree for me {
3 difference of opinion as to whether it's relevant or 3 to give to you, —— q
4 not, but I don't think this is the time for it. 4 MS. CURTIN: Could he today —— on his .2
5 We'll have a discussion about it off the record —— 5 own memory could he just tell us roughly when the .
6 or you want it on the record? 6 agreement was signed? t
g MR. MARGOLIS; No. l‘mjust saying 7 MR. MARGOLIS; Absolutely. g
that a typical separation agreement requires that E 8 MS. CURTIN: And as it pertains to
9 certain funds get transferred -— 9 CDIV, how much he agreed to liquidate and when he ,;
10 MR. OBEYESEKERE: Sure. 1 0 liquidated and what his proceeds were from the o
1 1 MR. MARGOLIS: -— and get liquilied. l 1 1 liquidation?
12 You know, assets that are in a certain form have to l 12 MR. MARGOLIS: Absolutely. I think ;
1 3 be liquitied to be in meet certain requirements. { 1 3 that's all relevant. i
1 4 That‘s really -· 1 4 MR. OBEYESEKERE: That’s what we're
15 MR. OBEYESEKERE: But I will -— but l l 15 looking for. f
1 6 think the subpoenas and our subsequent 1 6 MR. MARGOLIS: Okay.
1 7 correspondence made clear CDIV specitically was the 1 7 A. I believe at the time ofthe agreement, Q
18 subject of this —— of the subpoenas, and we 1 8 and I do not remember specifically when the date
1 9 specifically called for it to be searched throughout i 1 9 was, I want to say it was roughly the end of 2009,
20 all his documents, including his e—mails, and t 20 approximately. Maybe late summer, early fall of
2 1 produced to us. l 2 1 '09. Again, approximately. I
22 MR. MARGOLIS; I understand, but l 22 I believe at the time the value ofthe g
2 3 there's another issue. There's another person 2 3 shares that I held was approximately 400 and some ;
2 4 involved who has nothing to do with this, his wife. t 2 4 odd thousand dollars. $2
2 5 And I don’t know —— I haven't seen the 2 5 Q. All the shares you held at that time for *
Page 333 Page 335 lj
1 agreement, nor would I ask for it because I think I I 1 CDlV?
2 would have to go through her attorney, and Ijust 2 A. At that time. *
3 didn't see that this was —— 3 Q. And where did you hold those shares at q
4 MR. OBEYESEKERE: Well, ifyou‘re 4 that time?
5 saying that Mr. Williams has no access to it or it's l 5 A. In Gibraltar. l
6 not under his possession or control, that's another 6 Q. Just Gibraltar? it
7 issue. We can discuss that. 7 A. Well I mean I mav have had a few in
l 3 7 J V.
8 THE WITNESS: It's not, lt's at the 8 E*TRADE, but the substantial portion was certainly . A
9 Court in Norwich, Connecticut. 9 in Gibraltar. I
1 0 Q. Well, are you able —— my question was, 10 And, again, I don`t recall the specific ig
1 1 before we di gressed into this discussion, are you l 1 1 number that I had at the time, but the approximate 5
1 2 able to get a copy ofthat? 12 value was 400 and some odd thousand dollars, and gyie
1 3 A. Iftt's public record, then I could go to l 1 3 this agreement specified that I would liquidate }
1 4 Norwich and get it. Other than that, I don`t know. I 1 4 within l20 days, as I recall, to the best ofmy it
1 5 I don`t know those processes. 1 5 ability based on my charting experience.
1 6 Q. Does your attorney have a copy ofthat? 1 6 Q. You would liquidate the entire position? 4
17 A. I did not have an attorney at the time. 17 A. Correct. »
1 8 BY MS. CURTIN i 18 Q. Within l2O days? i;
1 9 Q. Could you tell us when the agreement was l 1 9 A. Correct. I
2 0 reached roughly'? l 20 Q. Okay. And did do you that? I
2 1 A. (No audible response.) l 2 1 A. Well, we subsequently decided to —— I did
2 2 MR. MARGOLIS; Let me make this offer l 22 a portion of it along the way, but we subsequently
2 3 because l’m trying to think of how to satisfy L 2 3 have stopped the divorce proceeding and are "working
2 4 everyone. If I can get a copy of the agreement, in 2 4 on it." V i
2 5 other words with his wife‘s permission because I l 2 5 Q. And how much did you liquidate? 3
18 (Pages 332 to 335)

a · ‘ - - ••: RL I• .n·.n. Filed 07/19/13 Pa e2O 0f83
Page 336i Page 338 r
1 A. I don't know. I 1 Q. 3 million shares? . A
2 Q. Roughly, in proceeds? 2 A. Yes. I
3 A. I don't know. l 3 Q. And you said that the value at the time {
4 Q. When you were liquidating it, were you l 4 you went into the separation agreement was about I.
5 transferring the money to your wife? l 5 400,000. Do you know how many shares that was —— .
6 A. I gave to my wire —— I paid offthe house, 6 made that value? ie
7 which was 200,000 thereabouts. I gave her money to 7 A. I don't remember. I just remember that on
8 renovate the house and bought her a new vehicle and 8 the agreement that as of that date that the
9 at the time when it was still going on, I allocated 9 agreement was made it was 400 some odd thousand. Q
1 0 $250,000 to a pay on death account. l 1 0 Q. But do you know how many shares it took
1 1 Q. Pay on death, D—E—A-T—I~l? What's that? 1 1 you to —- that you did liquidate roughly? .2
1 2 A. Ifl died she got the proceeds. l 1 2 A. I simply don't remember. 9
13 MR. MARGOLIS: Insurance. I 13 Q. And what you described, did you liquidate _
1 4 MS. CURTIN: Insurance. 1 4 within that l20-day period from the time you entered
1 5 A. Well, it’s not insurance. 1 5 into the agreement?
1 6 MR. MARGOLIS: Oh, it isn’t? l 1 6 A. I’m not even a hundred percent sure that
17 A. It's a bank account where I put $250,000 l 17 it was 120 days. It may have been 90. Ijust ?
1 8 and ifl die, she got paid. As our relationship has i 1 8 remember there was a specified time frame.
1 9 somewhat progressed back to the good side, I i 1 9 And over the course ofthat, again using I
2 0 liquidated that account and gave her the proceeds. 2 0 my best ability as I saw the chart doing well and/or I '
2 1 Q. The death account? 2 1 strength in the stock, I liquidated as I saw from a
2 2 A. I have no control over her accounts at 22 technical standpoint.
2 3 this point. I 23 Q. When did you stop roughly liquidating your T
2 4 Q. And you liquidated the payout death 2 4 position pursuant to that separation agreement? .7
25 account? I 2 5 A. I simply don't remember. I mean, l’ve g
Page 337 Page 339
1 A. Yes. l 1 probably had four or 500 transactions in CDIV. To
2 Q. You gave it to her? 2 try to get me to remember a specific amount at a
3 A. Yes. 3 specihc time isjust impossible. As I said, I've Q
4 Q. Okay. Were all those things that you 4 had fbur or 500 transactions in CDIV. I
5 mentioned that you did, paid $200,000 toward the 5 BY MR. OBEYESEKERE >
6 mortgage of the house, renovation costs of the 6 Q. ljust want to run by a couple of these L
7 house, buying the car for your wife and the pay on 7 items you mentioned. You mentioned you bought a Q
8 death account, were those all from proceeds fiom 8 vehicle for your wife? I
9 your liquidation oI’CDlV? l 9 A. Yes. .
10 A. Yes. , 1 0 Q. What kind vehicle? .
1 1 Q. Was there anything else that -— l 1 1 A. Mercedes GLK350, I think. About $45,000. if
12 A. Well, I mean, I may have gotten some 12 Q. And you had earlier said life gets in the
1 3 proceeds from class, as well, but substantially, 1 3 way —— your own life, part of your own life got in .
1 4 yes. 1 4 the way. I took that to mean you were under some `Q,
1 5 Q. But you didn't liquidate your entire 1 5 financial duress or hardship, is that correct?
1 6 position in CDIV? I 1 6 A. Well, I was under the agreement that I I
1 7 A. No. 1 7 needed to liquidate these certain things at certain c
1 8 Q. And what was your position at the point 1 8 times.
1 9 that you stopped liquidating it pursuant to the l 1 9 Q. Okay.
20 separation agreement? l 20 A. So that was my life got in the way. A
2 1 A. I don't know. l 2 1 Q. Did you purchase a house in 2009 or 20l O? g,
22 Q. How much do you hold now? 2 2 A. In 20l 0, yes. j
2 3 A. I currently have —— it’s right about 3 2 3 Q. Where did you purchase that house? Q
2 4 million, plus or minus maybe l00,000 or so one way 2 4 A. Arizona.
2 5 or the other. 2 5 Q. I~Iow much did you pay? F
19 (Pages 336 to 339)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 21 of 83
Rage 340 Page 342 .
t it
1 A. Not counting closing costs or whatnot, it 1 greater amount than that. .
2 was 545,000. 2 Q. Thats her salary? E
3 Q. Okay. ls that the value ofthe house or 3 A. Well, as pay for services, yes. 1 don’t I
4 the actual physical cash amount that you paid? i 4 want to call it salary. .
5 A. Thats the physical amount that 1 put the 5 MR. MARGOLIS: She's a subcontractor. is
6 offer in for and paid and then, like 1 said, there 1 6 A. And then 1 don’t specifically recall the 5
7 was additionally whatever closing costs or whatever. 1 7 amounts that 1 paid to Jason or Chad, but l believe tp
8 Q. Did you make any other purchases of over 1 8 1've provided those records. 1
9 $50,000 in the 2009 through 2010 time frame? 9 Q. Anybody else?
1 0 A. Yes. 1 0 A. lfthere is, 1 don`t remember it. Qi
1 1 Q. And what were they? 1 1 1 BY MR. OBEYESEKERE q
12 A. 1 bought a plane. 12 Q. We‘ll get into this later, but l did .4
1 3 Q. How much was that? 1 3 recall seeing an e—mail where certain checks were Q
1 4 A. Approximately 180 something thousand. I 1 4 mailed out to an individual in California. lt was of
1 5 don’t remember specifically. § 1 5 Chris Martin. Did you ever send any money to Mr. A
1 6 Q. Did you pay cash for that? i 1 6 Martin out of your accounts? ;
1 7 A. l paid in full for it, yes. Not financed. § 17 A. 1 don’t think so.
1 8 Q. What else? 1 8 Q. Okay. 1 mean, it could be checks that did .
1 9 A. My car. 1 9 not come out ofyour account. l'm just trying to Qi
2 0 Q. And how much was that? 2 0 refresh your recollection. ljust have one more
2 1 A. A hundred and something. I don’t remember I 2 1 question related to the Gibraltar records, if you 32
22 specifically. A little over a hundred. i 22 could take a look at that.
2 3 Q. And what was the type of car? 1 2 3 BY MS. CURTIN gy
2 4 A. Mercedes $1..550. 1 2 4 Q. ls Chris Martin related to Jeff Martin, —-
2 5 Q. And anything else? 1 2 5 A. No.
Page 341 i Page 343
1 A. I purchased another home in Arizona. l % 1 Q. —— the individual?
2 don’t remember the specific closing date. { 2 A. Not at all. j
3 Q. How much was that? 3 Q. Not at all?
4 A. l really don’t remember. 300 and E 4 A. Or to the best of my knowledge not at all. ii
5 something l think. 5 5 One’s in Oklahoma; the other is in California.
6 Q. Did you pay that in cash? 6 Q. Chris Martin lives in California?
7 A. Yes. 1 7 A. Yes.
8 Q. What else? 8 Q. 1effMartin lives in Oklahoma?
9 A. l think that's it. 1 9 A. Yes.
1 0 Q. Okay. i 10 BY MR. OBEYESEKERE .
1 1 A. l bought a truck, but l don’t think it 1 1 Q. lf you look at the very first page ofthis ;.
12 exceeded the amount you're talking. 12 Gibraltar account, it shows position details and it {
1 3 Q. Did you transfer any amounts ofover 1 3 shows CDIV quantity 170,099.
1 4 $50,000 to any persons? 14 (Reviewing document.)
15 MR. MARGOLIS: Other than his wife. 2 15 Q. Do you see that? i
1 6 A. Excluding my spouse? { 16 A. 1 do. B
1 7 Q. Excluding your spouse, yes. 1 1 7 Q. What does that relate to?
1 8 A. Not in a single transaction that I recall. g 1 8 A. That's a particular position that 1 still
1 9 BY MR. KELCOURSE 1 9 hold in that account. i
2 0 Q. Did you transfer funds to any particular i 2 0 Q. So as ofthe time ofthis, that was the .
2 1 individual that in total exceeded $50,000 during 1 2 1 amount of CDIV you held in Gibraltar?
22 2009, 201 O? Again, excluding your wife. i 22 A. As ofthe time ofthis printing, which l’m L
2 3 A. Yes. i 2 3 not sure what the date is.
2 4 Q. To whom? i 2 4 MR. MARGOLIS: December 2nd.
2 5 A. l’m pretty sure l paid Melanie 1-larvey a 2 5 A. December 2nd. As ofthe time ofthis EQ
20 (Pages 340 t;o 343)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 22 of 83
344 Page 346 2
1 printing, that's what I held in CDIV in this 1 request, I will comply to the best of my ability.
2 account. 2 Q. I’m asking you a different question. Can
3 Q. Is there any way that you can look and see 3 you go to Gibraltar and make a request for your 2
4 what you held at different points in time throughout 4 transaction history or account statements more than
5 this period? 5 what you see on line?
6 A. Well, this is my entire transaction 6 Literally go to the broker and ask them to
7 history. 7 give you specific account statements showing all
8 Q. I understand it's transactions, but it 8 transactional history in the account?
9 doesn't say let's say on April 20th, 20l0, how many 9 A. As I’ve said, I don't know what searchable
1 0 shares overall you held in your account. It just 1 0 parameters are there. This is 100 percent of my E
1 1 kind of lists only the transactions that you made. 1 1 transactions.
12 A. I don't know ifthat‘s a search parameter 12 Q. But I‘m asking can you go to the broker
1 3 that exists. At the time ljust —— in compliance l 1 3 orally or in writing and ask them to mail you
, 1 4 with the subpoena, Ijust gave you every 14 account statements; not to go on line, but to make ti.
1 5 transaction. 1 5 sure that we get documentation of every transaction
1 6 Q. But is there a way to either through your 1 6 in your account?
17 broker or through the electronic to look through and 17 A. Well, again, this is every transaction,
1 8 say, look, on February 20th, 20 I 0, what was my 1 8 but if you want to send a specific request to my
1 9 position in my account or on a monthly basis what 1 9 attorney, I will comply to to the best ofmy
2 0 was —— what was the position in the account? 2 0 ability.
2 1 A. Again, I don't recall if that's 2 1 Q. Does Gibraltar clear through Penson?
22 specifically searchable, but ifit is. do you have a i 22 A. I have no knowledge ofthat.
2 3 specific thing you would like me to do? i 2 3 Q. So you don't know what clearing firm
2 4 Q. Yes. I would like to see month by month l 2 4 Gibraltar uses?
25 what your position was, your total position when 2 5 A. No.
Page 3/I5; Page 347
1 your account opened. What your position was at 1 MS. CURTIN: Okay.
2 various times on a monthly basis nom the time your 2 BY MR. OBEYESEKERE
3 account opened through 20l0. 3 Q. I’m just going to turn your attention
4 A. lfyou will send to Mr. Margolis a I 4 to —— we've discussed in passing the various
5 specific request, I will be happy to comply. 5 seminars or what you were referring to as Monkinars.
6 Q. Okay, thank you. And Ms. Curtin asked you i 6 When did those begin? Let me back up. What is a
7 ifyou get account statements, but I believe you I 7 Monkinar?
8 already testified you do not. E 8 A. A Monkinar is a class where I teach about
9 A. Only electronic. l 9 technical analysis specifically to ETF's. ETF's
1 0 MS. CURTIN: Only electronic. 1 0 being Exchange Traded Funds.
1 1 Q. Thank you. I’m going tojust —· 1 1 Q. When did you begin having these classes?
12 BY MR. KELCOURSI3 12 A. The first one was December of2009.
1 3 Q. Just to clarify, I think we all know what l 1 3 Q. And was that specifically called a
1 4 you're saying but so the record is clear. you're not 1 4 Monkinar or was thatjust a seminar which
1 5 saying —— do you receive electronic monthly 1 5 subsequently became referred to as a Monkinar?
1 6 statements? 1 6 A. Mr. Erhard coined that phrase of Monkinar.
17 A. I receive no statements from them in any 17 I don't remember ifit was specifically a Monkinar
1 8 way, shape or form. The only time I have any access 1 B prior to that class or during that class or
1 9 to the account is when I personally go on. I don't i 1 9 thereafter, but that's what they became to be
2 0 receive monthly e—mails, nothing is sent to me in l 20 called.
2 1 any form. I only see it when l go on. i 2 1 Q. Prior to December 2000 -- December 2009, {s
2 2 BY MS. CURTIN I 22 had you had any other kind ofclasses for
2 3 Q. Can you request historical statements hom i 2 3 individuals?
2 4 Gibraltar? 2 4 A. For individual persons or like a group
25 A. As I'vejust said, ifl receive a specific 25 setting?
21 (Pages 344 to 347)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 23 of 83
Page 348 Page 350 y
1 Q. Either one. Group setting or individual 1 Q. And when you say the two January, January
2 persons. i 2 2009 and January 20l0?
3 A. Not specific to group setting unless you g 3 A. No. There were actually two classes in
4 count family members, but, yes, I had held private 4 January ot`20l0. One was in Los Angeles and then I I
5 classes before. 5 believe the other was in Richmond, I believe. 3
6 Q. And when did you first start holding 6 Again. l’m not a hundred percent specihc on these
7 private classes? 7 dates, but thereabouts. Y
8 A. It wasn‘t something I advertised or 8 Q. Did you discuss —— let's start with the {
9 anything like that. People just asked me and I 9 December 2009 class. What class was that?
10 would help them out. I truly have no idea of the 10 A. Los Angeles. I did two in a row at Los
1 1 exact times or locations, given the course oftime. 1 1 Angeles.
1 2 Q. Were these one—on—one sessions or larger 12 Q. And in both those classes did you discuss
1 3 sessions? 1 3 the float lock downs?
1 4 A. Typically one—on—one but occasionally like 14 A. Yes.
1 5 one—on—three. 15 Q. Did you discuss the float lock down
1 6 Q. Turning your attention back to these 1 6 concept?
1 7 l\/Ionkinars, you mentioned you taught technical 1 7 A. Well, the class —— sorry. One second. Q
1 8 analysis. 18 The class is based on technical parameters. Now, I
1 9 A. Yes, technical analysis. 1 9 obviously people in the Den knew that we were in the ?
2 0 Q. What do you mean by "technical analysis"? 2 0 float lock down so questions came up about it. [
2 1 A. Technical analysis is the use ofa stock 2 1 I believe it was after the Indianapolis ..
22 chart and various indicators that can be located on 22 class that l simply said l‘m just not going to talk
2 3 that stock chart to determine from the past what may 2 3 about them anymore, period. {
24 happen in the future; that is the art oftechnical l 24 But, I mean, we talked about them from
2 5 analysis. I 25 share structure stuff to what the charts look like.
Fage 349i Page 351
1 Some people refer to technical analysis as i 1 I mean, that's ~— they were there. You know,
2 removing the emotion hom trading because you're 2 they're reading the stuff on the Den so they ask me Q
3 simply using technical parameters as opposed to, 3 questions. They were not a topic. Let‘s put it
4 gosh, l love this stock. I 4 that way.
5 Q. Okay. Did you discuss stock I 5 Q. At various times on Investors Ielub, did you
6 recommendations or did you suggest stock 6 communicate to Den members that technical analysis
7 recommendations in those Monkinars? 7 goes out the window when dealing with float lock ig
8 A. Not recommendations. ltalked about the g 8 down stocks?
9 technical parameters, which I called signal 9 A. Absolutely.
1 O confirmation and continuity, to where I think a 1 O Q. So really it's a concept that’s completely
1 1 trade should be entered based on day trading as 1 1 separate nom the technical analysis that you do?
12 opposed to the long-term holds and then, of course, i 12 A. Well, technical analysis can be used to a I
1 3 when continuity broke, that would be an exit signal. i 13 certain extent but when something goes what you X
14 Q. Did you discuss any —— did you discuss I 1 4 would consider parabolic, you can throw charts out
1 5 stocks which in your opinion technical analysis i 1 5 the window at that point because it's operating
1 6 would suggest were good purchases? 1 6 purely on emotion and momentum.
17 A. Possibly. A lot of people ask about 17 And ifthe —— ifthere is covering going 3.
1 8 symbols at given times and we would put the chart up 1 8 on, then that’s going to propel the price to where I
1 9 and take a look, but I simply can’t remember every i 1 9 technical analysis simply does become useless at
2 0 stock that was ever mentioned. i 2 0 that point.
2 1 Q. Did you discuss the float lock down stocks 2 1 Q. And in the other —— in the January Q
22 during the Ivlonkinars? 22 classes, did you discuss these same aspects ofthe
2 3 A. During the December class and the i 2 3 float lock down?
2 4 January —- the two January classes, float lock downs , 2 4 A. Again, share structure, what the charts I
2 5 were brought up from a charting perspective, yes. i 2 5 looked like at that point. Keeping in mind at that
I 22 (Pages 348 to 351)

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Page 352 Page 354
. . I I
1 point, you know, there was no super substantial I 1 don't remember the order. Over the course ofthe I
2 movement in them. 2 year, I was in Pittsburgh, San Antonio. Portland. I "
3 Q. Did you discuss the fact that —— did you 3 was all over the country and even the world.
4 discuss the concept of locking the float'? 4 Q. But to your recollection, were any of G
5 A. Yes. t 5 those before Indianapolis in May 20I0?
6 Q. Did you discuss the concept ofholding to 6 A. I simply don't remember the times. g
7 trigger a short squeeze? E 7 BY MR. OBEYESEKERE ~
8 A. Yes. i 8 Q. One last question on this topic, and I
9 Q. When did the Indianapolis Monkinar take 9 apologize. I believe you’ve already answered this,
1 0 place? t 1 0 but -- I
1 1 A. Again, I‘m not a hundred percent specific l 1 1 A. That’s okay. .
12 on the dates, but I believe it was May. E 12 Q. —— other than the private sale to g
13 Q. May 20I0? 13 Mr. Roth, did you make any other private sales of
14 A. Yes. E 14 CDIV? f
15 Q. Prior to that time, apart from the classes I 15 A. No, I don't think so. I
1 6 that you mentioned, were there any other classes 1 6 MR. OB EYESEKERE: Okay. Let's take a
1 7 that you have a specific memory ofdiscussing the E 1 7 break. 10:15. .
1 8 float lock down stocks? { 1 8 (A break was taken from I
19 A. Not-- no. 1 9 10:15 a.m. to 10:30 a.m.) [
20 BY MS. CURTIN I 20 MR. OBEYESEKERE: We're back on the
2 1 Q. Did you have other classes between the i 2 1 record. It's 10:30 a.m. i
22 Richmond in January and the May Indianapolis in May? I 22 Q. Mr. Williams, when we were offthe record, .;;
23 A. I believe I held a class in Groton 2 3 was there any conversation between you and the Staff
2 4 in-between there. I 2 4 regarding the substance of this matter? I
25 Q. Groton, Connecticut'? t 2 5 A. Just spelling. f
Page 353 i Page 355 R;
1 A. Groton, Connecticut, yes. i 1 Q. Okay. I'm going to turn your attention
2 Q. When was that? I 2 now to a company called 8000, Inc., which we had t
3 A. I don't remember. It was cold. It was 3 previously discussed that was called as a float lock Qt
4 snowy. i 4 down stock. Approximately when was the stock called V,
5 Q. Winter 20l0? g 5 as a float lock down stock?
6 A. Yes. r 6 A. Approximately end of 2009. r
A 7 Q. Did you hold any other classes between the i 7 Q. Okay. I believe ~— _i
8 Richmond class in January and the Groton class in l 8 A. The play was originally called in October g
9 May —— excuse me -— the Indianapolis class in May 9 of 2009. It was later called as a float lock down. Y
10 other than the Groton class? I 10 Q. Okay, thank you. I
1 1 A. I was in Phoenix at some point. i 1 1 A. My pleasure, assuming that's what you I
12 Q. So you also have a Phoenix Monkinar? l 12 wanted. Y
13 A. Yes. I simply don't remember the dates. 13 Q. That is, and I tell you not to anticipate
1 4 I've taught 17 or 18 classes. I simply don't t 14 my questions, but for that one time I appreciate it. ~
1 5 remember the orders or the exact dates. 15 How did you hear about 8000, Inc.?
1 6 Q. Okay. I’m trying to figure out, so we had 1 6 A. How did I hear about 8000, Inc. I was G
1 7 Groton and Phoenix in-between Richmond and 17 introduced via a person named Robert I-Iainey to the
1 8 Indianapolis. Do you remember another one? 1 8 stock of 8000, Inc. I
1 9 A. Not specifically, no. Well, like I say, t 1 9 Q. Whos Robert Harney? I
2 0 we had two in L.A. and then there was a Groton and a 2 0 A. Robert I~Iainey is a person that I knew via
2 1 Richmond and a Phoenix. E 2 1 Tina Marie, and we had spoke about various other .
22 Q. Okay. And then eventually you had E 22 companies, not all of the symbols I could remember y
2 3 Indianapolis in May. Do you remember any other one i 2 3 but some I could, and he suggested that this might
2 4 up until Indianapolis in May 20I0? l 2 4 be a stock that I would consider to take a look at.
2 5 A. Not specifically. There may have been. I 2 5 Q. Is Mr. Ilainey a stock promoter? Q
23 (Pages 352 to 355)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 25 of 83
Page 356 Page 358 y
1 A. I have come to learn that Mr. Hainey is 1 Q. What was your involvement with the three q.
2 far worse than a stock promoter. , 2 stocks that you mentioned? Y
3 Q. When you say that, what do you mean? 3 A. BCl~IC was a coffee company that Mr. Hainey, ‘
4 A. I've learned things in the past few months 4 you know, told me that they were going to be ,
5 that indicate to me that Mr. Hainey is, for lack of I 5 opening, coffee and yogurt shops and that this is a .
6 a better term, straight upjust not a very nice 6 great one. The tloat's low, that type ofthing, "
7 person. 7 that I should get involved in the play. I did. J
8 Q. I mean, are you implying that you've 8 I later received I00,000 shares. I I
9 learned things that indicate Mr. Hainey is involved 9 listened to Mr. Hainey perpetually talk. The stock
1 0 in illegal activity? 10 actually did have a low float. The stock actually r
1 1 A. Well, I don't know whether or not it would 1 1 did do well, but with my continual listening to ;
12 be specifically illegal or legal, but I would say 12 Mr. Hainey, I ignored my charting ability and Q
1 3 that he’s pretty much a con man. 13 actually ended up holding the stock f`or loss. gg
14 Q. What have you learned about Mr. I·lainey in 14 Q. Was Mr. Hainey involved in promoting BCHC? Y
1 5 the last few months that led to this conclusion? 1 5 A. Well, at the time, I didn't know that he _?
1 6 A. That he frequently lies to people; that he 1 6 was a promoter. I knew that based on the
1 7 makes promise after promise after promise that he 17 conversations that I had had with Tina and
18 doesn't keep. I mean, that would be the general 1 8 Mr. Hainey, that he put companies together and kind g
1 9 scenario. I 1 9 of did like reverse mergers into shells, that kind ,
2 0 Q. In what context was he -— first of all, 2 0 ofthing. I
2 1 how did you learn this information? 2 1 You know, that he helped provide financing P
22 A. It has come out in the course of my 22 to companies, that type of thing, and I later found
2 3 searching of documents and speaking to people in the l 2 3 out that, again, basically he`sjust a promoter.
2 4 course ofthis investigation, as well as actions S 2 4 Q. Was he involved in promoting BCHC? 7,
2 5 that he promised me would happen that never did. i 2 5 A. Yes. Q
Page 357 Page 359
1 Q. Okay. You said in terms ofhe makes false I 1 Q. Did you recommend BCIWIC to the Den? Q
2 promises and frequently lies. About what did you g 2 A. I did talk about it on the Den and played 1,
3 believe he lied about? 3 the stock, as well. if
4 A. One particular situation was he told me t 4 Q. Did you make any profits off of BCHC?
5 that he was unable to complete a transaction because 5 A. Again, as I said, I ended up holding the IY
6 he had not been paid, and I later found out that he I 6 stock for loss.
7 had, in fact, been not only paid, but paid —- and 7 Q. When you said you held it for a stock, you q
8 essentially told the same folks that he had been -— 8 actually got the shares for tiee, correct?
9 had not been able to be paid, so they reimbursed him 9 A. Well, I also bought and traded shares. My
1 0 in a cash manner and then he actually did receive 1 O cost value by the time I was done even with the free
1 1 shares on a company and then sold them as well. i 1 1 shares I still ended up take taking a loss.
12 Q. Mr. Hainey, I understand was involved in a I 1.2 BY MR. KELCOURSE Q
1 3 company called Sungro? 1 3 Q. Why did you receive those hundred thousand
14 A. Correct. I 14 shares? *
15 Q. Okay. I’m going to come back to that 1 5 A. Again, Mr. Ielainey, you know, said that if
1 6 later. Other than that, that stock, were you 1 6 I was able to, you know, bring some attention to the I
1 7 involved with any other stocks with Mr. Hainey? 1 7 stock, that type of thing, because it had such a low ;
r . . . .
1 8 A. Yes. g 1 8 float, the company is going to do this, that and the .
1 9 Q. What were they? 1 9 other; essentially promised me the moon, that this
2 0 A. One specifically was bravo, charley, helo, l 20 company was -— as I recall, it was a Philippine I
2 1 charley, Bona Coffee. BCIIC. I 2 1 coffee company. »
22 Q. Any others? I 22 And he was —— he would tell me, like, I .
2 3 A. Another was TRXX, XYTS, and there were i 2 3 guess there’s an area outside of San Diego that’s g
2 4 others that we spoke about, but I can't remember all 2 4 actually called the Little Philippines and that they 4;
2 5 the symbols. 2 5 were going to, you know, open a store here.
24 (Pages 356 to 359)

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Page 360 Page 362 g
1 I mean, lie’s sending me pictures of i 1 and only talked about the chart and what was ;
2 locations and, you know, we’re going to lease this 2 publicly available. `
3 building. This is how much it’s going to cost. E 3 Q. Did you make any money offof your plays {
4 l·lere’s our projected revenues or whatever. i 4 on -- off of any purchases of sales of TRXX? I
5 l later found out-- I mean, like I said, i 5 A. Ifl did, it was insignificant. I didn't *
6 you know, when you're dealing with somebody and they i 6 play it to a large extent. ig
7 talk as sophisticated as they do and they rattle off 7 Q. Did you receive any compensation from the t
8 all ofthese hifalutin—sounding terms and 8 company? f
9 regulations and, you know, they do these things, you W 9 A. No. 2
10 believe them. And, you know, it’s like I truly i 10 Q. Did you receive any compensation from any
1 1 expected at the time that he was actually putting I 1 1 other source that's related to TRXX? i
1 2 companies together. I mean, he had told me about E 1 2 A. No.
13 some health insurance company. I don't remember the i 1 3 BY l\/IS. CURTIN A
1 4 name, I’m sorry, but he's like you see that stock? i 1 4 Q. When you said you played TRXX -— and ?
1 5 ltjust went to $4. I put this company with this i 1 5 you've used that term a lot through the testimony. I,
1 6 company and, you know, I knew they were shorting it, i 1 6 What do you mean when you say you played it?
17 so I held it and, you know, I would only put up this 17 A. By "played" I mean I purchased and sold. »
1 8 much or this much or this much as it was going up. i 1 8 Q. So you traded? i
1 9 The broker calls me and says, you know, I 1 9 A. Correct. I
2 0 I’ve only got-- he's like I’ve got to cover this or 2 0 Q. Does play mean anything else any other I
2 1 that or what have you. I·le's like I'll buy these for i 2 1 transactions? `
22 this or I'll buy this for that, and I was like, no, g 22 A. I don't think so. Typically, if you say I
23 I wouldn't do it. I 23 you’re playing a stock, it means you're in. You .7
2 4 BY MR. OBEYESEKERE I 2 4 actually have a position. *
2 5 Q. Let me ask you more simply, did Mr. Hainey 1 2 5 Q. And you used that terminology with your
Page 361 Page 363 Q_
1 ask you to promote BCHC? I 1 Monk's Den members?
2 A. Not specifically promote, but he did say, 2 A. Sure. {
3 you know, would you talk about this and see ifyou 3 Q. And they knew what you meant when you said Q
4 like it. 4 you played it'? I
5 Q. Was it your understanding you were getting 5 A. Mh-hmm.
6 the hundred thousand shares for talking about the 6 BY MR. OBEYESEKERE
7 stock —— talking about the stock on the Den? l 7 Q. "Mh-hmm" is yes? @3
8 A. Yes. E 8 A. I'm sorry. Yes. 1
9 Q. Moving to TRXX, how was Mr. l—lainey 1 9 Q. I'mjust going to go back to the next i
1 O involved in that? i 10 stock, XYTS. Was Mr. Hainey involved in promoting A
1 1 A. Mr. I-Iainey again called me and said this 1 1 that stock?
1 2 was a particularly low float with apparently a i 12 A. Again, I don‘t know that it would be
1 3 really good company model, which I don't i 1 3 called a promotion. This was my first introduction
1 4 specifically remember at the moment, but he's like 1 4 to Mr. Hainey from Tina Marie. I was told about the I
1 5 it’s a low float. The chart looks good. It's had i 1 5 company. I received no free shares. l'll say that,
1 6 increased volume lately. You should take a peek, so I 1 6 nor did I receive compensation.
1 7 I did. i 17 I was told about it; that it had a low I
1 8 And he's like, you know, ifthis thing E 1 8 float; that they were doing some type ofmedical 4
1 9 really gets going, he says I think I have a i 1 9 research and that, you know, it would be a really I
2 0 potential deal with these folks. I may be able to 20 good play to look at, so I did. g
2 1 take care of you on this. 2 1 I knew that Tina Marie had shares in it
2 2 Q. Did you receive any shares ofTRXX? i 22 and, again, I spoke with Mr. Hainey. I—le's like, i
2 3 A. No, sir. i 23 yeah, we’re bringing in this, you know, medical guy.
2 4 Q. Did you recommend TRXX on the Den? 24 He's the top whatever in his field. Again, I don't Q
2 5 A. Not specifically, but I did play the stock 2 5 remember the specific conversations. if
25 (Pages 360 to 363)

. - ‘ - - |•3 {L I• .n·n 4 - ·•| ° '.•· • 3
Page 364 Page 366 j
1 Short answer. it never happened. I I 1 in promoting the company? »
2 attempted to buy at I\/lr. Hainey`s request private I 2 A. At this particular point, he only referred
3 shares in the company. I paid for them. I received 3 to no type of promotion at this point. I·le spoke to
4 them. I was unable to clear them and I didn't get 4 me about needing to get the stock over 2 cents to ,j
5 my money back. 5 become DTC illegible and meeting a certain volume
6 Q. Did Ivlr. llaine ever rovide —— make any 6 re uirement. I don't recall what it was at the
Y P i Q
7 cash payments to you? 7 time.
8 A. Possibly. i 8 And he asked me ifl thought the company
9 Q. And what would that be in relation to? I 9 was worth playing and did I think that we could get
1 O A. I don‘t remember specifically, but —— and 1 O to that point, and I looked at the chart and I
1 1 I'm not even sure that he did. Ijust kind ofsort 1 1 looked at the previous volume on it and I looked at
12 of remember at one point that he owed me money 1 2 the share structure and I said, yes, I do think we
13 because I had given him money on a couple different 1 3 can get there.
1 4 occasions for things that fell through and I think 1 4 Q. And how were you —— did he ask you to help
1 5 he refunded one ofthem. . 1 5 him get there? _
1 6 Q. Has Tina l\/Iarie ever provided you cash i 1 6 A. Well, I think that's we'vejust
1 7 payments other than in the context of we've I 1 7 established, yes.
1 8 discussed -— let me strike that. % 1 8 Q. Okay. And what did you do? Did you agree e3?
1 9 I'm going to move back on to 8000, Inc. i 1 9 to help him get there? ~;
2 0 You mentioned that Mr. —- you learned about 8000, 20 A. Yes. §,
2 1 Inc., through Mr. Hainey. is that correct? E 2 1 Q. And what did you do to help him get there?
.22 A. Yes. i 22 A. Again, I looked at the chart and the {
2 3 Q. And what did he tell you about the I 2 3 volume and the share structure and I thought we
2 4 company? 2 4 could get there, so I started posting the chart and
2 5 A. l~le told me that it had a low float. l~le 2 5 talking about the la on the boards.
_“wM____WWm__Mm_M‘“___Mh“____1w________ _W_______»_*_*___“___W”P Y _
Page 365 Page 367
1 told me about some ofthe things that they had going 1 Q. And so, essentially, when you say you
2 for business; that they needed to get over 2 cents i 2 posted the chart and talked about the play, you e
3 in order to be -— excuse me -— DTC eligible. 3 recommended it to the Den, on the Monk’s Den message
4 And at this point or shortly thereafter, I I 4 board?
5 took a look at the iloat and agreed that it was 5 A. I think so, yes.
6 pretty low and started to play the stock. At the 6 Q. And did you post on any other boards?
7 time the price was .008, as I recall. ‘ 7 A. Well, the 8000, Inc., board, and I may or Q?
8 And at any pgittt did ygti get in tgtigh with g 8 may DOI have put it OH other bOa1'ClS. l Clehii l<l1OW.
9 the company? 9 For the most part, I stuck to the Monk’s Den and/or
1 O A. Yes. 1 O stock specific boards.
1 1 Q. And how did that come about? I 11 Q. Did you become a moderator ofthe 8000,
12 A. It came about I received a message from 12 Ine., message board? in
1 3 Jonathan Bryant, who told me that we had a mutual 13 A. I believe I was for 3 while, yes
1 4 friend. At this point, I didn't know who he was . 1 4 Q. Was that around the time that you started Q,
1 5 referring to. And I started speaking with him about 15 to first play the stock? _,
1 6 what the company looked like and the share 1 6 A. I believe so.
1 7 structure, and he started to tell me about the , 17 Q. And subsequent to that, any of the Den
1 8 various companies that were under the 8000 income I 1 8 members become moderators of the 8000, loo.?
1 9 umbrella and that's how it came about. 1 9 A. I believe so.
20 Q. And when did that call take place or that t 20 Q. And who were they? _
2 1 contact take place? i 2 1 A. I dont remember. I think Blockman went {
22 A, Approximately November-ish, thereabouts. i 22 along. Well, now X Blockinan was. I think the
2 3 Q. ZOO9? 2 3 aforementioned Louis Fortunato was for a while. I
2 4 A. I'm sorry 2009. 2 4 think done may have been for a little while.
2 5 Q. Did Mr. Bryant ask you to become involved 2 5 Q. In the period following December 2009
26 (Pages 364 to 367)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 28 of 83
368 Page 370 gt
1 through to October 2010, was it primarily Den 1 A. In Barbados.
2 members who were moderators on the EIO H board? 2 ‘ Q. Where? {
3 A. There was a main moderator who was already 3 A. Where'?
4 there long before I knew about it, but —— and there 4 Q. Yes. {
5 may or may not have been some additional assistants. 5 A. Where or when? Y
6 but there were definitely transient Den members that 6 Q. Where. Barbados is a big island.
7 were moderators throughout the course oftime. 7 A. Actually, it's not a big island. lt's one
8 BY MR. KELCOURSE 8 ofthe smallest ones, but I stayed at a place called
9 Q. Who was the main moderator at that point? 9 the Almond Beach Club and that's the first physical
10 A. I don’t know his full name, but his 10 location where I met him.
1 1 on—line screen name was Dhana, D—H-A-N—A, as I 1 1 MR. OBEYESEKERE: Maybe we shouldjust
12 recall. I don’t know ifthat's pronounced Dhana or 12 take turns. Let me finish up and I'll turn it over
1 3 Dhana or some other variation. 1 3 to you.
1 4 Q. When you were referring to the boards, 1 4 BY MR. OBEYESEKERE
1 5 these boards were all on Investors Hub? 1 5 Q. I want to wrap up here on some ofthe
1 6 A. Yes. 1 6 compensation, if any. With regard to your
1 7 BY MR. OBEYESEKERE 17 discussions with Mr. Bryant in which you talked
1 8 Q. And, again, l‘m sorry. What was the date 1 8 about getting the stock over 2 cents or .02 cents, Q
1 9 that you called the stock in float lock down? 1 9 did Mr. Bryant offer you any compensation for that'?
2 0 A. I don’t recall the specific date. I 20 A. Mr. Bryant did not offer me compensation
2 1 originally called the stock for play in October. It 2 1 for that at this point, although later he did pay me
2 2 later became a float lock down. 22 as a thank you and to come down to teach this class
2 3 Q. Was it subsequent to your meeting or your 23 when I first met him and to learn more about the
2 4 message from Mr. Bryant? I 2 4 company. Q
2 5 A. Yes. l 25 He gave me shares. I don’t remember the
Page 369 Page 371
1 Q. Did you discuss calling the stock as a 1 specific amount, but it was enough to cover my
2 float lock down with Mr. Bryant? I 2 expenses to go down and a little extra to teach a
3 A. I believe we spoke about that when I 3 class.
4 visited him and I later did call it. 4 MR. MARGOLIS: Can we ——just so the
5 Q. And when did you visit him? I 5 record is clear, did you teach him a class?
6 A. l’ve actually visited him a total ofthree I 6 THE WITNESS: I did.
7 times, the first of which was December 26 to January I 7 MR. MARGOLIS: Okay.
8 lst of`2009. i 8 BY MS. CURTIN
9 Q. And it was after that visit that you § 9 Q. Was that during your second or third
1 0 called the float lock down? 1 0 visit?
1 1 A. Yes. 1 1 A. It was during the first.
12 Q. And did you discuss -- 12 Q. The first visit?
13 A. Well, I want to be clear. l‘m not l00 13 A. Yes.
1 4 percent sure that it was after, but I believe it 1 4 Q. So you were talking about the first visit.
1 5 was. 15 Did you go down to Barbados at Mr. Bryant's
1 6 Q. Did you discuss calling the 8000, Inc., as 1 6 invitation in December 2009?
1 7 a float lock down with Mr. Bryant on that visit? 1 7 A. Yes.
1 8 A. I think so, yes. I 1 8 Q. He asked you to come down?
1 9 Q. And at that point had you —— did you agree 1 9 A. Well, we spoke back and forth and thought
2 0 with Mr. Bryant that you would call the stock as a 20 it would be a good idea to meet. I don’t remember
2 1 float lock down? 2 1 specifically whose idea it was, but, you know, we
22 A. I wouldn't a agree, but we spoke about it I 2 2 talked about we should meet sometime and wejust
2 3 and I thought it was a good idea. I 2 3 worked out a time that worked.
2 4 BY MR. KELCOURSE I 2 4 BY MR. OBEYESEKERE
25 Q. Where did you meet with Mr. Bryant? l 2 5 Q. Do you havejust a general recollection of
o 27 (Pages 368 t;o 371)

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Page 372 Page 374 _»
1 the amount of shares that you received? 1 A. Yes. i
2 A. I think it was 2 million, which at the 2 BY MS. CURTIN I
3 time would have been worth based on the .00815. 3 Q. And that was before your Iirst trip to {
4 $16,000. Again, prices fluctuated at that time, so. 4 Barbados, right? K
5 you know, halfa tick makes a big difference. 5 A. Yes. A
6 Q. And about when did you receive those 6 Q. So does that change your earlier testimony
7 shares? 7 where you said you thought you called it after your
8 A. I really don't remember specifically. I 8 first trip to Bahamas? I.
9 want to say in the general time name of 9 A. I was also very clear that I did not
10 November—ish, but I can‘t be specific. 1 0 remember the specific time frames. Again, we are
1 1 Q. That's November of 2009? 1 1 talking two years ago. I mean, a month one way or
12 A. Correct. I 12 another, no, I don't specifically remember, but
1 3 Q. And subsequent to that did you ever i 1 3 looking at this, yes, it does help refresh my l;
1 4 receive any other shares from either Mr. Bryant or 1 4 recollection that I apparently called it in
1 5 any other source apart from what you've purchased on 1 5 December. g
1 6 the o en market? t 1 6 Q. And you called the lock down at what
P { .
17 A. No. t 17 price?
18 BY MR. KELCOURSE 18 A. I first spoke ofthe stock as .008.
1 9 Q. Mr. William,just to be clear, when you 1 9 Q. When you -— I noticed in previous exhibits Y
2 0 say "halfa tick," what do you mean? 2 0 when you called a lock down. you cited a price. Was
2 1 A. An increase in price or a decrease in 2 1 that the price at the time you called the lock down
22 price. 2 2 or did it have another meaning, the price? g
23 Q. When you say "halfa tick," what amount do l 23 A. Well, l'm saying in this particular case, 3.
24 you mean by "halfa tick"? 24 that my first call of EIGH was at .008. Y
25 A. Well, in the case of.008, halfa tick 25 Q. So if we looked at the record ofthe price
Page 373 Page 375 .i._
1 would be .0085 on the way up or .0075 on the way 1 ofEIGH, we would see that on December 15th, 2009,
2 down. i 2 it was trading at .008? f
3 (SEC Exhibit No. 203 was marked 3 A. No, that’s not what I said. I said at the
4 for identification.) 4 time that I first called the stock, it was .008. I
5 BY MR. OBEYESEKERE 5 Q. Does that mean when you first played the
6 Q. I'm going to show you, Mr. Williams, 6 stock back in October Z009?
7 what's been marked as Exhibit 203. It's a document ( 7 A. That would sound accurate. I can‘t speak
8 Bates stamped WILLIAMS 10807 through 10808, ifyou 8 as to what the price exactly was here in December. .
9 would take a moment to look at that and tell me if i 9 Obviously, it was over a penny apparently. 3
10 you recognize those e-mails. 1 0 Q. So when you conveyed —- when you said you *
1 1 (Reviewing document.) 1 1 called the lock down on EIGH and you cited the price
12 A. This looks familiar, yes. 12 at .008, what were you meaning to convey?
13 Q. Again, this is a series ofe—mails between 13 A. That’s not what I said. {
14 you and an individual whose address is -- appears to 14 Q. l'm asking what were you meaning to f
15 be R. Waters. Do you know who that is? 1 5 convey? We've seen here in documents that when you Q
1 6 A. Yes. § 1 6 refer to EIGH's float lock down, you have a price
17 Q. And who is that? 17 next to it of.008. What does that mean? What did ;
18 A. 1-lis name is Rich Waters. 18 you mean it to mean? *
19 Q. Does this refresh your recollection as to l 19 A. Okay. Youjust said that I said --
2 0 when you called IEIGH as a float lock down? 2 0 THE WITNESS: Can you read back what F
2 1 A. By looking at this, apparently I called it 1 2 1 she said about October, please?
22 in December. l 22 (Question read back.)
23 Q. Around December 15th? l 23 BY MS. CURTIN if
24 A. Approximately. s 2 4 Q. Let me draw your attention, I think it’s ?
25 Q. And that’s of2009? , 2 5 to Exhibit 170 which is the Investors I·Iub info box. j
28 (Pages 372 to 375)

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Qage 376 Fage 378
1 It included the info box. 1 Q. But you called EIGH as a play in or about I
2 A. Again, the point that I'm making right 2 October 2009, is that accurate?
3 here is that you're saying that l'm referring to the 3 A. Correct. I believe so.
4 float lock down price as .008 and that’s not 4 Q. And at that time when you called it as a
5 accurate. 5 play, it was .0O8?
6 Q. Okay. I 6 A. In October, yes. H
7 A. What I said is the time that I called it E 7 Q. And is that all you meant when you state _
8 in October the price was .008. Clearly, in December i 8 price called? I
9 it was in excess ofa penny. l 9 A. Yes. 4.
10 Q. Okay. But l’m going to draw your 10 Q. Okay. You testified earlier that I
1 1 attention to Exhibit 170 and ifyou could take a r 11 Mr. Hainey had introduced you to the stock, EIGH? {
12 look at 170. 12 A. Yes. .
1 3 A. Okay. l 1 3 Q. How did he introduce you specifically? .7
1 4 Q. And if`you go to that page, you‘re looking 1 4 Tell me, when and how did he tell you about EIGH?
1 5 at JW 2459. Do you see that? 1 5 A. I can't speak to the specific of` when.
1 6 (Reviewing document.) 1 6 Again, he called me and said, you know, I`ve got a I
1 7 A. Yes. g 17 stock you should look at. Take a look at the float. t
1 8 Q. Okay. And the second —— you say here I 1 8 Read the last few PR's.
1 9 Monk's Den plays at the top, is that right? I 1 9 I think these guys are going to be doing .
2 0 A. Yes. . t 2 O some mergers and acquisitions. You know, the float
2 1 Q. Okay. And the second line. it says EIGH 2 1 is tiny. You know, it's right up your alley. s
22 price called 0.008. What do you mean by that? 22 You'll love it.
2 3 A. I mean that the time that I called that 2 3 Q. Okay. You called the play in October I
2 4 stock the price was .008, but I will also reiterate, I 24 2008 —— 2009. Did I\/lr. Hainey contact you before you
2 5 as I testified yesterday, I did not create this 2 5 did that? ,
Page 377 Page 379 {
1 table. 1 A. Yes.
2 Q. Okay. You don’t know who created this 2 Q. Do you know how —— how much earlier he had
3 table? Is that your testimony? I 3 contacted you? ;
4 A. I believe Don created it, but I can't 4 I A. lfl —— again, l’m only guessing, but .
5 swear to that. ' U · 5 maybe two weeks.
6. Q. Okay. Did you ever write or did you ever g 6 Q. So maybe the end of September 2009, ;
7 represent anything similar to this, that you had I 7 beginning of October 2009?
8 called EIGH at .008 and that you had called it on 8 A. Sounds about right. g
9 December l5th, 2009? t 9 Q. Okay. And Mr. Hainey, you testified, did I
1 O A. Well, what you need to keep in mind is 10 you know Mr. Hainey personally before you began to
1 1 what I'm looking at here, as I recall, is this was I 1 1 talk to him about potential stocks, the stocks that Y
1 2 the first time that I —— again, I didn‘t create this 12 you've talked to —- you testified you've talked to ·
1 3 table. 1 3 him about? g
14 Q. Right. But my question to you is, did you 14 A. No. I only met him through Tina Marie I
1 5 ever represent or post on your Monk's Den lhub ” 15 when we —— the first thing we ever spoke about was 7
1 6 message board or the 8000, Inc., message board on 16 XYTS and I did not know him prior. .
17 Ihub that you called EIGH on December l5th, 2009, 17 Q. And when did you first speak to him about 4
1 8 and that the price called was .0O8? 1 8 XTYS? 2
1 9 A. What I‘m representing is that I did not 1 9 A. Actually, it's XYTS. I
2 O create this board or ~— excuse me -— this table; 2O Q. XYTS. $
2 1 that the price that I originally called EIGH was E 2 1 A. But I don’t specifically remember. I
2 2 .008. I believe it was December l5th when it was 22 Q. Was it before you began playing EIOH? j
2 3 further called as a float lock down. 2 3 A. Well, yes, because XYTS was our first
2 4 Q. So —- l · 2 4 contact. · · g
2 5 A. At that time the price was not.008. I 2 5 Q. How much earlier had you spoken to Harney
29 (Pages 376 t;o 379)

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I Page 380 E I Page 382
1 about XYTS? 1 call Mr. Hainey? s_
2 A. I don‘t remember. I 2 A. Again, Tina Marie had talked to me about ‘
3 Q. Was it in 2008? 3 XYTS; told me that she liked it, small float. She I
4 A. I don‘t remember. 4 had a position and that Mr. I-Iainey was involved in I
5 Q. You can't tell me today whether it was in 5 helping with the merger and the hire of all these
6 2008 or 2009? 6 people; that it would be a good idea for me to talk I
7 A. I don’t remember. E 7 to him so I did. e
8 Q. Okay. You're not a childhood Hiend of E 8 Q. Okay. So did you physically meet with
9 Mr. Hainey's? 9 Mr. Hainey? j
1 0 A. First time I met Mr. Hainey was when we I 1 0 A. Yes.
1 1 spoke about XYTS. I do not remember the specific i 1 1 Q. Okay. And when did you meet with Qi
1 2 date in which that occurred. l 1 2 Mr. Hainey?
1 3 Q. Do you know the name ofthe company, the I 13 A. I don’t remember specifically.
1 4 symbol XYTS? 14 Q. But you met with him in Rhode Island? Y
1 5 A. I do know the name. 1 5 A. Yes. QQ
1 6 Q. Of the company who has the symbol XYTS? 1 6 Q. Did you meet with him at his house?
17 A. Yes. I 17 A. No. ;
1 8 Q. What's the name ofthe company? I 1 8 Q. You met where?
1 9 A. Xytos, Inc. I 1 9 A. Panera Bread. p.
2 0 Q. Xytos, Inc. And so when you began talking 2 0 Q. Do you remember what city? Town? ?
2 1 to Mr. Hainey, were you telling me that you were 2 1 A. Warwick or West Warwick. I don’t remember .
2 2 introduced to him by Tina Marie via Ihub message 2 2 specihcally where the line is, but thereabouts. g
23 board? l 23 Q. And did you meet with Mr. Ilainey in person Q
2 4 A. Well, that's where I met Tina Marie. At 2 4 other times after that?
2 5 that point, Tina Marie and I spoke via phone on li A. Yes.
Page 381l Page 383
1 routine occasions. l 1 Q. How often did you meet with Mr. Hainey f
2 Q. And what is her name? 2 between the first time you met him and now? How
3 A. Tina Marie. 3 often have you met with him?
4 Q. That's her real name? i 4 A. Maybe in total six times.
5 A. I don’t know. I 5 Q. Six times. And when was the last time you _
6 Q. You don't know her last name? 6 met with him in person? {
7 A. As I testified yesterday, I don’t know her 7 A. I believe, and this may not be a hundred
8 actual name. It could be Tina Marie. I don't know. 8 percent accurate, but approximately September 2010. I
9 Q. Okay. And Tina Maria introduced you to l 9 Q. September oflast year?
10 Robert Hainey? 10 A. Yes. Y
1 1 A. Yes. 11 Q. And when you met with Mr. Hainey, did you ,.
1 2 Q. Did she introduce you by telephone? Did 12 only talk about-- is it Xytoco? j?
1 3 she introduce you by message board? Did she 13 A. Actually, it was Xytos. f
1 4 introduce you by e-mail? 1 4 Q. Xytos. Did you only talk about Xytos
1 5 A. We spoke via phone. She gave me his i 1 5 during that first meeting? gi
1 6 number. I called Mr. Hainey. We then later rnet I 1 6 A. During that first meeting, no. Again, he
1 7 relatively close to his home. 1 7 told me about the recent health company that he had p.
1 8 Q. And Mr. Hainey, he lives in Connecticut? 18 called or worked with or what have you that went §
1 9 A. No, ma’am. t 1 9 from, like, 50 cents to $4 and something or
2 0 Q. Where does he live? I 2 0 whatever. ep.
2 1 A. Rhode Island. ’ 2 1 He was telling me again how, you know, he
22 Q. I·Ie lives in Rhode Island. You were living 22 was introducing companies to each other and playing
2 3 at the time where? Connecticut? 2 3 an active part in putting them together for
2 4 A. Yes, ma’am. 2 4 hnancing and then we spoke about XYTS. i
2 5 Q. Okay. And why did Tina Marie tell you to i _ 2 5 Q. And then did you talk during that first
30 (Pages 380 to 383)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 32 of 83
Page 384 Page 386
1 meeting with Mr. Hainey about 8000, Inc.? l 1 And after that phone call, what did you `
2 A. No. At this point, I didn't know 8000, i 2 do?
3 Inc., existed. 3 A. I looked up the share structure and took a I
4 Q. Okay. And then what was the next stock l 4 look at the chart; that’s pretty much always my
5 that Mr. Hainey brought to your attention aner your 5 first action. ,
6 first meeting? i 6 Q. So you looked up the share structure of I
7 A. I believe, and again we‘re talking a 7 8000, Inc., and you looked up the chart for SOOO, {
8 substantial amount oftime ago, I believe it was via l 8 Inc.?
9 the aforementioned Bona Coffee Company. i 9 A. Yes, ma'am. of
1O Q. BCHC? I 1 O Q. How did you look up the share structure 2
1 1 A. Yes, ma'am. 1 1 for SOOO?
12 Q. And then after Bona Coffee, what stock did l 1 2 A. Share structures are readily available
1 3 he then bring to your attention? l 1 3 with the Secretary of State where they're §
1 4 A. Well, we spoke about TRXX and, again, he l 1 4 incorporated.
15 mentioned other companies on occasion. I mean, some l 1 5 Q. So when you say you looked up the share
1 6 ofwhich Ijust simply don't remember. I 1 6 structure, you were looking at the corporate filings
17 Q. And how many stocks did he mention to you l 1 7 for SOOO? Q
18 before he brought up SOOO? i 1 8 A. Yes. At the Secretary of State website
19 A. Again, to the best ofmy recollection, we 1 9 for the share structure. I
2 O spoke about the XYTS, the BCHC, the TRXX and, again, i 2 O Q. And do you remember where 8000 was
2 1 there were some others in there, but I simply don't 2 1 incorporated and had its filings? I
22 remember the symbols. l 22 A. Nevada. y
23 Q. Is it fair to say that you don't remember I 2 3 So you looked on line for what had been
2 4 those symbols because you ultimately didn`t buy 2 4 filed by SOOO with the State ofNe\/ada?
2 5 stock in those companies or receive stock in those 2 5 A. Yes, ma'am.
Page 385Z Page 387 it
1 companies? X 1 Q. And what did that show you about the share
2 A. Well, I did not receive stock in those 2 structure of SOOO? 2
3 other companies, no. I may or may not have played 3 A. That the fioat was, in fact, very low. I
4 them. Again, I don't play every stock that somebody 4 don't recall the exact amount, but it was very low. I
5 talks to me about. I 5 Q. What document did you see on hle with the
6 Q. And how did l\/Ir. Hainey —— do you remember 6 State of Nevada that gave you the iioat for 8000, {I
7 how Mr. Hainey brought up 8000 to you? Was it in a 7 Inc.?
8 meeting like this, like your first meeting in Rhode 8 A. I don't remember what it specifically was
9 Island or was it by telephone or was it by message 9 called, but you can find it there.
1 O board? Do you remember that? l 1 O Q. Okay. I thought yesterday you testified
1 1 A. It was by phone. 1 1 that the float is free trading shares in a company. ‘ it
12 Q. So there was a phone call in or about the 12 A. Yes.
1 3 end of September 2009, beginning of October 2009? 13 Q. Okay. With the State of`Nevada, what
1 4 A. Approximately. 14 filing would be with the State of Nevada showing the *
1 5 Q. Do you remember how long that phone call 1 5 free trading shares for 8000, Inc.? pj
1 6 was? 1 6 A. As I said a moment ago, I don't know
1 7 A. No. 17 exactly what it's called, but you can either go
1 8 Q. Do you remember what Mr. Ilainey initially 18 through there or get clicked —- you can link through
1 9 told you about 8000, Inc.? 1 9 to like OTC where the filings are there, as well. I
2 0 A. As I said a few moments ago, he told me 2 0 mean, I may be off on the exact website where it's
2 1 that they had a good business model, share structure 2 1 located, but you can get there.
2 2 was really low, talked about some ofthe things that 22 Q. Okay. So it may have not have been a
23 were under the umbrella ofthe 8000, Inc., brand, if 23 website for the State ofNevada that you looked at.
2 4 you will. Pretty much the extent of it at that 2 4 It may not have, in fact, been corporate filings.
2 5 point. 2 5 It may have been something else to get the share
31 (Pages 384 to 387)

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388 Barge ?90 ,
l 7
1 structure for 8000? 1 A. I'm sure that I have. I don't remember
2 A. Yes. 2 specific dates, but, yes.
3 Q. Could it have been OTC Markets that you l 3 Q. Other than perhaps corporate filings Y
4 looked at? 4 with —- or filings made with the State ofNevada, L
5 A. Possibly. It may have even been 5 corporate or otherwise, or perhaps information on
6 pinksheetscom. 6 pinksheets or OTC Markets, would there have been any
7 O. Okay. § 7 other place you would have looked for information
8 A. Again, this stuffis available in a lot of 8 regarding the share structure of 8000?
9 different places. 9 A. Not specifically I don't think.
1 0 Q. Okay. So what is pinksheets.com? 10 Q. Do you recall looking anywhere else for
1 1 A. It‘s a website that maintains information 1 1 that information other than those two locations?
1 2 about various companies. 1.2 A. Not specifically, no.
1 3 Q. Did you —— do you recall specifically if` 13 Q. Mr. Bryant, I understand, contacted you in
1 4 you saw something on pinksheets about 8000 share 1 4 November 2009, is that correct?
1 5 structure? { 15 A. Approximately. I mean, again, this was a Q
1 6 A. Again, l remember looking up the float, 1 6 long time ago. It may have been the end ofOctober.
1 7 whether it was on OTC Markets or pinksheet.com or 17 It may have been the last week in November but
1 8 whatever filings were on the Secretary of State, I t 18 around that time frame.
1 9 do not recall specifically where I saw it, but I l 1 9 Q. And Mr. Bryant called you because he told
2 0 remember looking at the share structure and 2 0 you you had a friend in common or knew somebody in
2 1 thinking, yes, that is a pretty small float. f 21 common? if
22 Q. Okay. This is either end of 2009, l 22 A. A mutual friend, as he put it.
2 3 beginning 2000 —— October 2009? 2 23 Q. And who was that?
2 4 A. Approximately, October. lfl called it, i 24 A. It turned out to be Mr. Hainey.
2 5 then l had already looked at it. t 25 Q. Did Mr. Bryant tell you how he knew
Page 389 Page 391
t A
1 Q. Okay. So you called it as a float lock i 1 Mr. Hainey? e_
2 down on September l5th, 2009‘? 2 A. He told me that they had been involved in
3 A. I believe it's December l5th. 3 plays before. S
4 Q. December 15th, 2009. So at that point you 4 Q. Okay. Did he tell you specifically which
5 had already looked at the share structure for 8000, 5 plays they had been involved together? j
6 Inc.? 6 A. Specifically, he told me that they were
7 A. I had looked at it prior to my initial 7 involved together on TRXX.
8 call in October. i 8 Q. Okay. Did he tell you what they did with Q
9 Q. Prior to your play? 9 TRXX?
1 0 A. Yes. I 10 A. At this point in time, no.
1 1 Q. Do you remember the specific date in I 1 1 Q. Did Mr. Bryant represent to you how many
1 2 October 2009 that you called the play for 8000, l 12 shares he had gotten in TRX or what his profits, if
1 3 Inc.? l 13 any, had been in connection with any play in TRXX?
1 4 A. No. l 14 A. No. At this point, no. In fact, I don't
1 5 Q. When you called the play in October 2009 i 15 think he ever actually told me about TRXX. fi
1 6 for 8000, Inc., did you begin playing that stock 1 6 Q. So when you said that Mr. Bryant told you Y
1 7 yourselfas well? Q 17 that he and Mr. Hainey had played TRXX, did you
1 8 A. I would have to look in my trading { 18 understand that that meant they had traded in TRXX? Y
1 9 records, but, yeah, I believe so. I 19 A. At this point in time, I believe that they
2 0 Q. So is it typical when you call a play in a 20 were playing the stock, yes. l
2 1 stock for you to also begin playing the stock Q 2 1 Q. Other than TRXX, did Mr. Bryant tell you
2 2 yourself? 22 what other stock, rf any, he and Mr. Harney played 1,
23 A. Yes. l 23 specifically? Q
2 4 Q. And did you ever see a quarterly report 2 4 A. To the best of my knowledge, he did not
2 5 for 8000, Inc.? E 25 represent that they had played in other plays
. 32 (Pages 388 to 391)

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Bage 392l Page 394 I
1 before. 1 Q. Yes.
2 Q. So as far as you know, TRXX is the only 2 A. In one ofthe meetings that I was down in 4
3 stock that they had played together? 3 Barbados, Mr. Bryant made out some types of flyers. °
4 A. As far as I know. 4 I don‘t have them, but I mean, as far as specific
— 5 Q. Did Mr. Bryant tell you how he had met 5 documents relating to the company. itself, no. I've
6 Mr. I-·Iainey? I 6 received no such documents that I know of
7 A. I don‘t know that they ever physically 7 Q. And what —- you testified you had three
8 met. 8 trips to Barbados to meet with Mr. Bryant.
9 Q. Did Mr. Bryant tell you how he had been 9 A. Mh-hmm. Yes, ma‘am.
1 O introduced to Mr. llainey or learned of him? 1 O Q. Which trip did you get the flyer?
1 1 A. No. i 1 1 A. The August of20lO trip.
I "" J;
12 Q. And Mr. Bryant-- let me ask you this; To i 12 Q. That would be the third trip?
1 3 your knowledge, is Mr`. Bryant affiliated or was he i 1 3 A. Yes, ma'am.
1 4 affiliated in any way with any other security that 1 4 Q. And that flyer, how many pages was the
1 5 you’ve played or called as a lock down or otherwise 1 5 flyer?
1 6 traded? 1 6 A. I don‘t know. Maybe four.
17 A. Can you say that again, please? 17 Q. Four pages. And what was the flyer ——
1 8 Q. Sure. I'll just say, is Mr. —— to your 1 8 what was the contents ofthe flyer? What was it
1 9 knowledge, is Mr. Bryant afhliated with any other 1 9 about? Qi
2 O stock that you’ve traded? 2 O A. There were other participants that were §
2 1 A. The aforementioned TRXX. 2 1 there, and Mr. Bryant had highlighted certain things
2 2 Q. Other than TRXX and SOOO? 2 2 that he thought about what the short position was;
2 3 A. Not that I know of 2 3 that type ofthing for the most part. Product line,
2 4 Q. And did Mr. Bryant give you any materials 2 4 talking about market events.
2 5 after he introduced himselfto you in November 2009 2 5 Q. Did you ever ask Mr. Bryant for any
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Page 393l Page 395
1 relating to SOOO? 1 financial statements for SOOO?
2 A. When you say materials —— 2 A. Not that I specifically recall.
3 MR. MARGOLIS: Wait a minute. Can we 3 Q. Did you ever ask him for any o erational
4 i ‘ ·> i 4 r sow p *
get tie question. reports or .
5 MS. CURTIN: I'lI ask it again. l 5 A. Not that I specifically recall.
6 Q. Did Mr. Bryant give you any documents 6 Q. Did you ask him for anything relating to
7 relating to SOOO, Inc., alier he introduced himself 7 the operations or revenues of SOOO, any documents to
8 to you in November 2009? I 8 verify what they were or what they, in fact, were?
9 A. lfl’m understand your question correctly, 9 A. Not specifically. I kind of see where
1 O I received no physical delivery of any types of 1 O you’re going with this and ifl can take a minute
1 1 documents. He may or may not have. Again, I don‘t l 1 1 and ramble, maybe I can help.
12 remember specific time names; sent me links to the 12 Q. Okay.
13 various companies that were under the umbrella for g 13 A. Is that fair?
1 4 me to look at their websites. 1 4 Q. That’s fair. .
1 5 Q. So he sent you links to the websites of 1 5 A. Okay. I first met Mr. Bryant in, as you
1 6 the purported subsidiaries of SOOO? 1 6 know, December of 2009. Mr. Bryant routinely took
17 A. Again, I'm going to clarify that I don‘t 17 me to his home while I was there. I'm sorry. I
1 8 specifically remember when or even if, but it may 18 don’t remember the address, but, I mean, it was
1 9 have come up in a phone call that you should take a 1 9 essentially a mansion. I mean, it‘sjust beautiful.
2 O look at the SOOO, Inc. Again, I don‘t remember 2O And I walked in and there’s an office in
2 1 specifically. 2 1 his home probably this big, and it'sjust nothing
22 Q. So it's your testimony today that 22 but, you know, books and, you know.
2 3 Mr. Bryant has never given you any documents i 2 3 Q. Did he tell you he owned this home?
2 4 relating to SOOO, Inc.? I 24 A. I don‘t —— I don‘t know that that ever
2 5 A. Ever? 2 5 even came up.
33 (Pages 392 to 395)

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Page 396 398
i
1 Q. Did you ever find out whether he owned it g 1 MS. CURTINZ N0. because I heed him t0
2 Or he wgg renting that home? E 2 answer it. l’ll go back. Give me one second.
3 A. I don't know that that ever came up, no. i 3 MR. MARGOLISZ Sure. A
4 Dr) ygu krrgw if`Mr_ Bryanfg married? 4 Q. We were taking a little side trip because _
5 A_ Y€g_ 5 I was trying to understand who Mr. Bryant is. Did I
6 Hg ig married? 6 Mr. Bryant tell you if he was —- what country he was `
7 A_ Y€g_ 7 a citizen of`? I
8 D0 ygu kngyv {hg name; Oflqig wife? 8 A. As ljust mentioned. I don't know what his .
9 A_ Ye5_ I 9 citizenship was, but he lived in Barbados. .
10 ()]q§ wlqgfg her rqgrme? i 10 Q. Did he tell you if he had lived anywhere g
1 1 A. Nick. E 1 1 else other than Barbados prior to your visit? g;
12 Q. How do you spell that do you know? l 12 A. Yes.
13 A. Well, probably short for Nickie. ljust i 13 Q. Where did he tell you he had lived?
1 4 know her as Nick. I don't know how she spells it. 14 A. The UK. S
1 5 Q. And she was there when you went and met 15 Q. Did he tell y0u that he was a Citizen Of
1 6 with Mr. Bryant on these three occasions? 1 6 . the UK at all? i
1 7 A. She was there on each of the three trips. 17 A· Again. VII represent that I d<>ii’t khaw .
A 1 8 I mean, not 24/7, but she was in and out, yes. 18 his citizenship, but l knew at this point he lived I
1 9 Q. And does Mr. Bryant, to your knowledge, 19 in Barbados.
2 O have children? 2 0 Q. Did he tell you why he had moved to
2 1 A_ Yq;5_ 2 1 Barbados from the UK, if you knew he moved from the Q
22 Q. How many children does he have? i 22 UK'?
2 3 A_ Three that I pgrggrqglly kngw Of I 23 A. Assuming he moved fiom the UK, again. I S
2 4 believe the eldest is from a previous marriage of l 24 mean, Whah I that Shawed UD, h€'S like Walcame _
2 5 Nick'; ii 2 5 to -— in his British accent "Welcome to my island."
Page 397 Page 399 I
E
1 Q. So it's his stepchild? E 1 Hejust loves the islands. j
2 A. I think. I 2 Q. Did he tell you he had moved to Barbados .
3 Q. Are they boys or girls, these three E 3 because of 8000, Inc.? I
4 children'? 4 A. No, not that I know of. I
5 A. One girl, two boys. E 5 Q. Did he ever represent to you in any way {
6 Q. One girl, two boys. And their ages range 6 that he had moved to Barbados to help 8000, Inc.?
7 from approximately what to what? g 7 A. He represented to me on numerous occasions
8 A. Approximately 8 to 20. 8 that the substantial portions of`business and his .
9 Q. 8 to 20. Now, is Mr. Bryant to your i 9 thought processes of growth included Barbados, but l
1 0 knowledge a citizen of Barbados? i 10 don't know that that's the only specific reason.
1 1 A. To the best -— to the best of my l 1 1 Did I answer that correctly? .
12 knowledge, he lives there. I don't know where his i 12 Q. I'll start with thiSZ Were there any -— °
1 3 citizenship is. 13 did 8000 have any business facilities in Barbados, I
1 4 Q. Do you know if he's a U.S. citizen? 1 4 to your knowledge? I
1 5 MR. MARGOLIS: Ifl may, there is an 15 A. Can you define "business facilities"? r
1 6 incomplete part ofthe record. l-ie was trying to g 1 6 Q. Do they have an office? r
I 1 7 respond to your question -— g 17 A. Mr. Bryant had an office in his home. r
1 8 MS. CURTIN: I'll get back to that. 18 Q. Other than Mr. Bryant's home, was there ”
1 9 MR. MARGOLIS: —— about documents. Q 1 9 any other office that you know of that 8000
2 0 MS. CURTIN: I’m absolutely going to 2 0 maintained anywhere in Barbados? t
2 1 get back to that because I know —— and I am taking a 2 1 A. Not specifically an office, but there was
2 2 little side trip here. 22 a place that they had under lease contract where Q
2 3 MR. MARGOLIS: Ijust didn’t want him 23 Mr. Bryant had showed me the document for that. i
2 4 to appear that he hadn't answered the balance ofthe i 2 4 MR. MARGOLIS: Tell them about the
2 5 question. 2 5 tour.
34 (Pages 396 to 399)

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Page 400j Page 402 _
1 Q. Is that the Lime Grove lease? I 1 how we’re going to do this or merge this to that or j
2 A. Yes, ma'arn. 2 what this revenue is going to create, it's out ofmy
3 Q. You understood that 8000 had leased 3 league. It’s not what I do. I mean, I tuned it I
4 premises in a mall called Lime Grove? l 4 out. A
5 A. Yes, ma’am. 5 Q. Okay. So the important things to you with j
6 Q. Okay. Did you understand -~ did you see 6 regard to 8000, Inc., are what’s the stock float, is g
7 the lease, a copy of` the lease? 7 that correct? A
8 A. Yes. l 8 A. That’s very important. I
9 Q. Who showed that to you? l 9 Q. Cash flow, is that correct? g
1 0 A. I\/lr. Bryant. 10 A. It’s reasonably important. _Q
1 1 Q. So you had this understanding that 8000 j 1 1 Q. Okay. And where do you get that .
1 2 leased space at Lime Grove because Mr. Bryant told 1 2 information about cash flow? A
13 you? l 1 3 A. Again, various fillings as they’re shown. g
14 A. Yes. j 1 4 I usually have people look that stuff up for me, and Z
1 5 Q. And he showed you a copy of` that lease? 1 5 I would just take a peek at them but occasionally I i
1 6 A. Yes. E 1 6 would go and do it myself`.
. I . . . . .
1 7 Q. Do you remember any of the terms ofthat § 1 7 Q. And what other things were critical or did I
18 lease? 1 8 you think were important with regard to 8000, Inc? j
1 9 A. No. 1 9 A. The share structure. J
. 2 0 Q. Your counsel told you there was ·— 2 0 Q. "Share structure" meaning how many shares
2 1 mentioned something about a tour. Was there a tour l 2 1 were outstanding, is that correct? ·
22 that occurred during your first meeting or first l 2 2 A. Outstanding, authorized and float. I
23 trip to Barbados? 23 Q. And float. Okay. And what they were
2 4 A. Well, given the questions that you've E 2 4 intending to do with those shares? Would that have .
2 5 asked in the manner and/or order of which you’ve s 2 5 been important? L
Page 401 g Page 403 I
1 asked them, we're really jumping back and forth 1 A. It’s important if` they're planing on
2 between trips, which is why I was going to ramble a ‘ 2 diluting, then, yeah. Ifthey can't support ii
3 moment ago tojust kind of`give you an evolution of l 3 themselves without diluting, then it's probably not .,
4 what occurred. 4 a play l’m going to be interested in. Ii
5 Q. And let's do that chronologically, but 5 Q. And when you say dilution, do you mean
6 let's start with the question that I initially 6 issuing more shares? *
7 posed, which was about the documents so we least 7 A. Yes. ii
8 clarify that. j 8 Q. Okay. And why would that have been bad or
9 A. Sure. I 9 why is that bad?
1 0 Q. I had asked you ifyou had asked l 1 0 A. A dilution waters down the stock price
1 1 l\/Ir. Bryant for any documents relating to 8000's l 1 1 because ifthe stock, for example, is —— and this is .
1 2 operations of` revenues and you said no, and you said E 12 solely for example, a dollar, and you release double 1
1 3 but let me explain that, so explain why you didn't , 13 the amount you’ve got out there, well, now your Ig
1 4 ask Mr. Bryant for any documentation of 8000, lnc.’s 14 stock is only worth 50 cents.
1 5 operations or revenues. I l 1 5 Q. So now I understand why you may not have I
1 6 A. Because he was more than willing to share l 1 6 asked Mr. Bryant for any documents. Let me confirm {
1 7 those extensively. I mean, he would pull offa book l 1 7 this. Did I\/lr. Bryant ever literally give you ‘
1 8 and here's our this or that or whatever, and l would l 1 8 documents for 8000 to take with you? I
1 9 look at it and kind ofhalf heartily. I mean, that I 19 A. I never took documents with me. °
2 0 type ofthing. j 20 Q. So you don‘t have any documents relating
2 1 While I realize this sounds a little bit g 2 1 to 8000, Inc., in your possession and never have?
22 demeaning to me, that type ofthe business aspects l 22 A. Ifl haven't supplied it in accordance
2 3 are really outside of`my area. I'm a chart guy. j 23 with the subpoena, I don‘t have it.
2 4 That’s what I like. 2 4 Q. So you are now -· you went to Barbados in ¥
2 5 So when he‘s talking about lease terms or l 2 5 December of2009?
35 (Pages 400 to 403)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 37 of 83
Page 404 Page 406 .
1 A. Yes. 1 2010, I believe, and I’m not a hundred percent sure
2 Q. And you were there from approximately 2 on this, but l believe there were two adjustments to 5;
3 December, roughly. 26? — l 3 the share structure. but both were restricted shares
4 A. Yes. 4 for acquisitions. ,
5 Q. 26 through January lst? 5 Q. Okay. And do you remember what those ”
6 A. Yes. 6 acquisitions were? I
7 Q. How many times while you were in Barbados i 7 A. Not off the top ofmy head. Qf
8 during that trip did you meet with Mr. Bryant? l 8 Q. Was one ofthose acquisitions something I
9 A. I can’t be specific. Probably four times. g 9 called Sky Villas? y
10 Q. Four times. And where did you meet? At l 10 A. That was definitely an acquisition of ,
1 1 your hotel or his home? l 1 1 theirs, but I don't remember the exact time frame. I
12 A. Both. I 12 Q. And would the other acquisition have been A
1 3 Q. And of those four occasions, how many were E 13 Southbridge? r
1 4 at your hotel and how many were at his home? I 14 A. Possibly. f
1 5 A. Again, I’m saying four days; not t 15 Q. And so when you -- in December of 2009, do I
1 6 necessarily four entire meetings. For example, one 1 6 you know how many shares were outstanding for 8000 {
1 7 morning we would meet where I was staying and in the Q 17 at that time? A
1 8 evening we would go out for dinner; that type of 18 A. I’m going from memory and I may not be a
1 9 thing. 1 9 hundred percent accurate, but l think it was -- I
2 0 Q. So how many times during that period, 2 0 don't know if it was like 23 million or 33 million,
2 1 December 26 to January lst, did you physically meet, I 2 1 something like that, not counting those which were 1
22 just roughly? l 22 obviously restricted or, you know, not tradable. E
2 3 A. That would be -- that would be a guess I’m l 2 3 Q. So you understood that there were 23
2 4 unwilling to make. l 2 4 million approximately shares in the float for EIGH _
2 5 Q. And what did you and Mr. Bryant discuss l 2 5 as of December 20097
———~i—--~——-——--—-·---————-———·~~·~—-··~·~·-——~·- g
Page 405l Page 407
1 about 8000 during these meetings? l 1 A. Again, I’m going to reiterate that that's so
2 A. Well, we talked about the share structure, I 2 from memory and may not be a hundred percent *
3 as you know. Again, he would pull up this website_ i 3 accurate, but it was a low number, yes.
4 or that website and show me things that, again, l 4 Q. But was it your understanding that it I
5 frankly l tuned out. l 5 actually had more outstanding shares at that time? Q
6 Q. Well. what did he tell you about the share l 6 A. My understanding was there were shares
7 structure in December 2009? What did he tell you? y 7 that were pledged in some type of financing I
8 Since that was important to you, what did he tell r 8 arrangement-- Q
9 you about 8000’s share structure specifically? 9 Q. Okay. T
1 0 A. That there were no plans to dilute it. l 10 A. —— and, therefore. not tradable. ,
1 1 Q. And so that means they had no intent to l 1 1 Q. Do you know how many -— let me ask you
12 issue anymore shares, the company, going forward i 12 this: In December 2009, do you know how many shares j
1 3 from 2000 —- December 2009? E 13 EIGH had outstanding? if
1 4 A. At least not in the immediate future. I t 1 4 A. I don't remember off the top ofmy head. g.
15 mean, who knows what they may have done long-term, 15 Q. Can you recall whether it was .
1 6 but there were no immediate plans to do so. g 1 6 significantly more than the 23 million in float that I
1 7 Q. So in the immediate future would at least 17 you're talking about?
18 mean the next six months? 1 8 A. Well, again, I don't remember ifthe float
1 9 A. I would think maybe even a year or plus. E 1 9 was specifically 23 or 33. Ijust simply don't 3
2 0 Q. So at least through 20l0? I 20 remember. I don't remember how many. l know it
2 1 A. I would think. 2 1 was -- it was a good portion.
22 Q. Okay. Do you know if, in fact, they did l 22 Q. And you said that there were some shares
2 3 not dilute the share structure as he represented to F 2 3 that were -— had been used for financing. How do N
2 4 you in December 2009? 2 4 you know that?
2 5 A. As I recall, throughout the course of l 2 5 A. Mr. Bryant had relayed that to me. A,
36 (Pages 404 to 407)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 38 of 83
Page 408 Page 410 1,
1 Q. This is in your December 2009 meeting with 1 with 8000?
2 Mr. Bryant or visit with Mr. Bryant? 2 A. Well, I was unclear of this myselfand, $
3 A. I don’t remember. 3 actually, kind ofremained so for quite sometime. ;
4 Q. When was your next visit with Mr. Bryant? 4 Based on all the documents that he was showing me, if
5 A. I believe it was April. I 5 you know, in and about his home, taking me on {Outs I
6 Q. Qf 20l0? E 6 ofthe island, introducing me to Sky Villas' E
7 A. Yes. I 7 management, these types of things, I mean, it was
8 THE WITNESS: Can we break for a l 8 clear to me he was a decision—maker of some type Y
9 moment? 9 involved with the company. I did not know ofthe
1 0 MS. CURTIN: We‘ll go offthe record 1 0 specific title.
1 1 at 1 I :27. i 1 1 Q. Did Mr. Bryant tell you that he was either
1 2 (A break was taken from l 12 an officer or director of the company?
13 , 11:27 a.m. to 11:31 a.m.) 13 A. No. I don't believe that he did.
1 4 MS. CURTIN: We're going to go back on 14 Q. Did he ever represent to you that he had
1 5 the record at approximately I 1 :31. l 1 5 been an officer or director of 8000, Inc.? Q
1 6 Q. Mr. Williams, was there any conversation g 16 A. Not that I recall. {
1 7 between yourself and SEC Staff while we were off the I 17 Q. Did you —— during this hrst meeting in
1 8 record'? 1 8 December of 2009, who did you understand to be the y
1 9 A. No, ma‘am. 1 9 officers and directors of 8000, Inc., if anyone?
2 0 Q. When we went off the record, we were 20 A. Via my research on line when l was looking
2 1 talking about financing or some financing that Mr. l 2 1 up the company and the aforementioned times, 1 found it
22 Bryant had indicated to you that they were doing. 22 that Mr. Thomas Kelly was the CEO and as I f
2 3 Could you ·- my question to you initially 2 3 understood it the only board member.
2 4 when we —-just before we went off the record was, L 2 4 Q. Was it your understanding Mr. Kelly was e
2 5 did Mr. Bryant raise this financing issue with you 2 5 the only officer and board member or director of the
Page 409l Page 411 rg
1 in the December 2009 visit? i 1 company?
2 A. I don’t specifically remember when he 2 A. Yes. {
3 brought it up. 3 Q. Was that the case throughout 2009 and {
4 Q. Okay. There‘s no way to refiesh your 4 2010?
5 recollection, any document? 5 A. To the best of my knowledge, yes.
6 A. I have no documents that I haven't 6 Q. And did you ever meet Mr. Kelly?
7 provided. 7 A. No. I —— I spoke with him on the phone
8 Q. What did Mr. Bryant tell you about the 8 once.
9 financing? l 9 Q. And when did you speak with Mr. Kelly by e
1 0 A. Again, not remembering exactly when we i 1 0 phone?
1 1 spoke about it, but what was relayed to me was that 11 A. 1 really don't remember. He got my number ig
1 2 there was a very large amount of shares that were 12 probably nom Mr. Bryant and called me about one of Z}
1 3 pledged with some type of institution. I don't know 13 the classes I was teaching and thought he may show
1 4 specifically where, whereby they could draw down i 14 up and it never happened; that was my only
1 5 financing to help build the company. { 15 conversation with him.
1 6 Q. So was it your understanding that 8000 had , 1 6 Q. Did you ever talk to Mr. Kelly about the if
17 pledged shares to some institution that would give l 17 operations of8000, Inc.?
1 8 it money that it could use? § 18 A. No, not that I recall. Again, my only X
1 9 A. Yes. i 1 9 conversation was the one about the class.
2 0 Q. Do you know how many shares it had I 20 Q. Was there anybody on your —- in your trips Q
2 1 pledged? I 2 1 to Barbados and your meetings with Mr. Bryant, did
2 2 A. Again, l'm guessing, but I seem to § 22 you ever meet with anybody else who was an employee
2 3 remember it was in the area of 60 to 70 million, but 23 or you understood to be an employee of 8000, Inc., E
2 4 I don't remember specifically how many. 2 4 or affiliated with 8000, Inc.?
2 5 Q. Mr. Bryant —— what was Mr. Bryant’s role 25 A. If by "affiliated" you mean working for
37 (Pages 408 to 411)

. - ‘ - - |•3 {L I• .n·| 4 - ·•| ° '¤g* °• $
Page Page 414 [»_
1 Sky Villas, then, yes. i 1 specifically saying himselfor the company, but
2 Q. Did you meet Joel Parris? i 2 stating that I have this 60 to 70 or whatever that
3 A. Yes, I did. 3 number was, you know, for lack of a better term a Q
4 Q. Did you meet anybody else affiliated with 4 pledge to whereby they can draw down financing to j
5 8000, Inc., or who appeared to be or you were told 5 help grow the business.
6 was working for 80007 6 Q. Did Mr. Bryant ever tell you —· and Iet’s
7 A. Well, there was staff of Sky Villas. 7 just focus for a second on December 2009. Did he
8 Q. Qther than anyone associated with Sky 8 tell you who the shareholders were in 80007
9 Villas, was there anybody else that you believe 9 A. I don’t know thathe ever told me who the gi I
1 0 you've met who is officer, director, employee, 1 0 shareholders were.
1 1 contractor or otherwise had provided services to I 1 1 Q. Did you ever ask him ifthere were any
1 2 80007 i 1 2 controlling shareholders in 80007
1 3 A. Not that I know ofi no. 1 3 A. He had told me that —— and this was
1 4 Q. Did you go on this tour that your counsel 1 4 volunteered by him. It's not something I asked
1 5 referred to during that first trip to Barbados? 1 5 about. He said he was the largest shareholder.
1 6 A. Actually, the tour that I think he is 1 6 Q. So l\/Ir. Bryant told you he was the biggest
1 7 specifically referring to was on the second visit. 1 7 shareholder in 80007 _ X:.
1 8 Q. And we’ll talk about that in a minute. 1 8 A. Yes.
1 9 What I want to do, though, is get back to the 1 9 Q. When did he tell you that? Which trip or
2 0 financing deal that you were talking about. 2 0 when, roughly?
2 1 It's your understanding that between 60 2 1 A. First trip. ij
22 and 70 million shares had been pledged by EIGII or 22 Q. So in December 2009, he represented to {
2 3 8000, Inc., for financing? 2 3 you, he told you he was the largest shareholder in
24 A. Yes. — 24 8000, Inc.?
2 5 Q. And you got that information from l\/Ir. 2 5 A. Yes, ma'am.
Page 413 Page 415
1 Bryant? 1 Q. Did he tell you how many shares he heId‘?
2 A. Yes. 2 A. Not specifically that I recall.
3 Q. Did you talk about that financing with 5 3 Q. Did you ask him how many shares he held?
4 anybody else other than Mr. Bryant? ~ 4 A. No.
5 A. Not at the time, no. i 5 Q. Wouldn‘t that have been important to you
6 Q. You did, though, subsequently talk to t 6 in understanding the share structure ofthe company?
7 someone else about the financing? i 7 A. No.
8 A. Well, it was brought up on the various I 8 Q. Did you understand the shares he held were Q
9 boards about the financing. I don’t remember 9 restricted?
10 specific discussions because they had put out a { 10 A. No.
1 1 press release, and I don’t remember the time which 1 1 Q. Did you understand that they were -- l’m
12 it went out, about how they had pledged these shares 12 trying to —- you've told me you understood there was
1 3 for financing so that they could grow the business, i 1 3 roughly 23 million in float for EIGH in December
1 4 so there was discussion. I don’t remember j 1 4 2009. Do you know what portion, if any, of those
1 5 specifically what it was about. 1 5 were held by Mr. Bryant?
1 6 Q. During your conversations with Mr. Bryant, i 1 6 A. Again, I don’t know how many he had. I
1 7 did he tell you what shares or whose shares were I 17 didn’t ask.
1 8 being pledged for this financing? I 1 8 Q. Did you ask him who the other largest
1 9 A. You know, the way he stated it and, again, I 1 9 shareholders were in 8000, Inc., in December 20097
20 keeping in mind in the context in which I got-- you i 20 A. No.
' 2 1 know, we were talking about it, he's just like, oh, I 2 1 Q. Wouldn't that have been important to you
22 well, I have and by "I have," I don’t know that I 22 to know in terms ofunderstanding the share
2 3 necessarily meant himself or the company. I don’t i 2 3 structure, the float? And the float.
2 4 know how to take that. i 2 4 A. No. The share structure doesn't change
2 5 So I don’t know whether he was 2 5 just because certain people own various portions of
38 (Page$ 412 to 415)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 40 of 83
416 Page 418 I
1 it. The share structure is still the share 1 Q. Why was that important? ,
2 structure. 2 A. Because ifthey can't be traded, then *
3 Q. Okay. So did you understand that the 60 3 they're not out there circulating. E
4 to 70 million shares that he told you, Mr. Bryant 4 Q. Other than Mr. Bryant's representations to A
5 represented had been pledged by the company for 5 you that the shares —— between 60 and 70 million of
6 financing was restricted? 6 8000, Incfs. outstanding shares had been pledged
7 A. No. I don't know that they were 7 for financing and were not tradable, did you {
8 restricted because I believe they were listed in the i 8 independently verily that fact?
9 OS, but they were listed as untradable because they 9 A. No. I wouldn't even have known how to. g
10 were pledged. 1 0 Q. Well, did you ask him who the name ofthe
1 1 Q. What is an OS? 1 1 financial institution to which the shares had been
1 2 A. Outstanding shares. 1 12 pledged?
1 3 Q. So they were —— you're saying the 60 to 70 I 1 3 A. No. During our discussions ofthis, you
1 4 million were counted by 8000 in its outstanding 1 4 know. like I said, he told me about this. He likes _
1 5 share count? 1 5 to use the word "scheme" a lot. He says the scheme
1 6 A. Yes. 1 6 that I've set up allows for these shares to be held
1 7 Q. But you understood that they were not-- E 1 7 in a certificate form so that they can't be traded,
1 8 you couldn’t trade those shares? 1 8 and they're with this company and, you know, they're
1 9 A. As I understood it, correct. 1 9 basically —— there is a collateral for loans to the {
2 0 Q. How did you get that understanding? 2 0 company. {0
2 1 A. Because that‘s what I\/lr. Bryant related to i 2 1 Q. Did you ever ask Mr. Bryant for the ‘
22 me, that these shares were pledged and not tradable 22 agreements with that institution that was giving
23 for the financing that he had l°R'd about. I 2 3 8000, Inc., financing?
2 4 Q. Okay. Can you tell me more specifically 2 4 A. No. But there's an interesting sidenote
2 5 or can you tell me ifI\/lr. Bryant told you more E 2 5 to that or side trip, as you referred to earlier.
Page 417 i Page 419
1 details as to why they couldn't be traded, those { 1 Q. Okay.
2 shares that had been pledged for the financing? 2 A. When I was in New Zealand, the folks hom
3 A. He specifically said they were in i 3 Bancorp did ask for those agreements, and they were .
4 certificate form with this institution. , 1 4 sent to the —— to them by Mr. Bryant, apparently to
5 Q. Have you ever heard oflnternational g 5 their satisfaction as they, in fact, did invest.
6 Capital Group? i 6 Q. And that was in connection with that —— we
7 A. No. 7 can go back to that, but that was in connection with
8 Q. Did Mr. Bryant tell you that the company 8 their decision to actually invest in 8000? Z;
9 to which EIGH had pledged the shares for financing 9 A. Correct. Q
1 0 was International Capital Group? 10 Q. To your knowledge, is l\/Ir. Bryant in any
1 1 A. N0. l 1 1 way affiliated with Curt Wagner?
1 2 Q. Are you familiar with a gentleman by the 12 A. Not other than what we've already talked yi?
1 3 name of`Brian Nord? I 1 3 about.
1 4 A. No. Q 14 Q. Which is what? Qi
1 5 Q. Are you familiar with a broker—dealer by 1 15 A. Well, that Curt Wagner helped establish
1 6 the name of Alpine Securities'? i 1 6 those funds in Tokyo and those funds bought shares
17 A. I've heard of them. 17 ofElGH. I\/lr. Wagner did meet Mr. Bryant in August. g
1 8 Q. And have you ever done business with t 18 Q. Of20l0 OY 20097
19 Alpine? 19 A. 2010.
2 0 A. No. 20 Q. Okay. And then -- so prior to that 0,
2 1 Q. And was it important to you or was it —- 2 1 investment by Select —·
2 2 was it an important fact that those shares that had 22 A. Associates. ii
2 3 been pledged by the company were, in fact —— they i 23 Q. —— Associates, you don't believe that Mr.
2 4 could not be traded? i 2 4 Bryant had any relationship with Mr. Wagner?
2 5 A. Yes, that would be important. i 25 A. No, that's not true. That's not what I
39 (Pages 416 to 419)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 41 of 83
Page 420 t Page 422
_
1 said. 1 detail. And l got down this path because l was i
2 Q. Okay. Do you know how Mr. Wagner knows l 2 talking about the financing, and ljust want to get [
3 Mr. Bryant or Mr. Bryant knows Mr. Wagner? 3 back to that financing for a minute. l think we Q
4 A. Mr. Wagner was in Barbados in August. 4 were also talking about Mr. Bryant’s role with the L
5 Q. Of 201 0? 5 company.
6 A. Of 201 0. The New Zealand investment came 6 So Mr. Bryant represented to you that
7 after that. 7 these shares that had been provided to the ;
8 Q. Okay. And in that visit in September 2010 l 8 institution that was providing financing to 8000 g
9 to Barbados that you went to, was that also when Mr. 9 were locked up; couldn't be traded?
1 0 Wagner was there, too? You were there at the same 10 A. Correct. Q
1 1 time? l 1 1 Q. Did you ever learn that to be not true or V
12 A. This particular event was the only time 12 find out that that did not happen? W}
13 l've been there. To the best ofmy knowledge, Mr. 13 A. No. g
1 4 Wagner had been there before me, but l don't know 1 4 Q. Did Mr. Bryant ever tell you that, in Y
1 5 the times or discussions during that time name. 1 5 fact, that institution sold those shares? i
1 6 Q. lust to make the record clear, you went to 1 6 A. Dear God, did they? W
17 Barbados in or about December 2010. You met Mr. l 17 Q. l‘m asking you, do you know? r
1 8 Bryant during that meeting but Mr. Wagner was also 1 8 A. No. .
1 9 there, as well? l 1 9 Q. Did you see anything when you were looking °
2 0 A. No. l 20 at the stock. 8000, Inc., looking at your charts in .
2 1 Q. l‘m mixing it up. 2 1 2010, did you ever see any indication that there .
2 2 A. August. l 22 were more shares on the market than was represented ;
2 3 MR. MARIGOLIS`: lt was August. l 2 3 to you to be in the float? f
24 Q. Okay. So this meeting, this third trip l 24 A. l thought there was a massive naked short ;.
2 5 you took to Barbados was in August 20l0? t 25 position in 8000, Inc., based on the amount of 7
Page 421l Page 423
l . .
1 A. Correct. 1 buying that came in and what looked to be —- l
2 Q. Okay. And it was during that meeting or 1 2 thought there was a massive short. Y
3 that trip you met Mr. Bryant and Mr. Wagner was also 3 Q. Okay. Let mejust -— 1 want to talk to 1
4 there? r 4 you about that, but one last question l want to ask _.
5 A. Correct. l 5 you about this financing specifically. Are you
6 Q. Okay. Do you know if Mr. Bryant had any t 6 familiar with a gentleman by the name of Conrad i
7 association with New Zealand Bancorp before it l 7 Wall? Q
8- invested or Select Associate Management invested in 8 A. No. 7
9 8000? 9 Q. Did Mr. Bryant ever mention to you a t
1 0 A. Well, as there were two funds, the answer l 1 0 person by the name of`Conrad Wall? A
1 1 is yes. l 1 1 A. lt doesn't sound familiar. j
12 Q. And why does that -- why is there a l 12 Q. Did you ever see the name Conrad Wall?
1 3 distinction there? 1 1 3 A. lt’s not ringing a bell, no.
1 4 A. Well, because the actual -— what we { 1 4 Q. Do you remember looking at any information Q
1 5 referred to earlier as the U.S. -— excuse me. The 1 5 that 8000 posted on OTC Markets? t
1 6 earlier fund that we‘ve referred to ofthe US High l 1 6 A. Vaguely. lt was two years ago. y.
1 7 Performance Fund was already active and had a l 17 Q. Do you remember ifany ofthe information _
1 8 position in EIGH. 1 8 that that company posted on OTC Markets referenced a r
1 9 After -— l‘m sorry. l want to clarify the l 1 9 Conrad Wall? Z
20 distinction. After the August visit, myself and Mr. 20 A. No, I don't recall that. The name isjust ,
2 1 Wagner went to New Zealand, and New Zealand 2 1 not ringing a bell. I
22 Discretionary Funds of`Select Associates started E 22 Q. Did Mr. Bryant-- T.
23 another account in which they invested in EIGH. ls 23 A. Wait a minute. l know that name. Q
2 4 that clear? 24 l’ve heard it before. 1 don`t know. I've
2 5 Q. Yes. We can get into a little more l 2 5 heard it before. l don't recall where. l?
W 40 (Pages 420 to 423)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 42 of 83
Page 424 Page 426 .
1 Q. Do you know —— 1 incorporated in Nevada with —· essentially for G
2 MR. OBEYESEKERE: I can maybe help. 2 purposes ofa U.S. address, like one ofthose
3 BY MR. OBEYESEKERE 3 offices. like a rental office kind of thing in
4 Q. Reviewing your e—mails there appeared to 4 Manasis. .
5 be some correspondence between you and Mr. Bryant 5 Q. The Manasis address was just a
6 concerning a Mr. Wall's building up your website. i 6 professional office service? _
7 Does that rehesh your recollection in any way? E 7 A. Right. Something like that.
8 A. Okay. That’s where the name comes from. * 8 Q. Did he ever mention to you a company by 3
9 BY MS. CURTIN 1 9 the name of Cannonball SOOO? .
1 O Q. Do you know the company TVGS, Time . 1 O A. That’s where I've heard Conrad Wall. Q
1 1 Velocity? 1 1 Q. So explain. How do you know —— how did $
12 A. No, it doesn't ring a bell. 12 you hear Conrad Wall’s name in the context of
( 13 Q. Did Mr. Bryant ever tell you that a l 1 3 Cannonball SOOO?
14 company that builds websites and provides other I 1 4 A. Conrad Wall was involved with them i
15 technical support associated with SOOO, Inc., would g 1 5 somehow. ljust remember reading it on the boards .
1 6 do you some —- would offer you some services? I 1 6 and now that you say that, that rings a bell. ¢
17 A. l'm sorry. I didn‘t realize that was the 17 Q. I understand that-- I understand based on `
18 name of the company, but I did pay for SOOO, Inc., 1 8 your testimony that you don‘t know what shares the j
1 9 and/or some subsidiary to build a website for me, 1 9 company pledged, whose shares the company pledged I
2 O yes. I 2 O for the financing; just that it was between 6O and I
21 Q. In December 2009 did Mr. Bryant indicate I 2 1 7O million. t
22 to you how he became or how he held the most shares I 2 2 A. As I recall, between 6O and 7O million. I T
2 3 in SOOO, Inc.? 2 3 don‘t know specifically where that came from or how
24 A. No, I don’t —— I don‘t recall a specific I 24 they got there.
2 5 conversation of how he came to that. I 2 5 Q. Did Mr. Bryant tell you whether his shares ,
Page 425 Page 427 j
1 Q. Did Mr. Bryant tell you how long he had 1 that he held, that large —— the largest position in
2 been associated with SOOO? 2 the company, were restricted or free traded?
3 A. I don‘t recall specifically, no. 3 A. I don‘t recall that ever coming up, no. g
4 Q. Did Mr. Bryant tell you any history about t 4 Q. lust generally, because we haven't talked .fgp
5 SOOO, meaning any history ofthe company up through I 5 about this, what did Mr. Bryant tell you that SOOO,
6 the time that you began to play the company in 1 6 Inc., did for a business?
7 October 2009? I 7 A. Well, again, my first visit there he
8 A. Yes. r 8 showed me this Lime Grove place that they were I
9 Q. What did he tell you? 9 looking at, and we couldn’t get in at that
1O A. He had mentioned that the company had been { 1 O particular time, but, you know, he's like, oh, we’re
1 1 another company prior to that and that he was 1 1 going to have clothing here and this or that there —
12 instrumental in merging the two and changing the l 12 and that type of thing. I saw a sports arena that *
13 symbol. I 1 3 they were helping sponsor to do the renovations. ,4
1 4 Q. So there were two companies that created 1 4 Q. How do you know they were sponsoring it? rp
15 SOOO, Inc., as you knew it? 1 5 A. I'm sorry. Because they were —- had big
1 6 A. As I understood it, they kind of took over E 1 6 signs of SOOO, Inc., funding provided by. That kind
17 the old company and then as he put it cleaned it up 1 7 ofthing.
1 8 and then released it as SOOO, Inc., to help be a 1 8 Q. ls that that Desmond Haynes Oval?
1 9 public company to grow these businesses they were 1 9 A. Yes. I
2O looking at. 2O Q. Okay. So he showed you the Desmond Haynes I
2 1 Q. Did you understand the companies were both I 2 1 Oval?
22 U.S. companies or did you understand one ofthe 22 A. Yes. .
23 companies may have been foreign? 2 3 Q. Was it really there?
_ 2 4 A. I have no knowledge ofeither. I knew I 24 A. Oh, yeah.
25 that SOOO, lncfs, address was considered to be 1 2 5 Q. There‘s an arena there?
I 41 (Pages 424 to 427)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 43 of 83
Page 4 28 Page 4 30
1 A. Yes. { 1 A. Other than me and Joel. Q
2 Q. And what were they —— what did Mr. Bryant 2 Q. Okay. On that first trip, too.
3 tell you? How did he tell you they were sponsoring E 3 A. Well, I think so. I
4 that oval? 4 Q. Okay. I
5 A. He said that Vodafone, Coca Cola and 8000, I 5 A. There was no other person specific to I
6 Inc., were the three largest sponsors to help do i 6 8000, Inc., and/or Sky Villas, excluding possible 3
7 this renovation. g 7 staff members that were doing lawn work, that kind
8 Q. Did he ever show you or give you any I 8 of thing, whatever. .
9 documents to establish that they had actually given 9 Q. And the other two trips, I know you
1 O money for this renovation? 1 0 mentioned Mr. Wagner showed up on the last trip, the
1 1 A. No. But I will represent that while he 1 1 third trip. He was there at the same time.
1 2 were there, there were folks working on it that ' 12 A. Yes.
1 3 walked right up to him like, hey, Jonathan, we’re 13 Q. How about —— in all three of these trips,
1 4 going to be doing this or that. 1 4 was there anybody else other than Joel Parris, Mr. 5
1 5 Q. This was while you were at the oval 1 5 Wagner, Curt Wagner and yourself who met with Mr. $
1 6 walking around looking at it? 1 6 Bryant or were present when you met with Mr. Bryant ?
1 7 A. Correct. 17 who was associated with 8000 or you believed to be
1 8 Q. Was it on your second trip to Barbados? g 1 8 associated with 80007 2
1 9 A. Yes. , 19 A. Could I get a clarification on that‘? I
20 Q. And during these trips, I think you said 20 Because, I mean, l’m not sure I understand what y;
2 1 during the second trip there was somewhat ofa tour. 2 1 you're asking. I
2 2 Did you see something else that Mr. Bryant told you 22 Q. Well, who else —— I
2 3 was —~ you know, that something else that 8000, 2 3 A. Were you asking did I meet —— are you
2 4 Inc., was involved with, other, you know, brick and 2 4 asking did I meet other people that worked for 8000,
2 5 mortar stuff? i 2 5 Inc.?
Page 429 Page 431
1 A. The Sky Villas realty portion ofthis, 1 Q. Not necessarily. Let mejust put it this
2 which was a real estate and property management 2 way, make it simple. Other than Mr. Bryant, Ms. gi
3 office, apparently. I got to see, I don't know, 3 Parris and Mr. Wagner, who else did you meet on z
4 dozens, I5 listings or so where we went in and we 5 4 these trips to Barbados besides the Sky Villa
5 had —- they had keys to all of them. 5 employees? f
6 And we went in and looked around and that 6 A. I think that’s a far too open question. I
7 type of thing. They showed me what some of the 7 mean, I went into storage. I met ·— F
8 types of services they provided for the clients, as { 8 Q. No, l‘m not talking about that. Someone
9 they had a client coming in while I was there. i 9 related to Mr. Bryant. .
1 0 You know, they would pick them up from the 10 A. Someone related to Mr. Bryant?
1 1 airport in a nice car, whatever, bring them out, i 1 1 Q. Yes. I,
12 give them the tour, all the renigerator stocked, 12 A. Other than his wife and children?
1 3 all that kind of stuff. 13 Q. Right. Was there anybody else —— when you
1 4 Q. Are these properties they were renting? 1 4 were meeting with I\/lr. Bryant, was there anybody else I
1 5 A. Renting and/or had listings for sale. } 15 there other than I\/ls. Parris, I\/lr. Wagner?
1 6 Q. And who accompanied you on that tour? g 1 6 A. That was associated with 8000, Inc., no. is
1 7 A. In this particular case, I was with Mr. 17 Q. Associated with any other company that Mr. y
18 Bryant and Joel Parris and on occasion other members 1 8 Bryant was associated with or any other business
1 9 of the staff that worked for Sky Villas. 1 9 that Mr. Bryant was engaged in? ,
2 0 Q. For Sky Villas. On this trip, on the —— 20 A. Not that I know of.
2 1 let me just ask, on the first trip you took to i 2 1 Q. Did Mr. Bryant refer you to talk to
22 Barbados, other than yourself and Ir/lr. Bryant, was 22 anybody else in Barbados when you were there?
2 3 there anybody else that you traveled around with i 2 3 A. No that I know of }
2 4 with l\/Ir. Bryant or met with Mr. Bryant in connection 2 4 Q. You mentioned earlier, I thought, that you
2 5 with SOOO? 2 5 were going to teach a class when you were in l§
42 (Pages 428 to 431)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 44 of 83
Page 432 i Page 434 S
1 Barbados? 1 20,000 each? f
2 A. Yes. i 2 A. Correct. 5
3 Q. Did you, in fact. teach a class? 3 Q. Do you remember when that was roughly?
4 A. Yes. 4 A. No. I mean, it's in the records, but I gs
5 Q. What trip did you teach that class? I t 5 don't know. y
6 A. The first one. 6 Q. So Mr. Bryant sent them to you hom his
7 Q. So in December 2009? E 7 bank in Barbados to your bank here in the States? if
8 A. Yes. I 3 A. I can‘t specify where they came from, but I
9 Q. And you were teaching -— what were you i 9 they did come to my bank here in the States, yes. °
10 teaching in that class? 1 10 Q. So you got a total of40,000?
1 1 A. I taught charting essentially —— because I 1 1 A. Yes. {
12 it was only one student, which was Jonathan, I I 12 Q. You gave l0,000 ofthat to Mr. Hainey? r
13 taught him the methodology in which I used to read a 13 A. Yes. jj
1 4 chart. I 1 4 Q. And did you wire that to him? Y
1 5 Q. Okay. And you got —— were you paid for 15 A. No. · U -
1 6 that class by lvlr. Bryant? g 1 6 Q. I~Iow did you give Mr. Harney the $l0,000? y.
17 A. The aforementioned 2 million shares. g 17 A. I believe Ijust deposited it in his i
1 8 Q. Was it 3 million shares? X 1 8 account for him. I
1 9 A. Was it? I don't know. It might have 1 9 Q. Did he have a bank account at the same
20 been. 2 0 account that you had an account? What did you do?
2 1 Q. Okay. Did you receive any cash from Mr. 2 1 Withdraw the l0,000 from your own account, walk to Q
2 2 Bryant? t 22 his bank and deposit it? ¢
2 3 A. Not at this time. l 2 3 A. We were both at Bank ofAmerica, so I .
2 4 Q. But you received cash later from Mr. i 2 4 didn't have to physically leave anywhere. ,
2 5 Bryant? i 2 5 Q. And what did you do with the other Q
Page 433 Page 435
1 A. Yes. 1 $30,000?
2 Q. You received about $40,000 from him? · 2 A. Well, as I stated, 10,000 he said was kind f
3 A. Correct. 3 of for me being caught up in all the middle ofthis
4 Q. In two payments? 4 and he just called it a pain and heartache payment.
5 A. Correct. 5 Again, it was a week or two later before either of
6 Q. Okay. Did you get any cash other than i 6 us even knew that the other 20,000 had came through. ~
7 those two payments from him totaling about $40,000 § 7 And then since he had found out that I
8 at any time? 8 Mr. Hainey, as we discussed earlier about TRXX where
9 A. No. i 9 he said he would "take care of`me" and never did, rt `
1 0 Q. And what was that $40,000 for? i 1 0 Mr. Bryant told me to keep the balance for my —— the j
1 1 A. Mr. Hainey and i\/lr. Bryant apparently ended i 1 1 balance ofthe 20,000 for, again, the pain and q
1 2 up with bad blood between them and Mr. Hainey felt 5 12 heartache, ifyou will, ofthat entire situation
1 3 that Mr. Bryant owed him money for putting us g 13 that never occurred. Q
1 4 together since the stock was doing well and that I § 14 Q. So 10,000 was for the pain and heartache
1 5 actually did end up playing it, so Mr. Hainey t 15 related to 8000, Inc., and 20,000 was pain and
1 6 decided that he wanted $l 0,000. I\/lr. Bryant agreed. 1 1 6 heartache for something that never occurred for f
1 7 Mr. Bryant wired me $20,000 and said the 17 TRXX?
, 1 8 other ten was for all the pain and heartache I went l 1 8 A. Correct. V
1 9 through, so I gave Mr. Bryant —— excuse me -- 1 9 Q. And that's all the cash that you ever
2 0 Mr. Hainey the 10,000. 2 0 received from Mr. Bryant, to your knowledge? Y
2 1 I was traveling, teaching at the time and 2 1 A. Yes. 1
2 2 did not find out until later, nor did Mr. Bryant, 22 Q. Do you know a Keith Bryant? ,i
2 3 that inadvertently the bank had sent two wires, so I 2 3 A. Yes.
2 4 they actually sent two wires of 20,000. 2 4 Q. Who's Keith Bryant?
2 5 Q. So Mr. Bryant’s bank sent two wires of i 2 5 A. Keith Bryant is Jonathan Bryant’s father.
43 (Pages 432 t;o 435)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 45 of 83
Page 436i Page 438
1 Q. How do you know Keith Bryant? 1 Keith Bryant. Anybody else you know? j}
2 A. Mr. Keith Bryant attended my Phoenix 2 A. No, not that I know of.
3 Monkinar class. r 3 Q. And —- _;
4 Q. When was the Phoenix Monkinar class? 4 A. Oh. no, that’s not true, but it actually
5 A. I believe it was January of 2009 —— excuse 5 happened after the fact ofthe subpoena now that you
6 me. I0. Sorry. 2010. 6 mention it, but Mia, Mia. l\/Iia —- whatever her last
7 Q. 2010. Okay. And how do you know that 7 name is that I can’t think ofoffthe top of my head
8 Keith Bryant was .lonathan’s father? 8 is associated with Bancorp, New Zealand and has also
9 A. He told me. 9 met Mr. Bryant in person.
1 0 Q. Jonathan told you? 1 0 Q. This is Mia. You don’t know her last
1 1 A. Yes. 1 1 name?
1 2 Q. Do you know —— E 12 A. I can’t think of her last name. She
1 3 A. Well, as did Keith when I met him. 13 worked at Bancorp. I think it’s Evans, but I can't
1 4 Q. Did Jonathan tell Keith about you, to your 14 swear to it.
1 5 knowledge? 1 5 Q. Is she from New Zealand‘?
1 6 A. Yes. 1 6 A. I can`t attest to that. Tlrat‘s where I
1 7 Q. Keith didn’t independently find out about 17 met het.
1 8 you? 1 8 Q. And she attended one of your l\/Ionkinars?
1 9 A. I don’t know specifically how Keith found 19 A. Yes.
2 0 out about me, but after seeing my charting ability, 2 0 Q. Which l\/Ionkinar?
2 1 and the way Jonathan Bryant relayed it to me was 2 1 A. Boston.
2 2 that his dad really needed to learn how to do that 22 Q. Was that in October of 20l0?
23 type oftrading and so he suggested that he take my I 23 A. Okay.
2 4 class so that dad will get out of his hair. l 2 4 Q. I'm asking you.
2 5 Q. And where does Keith Bryant live? l 25 A. I don’t remember the dates of all ofthem.
Page 4371 Page 439
1 A. To the best of my knowledge, in the UK. i 1 That sounds right.
2 Q. Okay. And did Keith Bryant pay you for I 2 MR. MARGOLIS: lt is Mia Evans.
3 your 1\/Ionkinar? l 3 MS. CURTIN: It is Mia Evans. Okay.
4 A. Yes. I 4 Q. And just to get this out ofway, did you
5 Q. And did he pay you approximately $2,000 E 5 ever give any money, any cash to Mr. Bryant,
6 for that? , 6 Jonathan Bryant, directly or indirectly?
7 A. I believe it was 1,500. l 7 A. Not that I know of
8 Q. 1,500. And did you receive any other t 8 Q. Did you give him any stock in 8000, Inc.,
9 funds or money from Keith Bryant? 9 transfer any stock to him or sell any stock to him
1 0 A. Yes. 1 0 in 8000, Inc., directly or indirectly in any way?
1 1 Q. What else did you receive from Keith l 1 1 A. Not that I know of
1 2 Bryant? 1 2 Q. Did he ever to your knowledge, Jonathan
1 3 A. He's a member ofmy website. so he pays I 1 3 Bryant, ever purchase stock in 8000, Inc., from you?
1 4 24.99 a month as a member. 1 4 A. Not that I know of
15 Q. Okay. Other than those monthly payments 1 5 Q. Did you ever intentionally sell stock in
1 6 for your website and the money you got from Keith i 1 6 8000, Inc., in the market which you knew was going
1 7 Bryant for the l\/Ionkinar, have you ever received any 1 7 to be purchased by Jonathan Bryant?
1 8 funds from him? 1 8 A. Not that I know of.
1 9 A. Not that I know of 1 9 Q. One ofthe things that —— I want to still
2 0 Q. ls there anybody else you know who was 2 0 talk to you about this naked short position but
2 1 affiliated or associated with or known to Jonathan 2 1 first what I want to talk to you about is, are you
2 2 Bryant who attended your Monkinars? 2 2 aware that 8000, Inc., in September 2010 made an
2 3 A. Not that I know of unless ofcourse 2 3 announcement that they had acquired I\/lonk's Den?
2 4 you're including Curt Wagner. t 2 4 A. I am aware ofthat PR. gg
2 5 Q. Okay. I meant to include Curt Wagner, i 25 Q. l‘m going tojust show you those PR's and
44 (Pages 436 to 439)

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Page 440 Page 442
i Y
1 then you can help me. l'm going to show you what we 1 a regular basis after he introduced himselfto you .
2 previously marked as Exhibit Four and what we've 2 in November 2009? I
3 previously marked as Exhibit Five. 3 A. Yes, I would say.
4 A. Okay. 4 Q. And how were you communicating with Mr. _
5 MR. MARGOLIS: What is this? Is this 1 5 Bryant?
6 JAS4 or —— 1 6 A. Occasionally e-mail. occasionally phone
7 MS. CURTIN: No. These are previously 1 7 calls and then. ofcourse, the three mentioned .
8 marked exhibits and they are strictly Exhibits Four 8 visits. E
9 and Five. 9 Q. How often did you communicate by e—mail _
10 MR. MARGOLIS: Just Four. 1 0 with Mr. Bryant between his introduction in November q
1 1 MS. CURTIN: Yes. 1 1 2009 and November 2010 up to the point where --
12 MR. MARGOLIS; Okay. { 12 you're familiar that the SEC entered a trading E
1 3 (Reviewing documents.) i 1 3 suspension in S000? .
1 4 Q. For the record, Exhibit Four is a press 1 4 A. Yes, 1 heard ofthat.
15 release dated September 15th, 2010. lt is entitled 15 Q. Okay. That was entered on November 4th, >
1 6 8000, Inc., Announces Acquisition ol`Monk’s Den. t 1 6 2010. t
1 7 Have you seen this press release before, Mr. 1 17 A. Okay. .
1 8 Williams? 1 8 Q. So during that roughly year and one—month
1 9 (Reviewing document.) 1 1 9 period, how many times did you communicate with Mr. `
20 A. I have. 1 20 Bryant by e-mail? Volume. A
2 1 Q. You have. And when did you see this press l 2 1 A. l have absolutely no idea, but 1 have ,
22 release? 1 22 supplied all the documents that 1 have in compliance Q
2 3 A. 1 believe I saw it the night before it was § 2 3 with the subpoena.
2 4 to go out and then ofthe day it went out and then, 2 4 Q. Can you estimate for mejust in
2 5 ofcourse, during review of prior to coming here. L 2 5 recollection on a weekly basis on?
Page 441 Page 443
1 Q. Let'sjust start with this. This 1 A. No. l'm not going to because one week it .
2 represents that 8000, Inc., acquired Monk’s Den. ls 2 may have been one; another week it may have been *
3 that true? g 3 three; another, three weeks. There may have been f
4 A. Well, 1 want to be very clear on this. 1 4 none in between, so l'm not even going to attempt to ,
5 When 1 was there in August, we had reached a l 5 guess an average.
6 tentative agreement verbally about what we were l 6 Q. For phone calls, how ohen would you speak 1
7 going to do with this. 1 7 to him by phone during that same period?
8 And then when I got back, he told me that 8 A. Again, I am reluctant to make a guess.
9 they needed to PR this acquisition as it was —— § 9 Q. And can you give me an estimate? Would *
1 0 what's that phrase? Repoitable. That they needed 1 0 you speak to him once a week by phone?
1 1 to report that this was in process and so he sent me 1 1 A. Again, as l stated with the e-mails, there t,
12 a request asking for projections of what l thought 1 1 2 might be one one week; three the next. I simply
1 3 the Den could do and/or what I thought my new 1 3 cannot say on average we spoke X number of times.
I . . . . . i
14 software program would do. 1 1 4 Q. Did you ever communicate with him in any f
1 5 Q. So when you say "he," you‘re referring to 1 5 manner other than e—mail, via the phone or on the
1 6 .lonathan Bryant? l 1 6 three occasions that you traveled to Barbados? fl
17 A. 1 am. 1 7 A. Not that I know of
18 Q. So in August 2010, you testitied you had 1 8 Q. Did you ever communicate with him by y
1 9 reached a verbal, tentative agreement with Mr. 1 9 private message on Investors Hub? Y
20 Bryant concerning acquisition of Monk's Den. 1 20 A. Yeah, probably a couple times. Yf
2 1 Could you give me some background, explain 1 2 1 Q. And what was Mr. Bryant’s name on
22 to me how you even got to that point in August 20l0? 22 Investors Hub? His handle. 4
23 There had been prior visits to Barbados. i 23 A. As I recall, it was Pod66, Pod66.
2 4 A. Yes. 2 4 Q. To your knowledge, did Mr. Bryant ever
2 5 Q. Were you communicating with Mr. Bryant on 2 5 post anything on Monk's Den message board?
45 (Pages 440 to 443) s

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 47 of 83
?aqe j Page 446 l
_
1 A. I have no idea. I don't recall. 1 A. No. 3
2 Q. Do you know ifhe posted anything 0n the 2 Q. Did you ask for a copy ofthe NOBO list? I
3 8000, Inc.'s message board 0n Ihub? 3 A. No.
4 A. I don't recall. 4 Q. And why did you guys come to an
5 Q. So what I want —· can you just generally 5 understanding or discuss why there was a whole bunch I
6 tell me what led to this discussion in August 20I0 6 ofnaked short positions in 8000? I
7 and a tentative agreement for the acquisition of 7 A. From my perspective, I was looking at the I
8 Monk's Den? 8 chart and the amount of volume, and itjust —— given .
9 A. We had agreements that we thought the 9 the amount that I thought was in the float, the
1 O market was substantially short in 8000, Inc. During i 1 0 amount of pressure and volume, the stock should have g
1 1 this time between my April visit and the August 1 1 gone far higher than it did, and it looked to me q
12 visit, we spoke on the phone a few times and we 12 like the slightest selling was taking it down very i
1 3 spoke via e—mail a few times and then we kind of i 13 quickly. f
1 4 wrapped it up while I was there in August, and the 1 4 Q. Let me ask you this: We talked about the
1 5 thought process was that they would acquire the 1 5 float. You thought the float in December 2009 was
1 6 lvlonk's Den and that this would force an accounting 1 6 23 million shares. 3
17 of shares that would then force the cover of all 17 A. I said between 23 to 33. Somewhere around ;
1 8 these shorts that were out there. 1 8 there. I don't remember specifically.
1 9 Q. Okay. Let's just back up for a second. l 1 9 Q. By August 2010, what was your
2 0 So by August of 20l0, you and Mr. Bryant both 20 understanding, your beliefthe float in 8000, Inc.,
2 1 believed or at least he expressed this beliefto you i 2 1 was? .
22 that there was a substantial naked short position in l 22 A. 4l,000 —— excuse me. 4l million, —
2 3 8000, Inc.? l 2 3 somewhere thereabouts. I
‘ 2 4 A. Yes. He routinely showed me, you know, E 2 4 Q. And you’re —— what is the highest float y
2 5 like the -- when I was there, he showed me like the 2 5 you ever thought that 8000 had? ,3
··"·——’r·"—··—·~··~··r~·m·wW-r“·*~"····*"~*-*-~·~~·WM-
Page 445; Page 447 .
1 NOBO list and things like that. I·Ie’s like, look, 1 A. I don't remember. l’m sorry. Ijust
2 these numbers don't match. l 2 don’t remember. i
3 Of course he‘s got highlights and ink all j 3 Q. So you thought —- at least you thought in Q
4 over the place. You know, this doesn’t match. T`hat t 4 August 20l0 the lloat was about 40, 4l million, did I
5 doesn‘t look. You know, there‘s a discrepancy here. l 5 you say? Y
6 Where are all these shares? i 6 A. I don’t remember. I think it was about g
7 Q. The NOBO list, what‘s that? ls that 7 that. I simply don't remember.
8 N-O—B—O? 8 Q. But I want to make sure I understand why
9 A. Yes. · 9 you thought there was a naked short position. Is it *
1 0 Q. And what does it stand for? j 1 0 because —- in short, is there a fair statement you j
1 1 A. I don’t remember the exact acronym, It’s _ 1 1 saw a lot of trading activity which you thought was r?
12 essentially the Beneficial Owners list. { 1 2 in excess ofthe available float? 2
1 3 Q. Okay. , 1 3 A. Correct. Q
1 4 A. Non—Objecting Beneficial Owners list. 1 4 Q. Okay. l~low much in excess —— how much It
1 5 Q. And what is a Non—Objecting Beneticial l 1 5 trading activity did you see in excess of that if
1 6 Owners list? j 1 6 float? How bad was it? l·low bad would you describe
17 A. It's literally a listing ofall the 17 what you saw? I
1 8 shareholders. l 1 8 A. Given the volume and the price
1 9 Q. Of 8000 or of any company? j 1 9 fluctuations over the course of about two years, .,4
2 O A. Of any company. g 2 0 given the amount of shares that I considered to be I
2 1 Q. So he had this NOBO list, Mr. Bryant? 21 in the float, it looked to me like there could ji
22 A. Yes. 22 easily be in excess ofa hundred million short, .j
2 3 Q. Do you know where he got the NOBO list? i 2 3 given that with the float size, the amount of volume
24 A. No. 24 that this thing traded in the sub penny level and g
2 5 Q. Did you get a copy ofthe NOBO list? 25 even below double 0 level, itjust seemed impossible
46 (Pages 444 to 447)

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Page 4481 Page 450 ~
1 to me that that could be the case. i 1 A. Yes. is
2 Q. Did you ask Mr. Bryant ifthe company had 2 Q, And when's the last time you communicated ;
3 issued or released from restriction any additional 3 with him by e-mail? r,
4 shares? l · · 4 A. Prior to that. I don't specifically It
5 A. No. Keep in mind, you know, he routinely i 5 recall. 3
6 volunteers, oh, you know, the floats tight. 6 Q. And why did you speak to him on February
7 Nothing is happening, nothing is happening. So, I i 7 25th, 2010‘? g
8 mean, it never occurred to me to ask —- to say can 8 A, He called me, sent me a message. Mr. {
9 you please show me the document where it says that. 9 Margolis has relayed the general text of that
1 0 Q. Okay. And so you didn't ask him if I 1 0 conversation to you folks already. Y
1 1 perhaps he or some of the other shareholders were I 1 1 Q. Okay. He’s already given —— what do you ’
1 2 releasing any shares? 12 mean? You`ve e—rnailed:him a —— {
1 3 A. Not that I specifically recall. 1 3 A. Mr. Margolis relayed the substance ofthe rg
1 4 MR. MARGOLIS: Are we going to take a [ 14 conversation already. fj
1 5 break at some point? 1 5 MR. OBEYESIEKERE: We put on the
1 6 MS. CURTIN: Yes. Do you want to take { 1 6 record, me and Mr, Margolis had some conversations
17 a five—minute break? 17 about what Mr. Williams told Mr. Margolis, but I
1 8 MR. OBEYESEKERE: Let‘s take a break E 18 think it would be better for the record for Mr.
1 9 right now, plan our lunch and how long we're going 1 9 Margolis to ——
2 0 to take. 20 MR. MARGOLIS: Absolutely. The only
2 1 MS. CURTIN: Why don’t we go offthe 2 1 important aspect of it is after Mr. Williams relayed
22 record at 12:00. 22 this to me, I called Mr. Obeyesekere just to give }
2 3 (Whereupon, hom 12:00 p.m. to 2 3 him the conversation as best as I could after it was YQ
2 4 12:58 p.rn., a luncheon recess i 24 relayed from Mr. Williams. s
2 5 was taken.) i 2 5 Q. So Mr. Bryant called you. Q
Page 449 g Page 451
1 AFTERNOON SESSION i 1 A; Yes. Q
2 MS. CURTIN: We're back on the record I 2 Q. And what did Mr. Bryant tell you during
3 at 12:58. 3 that call just generally? i
4 Q. Mr. Williams, while we were off the I 4 A, Generally, that ifl wanted to put up my
5 record, were there any conversations between 5 house for collateral, he could borrow $500,000 and I
6 yourself and the Staff concerning the Monk's Den or r 6 make all this go away.
7 8000, Inc., investigation? 7 Q. So wait a minute. He was asking you to
8 A. Just spelling. 8 give him $500,000 to make it go away? Y
9 Q, Spellings. But nothing substantive 9 A. He either asked me, A, for 500.000 or, B, f
1 0 regarding the investigation? 1 0 to put up my house as collateral so that he could FQ
1 1 A. No, 1 1 borrow the money to make this all go away. Z
12 Q. Is that correct? g 12 Q. Okay. And let‘s clarity this fora second
13 A. Correct. 13 here. I have to ask you, what did Mr. Bryant
1 4 Q, Okay. When we went off, we were talking 1 4 specifically say to you on the phone as best as you
15 about-- we were talking about the tentative g 1 5 can recall now with regard to that? How did he put
1 6 agreement that 8000, Inc., had reached with Monk's 1 6 that to you? V
17 Den to acquire Monk's Den, but Ijust wanted to i 17 A. He relayed that he was running out of 1
1 8 clarify a few things before we went forward. , 1 8 money; that he had a financing source; that he could {
1 9 The first was, when was your last 1 9 show —— if he had enough money, that he could
2 0 communication with Mr. Bryant as of today? When was 2 0 produce the documents to make all of this go away. PY
2 1 the last time you talked to him? 2 1 I have absolutely no idea. To me,
22 A. Physically spoke with him would have been 2 2 frankly, it sounded like he was drunk when he ,
2 3 l believe February 25th of this year. 1 2 3 called, and I immediately relayed the conversation
2 4 Q. So that’s the last time you actually spoke 2 4 to Mr. Margolis.
25 to him by phone? 2 5 Q. And what did you understand Mr. Bryant was
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Page 452 E Page 454 r
1 saying to you? How did you interpret that? 1 the problem? if
2 A. Frankly, I interpreted it to believe that i 2 A. He’s not specifically stating anything,
3 for $500,000, ifl was willing to put up my house or i 3 but he’s like, oh, the I\/lonk's Den and, you know, the _
4 give him $500,000, that he would be able to make 4 persons associated with them.
5 this all go away. 5 Again, it'sjust —· it’s innuendo, but if I
6 Q. And what do you mean "go away"? What go I 6 you've read them, I'm guessing you probably have.
7 away? Make what go away? ; 7 Would that be accurate, so you know what l’m talking .
8 A. Again, keep in mind, as I said, it sounded l 8 about? Q
9 like he was drunk when he called me. { 9 Q. You mean the investor statements and
10 Q. Okay. i 10 updates? Q
1 1 A. He was like for $500,000 I can make this I 1 1 A. Yes.
12 entire investigation go away. I 12 Q. Yes. Q
1 3 Q. The SEC investigation? l 13 A. Okay. So you’ve seen the ones that are
1 4 A. Everything. He's like everything will be § 14 coming out every couple of days?
1 5 all fine, your reputation will be good again, all i 15 Q. Yes.
1 6 this will be cleared up, to which I responded -- 16 A. So as you can see, it looks as though he’s 1
1 7 again, you have to keep in mind that at this point 17 trying to create innuendos that l‘m the bad person Q
1 8 the investigation was going on. I've been put in a 18 and I‘m the reason all ofthis has happened and that O
1 9 situation that I never in a million years thought I 1 9 he made a mistake by ever getting in touch with me
2 0 would be in. 20 at all. r
2 1 And the audacity aner what had gone on 2 1 Q. Do you know I\/lr. -— in this call Mr. Bryant .
22 for this to even happen, to be as accurate in my I 22 told you he needed money. Do you know what his {
2 3 response to him, I'm like I can’t believe you have 2 3 current financial condition is? Q
2 4 the audacity to call me and ask this type of 2 4 A. He relayed to me he didn’t have money for
2 5 question, and I said —— and I told him that I was 25 a taxi.
Page 453 Page 455
1 going to share it with my attorney. E 1 Q. Did he ever tell you what his financial =
2 Q. Okay. So you told him you were going to 2 condition was prior to that or how well ofthe was it
3 tell your attorney what he had said to you? 3 or not? I
4 A. Yes. 4 A. No. You have to keep in mind at this yi
5 Q. Okay. And how did he react to that? 5 point, especially during that call, he had -- I was
. 6 A. That pretty muchended the conversation. 6 down there. He was obviously well off by any normal
7 Q. And did you feel in that call threatened 7 person's perception. I mean, he was living in
8 by Mr. Bryant? 8 literally a mansion in Barbados.
9 A. No, I wouldn't say that. 9 I mean, we're walking into the country
1 0 Q. At any time have you felt afraid of Mr. , 10 club for lunch and there's sir this guy or sir that
1 1 Bryant since that call or something he might do? 1 1 guy and they’re all, Johnny, how's it going? You ii
1 2 A. No. 12 know, how's the business? You know, when are you »
1 3 Q. To your knowledge, has l\/Ir. Bryant acted 13 going to build this and when are you going to build
1 4 on, you know, the fact that you rejected his offer? 14 that? I mean, from all appearances, he was clearly °
1 5 Has he retaliated, to your knowledge? 15 well off To what level, I have no idea. {7
1 6 A. Well, Mr. Bryant is now putting out what , 1 6 Q. Are you aware in these investor updates
1 7 he’s calling investor updates or shareholder updates 17 and investor statements Mr. Bryant is alleging that ,
1 8 or on occasion press releases and for lack ofa 18 there is still a naked short position in 8000, Inc.?
1 9 better term, it looks like he’s trying to throw me i 1 9 A. I am very well aware ofthat. I receive i
2 0 under the bus; that this is all my fault and that 20 still numerous —— I mean, I‘m actually still on the
2 1 I’m the sole reason that all of this is coming down. 2 1 list to receive those investor updates because I
2 2 Q. These investor statements and investor 22 think it’s important for me to see them.
2 3 updates are for 8000, Inc.? 2 3 Q. So you’re getting them as he’s sending ij
2 4 A. Yes. l 24 them out'? Q
2 5 Q. And he’s alleging what did you do to cause I 2 5 A. Yes. And if not, somebody else is
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Page 456 Page 458
1 forwarding them to me, but, yes, I am well aware 1 Q. Why?
2 that he is continuing to allege that there is a 2 A. Because they offered to second market
3 substantial naked short position. I can neither 3 execution guarantees for trades. IY
4 confirm nor deny that at this point. 4 Q. So did you ever recommend that they set up
5 Q. Do you thi-nk at this point there is a Q 5 accounts ateother brokendealers?
6 naked short position in SOOO, Inc.? I'm talking g 6 A. I believe I ve mentioned in the past gt
7 about now. 7 .lust2Trade and as the aforementioned earlier
8 A. Until this statement you made a few i 8 Gibraltar to one or two folks.
9 minutes ago about would you be surprised to learn 9 Q. Any other brokers that you’ve recommended?
1 O that those 60 million or whatever number ofshares 10 A. N0t Sp€©iti€3lly that I Gah thihk Of.
1 1 were sold, until that second, I fully believed there i 1 1 Q. Other than the two—second trade
1 2 was a naked short in EIGH. i 12 turnaround, is there any other reason why you
1 3 Q. And Mr. Bryant, are you aware I\/lr. Bryant's i 13 recommended E*TRADE to Monk's Den members?
1 4 now making specific allegations against E*TRADIi, ‘ 14 A. Not that I specifically recall.
1 5 that EWFRADE holds a naked short position in the l 15 Q. Do you know what -— I asked you or I is
1 6 stock? 1 6 talked to you about the allegations that Mr. Bryant
1 7 A. I am aware that he's making those l 17 is making that E*TRADE currently holds a naked short
1 8 allegations and I've reviewed what he has i 18 position in 8000. {
1 9 considering evidence to that account. g 1 9 A. Yes.
2 O Q. What do you mean you're reviewing i 2 0 Q. Do you know what position, in fact, or yr
2 1 evidence? Wliat evidence arc you reviewing? E 2 1 have any idea what position, in fact, E**TRADE holds
22 A. No. I said I am aware ofthe evidence 22 in 8000, hw.?
2 3 that he's presenting. 1 2 3 A. I have no way of knowing what their Q
2 4 Q. Okay. 1 2 4 accounts hold or not. I know what I, personally,
2 5 A. So I can see the stuff that he's printing 2 5 hold there but not what they de.
-».~—-.»~.~—m--2M.»...1.;—.....,m...~W.M~...-mw~M..~.*»..J
Page 457 Page 459
1 is what I'm saying. 1 Q. Would you be surprised to learn that
2 Q. Do you believe what he is stating, that l 2 E*TRADE’s clients, including yourself hold almost a
3 E*TRADE holds a short position is true? j 3 third ofthe float of8000, Inc.? I,
4 A. As I said a few moments ago, until you 4 A. That would not surprise me.
5 made that statement, I fully believed there was a I 5 Q. Why wouldn't that surprise you?
6 naked short in EIGH. The extent of which I have no { 6 A. Based on the general conversation of
7 idea, but I believed it was substantial. i 7 people and I know how many shares I hold and then in
8 Q. Have you ever talked to E*TRADE about this i 8 addition to that, going back to the New Zealand
9 allegation of a naked short position? l 9 folks, there was a very large portion of shares
1 0 A. No. 1 0 bought in 8000, Inc., and those are both E*TRADE f
1 1 Q. Has E*TRADE ever communicated to you that 1 1 accounts.
1 2 they have objected to any trading in your accounts? 1 2 Q. And did you recommend the New Zealand
1 3 A. That they‘ve what? 1 3 people set their accounts up at E*TRADE? ig
1 4 Q. Objected to any trading or activity in 1 4 A. I don't recall whether or not I
1 5 your accounts. 1 5 specifically recommended that. I know they
1 6 A. I don't know what you mean. 1 6 mentioned Charles Schwab. I think they mentioned
' 1 7 Q. Has I5*'l`RADE ever communicated with you i 17 somewhere else. I think kind of in passing at one Q
1 8 that they have a problem with any activity at any 18 point I said use E*TRADIE because it was the platform
1 9 time in your accounts, your accounts that you l 1 9 I was already familiar with, but for no specific Y,
20 maintain at E*"l`RADE? % 20 purpose;just because I already had it.
2 1 A. Not that I'm aware of. 2 1 Q. And then just going back to clarify, did
22 Q. Do you know —— did you ever refer members i 22 you ever get a call or a letter or any notice hom
2 3 ofthe Monk's Den to E*TRADE to set up accounts { 23 E*TRADE that they had a problem with any trading in
2 4 there? Did you ever tell them to do that? E 2 4 your -- in accounts at any time or with the ones
2 5 A. Yes. i 2 5 established by Bancorp, New Zealand?
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Page 460 Page 462
1 A. Yes. 1 broker had to have located that stock in order to
2 Q. And when did that happen? 2 be -— and have the ability to borrow it?
3 A. I don't remember, but it was around the l 3 A. As I understand it, that would be I
4 time that it was opened. Again, I don't remember 4 accurate.
5 the specific dates. 5 Q. Given that you knew that 8000, Inc.'s
6 Q. What account? t 6 float was extremely low, how would you have thought
7 A. The first one. 7 that there was a huge naked short position in 8000,
8 Q. The first account for Bancorp, New 8 Inc., since there wouldn't be a lot of stock
9 Zealand'? l 9 available for borrow in order for the brokers to I.,
1 O A. Yes. Q 1 0 issue —— to execute the short sales?
1 1 Q. High Performance Fund? l 11 A. Well, by definition, E*TRADE, to the best gi
1 2 A. Correct. 12 of my knowledge, doesnt allow the shorting of any
1 3 Q. And what did they -— what did they object l 1 3 stock under $4.
1 4 to? 1 4 Q. Okay. But I'm talking generally now. Reg
1 5 A. They objected to the fact that we were 1 5 SHO requires broker—dealers to identify stock f`or
1 6 trading in penny stocks, and they needed the opener 1 6 borrow before they allow a customer or anybody or —— 4E
1 7 ofthe account to verify to them that that's what 17 even it`they`re executing on their own account to
1 8 they actually wanted to trade and they did and 1 8 cover-- before they make the short sale, execute
1 9 everything was resumed as normal. 1 9 the short sale. Is that accurate? rl
20 Q. Did Bancorp, New Zealand attempt to 20 A. I believe that to be an accurate fe
2 1 deposit certificates in 8000, Inc., to its E*TRADE 2 1 statement, but I do not believe that rule is
2 2 account? l 22 followed by any stretch ofthe imagination.
2 3 A. Not that I know of. I 2 3 Q. So you think that is generally the rule, i
2 4 Q. Okay. And then -- i 2 4 but you don`t think in practice that brokers follow
2 5 A. E*TRADE wouldn‘t take the certificates 2 5 that?
Page 461 . Page 463
1 anyway. 1 A. I completely agree with that statement.
2 Q. Are you familiar with E*TRADE's policy l 2 Q. Okay. So do you know any specific
3 regarding short selling by its clients or customers? i 3 instances relating to 8000, Inc., where that rule
4 A. To an extent, yes. 4 was not followed?
5 Q. What is that policy? i 5 A. I can‘t be specific to 8000, Inc., but I
6 A. To the best ofmy knowledge, the shares E 6 can give you a specific example to which I would
7 have to be available for borrow before you can short 7 reference that says to me that it definitely
8 them. l 8 happens. {
9 Q. Do you know, did E*TRADE permit customers 9 Q. Okay. Tell me.
1 O to sell 8000, Inc., short? l 1 O A. There's a Bloomberg report that I sent Mr.
1 1 A. I have no way of knowing that. 1 1 Margolis a link to that's approximately 26 minutes
12 Q. Did you ever attempt to sell 8000, Inc., i 1 2 long that says that naked shorting happens to the
1 3 short in your E*TRADE account? 1 3 tune of $6 billion a day. One specific CEO in that
1 4 A. No. Q 1 4 video was a sub penny stock, and he got tired of
1 5 Q. No? , 1 5 being shorted, so he went in and physically bought
1 6 A. No. l 1 6 his entire float plus one share in a single order
1 7 Q. Okay. And are you familiar with 17 and the stock still traded billions of shares.
1 8 Regulation SHO? 18 Q. Have you ever had —— do you have specific
1 9 A. Generally. 1 9 knowledge of an instance where a broker short sold a
2 0 Q. What do you understand Regulation SHO is? l 2 0 stock without having the ability to borrow it?
2 1 A. That it has to show any legal shorts i 2 1 A. I can't speak to that because I can't —— I
22 within a stock that need to be covered within a i 2 2 have no access to broker records.
23 specified time frame. · i 2 3 Q. But you don't have any specific
2 4 Q. Do you understand the rule that before a 2 4 experience. That's what I'm asking you with that.
2 5 broker can execute a short sale for a customer, that 2 5 You don`t know of it yourself. You've never seen it
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Bage 464 Page 466 I
r
1 yourself. 1 A. Actually, TGB. ‘
2 A. Well, I couldn't verify it. I mean, I 2 Q. TGB.
3 can‘t say that it hasn't happened, but I can't 3 A. And I believe that was sent via e—mail _
4 verify it. I 4 yes.
5 Q. Ijust want to turn back to the Monk's Den 5 Q. Okay. And you produced a copy of that to 1
6 and 8000, Inc.'s relationship first with the float 6 us? ,
7 lock down. 7 A. Yes. Y
8 Earlier you had testified you thought that 8 Q. Okay. Was that agreement ever executed?
9 you had called the float lock down after you had i 9 A. I signed it. Nothing ever came of it. I
10 traveled to Barbados during the first trip but then I 1 0 Q. And under that agreement, were you to
1 1 subsequently changed your testimony acknowledging i 1 1 receive any compensation? gf
12 the float lock down in Monk’s Den which was called 12 A. Again, I've read it since then but even I
13 in or about December l5th occurred before your Hrst 1 3 at that, you know, I looked at it and said nothing L
14 trip to Barbados. Did you talk to Mr. Bryant by 1 4 ever came ofthis, so I don‘t even remember really j
1 5 telephone or by e—mail about the possibility or the I 1 5 what —— it was four or five pages long. I don’t
1 6 likelihood that you would call a float lock down on 1 6 specifically remember what it said, but I did Y
17 8000, Inc.? I 17 provide a copy, but as I said, absolutely nothing *
18 A. I don't recall specifically. Ijust E 1 8 came of it. f
1 9 simply don't. g 1 9 Q. And what I’m trying to understand here is Q?
20 Q. Do you recall any conversation with Mr. 2 0 what you -- you testified earlier that Mr. Bryant Q
2 1 Bryant where you specincally discussed the purpose 2 1 wanted you to get 8000, Inc., up to 2 cents a share. .
22 ofthe float lock down on SOOO, Inc.? 2 2 A. Correct. I
23 A. I don't recall specific conversations to i 2 3 Q. To get it to be DTC eligible? g
2 4 the purpose of SOOO, Inc., float lock down. I mean, g 24 A. Correct. i
25 a float lock down is a float lock down is a float I 2 5 Q. How were you going to do that? ;
Page 465l Page 467 I
1 lock down. The purpose is the same on all, to lock i 1 A. By buying shares, talking about it and
2 up the float for low share count floats that have i 2 starting to trade it. I;
3 charts that look good. I 3 Q. Okay. And, in fact, did you do that?
4 Q. Putting aside for a minute the agreement 4 A. I did.
5 relative to the acquisition, did you enter into any { 5 Q. And did Mr. Bryant compensate you forjust
6 other agreements, verbal or written, with 8000 or i 6 doing that? if
7 Mr. Bryant relating to SOOO? 7 A. Well, not specifically, no. The only
8 A. At one point Mr. Bryant sent me some type 8 compensation that was received was that which we’ve I
9 of Consulting Agreement, told me to read it and sign i 9 already discussed.
10 it or whatever and get it back to him. We could I 10 Q. Which is the 3 million shares? (
1 1 work on some kind ofbusiness partnership at this 1 1 A. And later cash —— <
12 point, but I don't believe it was specific to SOOO, 12 Q. $40,000? Q;
1 3 Inc. I've read it since then. At the time and the i 1 3 A. But that was unrelated to EIOH.
14 e-mail —— I remember specifically the e—mail you're i 14 MR. MAROOLIS: Let mejust have a {
1 5 talking about because we reviewed it recently and, 1 5 second. ,_
1 6 you know, I responded. Didn't read it. Just signed 1 6 (Witness and counsel confer.) }
17 it. 17 THE WITNESS: He‘s asking me ifI'm I
{ 18 Q. Oh, you mean the other e-mail, the i 18 sure it’s 3 million, ifit‘s not 2 million, and the I
1 9 Consulting Agreement relating to CDIV? I 1 9 short answer is, no, l‘m not a hundred percent sure, i
2 0 A. No. I’m referring specifically to one l 2 0 but the record would reflect whatever the actual
21 that I received from Jonathan Bryant. I believe it I 2 1 number is.
22 was TGB Fund. F 22 MR. MARGOLIS; lt’s in the record.
23 Q. Okay. So you got a proposed Consulting 23 MS. CURTIN: Right. ` Q
2 4 Agreement from Mr. Bryant in the name of TBG Fund Q 2 4 MR. MARGOLIS: I think it's about a I
2 5 and he sent that to you via e»mail? I 2 5 little over 2 million.
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Fage 468 Barge 470
1 THE WITNESS: I don’t remember, but it 1 A. I don't think it existed at that point. 7
y 2 was there. I agree it was there. , 2 Q. And other than the Ihub message boards, I
3 Q. What did you do with the shares that you 3 where else did you talk about it? r
4 got Hom or for that compensation, the 2 or 3 4 A. To the best of my knowledge, nowhere.
5 million shares? 5 Q. Did you discuss it during your Monkinars?
6 A. Over the course oftime, I used my 6 A. Possibly.
7 charting ability and I added and/or sold at varying 7 Q. Do you remember what you specifically said I
8 points. 8 in your Monkinars about 8000, Inc.?
9 Q. And where did you —— when you first got 9 A. No. Again, to be clear, it's not
1 0 the shares, where did you deposit them to'? i 1 0 something that I would have brought up. I only
1 1 A. Ifl recall correctly, they came to my 1 1 talked about those that people asked me questions. y
12 E*TRADE account, I think. Again, it was a longtime g 12 Again. the purpose ofthe Monkinar is to teach about _
13 ago, and l’m sure the records would show exactly 1 3 technical analysis. _ I
14 where they went. t 1 4 Q. So during this time, the early 2010, you A,
15 Q. Do you know how they got into your E*TRADE 1 5 were urging or at least from January —— let me put I
1 6 account? 1 6 it this way: From January 20I0 to September 20I 0,
17 A. The aforementioned DWAC. 17 were you urging the people who followed the Monk’s e
18 Q. Do you know whose shares they were before 1 8 Den to accumulate positions in 8000? ,
1 9 they were transferred into your account? 1 9 A. Over the course of that year, I would say
20 A. No. 2 0 that my posting history and/or e—mails would imply I
2 1 Q. Do you know ifthey were —— belonged to l 2 1 acquisition, yes. _
22 Mr. Kelly? 22 Q. With an intent to affect the short squeeze *
23 A. I have no idea, 23 in S000? T
2 4 Q. Do you know rfthe shares were transferred g 2 4 A. To lock the float and/or do that, yes. ,
25 from Mr. KeIIy‘s account to —— Mr. I<elIy's accounts E 2 5 Q. Okay. And is it your testimony that that I
Page 46% Page 471 4
1 at Charles Schwab to your account at E*'l`RADE? g 1 never happened in 8000? e
2 A. I don't remember. I —- I don’t know that 2 A. That what never happened? ,
3 I ever knew. 3 Q. That the short squeeze never occurred in
4 Q. And during this time —— let me ask you 4 8000. I
5 this: In November of 2009 when Mr. Bryant first I 5 A. I can‘t conhrm, nor deny whether that I
6 called you, did he come right out and tell you he 6 happened.
7 wanted you to buy or trade 8000, Inc., talk about i 7 Q. How come you don't know whether it
8 8000, Inc., post about it? How did you come to know 8 happened or not? Do you think it happened, the .
9 to do that? I 9 short squeeze actually occurred in -- i
10 THE WITNESS: Can you read that whole 10 MR. OBEYESEKERE: I think his _
1 1 thing back to me, please? i 1 1 testimony has already been it was your understanding
12 (Question read back.) i 12 that for all ofthe float lock downs, there was no ;
1 3 A. Again, this general time frame was the I 1 3 short squeeze, correct? 7
1 4 discussion ofneeding to get over 2 cents to be DTC 1 4 THE WITNESS: Correct.
1 5 eligible and, again, after looking at the share l 1 5 MR. OBEYESEKERE: Okay.
1 6 structure and the chart, I thought that was very I 1 6 BY MS. CURTIN I
17 easily doable and so, I mean, I did, so I started E 1 7 Q. ~ But how do you know there was no short I
1 8 playing it and talking about it and it got over 2 , 1 8 squeeze? {A
19 cents. 19 A. Again as I said earlier and I believe r
t 2: 7
20 Q. So you posted about it on the Ihub message i 2 0 even yesterday, I have no way of knowing g
2 1 boards for Monk’s Den and 8000, Inc.? E 2 1 specifically whether or not they did. s
22 A. Yes. I 22 They may have and I don't know, but based [
23 Q. And you talked about it on Monk’s Den 2 3 on the amount of volume that went through and the
2 4 website or was the website not available at that 2 4 amount of selling that occurred during that time, I
2 5 point? E 2 5 don’t believe a short squeeze occurred.
52 (Pages 468 to 471)

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Page 472 i Page 474
1 Q. And did you -- did you get EIGH or 8000, 1 rattle some number, whatever. Again, that stuffis Q
2 Inc.’s share price above 2 cents or to 2 cents? 2 outside ot` my league. Q
3 A. Yes. l 3 But avain he's like you know I have li
· · Q :· b 7 2 1 gr
4 Q. And when did you get it to 2 cents? 4 the precedent based on whatever, whatever. I don`t .
5 A. I don't specifically remember the day it 5 know, but the short answer is it never got there.
6 crossed. i 6 Q. Did he ever express anger or being upset ;
7 MR. l\/IARGOLIS: When you say "you," i 7 that it never became DTC eligible? ,;
8 just my sensitivity, he didn't do that all by 8 A. Routinely. Not toward me, but he's, like, Q;
9 himself. I mean, the market did it, whatever I 9 angry that it never got there because he kept
10 happened there. 1 0 saying, you know, I filed everything they’ve asked S
1 1 MS. CURTIN: Let me clarify. i 1 1 for in triplicate. You know, I’ve done this. I’ve lj
1 2 Q. The price went to 2 cents? I 1 2 done that. Why the blankety blank won’t they do if
1 3 A. The price did surpass 2 cents. 2 1 3 what they're supposed to do. I
1 4 Q. And you helped it get to 2 cents, is that g 1 4 Q. Okay. Did he ever tell you it was
1 5 accurate? j 1 5 literally rejected by DTC for eligibility? t
1 6 A. I think so. 1 6 A. Yes. He said it was rejected and, Q
1 7 Q. And that’s by trading it and by talking 1 7 again, he gave the excuse that, you know, this j
18 about it and posting about it, is that correct‘? 18 should be —- the reason they rejected it was because
1 9 A. Yes. E 1 9 of blah, blah, blah and then the precedent that he I
20 Q. And what happened when it reached 2 cents? E 20 listed says it should be accepted based on that and
2 1 A. I don't understand the question. { 2 1 this went back and forth many times. [
22 Q. Okay. So it reached 2 cents. Did Mr. i 22 Q. Do you know a Carl Duncan?
2 3 Bryant congratulate you or did he ask for another l 23 A. Oh, yes. Y
2 4 deal to increase it further? 2 4 Q. Who is Carl Duncan? “
2 5 A. You’re implying there was a deal. There 2 5 A. As I understand it, that’s the attorney I;
Page 473l Page 475
1 was no deal at this point. 1 for 8000, Inc.
2 Q. Okay. 2 Q. Did you ever meet Mr. Duncan? Y
3 A. So to ask for yet another deal, there 3 A. No. I
4 wasn’t one to begin with. 4 Q. Did you ever speak to lvlr. Duncan? I,
5 Q. Did he come back to you and say he wanted 3 5 A. Let me rephrase that. To the best of my Q
6 to see the price go higher? 6 knowledge, I never met him.
7 A. Oh, many times. He referred, oh, I would 7 Q. Why do you think you met him? Why do you
8 love to see it this or I would love to see it at i 8 say that caveat?
9 that, and I, you know, perpetually relayed the fact i 9 A. Because given the history of`Mr. Bryant at 3Y
1 0 that it wasn't DTC eligible yet because for whatever l 1 0 this point, I would not be surprised by anything. e
1 1 reason, it never got there. 1 1 Q. Did Mr. Bryant ever introduce you to ii
12 He had lots of reasons and/or excuses, but 12 someone he identihed as l\/Ir. Duncan?
1 3 it never got there, so many brokers were unable to 1 3 A. No. {
1 4 facilitate buys or sells in it. 1 4 Q. Have you ever spoken to Mr. Duncan?
1 5 Q. Because it wasn‘t DTC eligible? I 1 5 A. I've been present during a conference call
1 6 A. Correct. l 1 6 with Mr. Duncan but not personally spoken to him
1 7 Q. So even though it reached 2 cents a share, l 1 7 that I know of g
1 8 8000, Inc., never got to be DTC eligible? I 1 8 Q. When was that conference call? s
1 9 A. To the best of my knowledge, no. 1 9 A. I believe on —— I think it was early -—
20 Q. Did Mr. Bryant tell you why it never i 2 0 l‘m trying to pick the date and Ijust can't, but it
2 1 became DTC eligible? 2 1 was early in my August visit.
2 2 A. On many occasions he would say, oh, you l 2 2 Q. Early —— when you took this or when you I
2 3 know, we have to do this form. You know, I sent all 23 participated in this conference call with l\/Ir. {
2 4 this stuff It should have already been approved. 2 4 Duncan, where were you?
2 5 Now they're asking for this or that and he would 2 5 A. I was in Barbados at Mr. Bryant's home.
53 (Pages 472 to 475)

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Page 476; Page 478 .
I
1 Q. And he called Mr. Duncan? 1 frankly, at the point, lVIonk's Den in and ofitself
2 A. Yes. 2 had nothing. He literally handed me a number and g
3 Q. Okay. And was anybody else in this I 3 said here. You have to incorporate. I
4 conference call? l 4 Q. Who handed you a number? .1
5 A. Not that I know of. I 5 A. l\/Ir. Bryant. .s.
6 Q. So it was you and Mr. Bryant from Mr. E 6 Q. l\/Ir. Bryant told you you had to incorporate I
7 Bryant's home in Barbados and l\/Ir. Duncan, as far as i 7 Monk’s Den?
8 you know on the phone in the United States or from l 8 A. Right.
9 some other location? 9 Q. Which at that point had not been
1 0 A. Or wherever it was. 1 O incorporated?
1 1 Q. Okay. How long was this phone call? 1 1 1 A. Correct. y
12 A. It wasn't long. I would say maximum ten i 12 Q. So you incorporated it in August l0l0 at
1 3 minutes. I 1 3 Mr. Bryant suggestion?
1 4 Q. What was discussed during this call? t 1 4 A. And at his home. 3
1 5 A. Market events and, again, the business end X 1 5 Q. I·Iow did you incorporate l\/Ionk's Den at his .
1 6 ofthe stuff. ljust tune out. I don't know it. 1 6 home?
1 7 Q. ’ But did you discuss with Mr. Duncan the 1 7 A. I took the phone number that he gave me, I
1 8 tentative agreement for 8000, Inc., to acquire § 1 8 and I called them and went through all the questions
1 9 Monk‘s Den? i 1 9 right there and then they handled it. >
2 0 A. Again, they were discussing that. You 2 0 Q. Where did you incorporate it? Q
2 1 know, he routinely referred to his ex SEC senior 2 1 A. Arizona.
2 2 counsel of35 years that was on this stuff and —— 2 2 Q. And who did you call to incorporate it? I
2 3 Q. I\/lr. Duncan? That‘s who he’s referring to? 2 3 Who did he have you call? ?
24 A. As I assume. I mean, that's the only 24 A. The name that he gave me was The Company I
2 5 attorney he ever mentioned to me. Frankly, I was l 25 Corporation, which is who I used.
Page 477 Page 479
1 looking at charts while they were talking. 1 Q. ls it a private company that incorporates
2 Q. So at this point, what was your -— you E 2 businesses?
3 said there was a tentative agreement reached between 3 A. I don't know what the company,
4 you and I\/lr. Bryant in your visit in August 20I0 to 4 corporation's business structure is. I don't know {
5 Barbados. 5 ifthey're public or private, but, I mean, I've
6 A. Yes. 6 looked at them aher the fact, and they’re readily
7 Q. What was that agreement? I 7 available to find on line that they do this type of Y
. 8 A. It took on several evolutions, but the l 8 service.
9 general agreement that we had come to -— and, you I 9 Q. Was Mr. Duncan involved in that at all? sr
1 0 know, keep in mind at this point it's all tentative. l 1 0 A. No. ?
1 1 There was no employment agreement. There was no IP 1 1 Q. So you incorporated it there. And so what
12 agreement for the l\/Ionk's Den logo or the software I 12 was 8000, Inc., going to acquire from lVlonk's Den?
1 3 was working on, but tentatively there was going to 1 3 A. They would have acquired the corporation
1 4 be a I0 million share swap for Monk's Den and I 1 4 that I had just created and, again, no documents had
1 5 would have eventually ended up with an employment 1 5 been generated at this point, but there would have
16 contract to continue teaching and doing what I do. 1 6 been an employment contract to keep me onboard, as ,
17 Q. So 8000, Inc., was going to give you I0 1 7 well as what I expected from the general
1 8 million shares of 8000, Inc., in exchange for l\/Ionk’s g 1 8 conversation would be like rights to the software
1 9 Den? t 1 9 that I was doing. ' Q
2 0 A. As well as a future expected employment i 2 0 Q. For the software you were developing?
2 1 contract. r 2 1 A. Correct. I
2 2 Q. Okay. And when you say it was to acquire 2 2 Q. The trading software?
2 3 Monk’s Den, what specifically was 8000, Inc., 2 3 A. Correct.
2 4 acquiring? 2 4 Q. Would they have had —— would they have
2 5 A. Well, they would have been acquiring -— 2 5 acquired the Monkinars?
54 (Pages 476 to 479)

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Page 480 j Page 482
1 A. Yes. Well, the ¤ would have ac uired —— I 1 then he sent me over the course ofa cou le of da is
5 Cl . P 5 Q;
I 2 think the word I want to use here is like the I 2 these two PR’s.
3 branding ofthat because I would have continued to I 3 Q. Okay. These two PR's, press releases that Q.
4 teach them. Does that make sense? j 4 you‘re referring to —~
5 Q. Okay. g 5 A. Exhibit Four and Exhibit Five. é
6 A. As well as the I\»lonk's Den website which at 6 Q. Okay. Exhibit Four and Five. First off
7 that point was in existence. 7 let me ask you this: Was there ever an agreement
8 Q. And so did anything —~ you state at this I 8 signed by 8000, Inc., and Monk's Den? You and
9 point on your visit to Barbados in August 20I0 there 9 someone within 8000, Inc.?
10 was nothing in writing. Did it ultimately get I 10 A. No. In fact, I routinely asked Mr. Bryant
1 1 memorialized in writing? 1 1 about that, and he kept saying we have 60 days. We
12 A. No. Shortly thereafter that I left I 12 have 60 days to ratify. We have 60 days.
13 Barbados I went to New Zealand on Mr. Bryant’s I 1 3 Q. So there was never an agreement signed for
14 behalf to relay to them so —— excuse me ·— so they 1 4 the acquisition of Monk's Den by 8000? E
1 5 could review EIGFI to open this additional account we I 1 5 A. No. I didn't even have documents for an if
1 6 discussed and whether or not they would purchase 1 6 attorney to review yet. Wejust had a verbal
17 and, frankly, a lot ofthe time I wasjust sitting 17 agreement in principle.
1 8 there and they were back and forth on the phone with I 18 Q. So the representation that 8000, Inc., had
1 9 l\/Ir. Bryant faxing and/or e-mailing documents back i 1 9 acquired l\/Ionk's Den is not —— is false in these Q,
20 and forth, including this financing agreement that 2 0 press releases, is that correct?
gg gte eaglipr discussep qnd thpn lidiplllilke a halfa IA. ]Wel}l, gaviqg rereadetlppselnow go- again, ii
ay o c iartmg wit i tiem, tmc o 1 te a mini w ten oo e at tiese rnitia y, was ocusmg on
2 3 Monkinar, if you will. l 2 3 the quote of, you know, what I thought would happen
2 4 And then when I got back to the U.S. and 2 4 with these and to make sure that the revenue numbers
.2 5 was speaking with Mr. Bryant, he relayed that this j 2 5 were right. You know, this was their issue to put
Page 481j Page 483
t
1 was -— I don't remember exactly how he worded it, so 1 out. I had no idea of reporting requirements or how
2 I’m paraphrasing. I may not be saying this 2 this stuff had to go out.
3 accurately but along lines ofwe have to report to I 3 And when I first saw this, I took it that S;
4 the shareholders that we're buying you. l 4 the acquisition was merely a process. For example,
5 Q. When you say you’re now referencing to the j 5 I could say I`m buying a house. It doesn`t mean
6 press releases and you‘re saying Mr. Bryant told you 6 I’ve bought it yet. It means l'm buying one.
7 that they had to release a press release in order to j 7 Q. But this says its acquisition. 8000
8 report to the shareholders? i 8 announces its acquisition of Monk‘s Den.
9 A. That they were buying me, that we had to 9 A. Again, like I said, when I looked at this
1 0 let them know that. 1 0 at first, I merely thought that meant the process of
11 Q. And did he tell you why he was required to 1 1 it.
12 do that? 1 2 Q. Oka . You thou lit it was oin to ha en.
5’ 8 8 8 PP ,
13 A. No. Like I say, that end ofthe things 13 A. Right.
1 4 arejust really outside ofmy area. He just said. 1 4 Q. This was what was being represented in the
1 5 Q. Did he tell you how he was going to report j 1 5 release and therefore it was okay?
1 6 to the shareholders that 8000 was acquiring Monk's r 1 6 A. Well, again, you know, I figured anything
17 Den? 1 1 7 that they would put out he would run by his ex CEO
18 A. Well, he mentioned that we were going 1 8 or SEC senior counsel or whatever. I don't know the
1 9 to —— we. That he was going to PR it and that he 1 9 legalities ofthese things. I’ve never been
2 O was going to send me over something because he had 2 0 involved in something like this. I have no concept
2 1 asked me for the projections. I 2 1 of what has to happen.
22 And so I sat down with a calculator and I 22 Q. Well, let me ask you this: Do you know
23 worked out what I thought the projections would be l 2 3 who drafted these press releases, Exhibits Four and
2 4 on a relatively conservative basis that l thought I I 2 4 Five?
2 5 could it hit, and so I sent those over to him and 2 5 A. To the best ofmy knowledge, Mr. Bryant
55 (Pages 480 to 483)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 57 of 83
A Page 484 Page 486 .
1 drafted them after asking me for a quote and/or for 1 had made thus far would still be mine.
2 projections. 2 Q. So you mean all the assets that you had
3 Q. Did Mr. Bryant tell you he actually 3 created and were held within Firstinawareness would ji
4 drafted these press releases? 4 be yours?
5 A. No. But they came to me hom his e—mail. 5 A. Correct.
6 Q. So he e—mailed you drafts ofthe press I 6 Q. So he would hold or it was anticipated in
7 releases by e—mail, both of them, Exhibits Four and 7 that Monk’s Den corporation only the lvlonkinar
8 Five? 8 concept going forward? I
9 A. To the best of my knowledge, yes. 9 A. And/or the sohware.
1 O Q. Did he ever tell you or did you come to 1 O Q. And/or the software.
1 1 understand that anybody else helped him to draft the 1 1 A. Well, that’s a pretty big factor.
1 2 releases? 12 Q. Okay. But at the time it was starting up,
1 3 A. Not that I know of 13 the corporate entity that was formed had no assets.
. . I ¥
1 4 Q. Do you know if Carl Duncan reviewed these 1 4 ls that accurate? {Q
1 5 press releases? 1 5 A. As ofthat -~ again, it was formed right if
1 6 A. I have no way of knowing that. 1 6 there. It had nothing.
1 7 Q. Do you know if Mr. Duncan was aware of 17 Q. What did you give, if anything, to Mr.
1 8 these releases when they were sent out? 1 8 Bryant to substantiate these projections of 5 [
1 9 A. I remember these guys and when I say g 1 9 million in the tirst press release and IO million in
2O "these guys," I mean Mr. Bryant and Mr. Duncan on 2O the second press release?
2 1 that conference call. Again, I said I wasn‘t paying 2 1 A. Well, we actually spoke about these
2 2 particular attention, but I remember them loosely 2 2 numbers while we were there. what I thought the
2 3 talking about having to report this. 2 3 classes could grow to and/or lvlonk's Den membership
2 4 Q. And then so did SOOO, Inc., acquire lx/lonk‘s I 24 could grow to and then as well as what I thought the
2 5 Den? I 2 5 software could produce in revenues as well.
’_·—r"‘r"‘r“”‘"r”‘r"‘r"‘"”‘r“‘”"‘""‘r"‘r*r"‘r"M¤·’rr"`_‘"t"*’t“_‘·*‘rWMMMMWWWWé
Page 485 Page 487
I
1 A. The deal never went through. We never l 1 Q. Did you ever give him any documents to
2 consummated anything. 2 support these numbers, any papers?
3 Q. Why didn’t it go through? What happened? 3 A. We drew these up literally while I was
4 MR. l\/IARGOLIS: Ifl may, what's very 4 there, so these papers were -- I mean, I typed up
5 important to understand is, at least from his point I 5 something while I was sitting at his computer. Like
6 of view, all ofthe assets were still in I 6 I said, I looked at these things.
7 Firstinawareness because that's where he was doing I 7 Q. Did you give him bank records?
8 business. I 8 A. N0.
9 This new corporation, at least the way 9 Q. Financial statements?
1O I look at it, was absolutely a shell with nothing in 1O A. No.
1 1 it, so there`s another —— there’s another level of a 1 1 Q. Any kind of corporate documents or records
12 problem that this —- 12 to show what had been generated in seminars that had
1 3 Q. Well that’s a good question because if I 1 3 already been conducted?
’ I
1 4 you had been operating the I\/lonk’s Den business ’ 1 4 A. We spoke about them, but I gave no records
1 5 through Firstinawareness, was there an understanding 1 5 of such.
1 6 between you and I\/lr. Bryant or did you even discuss 1 6 Q. So the deal didn't go through. And why
1 7 it with him that those assets, so to speak, would be I 17 didn’t it go through?
1 8 transferred from Firstinawareness to the new Monk’s 18 A. Well, up until a short period after what I
1 9 Den corporate entity? 1 9 now refer to as the dividend fiasco, up until that if;
2 O A. The general discussion went along the I 2 O point I still thought we were going to go through.
2 1 lines ofthe money that I had already made would be 2 1 I mean, we still spoke on the phone.
22 mine and then I would receive these again at the , 22 You know, he still said we had time to
23 time IO million shares for Monk’s Den, at which 23 ratify, so, I mean, at this point I still had a
2 4 point, you know, we would integrate the website, the i 2 4 beliefthat this was going to go through.
25 software and those types of things, but everything I 25 Q. Okay. But why didn’t it go through? What
56 (Pages 484 to 487)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Pa e 58 of 83
Page 488 Page 490
1 happened? Why did it stop. Just tell me why —— why 1 How did you mean that? How would the
2 didn't the deal go down? 2 acquisition of Monk's Den eliminate or help with the V
3 A. Well, once I received two subpoenas at my 3 naked short position that Mr. Bryant believed there I
4 door and I'm guessing at approximately the same time 4 was?
5 he did, too, per my attorney I was to no longer have 5 A. Well, Mr. Bryant -— and, again, keep in —
6 contact with him, and I no longer speak with him, 6 mind at the time ofthis, my perception ofhim, it
7 excluding I believe the one communication that I’ve 7 has changed. j
8 told you about on February 25th. 8 Q. I-low has it changed? Tell me so we know.
9 Q. The subpoenas came in the beginning of I 9 A. Well, at the time I believed him. I mean, Y
1 0 November 2010, is that correct? 1 0 he‘s taken me around the island. You know, were Y
1 1 A. Yes. L 1 1 going out to dinner. He's spending tons ofmoney.
12 Q. Okay. Did you fully intend to go through . 12 He lives in this mansion. Everywhere we go
13 with the acquisition from the time it was announced 1 13 everybody knows him. So, I mean, I believed him to Q
1 4 in September 2009 until the time you got the 1 4 be wealthy, well-known and very business savvy. I A
1 5 subpoena? 1 5 now believe that that is not so much the case. I
1 6 A. Yes. 1 6 Based on his own statements, he doesn't have money. t
1 7 Q. Okay. And when you got the subpoena, what g 17 Based on his actions, he is apparently not too 3
1 8 made you decide not to go through with it? I 18 business savvy because he put out a dividend and
1 9 A. Well, at that point I was, as I stated, g 1 9 then couldn't pay it. c
2 0 told not to be in contact with him. 20 He approached this acquisition thing I
2 1 l\/IR. IVIARGOLIS: Without getting into i 2 1 apparently very poorly, so apparently not anywhere
2 2 our attorney/client, I was the reason. 1 22 near as savvy as I perceived him. .
23 MS. CURTIN: Okay. That‘s okay. I 23 Q. Let mejust back up for one second. Are q
2 4 Q. Let me ask you this; You talk about the I 2 4 you familiar with the 8000, Inc.’s, acquisition of
25 "dividend fiasco." What’s the "dividend tiasco"? 25 the Breitinger Agency? A,
Page 489% Page 491 *
I
1 A. Mr. Bryant had filed to pay what I believe 1 A. No. Let me rephrase that. I’m not T
2 is referred to as a special dividend and had hled l 2 familiar with the acquisition, but I know that it
3 to pay it and then PR'd or —— I‘m not sure if it was I 3 was suggested and/or pervade that it was on their .
4 PR'd or shareholder update or some form thereof that 4 website as one of their subsidiaries. 2
5 he was going to pay a I0 cent dividend and he then 5 Q. Did I\/lr. Bryant tell you how 8000 had
6 canceled that dividend and didn't pay it. 6 acquired that subsidiary? *
7 Q. Did you understand that they had the . 7 A. I don’t think he specifically told me how fr
8 ability to pay the I0 cent dividend when it g 8 he acquired it, but at a later time I recall him Q
9 announced it? E 9 sending me an e-mail when I had sent something to A
10 A. I\/lr. Bryant had relayed to me that the 10 him along the lines —— and l`m paraphrasing, along I
1 1 company had received $40 million available to them 1 1 the lines of we were getting hit on the bid today a A
12 based on this financing scheme as he had set out and 12 lot, and he relayed that somebody I believe from the I
1 3 that they would absolutely without a doubt be able E 1 3 Breitinger or Breitinger? *
1 4 to pay that. 14 Q. I pronounce it Breitinger, ·
15 Q. Did Mr. Bryant ever tell you how much § 15 B—R—E—I·"ll`—I—N—G-E—R. ,
1 6 money, in fact, the company had gotten through the 1 6 A. Can wejust refer to it as the modeling
17 financing or made you understand they had gotten? 17 agency? I
1 8 A. He was never specific about it, but he 18 Q. Yes, the modeling agency. A
1 9 said that they could easily pay this dividend and, I 1 9 A. That one ofthe folks from the modeling
2 0 again, per one of their PR's, they had a $40 million i 2 0 agency was dumping shares that they had received for
2 1 cash windfall I believe is how they put it. i 2 1 that acquisition. ,
22 Q. So I think earlier you had testified one 22 Q. Okay. Are you familiar that 8000, Inc.,
2 3 of the thoughts in going forward with the Monk's Den I 2 3 gave 22 million shares to the modeling agency in C
2 4 acquisition would be to —- for the company, 8000, to i 2 4 connection with the acquisition?
2 5 address the naked short position. l 2 5 A. I was not aware of that amount.
57 (Pages 488 to 491)

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Page 492 Page 494 ;
1 Q. Did Mr. Bryant ever tell you that the I 1 recollection that the shares that you got via the
2 modeling agency, the shares that had been obtained I 2 company, Mr. Bryant’s direction went into E*TRADE
3 by the modeling agency were restricted or could not I 3 via DWAC and all other shares you bought in the Q
4 be traded? 4 market, is that correct? V
5 A. I don't recall specifically. 5 A. As I recall. i
6 Q. Okay. I 6 Q. Okay.
7 A. He did specifically warrant to me that the 7 MR. MARGOLIS; Excuse me. Ifyou
8 ones for Sky Villas were restricted. I do recall 8 would ask —- because I never asked. Ask him what he
9 that specifically because I was there talking to her 9 thought those 60,000 shares that he was going to get
1 0 and she’s like, oh, yes. I got this many restricted I 1 0 were. Were they restricted or were they tree trade?
1 1 shares, whatever. I 1 1 The acquisition. The acquisition shares. it
12 Q. Other than Sky Villas and I think we 12 MS. CURTIN: Oh, the I0 million. gi
1 3 talked about possibly Southbridge, did he ever 13 MR. MARGOLIS: Yes, the I0 million.
1 4 specifically tell you what other shares were 1 4 l'm sorry.
1 5 restricted or identify restricted shares for you? I 1 5 Q. We were talking earlier. You indicated
1 6 Mr. Bryant. 1 6 that the contemplated agreement for 8000, Inc.'s,
1 7 A. Not thatl specifically recall. I 17 acquisition of Monk's Den would be for I0 million ’
1 8 Q. Have you —- have you talked or been 1 8 shares of EIGH. Were those going to be restricted .0
1 9 approached by any other authorities about 8000 or I 1 9 or free traded? ,
2 0 Bryant? Any regulatory authorities? 2 0 A. I expected them to be free traded. L
2 1 A. Not that I know ofi Should I be? I 2 1 Q. Why did you expect them to be restricted? Q
22 Q. You traded 8000, Inc. -- first offi how 22 A. Because I was under the impression based ~
2 3 many accounts did you trade 8000, Inc., in, play I 2 3 on my conversations with Mr. Bryant that any shares ;
2 4 8000, Inc., in? How many brokerage accounts? 2 4 for acquisition had to be restricted.
25 A. I only have three, so I had the Noble 2 5 Q. So your understanding is no matter when I
Page 493 Page 495 f
1 account, which was since bought out by Lightspeed. I 1 the company did an acquisition, whatever shares they
2 I had my Gibraltar account and I had my E*TRADE 2 exchanged for that acquisition had to be restricted I
3 account. Excluding anything involving in New ‘ 3 securities? I
4 Zealand, to the best of my knowledge no other l 4 A. Yes.
5 accounts. · 5 Q. What restrictions did you understand that
6 Q. So E*TRADE and all three of those 6 meant?
7 accounts? 7 A. As far as I knew, there would be a I
8 A. I'm not even sure that I traded it in the I 8 restriction on it from somewhere -— again, based on i?
9 Noble, but I'm listing it because I had that I 9 my conversations with him, somewhere from six months y
1 0 account, but I don't think I‘ve made any 1 0 to a year before I would be able to do anything with {
1 1 transactions in that account, which is now closed by I 11 them. Y
12 the way. I don't —— Ijust don't remember ifl made 12 Q. And what was —— was that a rule or
1 3 any trades in it. I may have. I 1 3 regulation?
1 4 Q. Not E*TRADE. 8000. I misspoke. I 14 A. I don't know. It‘s_iust what he relayed.
1 5 MR. MARGOLIS: Thank you. I 15 He says, you know, when you issue restricted Y
1 6 Q, The trading Fm talking about is 8000 1 6 securities, they come with a timestamp on them, and
1 7 A. Okay. I stipulate we're referring to 17 I think liejust said somewhere between six months {
1 8 8000, Inc. I 1 8 and a year. s
1 9 Q. And did you deposit shares into the 1 9 Q. Before retaining Mr. Margolis, did you
20 Gibraltar account, 8000 shares, because you knew I 20 consult with an attorney about securities or It
, 2 1 they would clear pinksheet certificates? 2 1 corporate matters relating to 8000, Inc.? I
22 A. I don't recall specifically. I‘m pretty 1 22 A. Again, specifically, I didn't even have .
2 3 sure that I got my shares in E*"I`RADE but I simply l 23 any documents to go over yet. I intended to get I;
2 4 don't remember. I 2 4 counsel as the documents would have been prepared,
2 5 Q. Okay. So you got the ones —· it’s your I 25 but at that point there was no need because there
58 (Pages 492 to 495)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 60 of 83
Rage 496; Page 498
1 was nothing written. 1 Q. Wait. So you would get shares in Monk’s I
2 MR. MARGOLIS: May I suggest another 2 Den and you would take those Monk’s Den shares and
3 question? Ask him what the value ofthose shares 3 swap them out for 8000, Inc., shares? 3
4 were at the time that he hrst had the discussion, 4 A. Right. And that's how he was going to *
5 assuming that they were hee trading. 5 acquire Monk’s Den. tsq.
6 MS. CURTIN: That's a very good 5 6 Q. Do you understand how that’s going to
7 question. Very remiss on my part. = 7 work? 7
8 Q. What was the value ofthose shares, the IO Q 8 A. The short answer is absolutely not. Q
9 million shares for the exchange? Because that was 9 Q. Did he indicate to you -— because in one I
1 0 the value that you had assigned to Monk’s Den 1 O of the e—mails that Mr. Obeyesekere was talking Q
1 1 acquisition, right? 1 1 about previously it indicated there was some E
1 2 A. We had agreed on l0 million shares at the 12 anticipated deal that 8000, Inc., was going to do
1 3 time the stock price was in the general ballpark of 1 3 with CDIV and GRNO. What was that all about? Q
1 4 6 cents. I 1 4 A. There was a conference call while I was Q
1 5 Q. So 6 cents, that's what? $60 million? r 1 5 there between Mr. Bryant and the three companies
r 1 6 MR. OBEYESEKERE: No. 1 6 and, again, along the same line, and I realize I
1 7 Q. I'm sorry. 600,000. x 1 7 looking back now especially after hearing it from my *
1 8 MR. MARGOLIS: No. 1 8 attorneys, that there was no possible way that what T
1 9 A. 60,000. i 1 9 they’re saying would have worked, but Mr. Bryant A
2 0 Q. 60,000. I’m sorry. I can`t do math. l 20 relayed to them that if we formed business e
2 1 60,000. And you felt that was a sufficient price i 2 1 combinations whereby EIGH would take over these I
2 2 for the seminars you had developed and the software 22 individual companies, that in each time that that ’
2 3 program that you were creating? 2 3 occurred, any short position would have to be Q
2 4 A. Well, what I believed was that Mr. Bryant 2 4 covered and that each of these companies would still Q
2 5 was not lying to me about this naked short position i 2 5 be able to run their individual businesses and make A
Page 497 i Page 499 i;
1 and that in accordance with him, this share swap 1 their own money. They would just fall under the ?
2 would force what he called a share accounting, which 2 8000 umbrella.
3 would then reveal the naked short and force our 3 Q. So, for example. if it acquired CDIV and Y
4 stock to a gazillion dollars a share. 1 4 it exchanged 8000, Inc., shares for CDIV, you would g
5 Q. That's what I don’t understand. How could 5 reveal a short in CDIV?
6 this acquisition reveal the naked short? That's 6 A. Correct. Q
7 what I don’t get. How did you understand that was 7 Q. Did that ever occur? fs
8 going to happen? g 8 A. No.
9 A. Again, keep in mind my perception ofthis i 9 Q. And -- R
1 0 man at the time was that he was very business savvy 1 0 A. To the best of my knowledge, that was the
1 1 and knew all of these rules and regulations and that 1 1 only call.
1 2 the virtue of a share swap would force an accounting 1 2 Q. And those three companies you referenced Z
1 3 ofall the shares and thereby reveal all ofthe i 1 3 were EIGH, CDIV and GRNO? You said on a
14 naked short and that we could, as he put it, 1 4 teleconference. ,’
15 literally hold the market hostage because ifthey're i 1 5 MR. MARGOLIS: HIGH, ofcourse.
1 6 short, where are they going to buy them other than Q 1 6 MS. CURTIN: Okay. 8000. Q
1 7 from us? 1 7 A Let me clarif I. I
. . t · > .
18 Q. And what share swapping are you talking i 1 8 Q. Okay. I
1 9 about? I think I maybe misunderstood you. l 1 9 A. There were four companies on the call.
2 0 A. That would be the l0 million that I'm l 2 0 ElGl·l and then the three other float lock down _
2 1 referring to from Monk’s Den. I—Ie's saying that I I 2 1 companies ofCDIV, GRNO and PNTV. lg
22 would open Monk’s Den. I would have some share i 2 2 Q. And this was during your third trip to ,
2 3 structures in a private company and then they would ` 2 3 Barbados? Q
2 4 do some type of share swap in order to buy Monk’s 2 4 A. Yes. This was during August.
2 5 Den. Again, looking at it in retrospect, —— 2 5 Q. So August 20l0?
59 (Pages 496 to 499)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 61 of 83
Page 500 I Page 502 .
I
1 A. Yes. 1 promoters? i
2 Q. And was Mr. Wagner participating in this 2 A. Yes.
3 call, too? I 3 Q. Did you call GNRO float locked on February q
4 A. No. I 4 26, 20l0? ~
5 Q. lt was yourself and Mr. Bryant? 5 A. I don't have that in tiont of me.
6 A. Again, Mr. Bryant was holding the call. I I 6 Q. l'm going to refer you back to Exhibit
7 . was merely in the room. I 7 179, l believe.
8 Q. Who else was on the phone? I 8 A. It sounds about right, but 1 don’t
9 A. I believe Nazir from CDIV, Mark Bradley I 9 remember the specific date.
1 0 from PNTV. and I‘m not sure. I believe there were a I 1 0 Q. Well, we saw earlier a document earlier
1 1 couple people from GRNO. I can't be specific on who 11 which we identified as a -— I‘m sorry. I`m going to IT
1 2 they were. 12 show you a copy of Exhibit 170, and I‘m going to ask
1 3 Q. And that phone call was how long? 1 3 you to turn your attention to the last page Bates
1 4 A. I0 minutes maybe. I 1 4 stamped JW 2459. And on that it shows GNRO and the ,
1 5 Q. But it never resulted in anything? I 15 date called at 2-26·l0. Do you see that? ¤
1 6 A. No. I 1 6 (Reviewing document.)
1 7 MR. OBEYESEKERE: 1`in going to switch I 17 A. Yes, l see that.
1 8 topics. Do you need to take a break? I 1 8 Q. ls that the date you called GNRO as a I
1 9 MR. MARGOLIS: Yes. Could we take a I 1 9 float lock down'? g
2 0 short break? I 20 A. Again, I‘m going to reiterate that I j
2 1 MR. OBEYESEKERE: We're off the record · 2 1 didn't make that chart or that table, but that does
2 2 at 2 o`clock. I 22 sound about right.
2 3 (A break was taken nom 23 Q. Okay. Now, we've differentiated a few if
2 4 2:00 p.m. to 2:02 pm.) I 2 4 times between when you called something as a float
2 5 MR. OBEYESEKERE: Let's get back on I 2 5 lock down versus when you called it as a play. f
Page 501I Page 503
1 the record. lt is 2:02. I 1 A. Correct.
2 BY MR. OBEYESEKERE 2 Q. And I want to make sure I have it on the ¢i
3 Q. Mr. Williams, when we were off the record, 3 record. You understand that on February 26, 2010,
4 was there any conversation between you and the Staff 4 you called the stock GNRO as a float lock down, is
5 regarding the substance of this matter? 5 that correct?
6 A. No, sir. 6 A. Say that one more time. ?
7 Q. Okay. I want to turn our attention to 7 Q. On February 26, 2010, you called GNRO as a
8 another float lock down stock which we've kind of I 8 float lock down, is that correct? °
9 referred to in passing, GRNO. and that's Green Oasis i 9 I A. Again, I can’t be specific. I called it
1 0 Environmental, is that correct? 1 0 around that time. 1%
1 1 A. Yes. 1 1 BY MR. KELCOURSE
12 Q. And when did —— how did you become 12 Q. I think what Mr. Obeyesekere was getting
1 3 familiar with that? 1 3 at was on the 26th, on or about the 26th you called
1 4 A. The aforementioned Stephen Taylor 1 4 GNRO as a float lock down as opposed to calling it
1 5 introduced us. 1 5 as a play, correct?
1 6 Q. And Stephen 'Taylor, the gentleman who ran 1 6 A. Again, I can't be specific with the date.
17 some promotion companies, is that correct? 1 7 lt sounds close, but l can't say that absolutely,
18 A. I didn't say promotion company. I believe 1 8 yes, that day I did it, but it sounds about right. {
1 9 it`s an investor relations company. 1 9 Q. I think you're missing the distinction.
2 0 Q. Okay. Did you understand that he did do 2 0 MR. OBEYESEKERE: lt’s all right.
2 1 promotion work as part of his duties? 2 1 l’ll clarify this with the document.
22 A. I believe he worked with various I 22 MR. KELCOURSE: Okay.
2 3 promoters, but I don't know that he actually did any 2 3 BY MR. OBEYESEKERE
2 4 himself 2 4 Q. I‘m going to show you a copy ofa document
2 5 Q. Did you understand that he hired 2 5 that we are going to be marking as the next exhibit,
60 (Pages 500 to 503)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 62 of 83
Page 504 Page 506 {
i is
1 204, and it‘s a document Bates stamped WILLIAMS 1 to determine the financial structure or status of
2 10050 to 10051. 3 2 GNRO?
3 And I'm going to ask you and your counsel 3 A. No. I only looked at the stuff that they
4 to take a quick look at that and ifyou turn your 4 referred me to on the phone at the time. I don’t
5 attention to the page Bates stamped 10051, there 5 recall specifically what it was.
6 appears to be a message that had gone out to 6 Q. Did you look at GNRO in trying to obtain
7 investors from Investors Hub from you. Do you see 7 any financial statements of GNRO?
8 that? 8 A. No, I don’t recall doing that.
9 (Reviewing document.) 9 Did you do any of your own research to
10 A. Yes. 1 0 identify any publicly available information
1 1 Q. Did you send that message? 1 1 regarding the financial condition of the company?
12 A. Yes. I 12 A. I recall looking at the filing briefly,
13 Q. Okay. And it appears that message was 1 3 but l simply don’t remember what it said.
1 4 sent on or around February 26, 2010. Do you see 1 4 You looked at a public filing of GNRO'?
is itat? t is A. Yes.
1 6 A. Yes. 1 6 Q. And did you recall when you looked at VQ
17 Q. Does that refresh your recollection as to 1 7 that?
1 8 whether you called the GNRO as a float lock down on 1 8 A. I'm sorry. I don’t recall.
1 9 February 26, 20107 1 9 (SEC Exhibit No. 205 was marked
20 A. Yes, that looks accurate. 2 0 for identification.)
2 1 Q. So is it fair to say then that you called i 2 1 Q. I'm going to show you, Mr. Williams,
22 GNRO as a float lock down on February 26, 20I0? I 22 what's been marked Exhibit 205, which appears to
23 A. Yes. 2 3 be —- which I’ll represent to you is a printout ofa li
24 (SEC Exhibit No. 204 was marked 2 4 public filing by GNRO made in Iune of 2010 but
2 5 for identification.) 2 5 relating to public filings for the fiscal year end
Page 505 } · Page 507
1 Q. We talked earlier about some ofthe -- 1 of December 31, 1999. I ask you to take a quick
2 what some ofthe criteria that you used to determine 2 look at that.
3 whether a stock should be a float lock down and one 3 A. Did you say I999?
4 of them was positive cash flow, is that correct? 4 Q. Well, it was filed in 2010, but it relates
5 A. Yes. 5 to the hnancial period ending December 31, 1999.
6 Q. And did you understand GNRO to have a 6 MR. MARGOLIS: Counsel, in all
7 positive cash flow? ' 7 fairness, when was this filed?
8 A. I actually did not do the typical research 8 MR. OBEYESEKERE: It was filed in June Q
9 with that. I spoke with I believe Dominic ( 9 of 2010.
1 0 Alessandro, assuming I'm saying that correctly, and 1 0 MR. MARGOLIS: So you‘re asking
1 1 another person whom I believe to be Aldo Rotondi, if 1 1 whether he saw this?
12 I'm saying that correctly. E 12 MR. OBEYESEKERE: No. I'm just
13 And they told me that the float was very, l 13 saying, has he seen this document? I mean, he
1 4 very small and that there were restricted shares out E 14 called a float lock down in February and this
1 5 there that wouldn't come out for quite sometime; 1 5 document came out subsequent to that.
1 6 that the actual tradable float, because certain t 1 6 MR. MARGOLIS: Oh, okay. As long
17 people held them in certificate form that were A 17 as —— all right.
1 8 closed to the company, so they wouldn’t be traded I 1 8 (Reviewing document.)
1 9 and that they were in the process of raising —- I _ 1 9 A. I don’t recall seeing this.
2 0 think it was like $200,000 or something for a new l 2 0 Q. But you do recall looking at a public
2 1 piece ofmachinery and that they were actually i 2 1 tiling relating to GNRO at some point subsequent to
2 2 generating revenues in this, ifl recall the correct l 2 2 or prior to your calling it as a float lock down?
23 term, slop oil industry. I 23 A. Again, I can`t remember ifit was
2 4 Q. Apart from speaking with Mr. Alessandro l 2 4 specifically a public filing or ifit was looking at
2 5 and Mr. Rotondi, did you do any independent research 2 5 like OTC pinksheets or something. I don’t remember
61 (Pages 504 to 507)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 63 of 83
E>age 508 ?age 510 ,
1 specifically. They directed me to some sites while 1 closely with Mr. Rotondi with the company. g
2 I was on the phone with them. i 2 Q. And did you understand him to be involved .5
3 Q. Would you turn your attention to Page 4 of 3 in promoting the company in any way'? 7,
4 4 ofthis document. May I see that, please? 4 A. At this time I had no evidence ofthat at g
5 (Reviewing document.) 5 all. I only thought he worked with Mr. Rotondi. I
6 Q. That's correct. I‘m sorry. And at the 6 have since received calls nom him where he’s I,
7 top of the page it says, The company has written off 7 Suggemd that we could do Somo typo oiflool and I
8 the following to equity as the Company was moribund 8 said no thank you.
9 nom l999 to 2009 and only became active again in i 9 Q. As you sit here today, do you understand Y
1 O 2()O9_ Do you gee that? i 1 O him to be a promoter of stocks?
1 1 (Reviewing doeuinent) 1 1 A. I don't know that I would call him a
12 A, I do 12 promoter, but I would put him along the lines of Mr.
1 3 Q. Do you have an understanding as you sit l 1 3 Taylor where they introduce promoters to companies
1 4 here today as to what that means? i 14 and that type ofthing.
1 5 A. I don't know what the word "moribund" i 15 Q. Did you do anything to V€i`il°y. anything to Q
1 6 means. 1 6 independently verify any ofthe statements about
1 7 Q. Okay. Generally, do you have an 17 GNRO that I\/lr. Alessandro and Mr. Rotondi provided to
1 8 understanding even without knowing what that 1 8 you'?
1 9 sentence -— that specific word means what that 1 9 A. Not personally that I recall. I had my —· it
2 O sentence relates to? 2 O I asked a person who was very good at that type of ?
2 1 A, Sounds as though they were generally i 2 1 thing to do sucli and that person l'm referring to is
22 inactive during that time period. 22 Craig Winston. I asked him to look it up. I Q
2 3 Q_ Did you understand prior to calling the 23 routinely referred to him as my "DD hound" because
2 4 company as a float lock down that the company had i 2 4 he Could find just about anything.
25 generally been inactive up until Z009? i 25 Q. Who is Craig Winston'?
.1».-~.M.....~»-MsWm»m».~.-»...»~-.~“—~»'*-i.-m-—"1--—~"»--»»--»»»·»·~~W-m»-—~»-»-»-»»-
Page sos; Page 511 ii
1 A. I did not know that. Based on the i 1 A. We've spoken about him earlier. I·le was
2 conversations that I had with them, they were, in 2 one of the gentlemen that received shares on CDIV.
3 fact, active and producing reserves ofthis, as they 3 Q. And does he do promotional work? i
4 called it, slop oil. t 4 A. To the best ofmy knowledge, no. Like I {
5 Q. Apart hom looking at the information that 5 said, he did —- he received shares in CDIV. To the
6 l\/Ir. Alessandro and l\/Ir. Rotondi provided to you, did l 6 best of my knowledge, other than that I don't know
7 you do any other independent work to determine 1 7 ofany shares or compensation that he may or may not
8 whether the company had strong fundamentals? 8 received on any other companies.
9 A. No. They kept referring to me that a l 9 Q. Okay. And to your knowledge did he s
1 0 Harbinger report was coming out; that this was all E 10 receive shares from GNRO?
1 1 being done by them for research purposes. Z 1 1 A. To my knowledge, no.
12 Whether or not that has come out since i 12 Q. Now, when you called the float lock down
1 3 then, I don't know, but they relayed to me over the i 1 3 strategy, this is the same strategy that we've
1 4 phone that they were a functioning facility, pretty E 1 4 previously discussed, correct?
1 5 much debt free and didn‘t need to dilute shares, Q 1 5 A. Correct.
1 6 other than as I mentioned the aforementioned § 1 6 Q. Your understanding was that Den members
1 7 approximately $200,000 that they needed to raise for 17 would be in order to have this strategy work
18 this other piece of equipment or whatever. i 1 8 _ essentially accumulating the shares, correct? ji
1 9 Q. And we —— we discussed Mr. Alessandro I 1 9 A. Correct. ¥
20 earlier in your testimony. He was a promoter, i 2 0 Q. And looking up the float to trigger a
2 1 correct? 2 1 short squeeze, correct? ij
22 A. Not that I know of. . 22 A. Yes.
2 3 Q. Did you understand what lvlr. Alessandro 2 3 Q. And essentially they would have to be
2 4 did? i 2 4 holding the float for the short squeezes to trigger, {
2 5 A. I was under the impression he worked i 2 5 correct?
62 (Pages 508 to 511)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 64 of 83
Page 512 514
1 A. Yes. 1 attached some message board postings that he had
2 Q. Is it your understanding generally that 2 sent. Take a moment to review that and let me know
3 the Den was buying during this time period 3 when you've had a chance to do so.
4 subsequent to the float lock down call'? 4 (Reviewing document.)
5 A. I'll say generally, yes. 5 A. Okay. y
6 Q. Wer·e you receiving updates of share counts 6 Q. Do you recognize this e—mail‘? I
7 from Mr. Erhard or others? 7 A. It dOesn`t look familiar to me.
8 A. I don’t recall. That was done very 8 Q. Do you have any reason to believe that you s
9 largely on CDIV and EIGI—I. I don’t personally recall 9 didn't receive it? I I
10 seeing one on GNRO or PNTV, for that matter. I 1 0 A. Since I pI‘OdLICecI it, I`m guessing I I
1 1 Q. Is it fair to say during this time period i 1 1 received it. ri
1 2 you were receiving e·mails or other Ihub posts or I 12 Okay. At the bottom, it appears to be Mr. I,
1 3 other correspondence from Den members which I 1 3 Erhard has attached a private message communication I
14 indicated that they were buying GNRO as pan ofthe I 1 4 between himself and some other individuals. Do you E
1 5 float lock down strategy? I 1 5 see that?
1 6 A. I don’t remember specific ones, but that 1 6 A. I do.
17 sounds like something that would be occurring, yes. 17 Q. And is that what you would interpret this
1 8 Q. But you remember generally that occurring 1 8 to be'? ~
1 9 without remembering anything specific? 1 9 A. Is what? ·
20 A. Yes. 20 Q. Is that what it seems to be, like a
2 1 Q. And is it fair to say during this time 2 1 private message communication that Mr. Erhard has .
2 2 period, subsequent to the call ofthe float lock 2 2 attached?
2 3 down you encouraged Den members to accumulate GNRO 1 2 3 A. Yes.
2 4 shares? I 24 Q. Okay. At the bottom, Mr. Erhard, who I g
25 A. Well, as l‘ve said all along, I neverjust 25 understand screen name is eX-blockman writes, As a
Page 5131 Page 515
t
j_ Speemeaiiy epeOLp~age_ { etwaye eek peeple te make 1 group we are holding very close to 7 million in the r
2 their own decisions and only do what they can I 2 Den and quite a few more are non Den or Ihub members {
3 afford, but, yes, I was referring to GNRO in a 3 who are very close to the company but their accounts I
4 positive way. 4 are unknown to me. I
5 Q. In some instances you also specifically 5 Was Mr. Erhard keeping track ofthe float ri
6 suggested that ifthey're able to afford it, they 6 accumulation by Den members, to the best of your
7 should buy GNRO shares, isn‘t that correct'? t 7 knowledge? I
8 A. I can't specifically recall that I 8 MR. MARGOLIS: Excuse me. .
9 statement, but it sounds reasonable. I 9 (Witness and counsel confer.)
1 0 Q. Now, you referred to GNRO. GNRO was t 1 O MR. MARGOLIS: ljust want the
1 1 discussed in some ofthe Monk's Den newsletters, 11 record -- when he said he produced this, he means e
1 2 correct? Q 12 that the document was produced; not that he wrote gf
1 3 A. Yes. 13 anything in this e-mail, Exhibit 206. ;
1 4 Q. And did you generally review those g 14 MR. OBEYESEKERE: I think that’s Y
1 5 newsletters before they were disseminated? I 15 clear. lt’s an e—mail only hom Mr. Erhard to him. 5
1 6 A. As I said yesterday, I rarely looked at 1 6 MR. MARGOLIS: Okay. It wasjust the Q
17 those. The moderators at the boards wrote those and 17 way the record read and I’m looking and I’m -— .
1 8 for the most part sent them to Mel and then she 1 8 thanks.
1 9 included them and sent them out. 1 9 A. Again, I can't be speciiic as to whether ’
2 O (SEC Exhibit No. 206 was marked 2 O Mr. Erhard was keeping track of this. I don’t I
2 1 for identification.) I 2 1 specifically recall seeing a count on GNRO.
22 Q. I’m going to show you,. Mr. Williams, 22 Q. Do you generally recall, though, that you
2 3 what's been marked as Exhibit 206. It's a document I 23 were getting updates from various people about the
2 4 Bates stamped WILLIAMS 6292, and it consists of I 24 accumulation by the Den of GNRO stock'?
( 2 5 e-mails between you and Mr. Erhard and to which is 25 A. It happened on occasion.
63 (Pages 512 to 515)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Pa e 65 of 83
Fage 516 Page 518 2
1 Q. l'rn just going to show you what’s been 1 Q. And when did you have this conversation?
2 marked previously as an exhibit. 1t*s No. 185. 1 2 A. 1 dont remember specifically. Obviously, A
3 Here it is right here. l'll ask you to take a look r 3 prior to February 26th. A
4 at that. 4 Q. Do you remember how much prior to February
5 (Reviewing document.) l 5 26th?
6 Q. l‘m going to turn your attention to the t 6 A. Not offthe top ofmy head.
7 second paragraph. We had discussed this earlier. 1 7 (SEC Exhibit No. 207 was marked I
8 lt states That being said, ljust want to remind 1 8 for identification.) .—g
9 folks that our three lock down plays remain in full 9 Q. l‘m going to show you what’s been marked C
1 0 effect, CDIV, EIGH and CDIV. 1 would suggest that 1 1 0 as Exhibit 207, a document Bates stamped WILLIAMS fi
1 1 you have the ability to add to them do so as you t 1 1 10155 to 10156, which is an e-mail hom Matt, who
1 2 can. lf not, I certainly understand. Do you see l 12 . appears to be Matt Campbell, to you copied to Aldo
1 3 that? 1 1 3 Rotondi, R—O—T~O—N-D—l, and another e-mail address .;
1 4 A. Yes. 1 4 which l‘m not familiar with. lf you could take a J
1 5 Q. And, again, you were suggesting if people 1 5 moment to look at that and let me know when you‘ve A
1 6 are able to, to add to GRNO. correct? 1 1 6 had a chance to do so. ,
1 7 A. Yes. 1 7 (Reviewing document.) .
1 8 Q. And this would be consistent with the 1 1 8 A. Okay. i 1
1 9 e—mails and message posts that you sent on or around 1 1 9 Q. Do you recognize this document? 1
2 0 this time about GNRO. Would that be fair to say? 1 2 0 A. l do not specifically remember receiving é
2 1 A. Generally. 1 2 1 it.
2 2 Q. Okay. And GNRO was a float lock down 22 Q. Does this document refresh your ;
2 3 through the entire 2010 period up until -— l‘m l 2 3 recollection as to the date of the conversation that .5
2 4 sorry. Up until at least October 2010, correct? 2 4 you had with Mr. Rotondi concerning »- and Mr. »
2 5 A. Yes. 2 5 Alessandro concerning GNRO?
”"""i‘—""°"‘“”‘””‘““""““`”““"“”“”“"°"`“““"l”“"”’““"”"“””””“"””"—"`"""”””””"""""“'“f“"`7““"““"“ .
Page 517 { Page 519 .
1 ’i
1 Q. And GNRO, as with the other float lock 1 A. Apparently, we spoke on the 17th. ¥
2 down stocks, to the best ofyour understanding no 1 2 Q. Of February 20l0? ,
3 short squeeze actually occurred, correct? 3 A. Yes. J
4 A. To the best of my knowledge, no. 4 Q. How soon after —— let me go back a second. .
5 Q. Did you do any promotional work for GNRO? 1 5 You said you received shares at a discounted price? 1
6 A. 1 bought shares from them at a reduced 6 A. Yes. gi
7 rate. 1 think you could loosely call it 7 Q. And how many shares did you receive? ig
3 promotional. t 8 A. l don't recall specifically, butl paid if
9 Q. Why were you provided shares at a reduced 9 $12,000. l want to say I think it was 1.2 million,
1 0 rate? 1 0 but 1 don't remember specifically.
1 1 A. Well, as 1 said, when 1 spoke with them on 1 1 (SEC Exhibit No. 208 was marked T
1 2 the phone, they told me they needed to raise l 1 2 for identification.)
1 3 $200,000 or so to buy this particular piece of 1 3 Q. l‘m going to show you, Mr. Williams, a
1 4 equipment and that 1 looked. i 1 4 document that is marked as Exhibit 208. lt’s a jg
1 5 Based on the information that they gave me 1 5 series of e—mails, and it's Bates stamped WlLLlAl\/IS
1 6 and the share structure that they relayed to me, l 1 6 101 15 through 101 18, ifyou could take a moment to 1
1 7 that the actual tradable float was very, very low; 1 1 7 review that and once you‘ve had a chance to do so, ~
1 8 that l thought that was an achievable goal based on 1 1 8 just let me know. `
1 9 the chart, and the stock already had a decent amount 1 1 9 (Reviewing document.)
2 0 oftrading and volume going on. 2 0 A. Okay. t
2 1 Q. Did you agree to call the stocks a float r 2 1 Q. Before we go there, l want to go back to ji
22 lock down as part ofreceiving those shares at the 22 our previous exhibit, ifyou could take a look at i
2 3 reduced price? i 2 3 that, 207. Q
2 4 A. It wasn't a specific agreement, but l 2 4 The bottom ofthe first paragraph
2 5 think it was implied that l would do so. 2 5 Mr. Campbell writes, lt seems that you have a big
` 64 (Pages 516 to 519)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 66 of 83
Page 520 Page 522 V;.
1 following and bring a lot to the table so thanks 1 (Reviewing document.)
2 again for your time today and I look forward to 2 A. Yes.
3 having you be a part ofGNRO. Did you tell Mr. E 3 Q. Okay. And do you know who —— first of Q
4 Campbell that you had a big following? i 4 all, did you send that e-mail?
5 A. I don’t think that I specifically said ‘ 5 A. It's from me, so, yes. {
6 that, but via introduction, via others it was Q 6 Q. And do you know who [e-mail] L
7 relayed that I did. 7 is? , F
8 Q. And you understood you had a big 8 A. That would be the Stephen Taylor we
9 following, is that correct? 9 referred to earlier. Introduced us.
1 0 A. Yes, I think so. E 1 0 Q. And the next page it states Hi, Stephen.
1 1 Q. Do you have an understanding as to how i 1 1 Per our phone conversation today". I would like to
1 2 many people were following you? i 12 purchase in Private Transaction, l.2 million shares
1 3 A. I have no way of knowing that. i 13 of free trading common stock under the symbol of
1 4 Q. And when you’re saying a big following, i 1 4 GNRO at the purchase price of`.0l. Do you see that?
1 5 are you referring to the people, the Den members who I 1 5 A. Yes.
1 6 would be receiving your e—mails via the Ihub message l 1 6 Q. And does that refresh your recollection as
1 7 board on Monk's Den? 17 to the price and the amount of shares that you sg
1 8 A. Well, not necessarily specifically that, 18 received in connection with the agreement with he
1 9 but the Monk's Den message board was routinely one 1 9 Mr. —— with GNRO?
2 0 ofthe most active boards on Investors Hub, so it 2 0 A. Yes.
2 1 was reasonable to say there was a large following. 2 1 Q. And so is it fair to say you received l.2 y
22 Q. Do you know who uses the e—mail address g 22 million shares of free trading stock at a purchase =
2 3 [e-mail]? 2 3 price of .0l cents as part ofthe agreement to s
2 4 A. No, sir. 2 4 publicize GNRO on the Monk’s Den message board on
2 5 Q. Is it Mr. Alessandro? 2 5 Ihub?
Page 521 E Page 523
1 A. It's possible. § 1 A. I recall completing the wire transaction
2 Q. Again, turning your attention to Exhibit g 2 for $l2,000. I don’t recall specifically how many
3 208 right now —— Hrst of all, by February l7th, had Q 3 shares I got, but for some reason l'm recalling that j;
4 you agreed to promote GN RO to the Den members? 4 I was not able to get the full l.2. There was some
5 A. We're going back to this one (indicating)? 5 lesser amount that I got, but I can’t be specific on AY
6 Q. Either one. It's just a general question. I 6 that.
7 MR. MARGOLIS: "This one" being 207? 7 Q. Okay. How many shares did you get?
8 MR. OBEYESEKERE: Either one. It's I 8 A. I don’t —— as Ijust said, I can’t be 7 i.ii
9 more a question generally. 9 specihc. I don’t recall. I mean, I may have got
1 0 A. I —— again, l’m using the term "promotion" I 1O the I.2, but I havejust a slight recollection that f
1 1 loosely because I actually paid for the shares, but, § 1 1 there was an issue and I couldn’t get them all.
1 2 yes, I had agreed with them at some point between 12 (Witness and counsel confer.) ,
1 3 there and the 24th or so that I would work with E 13 Q. l'm going to ask you, Mr. Williams, -—
1 4 them. 14 going back to Exhibit 208, if you look at page Bates L
1 5 Q. And by "work with them," you publicized E 1 5 stamped WILLIAMS l0l I6.
1 6 GNRO to the Den, correct? ’ 1 6 (Reviewing document.) Y
1 7 A. Yes. i 17 A. Yes.
1 8 Q. And you called it asa float lock down, i 18 Q. And there's an e-mail from Dominic f
1 9 correct? . i 1 9 Alessandro to somebody named Goncalves Francisco. 3
2 0 A. Yes. 2 O Do you see that?
2 1 Q. Ifyou go to Page WILLIAMS l0l I7 to 21 A. Yes. t
2 2 the top, it's an e—mail hom you to Dominic 22 Q. And it says Hi there. l need to dwac I
2 3 Alessandro -— I’m sorry. From you to 2 3 600,000 shares of GNRO to the recipient below for r.
2 4 [e-mail] and copied to Dominic 2 4 promotion. Do you Soo that?
2 5 Alessandro. Do you see that? I 25 A. I do.
65 (Pages 520 to 523)

Case 3:12-cv-01068-RNC Document 47-1 Filed O7/19/13 Page 67 of 83
524 Page 526 .
1 Q. The recipient will wire ramm investments 1 Q. I’m going to show you again, as I said,
2 6000 US in return for these shares. Thank you. Do i 2 what is a Price Volume Chart of GNRO fiom the period <
3 you see that? 3 November 2nd, 2009, through l2—3l, 2010.
4 A. Yes. I 4 I'lljust ask you briefly to take a look
5 Q. Does that refresh your recollection as to 5 at that- Fm 1UST going to dIY€€I YOU to F€bT¤3*1’
6 how much shares you initially received as pant of 6 17th. 2010, and thats on the third page ofthe
7 this agreement with GNRO? 7 document.
8 A. Assuming this transaction is exactly as i 8 (Reviewing dowtheht-) Y
9 relayed there, then I would have received 600,000, g 9 Q. It has a closed price of.09 cents. Do 7,
1 0 but, again, the agreement was for l.2 and I did wire 10 you see that?
1 1 S I 2,000 to them. 1 1 A. Yes.
1 2 Q. And as far as you know, do you have any % 12 Q. So would you consider that a signincant
1 3 reason to believe that you did not get l.2 million 13 discount?
1 4 shares? S 1 4 A. Yes.
1 5 A. I simply don’t remember. Like I said, I I 15 Q. And when I say "significant discount," a
1 6 have this slight recollection that for some reason i 1 6 significant discount from the price at which you
1 7 there was a problem and I was only able to get a i 17 were able to purchase it from GNRO?
1 8 portion ofit. Ijust don‘t remember. 18 A. Yes. But I would also like to reiterate I
1 9 Q. All right. Let’s just continue on. % 1 9 that a few days prior it was 8 cents, you know, so I T
2 0 BY MS. CURTIN i 2 0 mean, it was trading in the area of 8 to 9 cents.
2 1 Q. What does "wire ramm" mean? 2 1 Would that be reasonable?
2 2 A. I don`t know. l’ve never heard ofthat f 22 Q. Okay. And do you stand by your earlier I
2 3 before. 2 3 answer?
24 BY MR. OBEYESEKERE $ 24 A. Of`? .
2 5 Q. In connection with —— l‘m sorry. Go 25 Q. That it was a significant discount from
Page 525 § Page 527
1 ahead. f 1 the ——
2 MS. CURTIN: No, he doesn't know. 2 A. Yes.
3 MR. OBEYESEKERE: Okay. 3 BY MS. CURTIN
4 Q. In connection with the services you 4 Q. ls Ramm Venture Development Dominic
5 were —— you were to perform for GNRO from about 5 Alessandro's company? .
6 March, February of20l0 -- I'm sorry. From about i 6 A. I don't know.
7 February of 20lO, how long did that -— how long did 7 Q. Have you ever heard of Ramm Venture
8 that contractor agreement last? 8 Development?
9 A. Again, there was no contract. As I E 9 A. No.
1 0 specifically stated, I actually bought the shares. r 10 Q. It`s referenced in Exhibit 208.
1 1 I~Ie's referring to it as a promotion and I realize, 1 1 A. I believe you when you asked me that. I
1 2 yes, I was going to call it as a float lock down, 12 don't know what it is. Where is it specifically?
1 3 but it was not by any definition a strict promotion, i 13 Q. l0l I6, and it’s at the top. lt says Hi,
1 4 as I was purchasing the shares. Q 14 Don. Please see the attached wire instruction.
1 5 Q. Okay. Do you know what the share price 15 They will need to reference No. 8255, Ramm Venture 5
1 6 was at that time? i 1 6 Development.
1 7 A. Not specifically, but in the area of7 17 A. (No audible response.)
1 8 cents or 6 cents. I’m approximating. 1 8 Q. You tlon‘t know?
1 9 Q. Just to make life easier going forward, 1 9 A. No.
2 O l‘m going to show you —— I printed out a price 2 0 BY MR. OBEYESEKERE IQ »
2 1 volume chart ofGNRO and that will just —— let's g 2 1 Q. What else, if anything, were you -— did if
2 2 mark it as an exhibitjust to keep things moving 22 you do for GNRO in connection with, as you loosely gf.
2 3 along here. i 23 said, promoting the company? {
2 4 (SEC Exhibit No. 209 was marked 2 4 A. What do you mean?
2 5 for identification.) 2 5 Q. I mean, you called the company as a float
66 (Pages 524 to 527)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 68 of 83
Page 528 Page 530
1 lock down, correct? 1 Harbinger report was?
2 A. Yes. 2 A. As 1 understood it, Harbinger report was j
3 Q. And you disseminated information to 3 an outside analysis ofa company to determine its
4 various people via the Monk’s Den website, correct. 4 tinancial strength and/or ability to succeed. ff
5 about GNRO? 5 Q. Did you do any independent work to see if
_ 6 A. Yes. 6 the Harbinger report or that company was in any way
7 Q. What else? What, ifanything, else did 7 connected to Mr. Alessandro or any company that he
8 you do? 8 operated?
9 A. l traded the stock. 1 9 A. No.
10 Q. Anything else? 10 MR. MARGOLIS: Off the record.
1 1 A. l don't think so. 1 1 (Discussion off the record.)
1 2 Q. Did you post the —— post information about 12 (SEC Exhibit No. 210 was marked
1 3 the stock on any other boards? 1 3 for identification.)
14 A. Possibly. l mean, l can’t remember all my 14 Q. l'm going to show you what’s been marked
1 5 specific postings. 1 5 as Exhibit 210. lt's a document Bates stamped
1 6 Q. Did you hire anybody else to promote GNRO? 1 6 WlLLlAMS 10046 through 10047.
17 A. Not that l recall. 17 And, again, Mr. Williams ifyou would let
1 8 Q. Did you understand whether Dominic 18 me know once you‘ve had a chance to review these
1 9 Alessandro also received shares of GNRO? 1 9 documents.
2 0 A. l believe to know that he had shares in 20 (Reviewing documents.)
2 1 the company but whether or not he received them or 2 1 A. Okay.
2 2 whatnot, 1 don't know. 22 Q. Do you recognize these e—mails?
2 3 Q. Did you understand that he had tree 1 23 A. 1 recall this general, yes.
2 4 trading shares in the company? 1 2 4 Q. On the tirst page, Bates stamped 10046,
25 A. l was under that impression. l had no 1 25 there is an e-mail, Friday, February 26, 2010, from
Page 5291 Page 531
t
1 idea ofthe volume, though. 1 1 Stephen Taylor, and it says Greatjob. 1 will make
2 Q. Is it fair to say that ifthe stock price 2 sure Dominic follows through with the other
3 went up, those nee trading shares would increase in 1 3 transfer. Do you see that'?
4 value, is that correct? _ 4 A. Yes.
5 A. Yes. 1 5 Q. To your understanding, is Mr. Taylor
6 MR. MARGOLIS: Can we agree if they 1 6 referring to another transfer of shares?
7 went down, it would also decrease? 7 A. Yes.
8 MR. OBEYESEKERE: Sure. 1 8 Q. And so is that the -· in addition to the
9 MR. MARGOLIS: Okay. 9 600,000 shares that we've talked about?
1 O Q. And would you agree that Mr. Alessandro 1 10 A. Yes. 1 was to get another amount, which l
1 1 also had an interest in the success ofthe promotion 1 1 1 don‘t recall specifically what it was. lt was like
1 2 ofthe stock? 1 12 1.3 or 1.5.
1 3 A. 1 would say anyone holding shares would 1 13 Q. And 1.3, 1.5 million shares?
1 4 have an interest in the stock price going up, yes. 1 14 A. Yes.
. 1 5 Q. Did that make you in any way question some 1 15 Q. At the very top most e-mail from info or
1 6 ofthe representations that Mr. Alessandro gave you 1 1 6 Mr. Taylor to you dated February 28th, 2010, he ,}
1 7 regarding, you know, the share structure and 1 17 talks about a GNRO press release.
1 8 products and future prospects ofthe company? 1 1 8 He states Release should be hitting the *
1 9 A. No. Again, they kept referring to this 19 market between 7:30 a.m. and 8:30 a.m. EST. Monday
2 0 Harbinger report that was being done by an outside 2 O morning. Keep an eye out for it. Once it hits, 2
2 1 source and that it was going to reveal that they had 1 2 1 groups will immediately be sending it out through
22 X number of gallons ofthis stuff in reserve and 1 22 their e—mail database. l will be sending it out
2 3 that they were doing quite well. 1 23 through my database as well. Do you see that?
2 4 Q. Did you ask Mr. Alessandro or any ofthe 2 4 (Reviewing document.)
2 5 other individuals as to who the —· or what the 2 5 A. l see that.
67 (Pages 528 to 531)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 69 of 83
Page 532 Page 534
I Q. Do you remember receiving this e-mail? I A. Yes. si
2 A. 1 don’t recall it specifically, but its i 2 (SEC E><1iibitNo. 211 was mer1<e<1 0
3 addressed to a person named Ken. l'm not sure ifl i 3 10F identification.) y
4 was -— if he was just copying me on something else 4 Q- II1`1"1 20111210 $110W Y011 Whale been m¤1`I<0€I
5 that went On 5 as Exhibit No. 211, a document Bates stamped
6 Again, 1'll reiterate, as l said 6 WILLIAMS 04182 through 04184, which also consists of 4.
7 yesterday, l have hundreds upon hundreds of e—niails 7 a series of e—mai1s, if you would take a moment to {
8 that l've never read 8 review that and let me know when you've had a chance y
9 Q. But you were involved in publicizing this 9 to do so.
I 0 company, correct? I O (Reviewing document.)
1 1 A. Yes. II A- OI<¤>’·
I 2 Q. And did you also understand that there I2 Q. lt appears that Mr. —— well, tirst of all, {
I 3 were other groups that were also concurrently I 3 do you recognize these e-mai ls?
1 4 publieiging thig egmpany {Or GNRO? I 4 A. I do not recall reading these before. j
I 5 A. 1 was unaware that other things were I5 Q. Look at the first page. lt appears that p
1 6 happening. lf 1 read this, obviously then 1 became i I 6 Mr. Alessandro has forwarcied you a series of
17 aware ofit, but l was unaware in the initial stages I7 0-1113115. correct? S
I 8 that there was anyone else represented to be doing i IB A. It appears as such.
1 9 anything of any kind with it. 1 9 Q. lfyou look at the bottom, it indicates t
2 O Q_ At ggme pgint Subsequent tg the initial 2 O that there's an e-mail from Mr. Alessandro to Thomas j
2 1 stages, did you come to understand there were other i 2 I Curtis and it states. III. Tom. Hope all is Well. p
22 companies publicizing GNRQ? g 22 Please refer to the e—mail on how I would like to ¥
2 3 A_ Ye5_ 23 divide the shares for GNRQ. It says 1 —— Jerry Y
2 4 Q. And when did that happen? i 2 4 Williams, 1.3 million shares. Do you see that?
25 A. I don’t recall specifically. 25 A. Yes. *
Page 533i Page 535
1 Q. Did you see a press release from GNRO I 1 Q. Does that refresh your recollection as to
2 announcing the Harbinger report? i 2 around the time when you received the l .3 million
3 A. 1 recall a couple of different press t 3 shares? .
4 releases from them that ranged from, you know, like i 4 A. Approximately that time frame.
5 production ofreserves, and 1 recall one mentioning , 5 Q. And did you pay anything for those 1.3 .
6 the Harbinger report, but I don’t remember when it 6 million shares? 0
7 was or what it specifically stated. 7 A. No.
8 Q. Did you think the Harbinger report, 8 Q. And what did you do in exchange for those Y
9 itseli was an important factor in your decision to 9 1.3 million shares?
1 0 select the company as part ofa float lock down 1 0 A. At that point nothing.
1 1 strategy? 1 1 Q. Nothing more than what you had been doing A
12 A. I had heard from folks that were posting i 1 2 all along?
13 on the boards that this Harbinger report was 1 3 A. No. As in nothing more, period. t
1 4 supposed to be a very big deal and so, yes, 1 g 1 4 Q. Were you promoting the company at this
15 thought that would be important. 1 5 time?
1 6 Q. Did the Harbinger report ever come out? 1 6 A. At this point, no. E
1 7 A. I don’t know. 1 7 Q. What was —- why did they give you these ij
1 8 Q. Did you ever see it? 1 8 shares?
1 9 A. 1 don’t know that 1 have personally seen 1 9 A. Well, referring back to the earlier
20 it. .20 e-mails, 1 was supposed to get these on or around
2 1 Q. Now, you conducted some activities -— 2 1 February or March. 1 didn't receive them until Q
22 sorry ifl've kind of alluded to this. ls it fair 22 then. P
2 3 to say that throughout 2009 —- is it fair to say i 2 3 Q. 1’rn going to show you some trading records
2 4 that throughout 2010 you were performing some i 2 4 later which appear to indicate that you actually
2 5 publicity work or marketing work for GNRQ? 2 5 received —— and 1'll double—check this. 1'll take a
68 (Pages 532 to 535)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 70 of 83
Rage 536 Rage 538 _
i
1 break and go back to it. 1 1 GNRO, he called me every day wanting to talk about "
2 (SEC Exhibit No. 212 was marked l 2 promotions and I told him no. I
3 for identification.) l 3 Q. l‘m going to ask you to back to the I
4 Q. l'm going to show you, Mr. Williams, 4 exhibit which is -—
5 what's been marked as Exhibit 212, a document Bates l 5 A. 209?
6 stamped WILLIAMS 2176. It’s an e—mail from Dominic 6 Q. Yes. I think it`s the Price Volume Chart. t
7 Alessandro to you dated October 13th, 2010, ifyou l 7 Again, ifyou would go to the third page. And,
8 could take a moment to look at that. 8 again, ifyou look at the date 2-25-10 and you y
9 (Reviewing document.) 9 previously -· l'm sorry. 2-25-10, the closing share .
1 0 A. Okay. 1 0 price is .08. Do you see that? ’
1 1 Q. Do you recognize this e·mail? § 1 1 (Reviewing document.) I
12 A. I seem to remember it, yes. l 12 A. Yes. f
13 Q. In the second sentence Mr. Alessandro E 1 3 Q. And the day you called the float lock I
14 writes, I need to verify with you if we are going to i 1 4 down, the closing price was 19 cents. Do you see (
15 be doing some type of program on colv and continuing E 1 5 that? it
1 6 on GNRO. Do you see that? , 1 6 A. Yes. ,
17 A. I do. 17 Q. Would you consider that a significant y
1 8 Q. At this point in time, does that refresh I 1 8 jump? I
19 your recollection as to whether you were, in fact, 1 9 A. Yes. ~
2 0 doing any additional or promotional work on GNRO? l 2 0 Q. And at the end ofthe week or somewhere on (
2 1 A. I did no further work on GNRO. l 2 1 3-9, 2010, it was at 52 cents. Do you see that? I
22 Q. When was the last time that you recall you · g 2 2 A. Yes. 0
23 doing any work on GNRO? , 2 3 Q. Do you consider that an even more I .
2 4 A. I don’t know specifically, but l can say 2 4 significant, very significantjump? T
25 that my last post on lhub, as best that l can 2 5 A. Yes. *
·-~*~m~—re~M~r~M·Wm·rM·~MMMr·~rmr~t—r-~W·~—M~~r*r·-r·*r—·r~···MMrr~——~·r~~e~·r-»~···r~r·r~r·rrr·»r Z
Page 537l Page 539
1 remember, was in September. 1 MR. MARGOLIS: Can we look at the next
2 Q. Of 2010? I 2 day? Q,
3 A. Of20l0. E 3 MR. OBEYESEKERE: That's all right. I .
4 Q. Okay. 1 4 just want to get the general idea. _
5 (Witness and counsel confer.) { 5 MR. MARGOLIS: Well, but the next day,
6 Q. I'm going to ask you to go back to Exhibit 6 l mean, in fairness -—
7 No. 21 l. Well, did you have any understanding that 7 MR. OBEYESEKERE: Sure. *
8 Mr. Alessandro was providing free trading shares to 8 MR. MARGOLIS: -- on 3-10 it went down j
9 an entity called Ramm Venture Development? 9 to 4 cents. ls that a significant --
1 0 A. As l‘ve stated earlier, I don't recall t 10 THE WITNESS: 40 cents.
1 1 ever even hearing ofthat company. 1 1 MR. MARGOLIS: l‘m sorry. 40 cents. g
1 2 Q. And did you recall hearing of Ramos & t 12 Q. And between the time ot`-- you called the
1 3 Ramos Investments? 13 float lock down at 19 cents to 40 cents. Do you if
1 4 A. No. l 1 4 consider that a significantjump? .
1 5 Q. Do you know an individual who uses the 15 A. Yes.
1 6 e-mail address [e-mail]? 1 6 Q. We had talked about earlier pump and I
1 7 A. I believe we referred to him yesterday as 17 dumps, and you had indicated one ofthe criteria of
1 8 James Caldwell. 1 8 that is a sharp rise in stock price and the
1 9 Q. Was he involved with you in promoting 19 promoters selling the shares, is that right? {
2 0 GNRO? l 2 0 A. Essentially what I would refer to as a l
2 1 A. Not that I know of 2 1 pump and dump would be, in fact, a sharp rise in I
2 2 Q. Did he do any work for you? l 22 share price over a very short period of time whereby [
2 3 A. No. Mr. Caldwell attempted to hire me on 2 3 someone would dump pretty much everything they had. Q
2 4 many occasions that never came to pass. K 2 4 MR. OBEYESEKERE: Okay, thank you. f
2 5 Mr. Caldwell, during the time that I was trading , 25 Let‘s take a quick break. We're offthe record at 3
69 (Pages 536 t;o 539)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 71 of 83
Page 540; Page 542 i
1 o'clock. 1 bottom.
2 (A break was taken from 2 A. Yes. (_
3 3:00 p.m. to 3:15 p.rn.) 3 Q. It indicates Green Oasis Environmental
4 MR. OBEYESEKERE: 1t’s 3:15 p.m. 4 stock, GNRO, received 600.000 shares. Do you see 3
5 Q. Mr. Williams, when we were off the record, 5 that'? I
6 was there any conversation between you and the Staff i 6 A. Yes. —
7 regarding the substance of this matter? I 7 Q. Does that refresh your recollection as to
8 A. No. 8 the amount of GNRO stock that you received in {
9 Q. At any point during 2009 through 2010, 9 exchange for or as part ofthe initial promotion
10 actually -- I'm sorry. At any point in 2010, did 1 1 0 that we had discussed earlier? >
1 1 you disclose to any Den members that you had been i 1 1 A. Again, 1 believed that I was going to get 1
1 2 involved in marketing or promoting GNRO stock? I 1 2 1.2, but I got 600 apparently. if
1 3 A. 1 don't think so. . 1 3 Q. At this point in time you got 6007
1 4 Q. At any point in time have you disclosed to 1 4 A. Yes.
1 5 any Den members that you were involved in marketing 1 5 Q. And so on 2-25 is when you received those
1 6 or promoting GNRO stock? I 1 6 shares, correct? .
1 7 A. I don't think so. 1 7 A. I'm sorry? j
1 8 Q. Have you disclosed to anyone that you were 1 8 Q. So you received those shares on 2-25-107
1 9 involved in marketing or promoting GNRO stock? t 1 9 A. Apparently. _
2 0 A. 1 don't think so. E 2 0 (Witness and counsel confer.) E
2 1 (SEC Exhibit No. 213 was marked 1 2 1 Q. l'll take a look and see ifthere‘s an
22 for identification.) 22 easy way to do this. .
2 3 Q. l'rn going to show you, Mr. Williams, 2 3 (Reviewing document.) I
2 4 what's been marked as Exhibit 21 3, and 1’l1 g 2 4 Q. I’1ljust summarize for you. Did you 1
2 5 represent to you it's a printout from document E 2 5 begin selling shares in GNRO on 2-26, 2010? {
Page 541. ( Page 543
1 production from Ei‘RADE, which they represented Q 1 A. Yes.
2 brokerage accounts of yours. I want you to take a E 2 Q. Arid did yOU 1idU1d4i€ %1DDY0><1m31€1y ,5
3 look at that and let me know if you can identify 3 450,000 shares on or about that date'?
4 these. ( 4 A. Yes. ge
5 (Reviewing document.) l 5 Q. And that’s a date that you call the float
6 MR. MARGOLIS; What are you asking 6 lock down stock —— you can strike that. l‘m going ;
7 him, whether these are complete and accurate? i 7 to then turn your attention to another exhibit. ?
8 MR. OBEYESEKERE: Well, I mean, ifhe I 8 (SEC Exhibit No. 214 was marked
9 recognizes these as copies of his brokerage records. 9 for identification.) ti
1 0 MR. MARGOLIS: For the statement § 1 0 Q. I'm going to show you, Mr. Williams,
1 1 period February 1, 2010, to February 28, 20l0? [ 1 1 what's been marked as Exhibit 214. Again. 1'll _
1 2 MR. OBEYESEKERE: Correct. { 12 represent to you that's an account statement of Q.
1 3 MR. MARGOLIS: This is just for one _ 1 3 yours that E*TRADE sent to us purporting to be yours
1 4 month. I 14 for the period dated March lst, 2010, through March if
1 5 MR. OBEYESEKERE: Yes. % 1 5 3 lst, 2010, if you can take a look at that.
1 6 MR. MARGOLIS: Okay. i 1 6 A. Okay.
1 7 A. While I can't be specific knowing that 17 Q. Let me know if you have any reason to iigr
1 8 they sent exact accurate records or that you l 1 8 believe that that’s not a copy of your account §
1 9 received them as such, it looks to be accurate. ' 1 9 statement. it
2 0 Q. Okay. ifyou look at the last page of i 20 MR. MARGOLIS: Can 1 get one, too?
2 1 this document, -- 2 1 MR. OBEYESEKERE: I'm sorry. Didn‘t 1
2 2 A. Are we referring to 9 of Q? 22 give you one?
2 3 Q. Yes. § 2 3 (Reviewing document.) fg
2 4 A. Okay. 2 4 Q. I'm going to -- · gQ
2 5 Q. On 2-25, there's a date 2-25-I0 at the 2 5 A. I have no reason to believe this isn't
70 (Pages 540 to 543)

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Page 544% Page 546 _
1 mine, l 1 MR. MARGOLIS: Not operating. _,
2 Q. Again, if you would turn your attention to 2 MR. OBEYESEKERE: l'm sorry.
3 the last page of this document, the second kind of 3 Q. That you were making trading decisions for qi
4 row hom the bottom states 3-10, 2010, Green Oasis 4 the U.S. High Performance Fund. Do you recall that? {
5 Environmental, lnc. Do you see that? l 5 A. Yes.
6 A. Yes. 6 Q. And that was the —— that was through ;
7 Q. And it appears that you received 800,000 l 7 accounts held at Select Associates, is that correct?
8 shares. Do you see that? 8 A. Yes. tf,
9 A. Yes. i 9 Q. And were you employing a float lock down J;
1 0 Q. Does that rehesh your recollection that l 1 0 strategy when trading those accounts?
1 1 you, in fact, did receive 800,000 shares on or about 1 11 A. Yes. ”
1 2 March 10, 20l0? I 12 Q. And were you purchasing your float lock
1 3 A. Yes. ( 13 down stocks in those accounts?
1 4 Q. Okay. So you essentially did receive the 14 A. Yes. 3
1 5 full 1.2 million shares, correct? I 1 5 Q. And was some ofthe stocks that you were
1 6 A. Yes. t 1 6 purchasing in those accounts GNRO stocks?
17 Q. And subsequently we`ve seen in exhibits l 17 A. Yes.
1 8 that you received another 1.3 million shares on or l 18 Q. Okay. And did you begin purchasing in A
1 9 around August —- l mean, l think August of`2010, is l 1 9 those accounts or at least in one ofthose accounts 5,
2 0 that correct? l 2 0 in July of 2010? 3
2 1 A. On or about. t 2 1 A. Sounds accurate. ]
22 Q. And that’s an additional 1.3 million Q 22 Q. And did those purchases include GNRO
2 3 shares, correct? 2 3 stock?
24 A. Yes. 1 24 A. Also sounds accurate.
2 5 Q. At any point did you disclose to anybody 25 BY MS. CURTIN
Page 545 § Page 547
1 that you were receiving GNRO shares at a reduced { 1 Q. Can 1 ask you a question'? Mr. Obeyesekere
2 rate or free hom the company? 2 was asking you if —- between February and July 2010
3 A. No. 3 ifyou had liquidated your position in GNRO,
4 (Witness and counsel confer.) 4 specihcally the position you had gotten from the ,
5 Q. Our records reflect that on the —— first 5 company, which l understood included 600,000 shares
6 of, actually, let me strike that. In March of2010, 6 you received in February 2010 and 800,000 shares you
7 did you sell approximately 441,000 dollars' worth of 1 7 received in March 2010.4 .j
8 GNRO shares? t 8 So did you liquidate the entire 1.4
9 A. lf that's what it adds up to. 9 million shares between February when you started,
10 Q. Do you have any reason to believe that’s 1 0 when you first received those shares through to July Y
1 1 not accurate? 1 1 201 O?
12 A. No, l guess not. 12 A. 1 don’t know the record specifically, but
13 Q. And in April of2010, did you sell 13 ifl had none after that, then, yes.
14 approximately 126,000 dollars' worth of GNRO shares? 14 Q. Okay. So you did get initially in
15 A. lfthat's what it says, l believe you. 15 February and March 1.4 million shares roughly?
1 6 Q. Between February of20l 0 through July of 1 6 A. Yes. q
17 2010, did you liquidate the entire 1.2 million E 17 Q. Okay. And so the testimony is ifit‘s if
1 8 shares of GNRO stock? l 1 8 gone and not in your account or reflects on your
1 9 A. l'm sorry. Between when? l 1 9 statements, you liquidated it all by July of`20l0? gi
2 0 Q. February of20l0 and July of2010, did you 2 0 A. Yes. [
2 1 liquidate the entire 1.2 million shares ofGNRO 2 1 BY MR. OBEYESEKERE
22 stock? 22 Q. The other 1.3 million shares, do you
2 3 A. Apparently. 2 3 currently have that?
2 4 Q. We had talked about a fund that you were 2 4 A. Yes.
25 operating, the US High Performance Fund. l 2 5 Q. And when, in fact, did you receive those?
71 (Pages 544 to 547)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 73 of 83
Eage 548 i Eage 550
1 A. On or about the time that —~ somewhere in 1 opinion.
2 August l believe. although l'll stipulate that 1 2 A. My thought process would be that —- just
3 expected them far sooner. 3 so you know, these folks knew that I had a position
4 Q. At any time during —— at any time did you 4 in GNRO. 1 traded that loosely on the chart at this
5 disclose to anybody that you were selling GNRO 5 time frame.
6 stock? 6 1 also knew that 1 was going to be
7 A. No. 7 receiving these additional 1.3 million and that 1
8 (SEC Exhibit No. 215 was marked 8 would not deposit them and hold them long-term. 1
9 for identification.) l 9 mean not sell them.
1 0 Q. l’m going to show you, Mr. Williams, l 1 0 Q. Did you communicate that to —— that you
1 1 what's marked as Exhibit 215. lt's a document which 1 1 would not sell them?
12 was not produced by you but consists of one, two, 1 12 A. Yes.
1 3 three, tive pages. l‘m going to ask you to take a 1 3 Q. Okay. But the people at Bancorp
A 1 4 moment to look at that and let me know when you`ve , 1 4 understood that you were applying a float lock down
1 5 had a chance to do so. 1 5 strategy, correct?
1 6 (Reviewing document.) 1 6 A. Correct.
17 A. Okay. 1 7 Q. And that strategy was to accumulate the
1 8 Q. Do you recognize this document? 1 8 float, correct?
1 9 A. Yes. 1 9 A. That is correct. And those folks did, in
2 0 Q. What is it? 1 20 fact, know that 1 would be holding that 1.3 million
2 1 A. lt is a management agreement for the fund 2 1 for long—term. {
2 2 in New Zealand. 2 2 Q. Okay. 1-low long did they —- they
2 3 Q. And you understood that you were the 2 3 understood also that the float lock down strategy
2 4 investment manager of this —— the USPH Fund, is that 2 4 had been in effect since February, correct?
25 correct? E 25 A. Yes.
Page 549k Page 551
1 A. They refer to it as Investment Adviser, l 1 Q. Did you in any way indicate to them that
2 but yes. 2 between February and July of 20 1 0 that you had
3 Q. And turning to the third page, is that 3 traded GNRO stock —— that you had sold GNRO stock?
4 your signature? i 4 A. l'm sure that 1 had those conversations
5 A. Yes. 5 with Curt. 1 don't know that l had them
6 Q. Did you discuss with Bancorp in connection i 6 specifically with New Zealand.
7 with this matter the particular float lock down E 7 Q. When you say you had those conversations
8 stocks that you would be buying? { 8 with Curt, you have a distinct memory of having a
9 A. Routinely. 9 conversation with Mr. Wagner in which you disclosed
1 0 Q. And did they understand that you would be Q 10 that you had sold GNRO stock?
1 1 buying GNRO stock? E 1 1 A. 1 told him that 1 always trade them early
1 2 A. Yes. 12 on and that I always take a little bit off on the
1 3 Q. And did you ever tell them that you had l 1 3 way up but that 1 always hold a position for longer
1 4 previously sold GNRO stock? l 14 term. {
1 5 A. No, but —— not specifically, but they knew 15 Q. Anybody else that you told that to?
1 6 that 1 had traded it, yes. 16 A. Not that 1 specifically remember.
17 Q. Do you believe there's —- this is E 17 Q. Okay.
1 8 independent of —— let me strike that. Would you 18 BY MS. CURTIN
1 9 understand there to be a conflict ofinterest 19 · Q. ls Exhibit 215 your Consulting Agreement Pi
2 0 between you buying as an investment manager for a t 2 0 for both accounts, both the High Performance Fund Q2
2 1 fund while personally selling those same types of 2 1 andthe Select Associates other fund?
22 shares in your personal account? l'm only asking t 22 A. To the best of my knowledge, there was no
2 3 for your understanding. l 2 3 written agreement for the other fund.
2 4 MR. MARGOLIS: Not his legal opinion. 2 4 Q. The one that’sjust with Select
25 MR. OBEYESEKERE: Not as a legal l 25 Associates?
72 (Pages 548 to 551)

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Page 552 Page 554
1 A. Correct. 1 A. I don't know exactly how many, but I know
2 Q. So this agreement applies to your I 2 it was hours upon hours of work over two days. t
3 relationship for the High Performance Fund? 3 Q. Over two days. And on those calls in if
4 A. Yes. 4 addition to Mr. Bryant was you Mr. Wagner. Anybody i
5 Q. And when you -— at the time that you 5 else?
6 executed this agreement, which appears to be June 6 A. No. Those were probably the calls that
7 22nd, 20l O, is that right? 7 they went back and forth with.
8 A. Yes. 8 Q. And what was Mr. Bryant telling Mr. Wagner
9 Q. Had you discussed with Mr. Wagner or 9 about when the float lock down in 8000, Inc., would
1 0 anybody else associated with Bancorp, New Zealand or 1 0 become effective?
1 1 the fund, High Performance Fund when you expected I 1 1 A. When we were in Barbados, Mr. Bryant —-
12 the t1oat lock downs to achieve their purpose or the 12 say that question again.
13 squeeze to occur in any ofthe stocks, GNRO, EIGH or 1 3 Q. What I said was what was Mr. Bryant saying
1 4 CDIV? 1 4 to Mr. Wagner about when the float lock down or the
1 5 A. We never put a time frame on them. We 1 5 squeeze would result or become affective?
1 6 simply stated that based on the chart and based on I 1 6 A. Again, when Mr. Wagner was in Barbados,
17 what we believed could happen as a result of the 17 Mr. Bryant showed much along the same types of
1 8 float lock down, that it would occur, but we didn't I 1 8 evidence that you're seeing now about how there’s a
1 9 put time frames on them, no, not that I recall. 1 9 naked short and that —- excuse me ~- once some real
2 O Q. For example, with GNRO, did you discuss 20 volume comes in and we have this accounting of
2 1 specifically how many months it might occur within 2 1 shares, that this is going to happen instantly
2 2 or expected months? 2 2 because they will have to buy in.
23 A. I don‘t recall. 23 Q. So it was going to happen —— you E
2 4 Q. How about with 8000, Inc., or EIGH? 2 4 understood that Mr. Bryant was conveying to Mr.
25 A. Those were the same. I 2 5 Wagner it was going to happen in the near future'?
"";*”*””**’“*‘“*‘“"‘“““*”“”““*"***_—-;`··*I·*~**~i'“**““”W”**’“" l
Page 553I Page 555
1 Q. Right. I realize that. I'm just I 1 A. Yes. III
2 clarifying for the record. Did you discuss with Mr. I 2 Q. Like within a month?
3 Wagner or anybody with New Zealand fund or with I 3 A. I don't want to say within a month, but
4 anybody invested in the High Performance Fund when 4 the near future.
5 EIGH might -- the squeeze might become effective? 5 Q. Like in two months? What’s "near future"
6 A. Actually, more specihcally Mr. Bryant 6 to you?
7 discussed that with him. I 7 A. To me near future would say a quarter,
8 Q. So Mr. Bryant spoke to —- when did he do I 8 maybe three to tour months.
9 that and who did he discuss that with? 9 BY MR. OBEYESEKERE g
1 O A. Well, Mr. Wagner in Barbados and when I I 1 O Q. I'm just going to touch briefly on a lg,
1 1 visited New Zealand, as I said, Mr. Bryant spoke 1 1 couple of other —-
12 with him more than I did. The folks from New I 12 MR. MARGOLIS: You are going to give
1 3 Zealand were on the phone with Mr. Bryant going back 13 me some time.
14 and forth with e-mails, like I said, far more than I I 14 MR. OBEYESEKERE: Sure. How much time
15 was. I literally —- once I was there, I did, like I I 15 do you think you need?
1 6 said, a half of day of charting with them and was I 1 6 MR. MARGOLIS: About two days.
17 basically just available to answer questions. 17 MR. OBIEYESEKERE: You can have it if
1 8 Q. And when were you in New Zealand? 1 8 you want to cancel your flight.
19 A. I don't remember the specilic dates, but I 19 MR. MARGOLIS: No. No. It‘s
2 0 it was approximately early September. 2 0 canceled already. I5 minutes should be --
2 1 Q. Of 20lO? 21 MR. OBEYESEKERE: I5 minutes. Okay.
22 A. IO, yes. 22 I will plan accordingly.
2 3 Q. And how many calls did Mr. Bryant I 23 Q. lust briefly, we had looked over earlier
2 4 participate with or how many calls was Mr. Bryant on 2 4 at your background questionnaire, Mr. Williams, and
2 5 with the folks in New Zealand? I 2 5 it might not be exactly right, but I remember
73 (Pages 552 to 555)

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Page 556I Page 558 {
1 reading something that after you noted that you had 1 A. Berg v. someone. I don’t remember the I
2 a Ph.D. from Concordia College, you stated that 2 other someone.
3 that's a less than credible institution or something I 3 Q. Do you remember approximately when that
4 along those lines. 4 was? , I
5 A. Yes. 5 A. Approximately summer of"07 or ‘O8. I ?
6 Q. What did you mean by that? 6 mean, I remember it was summer. I don't remember if I
7 A. It was one of those on-line only things 7 it was ’07 or ’0·8, but a few years back. ·
8 where you took the classes on there. They didn’t I 8 Q. What did Five Star Property Services do? »
9 have physical campuses, that type of thing. 9 A. The aforementioned engineering portions, —
1 O Q. We had seen earlier a draft of-- strike 1 O as well as property management and property ? I
1 1 that. Did you ever tell anybody that you believed 1 1 construction and contracting and maintenance. I`
12 it was a less than credible institution? t 12 MR. QBEYESEKERE: Let's go offthe
1 3 A. No. But I rarely spoke about it at all. 13 record. Ijust want to talk to you guys about a Z
1 4 Q. You mentioned it was a Ph.D. degree. Do 1 4 couple of things. if
1 5 you have an undergraduate degree? 1 5 (A break was taken from .
1 6 A. Not specifically. Again, I went through I 1 6 3138 p.m. to 3:45 pm.) §
17 this institution and I had all ofrny records 17 l\/IR. QBEYESEKIERIE: It is 3:45. =
1 8 reviewed to go from there. 1 8 Q. lvlr. Williams, when we were off the record,
1 9 Q. Okay. Did you get some sort of credit for 1 9 was there any conversation between you and the Staff _
2 0 work that you had done in the past through this 2 0 regarding the substance ofthis matter?
2 1 institution? I 21 A. No, sir. 4
22 A. Yes. And I received transcripts from 22 Q. I'm going to turn your attention to a
2 3 them, but I'm sorry. They were damaged by water and I 2 3 company, Sungro l\/Iinerals, which we had talked about g
2 4 I've been unable to locate them. I 2 4 briefly. How did you first learn about Sungro? ‘
25 Q. Did you receive -— obviously, you said you WMI 25 A. Through Mr. I—Iainey.
Page 557 Page 559
1 received a Ph.D., but did you also receive an 1 Q. What did Mr. I-lainey tell you about the
2 undergraduate degree from this college? I 2 company?
3 A. No. I 3 A. That they had acquired claims to some I
4 Q. Would you be able to —— did this I 4 several thousand acres of mineable property in I
5 institution offer undergraduate degrees? 5 California.
6 A. I don't specifically know. I 6 Q. What did he want you to do?
7 Q. You also I believe had mentioned you were I 7 A. I—Ie thought it had a very nice low float.
8 an engineer in Five Star Property Services, is that I 8 I·Ie asked me to call it as a float lock down. I
9 right? I 9 declined. I told him that I would play it but not
1 0 A. Yes. 10 call it as a float lock down because there was I
1 1 Q. And what type of engineering work did you I 1 1 nothing fundamental or chart—wise yet that would
1 2 do? 1 2 make it worth calling.
1 3 A. Well, I did impact analyses. I did 13 Again, so he relayed to me that it had a
1 4 preventative maintenance procedures. I did 14 decent float but at the time I was unable to verify 1
1 5 technical writing. That type. I served as an 15 it, and he said that these claims were previously I
1 6 expert witness in a case relating to contracting, 16 held by another company. I believe it was called A
1 7 engineering drawings and whatnot. I 17 Timberline Resources and that they had lost them for
1 8 Q. How many cases did you serve as an expert I 1 8 some reason or another. it
1 9 witness in? 1 9 But they had while they were there done
2 O A. I was asked for a couple but only t 2O substantial geological and/or mineralogical reports Q
2 1 technically served in one. I 2 I to indicate that there would be however many tons or
2 2 Q. Were you deposed in that proceeding? I 22 pounds ofgold or led or copper or what have you. I I
23 A. Yes. 23 mean, I'm generalizing. .
2 4 Q. And do you remember the name of that 24 Q. When did you Hrst meet l\/Ir. I-Iainey?
2 5 proceeding? I 25 A. As I mentioned. ——
74 (Pages 556 to 559)

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Page 560 Page 562 g
1 Q. I realize you mentioned this. I'm sorry. i 1 financiers was he ref`erring to? Q
2 Ifyou could just let me have that again. 2 A. I don't know specifically who he was I
3 A. When I was introduced to him via Tina 3 referring to, but he was talking about people that
4 Marie. I don't recall the exact specific time 4 were going to come in to help, you know, fund the
5 frame. 5 work and/or equipment to do what they needed to do 2.
6 Q. Did you understand Mr. l·lainey to have any i 6 on this property.
7 connection to Sungro? l 7 Q. Did you have an understanding as to how .
8 A. Mr. Hainey explained to me that he was g 8 much Hnancing they were going to be bringing in? I
9 working with Sungro to secure these mineral claims g 9 A. No. g
1 0 and to organize Hnancing for them to be able to get l 1 0 Q. Did you receive any shares ofSungr0? fg
1 1 the mining equipment and the ability to upgrade the l 1 1 A. Yes.
1 2 shafts that they would need. I 1 2 Q. How many shares? .
1 3 Q. Do you have any understanding as to who 1 3 A. I believe ~— I don't remember —— it was r
1 4 started the Sungro board on Investors Hub? 1 1 4 300 some odd thousand. I believe 333 or 350. 2
15 A. Actually, I think I did. I 15 Something like that. Q
1 6 Q. And what prompted you to start that board'? 1 6 Q. 353,000 shares?
17 A. Well, once I had heard about the company, 17 A. Yes.
1 8 I believe I started the board to open up discussion. 1 8 Q. And did you sell any ofthose shares? s
1 9 Q. And when did you start that board? 1 9 A. N0. i
2 0 A. I don’t know. I 2 0 Q. Do you have those today? I
2 1 Q. And do you know who the other-- were you f 2 1 A. Yes, I do. I
2 2 the moderator ofthat board? 2 2 Q. Did you receive any other Sungro stock I
2 3 A. Well, yes. 2 3 from any other source other than what you purchased q
2 4 Q. Did you have any assistants? I 2 4 or sold on the public markets? e
2 5 A. l'm sure I had some along the way. , 2 5 A. I don’t think so. .
Page 561 Page 563 i
t 2
1 Q. Were any of them Den members? I 1 Q. Did you buy any Sungro shares on the open Y
2 A. I’m sure. Q 2 market? I
3 Q. Do you recall any oftheir names? ¤ 3 A. Yes. r
4 A. I'm sure Blockman was on there at some 4 Q. And about when did you start buying Sungro g
5 point, and there were various others. I don't l 5 shares? r
6 remember specifically. 6 A. Approximately June of '09. tyig
7 Q. In June of 2009 did you make lhub postings r 7 Q. And why did you start buying Sungro shares Q;
8 indicating that Sungro's share price was going to 8 at that time? {
9 increase significantly? 9 A. Again. based on the conversations with y
1 O A. Ifl did, then yes. 10 l\/Ir. I-Iainey, if even half of what he was saying I
1 1 Q. As you appear today, do you have any 1 1 turned out to be true, then it sounded like a good
12 understanding as to why in June of 2009 you believed 12 idea. iQ
13 Sungro share price was going to increase I 13 Q. Did you sell any of those shares that you
1 4 significantly? ; 1 4 purchased on the open market? I
15 A. Again, based on the conversations that I A 1 1 5 A. Over the course of time, yes. “
1 6 had with Mr. I-Iainey, he had told me that some I 16 Q. How many shares? How much ofthose shares _
17 financiers were going to be coming in; that they 17 did you sell? Q
1 8 were very interested in the company and that they l 1 8 A. I eventually liquidated them all, but I A
1 9 were likely to be taking a position and that the i 1 9 don't remember how many it was. At different times
2 0 float was, again, reasonably small. g 2 0 I bought and sold and traded. I don’t remember ,
2 1 The way he stated it, it sounded almost 5 2 1 specifically. r
22 impossible, which is why I didn’t call it as a float i 22 Q. Did you end up as a profit position with ,
2 3 lock down because I couldn't -— couldn‘t verify what { 2 3 regard to those shares? Ei
2 4 he said. _ 2 4 A. I think so. I don't remember Q
25 Q. And when you say financiers, what l 2 5 specihcally. ljust don't remember.
75 (Pages 560 t;o 563)

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Page 564I Page 566 i
1 Q. And —— 1 I would deposit the rest into Mr. l~Iainey's account. .
2 A. It would not have been substantial. I 2 Q. So is it fair to assume that any ofthe {
3 Q. And what account did you trade those in, I 3 checks that were deposited from you to Mr. Hainey, q
4 do you recall? I 4 some percentage of that was retained by you sort of
5 A. I believe I traded some in the Gibraltar ; 5 as a commission?
6 account and some in the E*"fRADE account. 6 A. Sort of {
7 Q. And those are two accounts that are active 1 7 Q. Was that fair to say? PZ
8 today, correct? I 8 A. Yeah, I think so.
9 A. Yes. I 9 Q. Okay. And it would be up to —- it could
1 O Q. Did you buy Sungro shares in private I 10 be up to halfthe amount on certain occasions. Is
1 1 transactions? I 1 1 that fair to say?
12 A. Yes. 12 A. Yes.
1 3 Q. When was that? I 13 Q. So Iet's say Mr. —— you deposit a check
1 4 A. There was a period of time when Mr. Hainey I 1 4 for EISIOO into Mr. Hainey's account. It could also pj
1 5 was doing private offerings. He knew that I knew a 15 be that you kept SIOO of whatever had been initially j;
1 6 lot of people; asked me to ask around if anybody 1 6 provided to you to pass on to Mr. Hainey?
1 7 wanted to get involved. He would speak to them on 17 A. Yes.
1 8 the phone or e—mail with them and relay and then -- I 1 8 BY MR. KELCQURSE
1 9 so, yes. 1 9 Q. Was this all done on your Bank of America
2 O Q. Did you, yourseli buy Sungro shares from 2 O account? f
2 1 Mr. Hainey? I 21 A. I believe so.
22 A. Yes, I believe so. I 22 BY MR. QBEYESEKERE
2 3 Q. About how much? I 2 3 Q. Approximately how many people did you help f
2 4 A. I don't recall specifically. I'm sorry. 2 4 Mr. Hainey tind as buyers for Mr. I·lainey's shares?
2 5 Q. Where did you put those shares? 2 5 A. Approximately ten, maybe. {
Page 565I Page 567
1 A. Again, I'm sorry. I don't recall I 1 Q. Do you have any knowledge ofa Q
2 specifically. I 2 conglomerate Mesa Property? rj
3 Q. Did you buy those shares and subsequently I 3 A. No, that doesnt ring a bell.
4 sell those shares in other prime transactions? 4 Q. Did you have understanding of what
5 A. I was kind of a pass—through middleman on 5 Sungro’s float was in .lune of 200l ? S
6 these. Most ofthe folks sent me the money. I then 6 A. Again, I said I couldnt verify it. Based
7 gave Mr. Hainey the money and I kept a portion of it 7 on what Mr. Hainey told me, it was less than IO
8 and then he would deliver the shares. 8 million shares.
9 Q. What portion ofthe money that people gave 9 Q. ls that what he said, less than IO g}
1 O would you keep? 1 O million? Y
1 1 A. It varied. In some cases half ofit; in 1 1 A. l believe. I don't recall specihcally.
12 some cases none of it. 12 I remember him saying it was very low and as I ‘¥
1 3 Q. In total how much money did pass through 13 recall, shortly thereafter they did a split because
1 4 you in connection with these transactions? 1 4 they said there wasn‘t very much tradable. I
1 5 A. I don`t recall. 15 believe it was 5 to I. Lf
1 6 Q. Was it over IO0,000? 16 Q. When did you tirst learn ofthat 5 to I
1 7 A. I don't recall. 1 7 split? Y
1 8 Q. When you say you would get money and it 18 A. Through conversations with Mr. Ielainey.
1 9 would sort of pass through you, can you physically 1 9 Q. Was that prior to the press release being
2 O describe for me the process by which this money 2 O issued by Sungro? _
2 1 would be transferred? 21 A. I don't recall. I mean, I recall that I Q
2 2 A. People would either send me a check or 22 was in Virginia when Mr. I·lainey tirst called me ig
2 3 deposit it in my account. I don't remember I 23 about this, so I wasn‘t —— didn’t have access to a
2 4 specifically and then whatever percentage I was 2 4 computer to go in and out. If l'rn in Virginia, it
2 5 supposed to keep, ifyou will, I would keep and then I 2 5 means I'm hanging out with my dad and not sitting in
76 (Pages 564 to 567)

Case 3:12-cv-01068-RNC Document 47-1 Filed 07/19/13 Page 78 of 83
Page 568} Page 570
1 front ofa screen all day. l 1 A. Yes. Maybe six, but not long.
2 Q. We’ve talked earlier in your testimony 2 Q. Do you know who Jim Bettnar is? I
3 about something loosely referred to as a core group i 3 A. No. I
4 on investors, on the Monk’s Den Investors Hub j 4 Q. Do you have any idea why Sungro share
5 message board and that group changed over time. Do ; 5 price increased dramatically from mid June to early y
. 6 you recall that? 6 July?
7 A. Yes, I do. g 7 A. Again, as represented to me by Mr. Hainey,
8 Q. And do you recall who was in the Monk‘s 8 the float was very small and apparently was very
9 Den core group on or about June 2009? i 9 small because the slightest of buying increased the i
1 0 A. Not specifically. 10 price very easily. *
1 1 Q. l’m going to throw out some names. Was 1 1 Q. Other than your previous testimony of the
12 Mr. Erhard one ofthose? { 12 float being less than 10 billion, did at any point
1 3 A. I think so. I 13 you get a more concrete idea as to what the actual
1 4 Q. Was Brent one of those? i 1 4 float was? J
1 5 A. Brent was a much smaller investor. but I { 15 A. Not that I recall. [
1 6 considered him a supporter, yes. 1 6 MR. QBEYESEKERE: I think that’s all I ?
17 Q. And he was a investor in Sungro? I 17 have on that topic. Just give me two minutes to jj
1 8 A. I don’t know if he did or didn't. 1 8 gather -— review my notes and you can have your
1 9 Q. When you say he was a much smaller 1 9 time. Let‘s go off the record. 4
2 0 investor, you mean just generally as a smaller i 2 0 (A break was taken from g
. 2 1 investor in the float lock down? j 2 1 3:57 p.I`11. to 4:00 pm.)
22 A. I mean generally based on conversations t 22 MR. QBEYESEKERE: Let‘s go back on the j
2 3 with him. his average trade was typically a few I 2 3 record. It’s 4 o'clock. Y
2 4 hundred bucks. I 24 Q. Mr. Williams, we have no further questions
2 5 Q. What about John Provecek? Was he one of Q 2 5 for you at this time. If we would need to contact yy
I Page 569 Page 571
1 the core members in June of2009? i 1 you, we may however call you again to testify in I
2 A. I was getting to know John at that point, 2 this investigation. Should we have to do so, we Q
3 and I thought he was going to be a good core member, 3 will contact your attorney. Do you wish to clarify y1
4 yes. 4 any ofthe statements you made today? I
5 Q. I don’t even want to try to look for 5 A. I don’t think so. ~
6 exhibits at this point. Do you know Mark McLeary or 6 MR. QBEYESEKERE: All right. Counsel,
7 have you heard of a Mark Mclseary? 7 would you like to ask some clarifying questions?
8 A. I don‘t think so. 8 MR. MARGQLIS: Yes. i
9 Q. Again, I'Il represent to you he may be I 9 MR. MARGQLIS: There was some discussion g
1 0 somehow associated with Sungro. Does that jog a 10 about your background, Mr. Williams. I want to just I
1 1 bell? 1 1 go into one piece of it and that's your Naval career. y;
12 A. No. 12 You were chosen for the Nuclear Submarine Program
1 3 Q. Do you know somebody named Malkeet Bains? 1 3 in the United States Navy?
1 4 A. I have since learned that he was one of 14 THE WITNESS: Correct.
1 5 the investors that held particular amount of shares i 15 MR. MARGOLIS: Without going into detail,
1 6 in Sungro, but I did not know it at the time. 2 16 which I know you can, can you tell us essentially
1 7 Q. When did you learn that Mr. Bains held 17 what yourjob was? be
18 shares in Sungro? l 18 TI-IE WITNESS: Specifically, I worked .
1 9 A. I believe it was right about the time the 1 9 with the Trident 2 nuclear missiles. I worked j
2 0 British Columbia Securities called me. I don’t 2 0 in control and monitoring situations, missile g
2 1 remember specifically when that was. 2 1 compartment supervisor, the missile control center, ·
22 Q. Did you speak with the British Columbia’s g 22 fire control, nuclear weapons security, among other I
2 3 Securities Commission? 2 3 scenarios.
2 4 A. For a few moments, yes. 24 MR. MARGQLIS: And to be chosen for that,
2 5 Q. Less than five minutes? 2 5 is it fair to say that that group of people who you j;
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Page 572 Page 574
1 were colleagues with in the U.S. Navy represent 1 THE WITNESS: Yes.
2 somewhere less than the top I percent ofthe I 2 MR. MARGOLIS: And through much ofthat
3 United States Naval forces? 3 period oftime, there was a designation that you
4 THE WITNESS; Thafg ar;ourate_ 4 were a promoter, isn't that correct? I
5 MR. MARGOLIS: Okay. And, further. were 5 THE WITNESS: Yes.
6 you one ofthe folks who in the event that a I 6 MR. MARGOLIS: So people on the Den
7 nuclear weapon had to be dispatched, you were 7 understood that you did promotion work?
8 one of the people who would end up doing that? I 8 THE WITNESS: Yes.
9 THE WITNESS: Yes. I 9 MR. MARGOLIS: As did anybody else who
1 0 MR. MARGOLIS: Okay. And is that-- as I 10 went up on Ihub, right?
1 1 a result of that, that's where you got a lot I 1 1 THE WITNESS: Yes. We were designated
1 2 of your engineering training? I 12 with a triangle and a dollar sign in it.
1 3 THE WITNESS: Yes. 13 MR. MARGOLIS: Okay. When you were asked,
1 4 MR. MARGOLIS: So you had classes and 1 4 did you tell anybody that you had done promotion work?
1 5 you were qualified in various engineering and 15 Did you ever tell people at any ofthese Monkinars
1 6 mathematical areas? I 1 6 that you had done promotion work?
1 7 THE WITNESS: Yes. I 17 THE WITNESS: At the Monkinars, yes.
18 MR. MARGOLIS; Okay. I want to talk I 18 MR. MARGOLIS: Now, theres been an
1 9 economics with you. Can you tell us the shares, 1 9 implication that in a sense you were -- and I
2 O approximately the number of ghareg that you I 20 will summarize this as an implication in the
2 1 have in each ofthe entities that you called I 2 1 questioning today, that in order for you to
2 2 as float lock downs? * 22 call a tloat lock down, you needed to get
2 3 THE WITNESS: Yes, I can. l 23 paid shares of stock?
2 4 MR. MARGOLIS: All right. Start with I 2 4 THE WITNESS: That's not entirely accurate.
2 SMMCDIV, pl—e{a·s*e;¥m·W“WWWWWmW“M“m—M_"_ I 2 5 Fgiexaptple, l\/Ir. Hainey wanted to offer me shares to
Page 573 Page 575
1 THE WITNESS: In CDIV I still hold 1 call the SUGO, and I declined because I didn‘t think
2 approximately 3 million shares ofthat stock. I 2 it would have been a good float lock down play.
3 MR. MARGOLIS7 What about EIGH? I 3 MR. MARGOLIS: Now, if, in fact, you went
4 THE WITNESS: EIGH I hold in excess of 4 into these float lock downs to dump the shares, from an
5 3 million shares in that stock. I 5 economic point ofview, where did you end up with
6 MR. OBEYESEKERE: I‘m sorry. How many I 6 CDIV?
7 million shares? I 7 THE WITNESS: While I did sell a good portion
8 THE WITNESS; In excess ot`3 million. 8 ofthem along the way up, I've held my 3 million shares
9 MR. MARGOLIS: GNRO? 9 because I wouIdn‘t sell them as the stock was
10 THE WITNESS: I still hold l.3 million. 10 decreasing in value. Had I sold those 3 million at
1 1 MR. MARGOLIS: And PTNV? I 1 1 any given time along the way, I could have easily
12 THE WITNESS: Actually, PNTV. I 12 netted an extra $2 million off ofthat.
13 MR. MARGOLIS: PNTV. Sorry. I 13 MR. MARGOLIS: And why didn't you do that?
1 4 THE WITNESS: Thats all right. PNTV, I 14 THE WITNESS: Because I wasn't going to hurt
15 until recently I held approximately I.7 million. 15 people.
1 6 In negotiations with the company, since they 1 6 MR. MARGOLIS: Well, was it also because you
17 have elected to not continue doing videos for I 17 still believed in the float lock down?
18 me or doing a show, I returned I.5 million I 18 , THE WITNESS: Absolutely. I still believe,
1 9 in change to them. I 1 9 and I will say aside from the fact at this point
2 O MR. MAROOLIS; Okay. I 2 0 because I have serious doubts as to whether or not I
2 1 THE WITNESS: I still hold some, but I 2 1 EIGH has been shoited at this point, but I still
22 I've returned those because I kept them in 22 believe that the others are very tightly traded.
2 3 certificate form. I 2 3 As to whether or not they’re still locked
2 4 MR. MARGOLIS: Now, you posted on Ihub I 2 4 up, I think since the situation got involved with
2 5 for many years, did you not? I 2 5 EIGH, I think many of those stocks are now basic
78 (Pages 572 to 575)

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Page 576 Page 578
1 flippers for everybody. 1 THE WITNESS: Well, and/or my ability.
2 MR_ l\/IARGOIJIS; What about EIGH and these 2 MR. MARGOLIS: Okay. When you would sell ,7
3 3 million plus shares? Why didn't you -- what is 3 some ofthese float lock down stocks, as you said I,
4 the economic effect of you not having sold those? 4 taking a little offas it went up, were there times g}
5 THE WITNESS: The economic affect ofElGl~l 5 that you would sell one so that you could fund t
6 shares that I hold are in excess of3 million I 6 buying another?
7 and my approximate cost value is 20 cents, and 7 THE WITNESSZ Well, I don't Want to Say that
8 I didn’t sell any of`them. Even when Mr. Bryant 8 specifically, but what I will say is as I took some f
9 relayed to me that the dividend wasn’t going 9 off on the way up, for example, one ofthe exhibits
1 0 to happen, I didn't go in and sell anything. 10 that you recently registered -- or "you" being Mr.
1 1 I held them. Had I sold them along the way I 1 1 Obeyesekere referenced was 2l3 where I was selling
12 up to the rough top of 42 cents, I could I 12 GNRO. The page before that was also me buying CDIV,
1 3 have —— well, A, I would have never continued to i 1 3 so I supported the plays as I saw weakness in them
1 4 buy. I 1 4 because I thought that was beneficial.
15 I would have probably sold after I had I 15 MR. MARGOLIS: So, I mean, is it fair to say
1 6 or 2 million because I bought some as low as 6 I 1 6 as a result ofthese float lock downs you lost Q
17 cents, continued to buy up. Again, my approximate I 17 out—oflpocket at least in excess ofa million dollars?
1 8 cost average is 20 cents, so I spent $600,000 buying 1 8 THE WITNESS: Well, had I sold any ofthose
1 9 them and did not sell one. 1 9 or all of those among the tops, I would have netted an ti
I .
2 0 MR. IVIARGOLIS: What about GRNO? 2 0 approximate another 5 to $6 million. gf
2 1 THE WITNESS: GNRO, I could have deposited 21 MR. MARGOLIS: And as a result ofthis
22 my remaining l.3 million that I received in August 22 investigation, what's happened to your reputation in ig
2 3 and at that time had I elected to sell them, I could 2 3 the rnarketplace?
2 4 have sold them for approximately a million dollars. 2 4 THE WITNESS: My reputation bas boon absolutely
2 5 l chose not to_ A, because partially the fund that 25 decimated, as has my financial position and/or in
Page 577 Page 579
I 11
1 I was with at that point was buying them. I wasn't 1 some cases my ability to even continue earning, as I
2 going to deposit them. Keeping them in certificate 2 have now put in approximately I500 of my own hours
3 form was a better method ofobtaining, the float lock 3 not even counting this trip, an additional 2000
4 down. 4 hours by volunteers helping to copy and paste the
5 MR. MARGOLIS: Now, we’ve talked about your I 5 required documents. Now, what'? Four trips with at
6 reputation on Ihub. Was that reputation gained because 6 you. I
7 you made calls on various stocks that worked out for I 7 MR. MARGOLIS: But l’m really focusing on if
8 people? I 8 your reputation and the impact of that. What about Q
9 THE WITNESS: My reputation was achieved 9 your classes? Are they still going on?
1 0 because I routinely made calls that did very, very 10 THE WITNESS: The last class I had prior
1 1 well. One example, CEMIQ that I called at 3 cents 1 1 to receiving this subpoena was in Boston, and I believe
12 went as high as a dollar 72. I called Pilgrim's I 12 there were about 90 people in that class. After
1 3 Pride at I3 cents. I was still talking about it E 1 3 receiving the subpoena and that which has happened I
14 when it was $8. I 1 4 with the IGH, my next class I believe had I2 students.
15 I called CTIC, Cell Therapeutics, at I4 i 1 5 MR. MARGOLIS: Okay.
1 6 cents. It went as high as right about S2. I called 1 6 MR. OBEYESEKERE: I have a couple of
17 ACAS. It went up 400 percent or so. I believe I 17 follow—ups on that.
18 called it like 78 cents. I 18 BY MR. OBEYESEKERE j
1 9 I called PNX I believe at approximately 28 1 9 Q. I`m going to start with your reputation.
2 0 cents. It went to nearly $4. Play after play after é 2 0 Your counsel suggested that your reputation has C
2 1 play I had called that did very, very well. 2 1 suffered as a result ofthe SEC's investigation, is f
22 MR. MARGOLIS: So would you say that really 22 that correct? A
2 3 the major asset for you was your reputation'? 2 3 A. I don't want to say specifically the SEC's
2 4 THE WITNESS: Absolutely. I 2 4 investigation. Specifically because of what's
2 5 MR. MARGOLIS; Okay. Now, when you would —— I 2 5 happened with the IGH and then the resultant action
79 (Pages 576 to 579)

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Page 580 Page 582
1 thereafter. I 1 A. I think the specific hit to my reputation
2 Q. Well, also none of your —- as far as you 2 comes as a result of what are referred to as
3 understood, none of your float lock down stocks 3 bashers. You and I specirically spoke yesterday I
4 actually generated a short squeeze, correct? 4 about positive and/or negative campaigns, and I e
n 5 A. Correct. 5 believe that there are routinely negative campaigns
6 Q. And so all ofthe people, your Den members 6 against certain stocks that are doing well for the ,
7 who accumulated that stock and held that stock in 7 purposes of selling and/or shorting, and I believe I
8 anticipation ofthe short squeeze, they‘re currently 8 was a target of that because stocks went up
9 sort of disappointed. Would you assume that? I 9 dramatically and I believe they were shorted
1 0 A. I can’t assume what their thoughts or 10 thereafter. I can’t specifically prove that.
1 1 actions may be. 1 1 Q. Okay. Do you believe that the fact that I
12 Q. Okay. Well, certainly they haven't seen I 12 the short squeeze has not occurred according to your I
1 3 the benefit of a short squeeze, right? I 1 3 own understanding, any of these float lock down ,
1 4 A. Well, I don't know what positions they may 1 4 plays has in any way impacted your reputation?
1 5 or may not have traded. As I’ve stated earlier, I 1 5 A. I think that could possibly be a factor, I
1 6 don't believe a short squeeze has occurred. 1 6 absolutely. But, again, I will reiterate that i
17 Q. Okay. And if, like you, they also did not 17 negative campaigns certainly exist. and it's not a A
1 8 believe a short squeeze had occurred and held their I 1 8 coincidence when 20 negative people show up within _
1 9 stock to this current point, most of these stocks I 1 9 an hour of each other. g
2 0 would be essentially almost valueless. Is that fair 2 O Q. Okay. A
2 1 to say? I 2 1 l\/IR. l\/IARGOLIS: Referring by the way to
22 A. I don't want to say valueless, but I 22 this investigation. I
23 certainly not what-- I guess I don't understand I 23 MR. OBEYESEKEREZ Sure _
2 4 entirely your question. It would depend on each I 24 Q. With regard to PNTV, you said you ’
25 II1CllVlClU8llS cost axggrim 25 currenwr hold I;7”rniIl@li@?~ Y__“M_’
Page 581 Page 583
1 Q. Sure. But is it fair to say from the high 1 A. No, that's not what I said. I
2 of this stock between 2009 —— any ofthese stocks 2 Q. I'rn sorry. You returned l.5. But at some `
3 from 2009 through 20l0, as it stands, the stocks 3 point you were holding I.7 million shares, correct'? I I
4 stand today, they‘re essentially significantly 4 A. Thereabouts, yes. —
5 lower? 5 Q. And how many shares did you receive from {
6 A. Yes. I 6 PNTV?
7 Q. Okay. And for the majority ofpeople who 7 A. I received I think it was l.5 million .
8 bought fiom Iet’s say the beginning of 2010 onwards 8 restricted and another 75 that were free trading. I
9 would probably have lost money had they held their I 9 never deposited any ofthem. I
1 0 stock. Is that fair to say? 1 0 Q. And what's the 75? ;
1 1 A. I guess that depends on their trading 1 1 A. There were 75 that were free traded. A
1 2 ability, where they may or may not have taken any I 1 2 Q. 70 shares? Q
13 profit or added, so ifthey only bought and never I 1 3 A. 75,000 shares that, again, I never ?
1 4 sold, yes, they would be less. 1 4 deposited them. I
1 5 Q. And so people who would be following the I 15 Q. Okay. And did you do any promotional work {
1 6 float lock down strategy hoping to trigger a short 1 6 for CDIV —- I mean for PNTV? A
17 squeeze as a part ofa trade would be holding onto I 17 A. No. I was hired by them. The shares that I
1 8 their stock, right? In order to support the team? 1 8 I received were restricted and they were for me to A
1 9 A. Generally speaking, yes. I 1 9 do videos. The show was called Monk's Money Lab.
2 0 Q. Okay. So is it fair to say that part of I 2 0 They also wanted me to do some producing and Y
2 1 the loss of your reputation could be attributed to 2 1 potentially do TV spots and/or radio spots for them I
2 2 the fact that many members perhaps held onto their I 22 in relation to them. _
23 stock ofthese float lock down plays in anticipation I 23 Q. Did you get the l.5 million shares aner
2 4 ofa squeeze which according to your knowledge has I 2 4 you had called PNTV as a float lock down stock? Q
25 not yet occurred? I 25 A. Substantially later as I recall.
80 (Pages 580 to 583)

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Page 584 Page 586 j
1 Q. With regard to CDIV, you said you l 1 PROOFREADER'S CERTIFICATE
2 currently hold 3 million shares? 2 ?
3 A. Yes. 3 In the Matter of: MONI<'S DEN
4 Q. You made —— you sold shares resulting in 4 Witness: Jerry S. Williams L
5 over $2 million in profits, is that correct? Or $2 5 File Number: B—02577—A
6 million, is that correct? I 6 Date: Wednesday, June 29, 20l I
7 A. Approximately. l 7 Location: Boston, MA i
8 Q. And you sold over 20 million CDIV shares, l 8 E
9 is that correct? l 9 3
1 0 A. Okay. 10 This is to certify that I, Donna S. Raya, f
1 1 Q. And would you agree that you sold 1 1 1 (the undersigned), do hereby swear and affirm .
12 substantially more than you’ve kept? 1 12 that the attached proceedings before the U.S. I
1 3 A. I definitely agree that I‘ve sold 1 3 Securities and Exchange Commission were held
1 4 substantially more than I kept, but when looking at 1 4 according to the record and that this is the *
1 5 it from a dollar volume, keep in mind that, you l 1 5 original, complete, true and accurate transcript
1 6 know, many of these shares were sold when the stock I 1 6 that has been compared to the reporting or recording
. 17 was much lower. l 17 accomplished at the hearing. E
18 So, you know, when —— as you put it in one i 18
1 9 month, you know, it might have been 13,000. By 1 9
2 0 comparison to what I held and did not deposit and/or 2 0 J
2 1 sell when the stock was far, far higher. 2 1 .
2 2 Q. But in all those points when the stock was 1 2 2 (Prooh·eader's Name) (Date)
2 3 far, far higher, you were also selling, correct? 2 3 {
2 4 A. Well, I was always talking a little bit 2 4
2 5 all the way up, but I always wanted to keep a good l 2 5
Page 5851 Page 587
1 chunk for longer term. l 1 STATE OF MASSACHUSETTS)
2 MR. OBEYESEKERE: Okay. I don't have 2 COUNTY OF MIDDLESEX) Y
3 anymore questions. Anybody else? l 3
4 (No response.) I 4 I, SUSAN LOZZI, Registered Profession Reporter and
5 MR. OBEYESEKERE: We're off the l 5 Notary Public duly and qualified in and for the
6 record. It’s 41 l 5. 1 6 State of Massachusetts do hereby certify that the
7 (Whereupon, at 4; I 5 p.m., the l 7 foregoing statement is a true and correct transcript
8 examination was concluded.)