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But let him bring it to the Supreme if he wants…
It isn't really his choice. He can file a writ of certiorari if he wants, but unless he successfully raises a legitimate constitutional issue, the Supremes won't grant it. And that means there'll be no hearing. Just an announcement that cert was not granted.
That is exactly what happened to Xer Krazy Al Hodges when he tried it on.
Now it's intermission.
No. Now it's finally over.
Well, that ends the story here about selling anything
Couple of things.
Actually that's the thing about Supreme Court rulings...they are generally on points of law which there is not clear guidance or have not been previously addressed....and virtually certainly - personal belief does not carry the finding[/i].
Precedent
SPNGQ: CUSIP suspended. Finra deleted symbol:
http://otce.finra.org/DLDeletions
As I post this it says you already deleted your comments on judges do what they want and feel....and thats why supreme court decisions are not always 9-0. Etc. Even too off base for you to stand behind for long?
Actually that's the thing about Supreme Court rulings...they are generally on points of law which there is not clear guidance or have not been previously addressed....and virtually certainly - personal belief does not carry the finding....and most importantly only that court does not have to follow the precedent of prior rulings (in its district), since it supercedes all others.
(That in it's district is important as it is common that because of precedent the exact same facts in one district will be required to have a different result in another.
Precedent defined: "Precedent that must be applied or followed is known as binding precedent (alternately mandatory precedent, mandatory or binding authority, etc.). Under the doctrine of stare decisis, a lower court must honor findings of law made by a higher court that is within the appeals path of cases the court hears. In the United States state and federal courts, jurisdiction is often divided geographically among local trial courts, several of which fall under the territory of a regional appeals court, and all regional courts fall under a supreme court. By definition decisions of lower courts are not binding on each other or any courts higher in the system, nor are appeals court decisions binding on each other or on local courts that fall under a different appeals court. Further, courts must follow their own proclamations of law made earlier on other cases, and honor rulings made by other courts in disputes among the parties before them pertaining to the same pattern of facts or events, unless they have a strong reason to change these rulings."
But let him bring it to the Supreme if he wants (or could actually find a lawyer that would do so - or can find grounds to appeal, as there is no disputable part of the holding adhering to the lower courts findings and prior cases that a loss in a transaction (especially one subject to the reduced capital gains rate) which was not entered into directly with someone found to act criminally intentionally making a fraud/theft (so if a broker is used) is allowed Section 165 relief against gains of the same type (and an unlimited cutout for the 3K a year against not even other investment income, but ordinary income) Entirely unlikely they will set new precedent to the very well established and held to (uncountable cases trying to find a way theirs is different than the other many) Tax Laws out of compassion for this party. Actually, they most certainly won't take certori of it. There simply is nothing to argue.....he gets 165 relief, but not as a casualty.
Also, while they sometimes find humor and validity in some arguments...and certainly show it in their responses:
http://www.cracked.com/article_19147_5-awesomely-sarcastic-supreme-court-decisions.html
And as is stated here - even when a party acts reprehesibly - "unfortunately the courts are there to declare only what is illegal, not what is merely shitty. The lesson is apparently that the next time you're up against the government, maybe you should hire Superman as your lawyer."
And the Supreme Court is probably part of the whole conspiracy against the destiny that was to make all the SPNG longs successful too....they probably have NSS tatoo's under their robes. Heck as part of the Government....they MUST have a great deal to lose if any SPNG lusa gets something. As you say...it's personal.
Staying to that argument, as it is: That courts just make decisions independently based on what some judge personally feels.....
In this case once again what you felt should happen was not shared by the Judge --- so it didn't.
I guess it's fortunate that it adhere's to all the requirements the courts must follow and he doesn't have to explain doing something else.
In all seriousness...if this guy gets the offer to settle up with only a minor penalty (and interest only at the statute rate)...he should jump on it. At this point the IRS has every legal right and could most certaily collect the treble damages for what is essentially considered a tax protester and tiredsome costly litigation.
And also - in total seriousness....I think the tax rules on this and especially in this instance suck big time.
You did see Penson Financial charged with naked shorting, didn't you?
You did see IIROC go after Canaccord and the stock beneficiaries from Panama, didn't you?
You did see the DOJ fail to achieve any substantial criminal convictions against M&M, didn't you?
Perhaps you also recall that the SEC's Settlement Agreement with the Trustee was DENIED.
Why do you think Cavanagh and Nicolois were allowed to go to Europe? And why were certain defendants from Europe lured into the US, where they were arrested? Do you think those are truly separate actions? Do you think that's the only relevant case that undercover agent worked? Do you think think these actions are unrelated to the IIROC case?
And yet, you say that you are still waiting for one of my "...positions, prognostications or pronouncements to be realized, successful or agreed to and supported by anything of authority."
This case is continuing to unfold. I think we will see a financial recovery for shareholders, to include funds retrieved from Europe. I want to see shareholders receive every penny of compensation they are entitled to receive, by law.
Still waiting for one of your positions, prognostications or pronouncements to be realized, successful or agreed to and supported by anything of authority.
Again, your back with the hidden things only you understand and know.
And everyone is a conspirator...out to get you and the SPNG victims....for some reason its so much fun - and they have so much to gain its worth all th time and effort required of them. Probably the NSS paying them all off too? You know they all are a really well organized crowd.
You have proven your point....YOUR RIGHT ON THAT...EVERYBODY IS OUT TO GET YOU. No one likes any of you. Your too smart and informed....all of you...a danger. SO DON'T MAKE YOURSELF A TARGET ANYMORE AND SACRAFICE FOR THE REST OF US. SIT BACK QUIETLY WAITING FOR THE NAMING OF YOUR RELIEF DEFENDANTS. But please, post again when it happens.
I can only surmise the SEC (who you still refuse to wake up to - and the chorus of others here generally agree with - certainly did what it could to alert and protect investors....and those that heeded the warnings (good decision) when the questions were asked, even before the suspensions were made, before failure to file was announced, etc. bailed out and protected themselves. OK - some maybe after one of those.
Instead - the records show many clearly decided to remain true longs (bad decision)....and take the advice of those that they followed to get in the investment....maybe even taking advantage of that great buying opportunity they were pumping.
And as you said...you know the rules. The tax court (or whichever tribunal it was) doesn't have the legal authority to go contrary to the laws and prior holdings. I gather it diligently inquired about the way the stock got to be owned by the defendant to make sure the decision was in line with the law and all others that abide by it.
Not purchased directly from a Ponzi promoter...not classified as a casualty deduction. No hardship abeyance. Agreeably harsh....but along with the many other qualifications for a stock loss to be taken as a casualty...not at all uncommon for the Tax Code. And as one gets further into the timing and class of income/losses and expenses that are required in the attempt to make taxable income (successful or not) - not even all that wild.
That was a pretty good post, Teflon.
But the bottom line is that Mr. Greenberger was victimized TWICE. First, he was victimized by buying allegedly unregistered shares. Then he was victimized by not being able to claim a theft loss deduction.
The "gracious granting of 3K a year (deduction) against ordinary income" is fine for small investors, like me. But large investors, like Mr. Greenberger, will never realize the full potential of that deduction, and there is nothing gracious about that.
I fully understand the law in this regard, and as you so well outlined. But there is more to it, as it relates to this specific case. However, over the last several months, I have said all that I can about this. The case is still open, and as I repeatedly say, I'm expecting to see dozens of Relief Defendants named.
The thing that really gets me about this specific case is that, unlike the shareholder victimization caused by corporate insiders and the still-unnamed Relief Defendants who should be facing charges, the SEC is solely responsible for Mr. Greenberger's failure to prevail in his effort to claim a theft loss. It was more important to them, and to Attorney General Eric Holder, to scratch a notch in their gunbelt by filing related cases, than it was to see justice for Mr. Greenberger. It's a national disgrace.
No, he wouldn't....and just like always...it ain't that hard.
I'll repeat it a few times more here.
Start with the Law, Rules and Notices from the Government on the topic. And go to the ones on point:
(since well before 1975) To qualify: The investor must have bought the investment directly from a seller that committed fraud under a local law. This leads to a requirement of “reliance” that the investor relied on the fraudulent information when parting with their property. This means that the investor dealt directly with the person committing the fraud, as opposed to purchasing the stock through their broker on the open market. The courts have consistently disallowed theft loss deductions relating to a decline in the value of the stock that was attributable to corporate officers misrepresenting the financial condition of the corporation, even when the officers were indicted for securities fraud or other criminal violations. Paine V. Commissioner, 63 T.C. 736,523 F.2d 1053 (5th Cir. 1975).
So tired of having to repeat and reprove itself - and waste time and resources over the whole concept....with court and political approval the IRS wants to get punitive to anyone obstinate enough to continue after being found trying to do so. (And as a final act of fairness they would always first provide the taxpayer a chance to correct before doing so).
The IRS in Notice 2004-27, 2004-1 C.P. 782 advised taxpayers that the IRS will disallow (and may impose penalties) for theft losses claimed by taxpayers for the decline in market value of their stock caused by disclosure of accounting fraud or other illegal misconduct of the officers or directors of the corporation that committed the fraud.
If he bought the stock from a broker....NOT DIRECTLY FROM THE PROMOTER...there is no opportunity to claim the loss as a casualty. Period.
Nothing lost intranslation, nothing else that needs to be presented about how he was a victim....And we all agree....all types of terrible illegal theft and things under any number of laws did happen.
The laws also say: to take it as a casualty loss against ordinary income you must have purchased it directly from the promoter...not from a 3rd party or broker.
So did he buy directly from M&M, (or likely from any of the "network" you refer too so often and I suspect only sold to each other)?
No?
Can't take it as a casualty. Regardless of whatever else you may want to present. That is an absolute requirement (like it or not). Bought directly from the (really Ponzi/Madoff type) promoter. Without it, it simply isn't a Casualty Loss against ordinary income.
THERE IS NO ONE DENYING IT WAS A TAX DEDUCTIBLE LOSS...
Nor that it was a theft.
It is a loss....against other stock/investments....and a gracious granting of 3K a year against ordinary income.
Don't try to take it any other way. It isn't cute, clever, or novel. It is directly and explicitly explained and supported by decades of court cases and puts you at risk of not just costs of litigation....but puts you at risk of being assessed a substantial penalty for trying something that has been well explained, and re-explained, and is clear and final. Without having acquired it directly from the promoter, it simply isn't a Casualty Loss against ordinary income.
Whatever other things you say were hidden, not presented, etc are totally irrelevant.
It is, by definition - a tax deductible stock loss. Probably, because some don't read the writing on the wall either and held on too long - a long term one. (The requirements of when a loss MUST be realized, even if not sold, one reason the law also actually require it be considered the last day of the year of the qualifying event....).
Yup. Thats the way it is. And again, all those reviewing his position have denied it. I suspect some of the many other reasons and rules disallowing stock investment losses as casualty were involved too...but this one is enough.
You as always insisting it should be some other way in spite of it all...well it just sounds like another bad decision and gets the corresponding result.
And which way is it? You were arguing how the stock should be allowed to trade....(so you could sell it for hundreds of bucks a share value it has - which would mean this guy has a substantial gain coming if like you he owns some of it to sell)....at the same time your feeling that no stock of value was actually delivered and hence a casualty loss should be granted because....the whole thing was a theft...WOW...your sort of all over the place, don't ya' think?
That's all there is to it.
It seems the SEC should be protecting honest investors from you.
"So to say it was totally worthless is totally incorrect."
No, it's ABSOLUTELY CORRECT.
And the Chapter 7 LIQUIDATION bankruptcy that left creditors with losses proves that SPNG was LESS than worthless - it had NEGATIVE WORTH.
"Like the IRS, verifying all tax records submitted to them are correct, the SEC has the same responsibility to verify all information submitted to them is also correct."
!!!LOL!!! REALLY??? The IRS does a FULL tax audit on all individual and business tax returns every year? They check all the receipts for all the deductions - the taxi cab receipts, the restaurant receipts?
Every year? For everyone and every business?
LOLOLOL!!!!
How UTTERLY RIDICULOUS!!! It would take every person in Eurasia and Africa working 20 hour days to do that. The IRS budget would be two-thirds of the world's economy!
Just like the SEC, the IRS relies on voluntary compliance.
The SEC does nott have any way to Czech the boolsheet put ~OUTT by criminals like STEVEN YEHUDA MOSKOWITZ and his imaginary sales invoices from imaginary companies and the fake PRs.
My gosh - does one expect a policeman sitting in the passenger seat of every car to make sure nobody speeds???
"04/01/2016 449 Order on Report of Offender Under Supervision as to Frank Nicolois, endorsed on 448 PROB-12A Report on Offender Under Supervision -- Request to travel to Spain APPROVED. So Ordered by Judge Dora Lizette Irizarry on 4/1/2016. (Carosella, Christy) (Entered: 04/01/2016)."
So I wonder if Frank will be visiting Carolina while he's in Spain. Maybe that's the main purpose of this trip. Cavanagh has already made his European trip.
Could be, well, it's at least possible, that I'm talking about this:
https://en.wikipedia.org/wiki/La_Carolina
He might have to visit some other countries, too. while he's there, depending on where Cavanagh has already visited.
Some people want to continually hit the rewind button, and keep the focus of discussion solely on corporate malfeasance.
That part of the movie has played out. We've seen how it ended. Not a single day of jail time for the primary defendants. A couple of relief defendants did serve time because they were recidivist offenders who were charged with structuring payments, and with contempt of court.
The contempt charge was huge. It was a tactical error on the part of the SEC and the DOJ, since it opened a door intended to remain closed. So the contempt charge was dropped, as I informed the original sentencing judge, Denise Cote.
Now it's intermission.
I expect to see dozens of Relief Defendants named in Part II of the movie. We know, so far, how it has worked out for those of us who did not sell all of the shares we bought. Now I want to see how it will work out for those who sold shares that were allegedly unregistered, or sold shares that they never had and never borrowed (or sold shares that were repeatedly naked shorted to them by firms such as Penson Financial).
The IRS does NOT verify all records.
What percent are checked, and for what they are checked, is kept confidential.
But a reasonable and frequently used estimate is any specific return (and there are things that makes one more suspect than another) to reach actual review is maybe 1 in 100. that isn't actual full audit mind you....but a "desk review" (which is still really done by computer) to determine if further look is needed.
Audit roulette is a term used for how some use this fact. Actually, a much better chance of getting a positive outcome (no questions asked) than success of a company with penny stock. Really.
No roulette with SEC. Everything has some level of review. In this case lots of questions quickly posed when the false items were compounding so they began to not make sense.
And of course....there can be no review when there is no filing....and that failure to file is automatically disclosed. Guess you felt it was all acceptable though.
Bad decision.
Now you'll have to QUIETLY wait for the dozens of relief defendants.....
Ha, ha...your actually funny. To feel a product that hasn't been made for over 5 or 6 years is still being sold (by some website close out place, and it MUST be well past its Xdate...as disclosed when they tried to get rid of the inventory)....is a sign of some merchant success is beyond crazy. AND AS A LATE ADDITION - SEE BELOW
And the Q is NET assets....still can't get it throuh your head that the CREDITORS (which is NOT stockholders) get the assets till paid off...and those claims were way past any possible value - certainly of any real recovery - to stockholders.
You bought stock in a scam of a company with no real business purpose but to get investor money....the business did not exist really. It did not pay its bills (you know, things like rent, advertising, license fees for use of names...etc., etc.).
You made a bad investment decision.
Warnings about investment generally, especially of this type were numerous and you agreed you understood.
Others were simply offered by many. And virtually everyhting they said realized.
It became clearer all the time.
You didn't sell when you still could have.
You did all the wrong things.
You lose.
So that site...it is simply an advertising site. I know you know better....your wisdom in all this shows it...but I'll bet they don't have the product really and if anything its a hanging drop ship/click through on their site....that your getting to by another who clearly doesn't have any control of it. Your site even advises "Marketplace Item -- Shipped by: Pens-N-More". Pens -N-More - which is barely operational with a slew of complaints about being a sham, not shipping items, tossed off of many sites for all type of reasons. They generally don't make refunds...as in all complaints the problem with failure to deliver is never theirs... Why not order and see what happens? I mean, you really need that (well discounted now) $8 sponge don't you?
Better yet...why don't you see if they will sell you stock and you can be an investor - they have obviously expanded from out of date pens and office - to other things.
"Pens N More was established in 2006 in a south suburb right outside Chicago. We are a family owned business that has a combined 30 years + of experience in the office products industry. We have been serving our customers with major brand office products and fine writing instruments at discounted prices. We specialize in hard to find writing instruments and other office type products that have been retired from major brand manufactures. We here at Pens N More pride ourselves in providing top-notch customer service while offering our best possible price of name brand products."
Compuostina
Order Date : 11/11/2015
11/24/2015 6:03:24 PM
Rating + 1 Very poor seller
If I can give (-5) negative 5 to seller is not enough. I ordered an item and received different item after waiting 10 days, then I called newegg.com customer service and waiting time 42 minutes, then they said that they will email 3rd party, then I have to ship my wrong item back, then they will ship me my correct item. When I asked him that means may I have to wait a month to receive my item! he said that he's sorry for that.
Did you find this review helpful? Yes No
Mr Common Sense
Order Date : 9/25/2015
10/17/2015 12:47:34 PM
Rating + 1 Zero Eggs Deserving
With some many excellent vendors that ship at lightning speed even when you pay for standard, please don't give these people your money. You will receive your product on "theee" last possible day that is allowed. And I've had long interactions with pens n more custo service and they seem to pride themselves on the fact. Please I beg of you good citizens of the Newegg marketplace do not facilitate this very poor service oriented company by shopping with them. Their are some great vendors out their and these people do not fit the bill when it comes to even marginal service. PLEASE DON'T USE THIS VENDOR.
1 out of 2 people found this review helpful. Did you? Yes No
Pens'n'more orless
Order Date : 9/25/2015
10/7/2015 7:54:15 PM
Rating + 1 Order if Customer Service and Shipping is not of concern
By far the absolute last place you want to place an order with. DO NOT ORDER with this company. If you ship standard I promise they will take every last day possible to deliver your package, no exceptions. 12 days from order til delivery for 2 boxes of binder clips. Seriously, 12 days, when i asked the customer service manager about the delay she simply stated that even though it was literally delivered on the last possible day it was within their guidelines and thats how they do business. Please don support vendors like this when their are really fast shippers out their that try hard to make Newegg customers happy.
Now that was seconds ....guess your due diligence skills haven't changed much.
Like the IRS, verifying all tax records submitted to them are correct, the SEC has the same responsibility to verify all information submitted to them is also correct.
The SEC has maybe 300 lawyers on staff; the IRS has 95,000 employees.
They do and did that exactly!
Within in days, virtually working hours of the filing, they found problems, asked for explanation.
the constantly changing and repeating that it would be provided "soon" apparently worked for those blind to everything by the destiny of their well advised investment. (Remember how comments of the demands of running the business and its huge growth made timely responding too difficult....etc, etc.)
Amid the name calling and uproar that it wasn't the SEC position to interfere with a grwat American company, the SEC didn't flinch & put a suspension (maybe some other name) on trading for as long a time as possible....and NEVER said things were right.
Uh....while soon still hasn't come, those who accepted waiting for it still are looking for reasons other than SPNG was an investment in a company made to fail.
Yes...they refused to accept that it was a worthless company and a scam.
The regulators acted - very quickly - questioning submitals and statements made by SPNG....and these same wackos protested how it was unfair and a conspiracy to get their great investment to fail..and even more wild dumb claims.
Obviously - they didn't close their position the moment it --- a penny stock in the midst of a wild time to say the least - and the disclosures about the history of who was involved were all over the place, Instead....holding on and insisting SPNG (and they) are a victim.
Repeating what was regularly referred to then too:
Like the Stockholm Syndrome of hostages popularlized years later...there was (and remains) a similar one with investors in scams, first identified with the original Ponzi scam. The Ponzi syndrome. A large percentage of the "investors" refused to even take the restitution that was afforded because they didn't believe it had been a scam....and continued to insist the buyout was a conspiracy to take their great investment away....this is absolutely true.
And as I repeat it here again...I can only observe and I guess have some compassion for those that keep on failing to come to grips with reality as suffering from an actual sickness that it seems has no cure.
Assets
Spongetect sponges are still being sold, (somebody is making money on them today. $7.99 on Rakuten.com
Dicon had value,
Radio station had value
A clean shell has value
So to say it was totally worthless is totally incorrect.
drugmanrx, you do understand that the SEC does not audit any filings. EOM
Disagree,
Like the IRS, verifying all tax records submitted to them are correct, the SEC has the same responsibility to verify all information submitted to them is also correct.
"verify false financials reported by SPNG" is not one of the three.
SEC and many others - were warning of many problems well before what you mention actually came to light.
And as to assets....well it was a company made to be a fraud....and very simply had waaaayy, waaay more liabilities than assets. It6 simply didn't pay for much of anything....and much of what it may have owned - like some stock - was basically worthless.
If it wasn't for the protection afforded by bankruptcy - that limits the amount of a stockholders liability to the amount of his investment, you would have had to reach in your pocket and pay. Fact: at all times this company was insolvent.
Fact: the assets you claim existed were so small that when put to sale they proffered one offer of $50,000. (and a dispute over if Dicon was worth anything at all). Which under pressure - Moskie himself ante'd up $500K - which was well less than even administrative costs for the bankruptcy. The inventory wasn't in a dispute and not really worth the cost of shipping to anyone (if you could find anyone that would have it....virtually all the prior sends languishing on closeout shelves).
SPNG was a fraud...a scam...there was no viable product, there was no reason for it except as an instrument to funnel investment money to its founders (or conspirators if you prefer). And those conspirators have even said as much....and were thanked and excused by the court for explaining how it worked.
You made a bad decision. You bought a stock in a corporation that had no business purpose and was set up to fail. It succeeded. You lose.
It's reports were quickly questioned upon submittal...
The company was stopped quickly....
drugmanrx, "verify false financials reported by SPNG" is not one of the three. EOM
Equally ridiculous headlines:
"John Belushi Claims DEA Failed to Prevent His Eightball Overdose: Files Wrongful Death Lawsuit"
"Sirhan Sirhan Files Appeal for Release and Overturn of Verdict on Basis that Incompetent Secret Service Agents Allowed Him to Shoot RFK"
"Man Who Was Drunk and Shot Himself in Head and Burned House Down with Lit Cigarette Sues BATF for Not Protecting Him from Firearms, Alcohol, and Tobacco Products"
"SPNG Investor Blames SEC for Not Stopping Him from Buying Pennystock in Obvious Scam Run by Recidivist Financial Crooks"
People have to accept responsibility for their foolish actions, like buying SPNG which was such a blatant, obvious scam.
Nannystate government can only go so far in protecting people against their own bad decisions. The responsible party for anyone stuck holding shares in the now-defunct SPNG is the person in the mirror.
And that is just a FACT.
LOL - that claim is simply boolsheet.
Tell ya what, ole Krazy Al Hodges tried to file a Bivens claim against the SEC and individual SEC persons involved in the CMKX investigation, lawsuit, and subsequent DOJ prosecution on the exact same basis as your post asserts.
His lawsuit was tossed ~OUTT (dismissed with prejudice) by the District court AND the Circuit Court of Appeals literally laughed his appeal ~OUTT of court as well - on initial motion for failure to make a justiciable claim in his complaint and in his AMENDED complaint(s), all of which were tossed for failure to state a claim.
So, that's the facts about that type of nonsense claim.
The SEC does nott owe any duty to any specific investor - it only functions to protect the market as a whole and it has no requirement to act prospectively. Nor does it have the means or authority to track share issuances from pennystock TAs on a real-time basis or any basis at all, barring the SEC already having extrinsic evidence of wrongdoing that is already sufficient to allow them to have a reasonable belief that there has been illegal share issuances.
The SEC is nott Mommy to make a kid's boo-boo go away. The kids have to learn the hard way to take care of themselves and nott keep getting their lunch money stolen.
Anybuddy who did even MINIMAL DD on SPNG would have immedaitely known that CEO Metter had a history of running a pennyscam boiler room operation as a broker and that CFO Moskowitz had a history of fabricating documents - to the New York Tax Court for ONE example - and also both had histories of running scam companies. It was all on the internet - only needed to Google the names - AND it was also posted here on the SPNG board by me and others.
Those who failed to do even that MINIMAL due diligence on the SPNG obvious scam has no basis to claim that the SEC should have protected them from their own recklessness, laziness, and/or stupidity in putting money into this OBVIOUS scam.
"SEC should never have allowed it to escalate to the level it reached."
I totally agree.
And yes, it IS the job of the SEC to protect the investing public. This is especially true when investors are being victimized by recidivist offenders. I discussed some of this activity in the following:
https://www.scribd.com/doc/102859578/7-31-12-Spongetech-Doc-392-Letter-Email-Filed-by-Jay-P-Booth
Perhaps those who are telling you now that it is not the SEC's job to protect investors, can explain why the SEC did protect investors who were previously victimized by some of these same people, who previously committed these same violations.
That's assuming, of course, that the SpongeTech shares sold by these people were, in fact, unregistered, as charged by the SEC.
They did help the future buyers with the stoppage. They are not babysitters. You buy you are responsible for everything that happens.
There is no CONspiracy in the IRS rule - it follows hundreds of years old common law regarding bona fide purchaser's for value (BFPs) and privity of contract.
A brokerage is simply a BFP, so anyone who buys from a BFP does not have a claim against the brokerage (BFP). When most people buy a stock, they are in fact buying it from a brokerage's house account, nott directly from an individual seller.
Nothing new here for hundreds of years.
No its not their job. They warned you and everyone else. They have \done their job.
Its a roll of the dice. Try buying Apple, you wont have to watch your screen every day.
and when did that happen?
when were there more shares outstanding that the authorized common shares of criminal enterprise SPNG?
oh wait, it must have been all those alleged air shares produced by the Evil Naked Short Sellers From Mars...
geesh
Sec should have done it's job the day one share showed up that was more than those authorized.
Excactly why would they be monitoring that?
There are thousands of public company's. You should have done more DD.
Sec should have done it's job the day one share showed up that was more than those authorized.
A bank will notify you immediately when you spend more than one penny over what you have in your account, there is no reason that the SEC doesn't have a similar system with companies AS and OS shares in this day and age.
SEC should never have allowed it to escalate to the level it reached.
It is always easy to see the obvious long after it has happen.
The company had assets and if proper action was taken by the SEC immediately and correctly shareholders would at least had something to salvage out of this mess.
IMHO!
The SEC did its job it warned all. You chose to to not see the obvious.
I saw the red flags, but SPNG being a reporting company and all,
it was my fault for believing the SEC was doing it's job and making sure the information SPNG was giving them was correct.
I mean in this day and age with massive computers how hard is it really to keep track of actual shares in the market place.
Heck banks can follow the transaction of trillions down to the last penny.
And every stock certificate has a number.
No! You and only you failed to see all of the red flags.These POS companys are to be traded not held. The SEC warns everyone about buying thi shit. Most are just greedy and inexperienced.
So I should get my money back every time I play and dont win the power ball?
No. Im talking about me who was able to make money from shares I bought through eterd back then. You seem to be crying because you continued to believe in the BS they were regurgitating.
Like in this case with the SEC's action here, it comes down to another example of our government failing it's job of protecting and treating ALL of it's citizens equally.
IRS Information Letter 2009-0154 clarifies the position:
Qualified investors under [Rev. Proc. 2009-20] include only investors that transferred cash or property to the perpetrators of the fraudulent scheme. These direct investors include individuals, partnerships, limited liability corporations, and other “persons” as defined in section 7701(a)(30) of the Internal Revenue Code. . . . The primary reason for the restriction to direct investors in Rev. Proc. 2009-20 is because they are the party from which the perpetrator of the fraudulent arrangement stole money or property, and thus the proper party to compute and claim a theft loss deduction under section 165 of the Code. . . . However, this restriction does not prevent indirect investors from benefitting from the safe harbor treatment or from deducting their share of a theft loss sustained by a passthrough entity.
By taking the position that privity is required between the fund and the fraudster, the IRS essentially is allowing the safe harbor and theft loss to indirect investors only when there is no broker in the transaction. If an individual were to invest in a Ponzi scheme through a stockbroker or other intermediary and not be in privity with the perpetrator of the scheme, that individual would not get the same protection as other victims of the same scheme, even though he or she would be just as much a victim.
Pacer update 01 Apr 16 - USA v. Metter et al CRIMINAL DOCKET FOR CASE #: 1:10-cr-00600
https://ecf.nyed.uscourts.gov/cgi-bin/iquery.pl
Date Filed # Docket Text
04/01/2016 449 Order on Report of Offender Under Supervision as to Frank Nicolois, endorsed on 448 PROB-12A Report on Offender Under Supervision -- Request to travel to Spain APPROVED. So Ordered by Judge Dora Lizette Irizarry on 4/1/2016. (Carosella, Christy) (Entered: 04/01/2016)
1:10-cr-00600-DLI USA v. Metter et al (closed 02/05/2015) -
1:10-cr-00600-DLI-1 Michael Metter (closed 04/26/2013)
1:10-cr-00600-DLI-2 Steven Moskowitz (closed 12/05/2014)
1:10-cr-00600-DLI-3 Andrew Tepfer (closed 02/05/2015)
1:10-cr-00600-DLI-4 Seymour Eisenberg (closed 04/11/2014)
1:10-cr-00600-DLI-5 George Speranza (closed 10/19/2011)
1:10-cr-00600-DLI-6 Thomas Cavanagh (closed 12/22/2011)
1:10-cr-00600-DLI-7 Frank Nicolois (closed 06/07/2012)
https://ecf.nyed.uscourts.gov/cgi-bin/iquery.pl
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"The people who played this scam and made money should have to give the money back?"
Yes, according to the SEC, if they received their shares directly from the company, and as members of the SpongeTech stock distribution network.
"Or is it that the sheep who refused to trade and lost should be reimbursed?"
Yes, specifically as it relates to Mr. Greenberger, based on the information contained in his Motion to file a theft loss deduction, and also based upon evidence subsequently provided (to an extent).
Yes, also, as it relates to shareholders who were victimized by buying unregistered shares in the open market, if the SEC's charges are correct.
So. The people who played this scam and made money should have to give the money back? Or is it that the sheep who refused to trade and lost should be reimbursed?
There were facts not in evidence at the time that Greenberger tried to claim a theft loss deduction.
Had those facts been in evidence, Greenberger could have modified his Motion, and he would have prevailed in claiming a theft loss.
However, prosecutions in this case have not been initiated in accordance with the rule of law. Rather, they have been initiated to suit the purposes of agencies such as the SEC and the DOJ.
In this particular example, certain evidence was not introduced until the SEC and the DOJ were ready to initiate charges against Axius, Inc., and promoter Jean-Pierre Neuhaus.
Then-Attorney General Eric Holder highlighted the Axius case on his website, where he bragged of his accomplishments during his tenure. The US Attorney who worked with Holder on this case was Loretta Lynch, of the Eastern District of New York.
It's activity such as Holder and Lynch displayed that prompted me, in part, to file a shareholders' claim to the SpongeTech shares Holder wanted forfeited to his office. It is also, in part, why I wrote an open letter to the Senate Judiciary Committee, asking them to deny the confirmation of Loretta Lynch as the new Attorney General.
Mr. Greenberger is left with claiming losses of $3,000 per year, to offset gains in future years. If he has gains every year going forward, he will need to live another 100+ years to recoup his SpongeTech loss. That is not what he was entitled to, by law. It is what he is left with as the result of how the SEC and the DOJ decided to proceed in these cases.
There is certainly a part of me that would like to agree with you. But, as this investor – and so many others have found….this case is NOT going to qualify for casualty loss against ordinary income. (And clearly, all those SPNG millionaires were expecting to only pay the very reduced tax on long term capital gains on all their absolute profits for having so astutely chosen the next big thing).
It has nothing to do with whatever your ranting about being held from investors (as if this case hasn't had some of the most in-depth investigation and exposure in reality anyway).....I don't think the Court ever questions that there was all types of criminal theft type acts. But, simply that does not qualify for casualty loss in itself.
Once again your absolute command of everything except reason and the facts leads you to repeating and supporting bad ideas…or making bad pretty laughable proclamations. (Maybe a result again of faulty research and reading things and forcing them to apply to a situation they don’t).
Or maybe you have once again uncovered that den of NSS and conspirators that are in collusion to keep things from the good long investors? And simply don’t understand things as well as you or think anyone with your focus would be involved and can catch them. Pretty much the list of everybody – for decades – of CPAs, Tax Attorneys, Courts and their Judges, IRS Counsel, elected and appointed representatives and the rest! Don’ let that temper your opinion……Go get ‘em!
What happened here is pretty much specifically defined and has been litigated too many times to even try and count….and once again here – after presumably much dedicated and hard work, conferences, research and examination to prove otherwise was found…NOT ALLOWED AS A CASULATY LOSS.
While I understand how reading Sect 165 and applying a common understanding that it is easy to believe something like this could qualify as a Casualty loss – but it is reading all the material including the already made and defined cut outs, exceptions (and exceptions and exclusions to the exceptions) that need to be considered too. Don’t just pull up when you think you find a result that suits you.
To jump to some of the clearer parts you must have overlooked, the Courts have defined the regulations – and the IRS has both made and been given guidance on this topic and many twists. (In fact trying to convert a bad decision on an investment into a theft loss has been denied and re-affirmed so many times that it is approaching becoming one in a list of “tax protestor” type arguments that will be allowed to be immediately dismissed and have 3x damages imposed). Below is to get you to the chase…..but there are about another dozen well explained and defined legal positions (developed in the hundreds of – all unsuccessful cases) that make it disallowable.
The good news: It can happen – but a major hurdle (since 1975) To qualify: The investor must have bought the investment directly from a seller that committed fraud under a local law. This leads to a requirement of “reliance” that the investor relied on the fraudulent information when parting with their property. This means that the investor dealt directly with the person committing the fraud, as opposed to purchasing the stock through their broker on the open market. The courts have consistently disallowed theft loss deductions relating to a decline in the value of the stock that was attributable to corporate officers misrepresenting the financial condition of the corporation, even when the officers were indicted for securities fraud or other criminal violations. Paine V. Commissioner, 63 T.C. 736,523 F.2d 1053 (5th Cir. 1975). (Note: Even in 1975 the findings were repeating what was the rule for forever).
The IRS in Notice 2004-27, 2004-1 C.P. 782 advised taxpayers that the IRS will disallow (and may impose penalties) for theft losses claimed by taxpayers for the decline in market value of their stock caused by disclosure of accounting fraud or other illegal mis¬conduct of the officers or directors of the corporation that committed the fraud. And again we see, because of so many wasteful (of court - and taxpayer - time and money...on something so well and clearly positioned by the US for so long...actions to make it not just foolish...but a penalty to ignore the law).
Bad news is – that apparently excludes most all SPNG investors, including the one here. Furthermore – and perhaps good (as anything that provides further clarification is good for a proper even if disagreeable position. Although probably not helpful to those ignorant types who read enough to convince themselves of only what they want): Around the time of SPNG and actually probably as part of the Madoff thing, the IRS provided a safe harbor in Revenue Procedure 2009-20 – (that means year 2009 – in case you think the long standing laws are just old and cold about to be abandoned – this is in SPNG times) which gives guidance – all in line with the prior Code, Statutes, Court holdings and Notices - of what would hold. It is nicknamed the Ponzi Rule – as it seems to apply to acts exactly like that. (As in Madoff, which was essentially a Ponzi Scam and where he actually solicited and received the funds. Very few brokers suggested investing with Madoff. In fact, any reasonable due diligence made someone wonder what was actually going on….and after so many had done it the chorus of “….don’t understand, don’t see how….and no one in the industry has ever heard of him actually investing in anything….”, that finally got the authorities on him).
Finally – just like investor boards (or company websites) are filled with people advertising or self-interest….and are not any authority…I see many places trying to promote the position of a stock loss as a Casualty loss is allowed. Most seem willing to help someone do so…for a fee!.. In fact, at each and every site by any reliable source (ranging from Fed Code, IRS, Court Reporters, State Bar Assoc, CPA societies, etc.) that position is ALWAYS dismissed. Because it is a bad and unsupportable decision to pursue.
Greenberger should have been allowed to claim a theft loss.
But, when the SEC and the DOJ choose to withhold information from shareholders and judges, shareholders not only get robbed of their investment, they get robbed of their ability to claim a theft loss, as well.
It's unconscionable. There is absolutely no moral compass in the government's regulatory agencies.
Thanks..very interesting.
And I want to note that that issue on how unaliowed taking a casualty or theft loss for the inc=vestment was I had addressed and warned about - on this and other board - many, many times.
It is an well defined no - no. Has been for decades. The explanations - and many supporting cases - are easy to find, clear and precise.....and totally correct law.
there are many thinking the same... wondering how he got away with his SPNG FRAUD http://investorshub.advfn.com/boards/read_msg.aspx?message_id=78451185
Douglas Furth aka (alfie3155)
The Signature Fund, a purported Ohio limited partnership; Signature Management, LLC, an Ohio limited liability company
http://www.wikinvest.com/stock/GWS_Technologies_(GWSC)/Legal_Proceedings
Millennium Consulting Group
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=52441723
Message in reply to:
Speaking of SPNG's old promoter, Doug Furth (ala Alfie3155 and SoapyBubbles), some recent legal developments:
Tax problems for his 'client' that he invested in SPNG:
http://www.parkertaxpublishing.com/public/tax-pump-and-dump-stock-capital-losses.html
More serious tax problems for Alfie/Doug/Soapy hisseff:
http://www.thefinancialinvestigator.com/wp-content/uploads/2010/06/Furth_IRS11.pdf
and an SEC civil complaint:
https://www.sec.gov/litigation/litreleases/2014/lr23157.htm
These links also cite a Federal criminal indictment, but I have nott found it so far:
http://www.offshorealert.com/usa-v-douglas-furth-SearchPath-HCS-fraud-criminal-complaint.aspx
https://www.securitieslawyer101.com/2014/doug-furth-charged-securities-fraud/
The SPNG saga and its crew of promoter-clowns continue to amuse even years later when they pop up in other scams.
In a search for a contractor to replace my roof I had 5 estimates provided from 5 different companies. STEVEN MOSKOWITZ of Renovex LLC gave me the best price by over a couple thousand dollars. This was too good to pass on, so I hired Renovex to do the job.
Steve immediately demanded 60% of the cost to be paid upfront. I was hesitant so I told him once the material arrives on site I would give him the 60%. He rudely told me "I am not a bank, and I won't lay out that kind of money." We eventually came to an agreement. The following day, 80% of the material arrived and so I paid him in good faith. That was my second mistake. My first mistake was hiring him in the first place. I was initially promised that the entire job would be completed in 3-5 work days. Over the course of 3 weeks I've heard one excuse after the other. It went from bad weather (which never came) to family emergencies, to sick days (6 in a row, with no communication) This company left my roof unprotected which lead to a semi-major leak in multiple areas of my home. I am currently in the process of filing a claim against his insurance, which I'm beginning to think is fraudulent. I have gotten no where. After over three weeks from the start date they were only competent enough to complete 45% of the job. I had finally had enough of the excuses and contacted Steve. I told him I have no other recourse at this point. I need to hire someone else to complete the job. His response was, "Why didn't you tell me that my workers haven't been there in over 5 days? You are just trying to steal my materials and I will see you in court!" As if I'm responsible for managing his labor force. Save yourself the headache, don't use Renovex LLC for ANYTHING! It was a waste of my time and money in the long run. It was the least professional management I've ever dealt with in my entire life. PLEASE DON'T BE TEMPTED BY THE LOW COST, IT IS A FACADE THAT IS WELL WORTH AVOIDING!
Ross G. and 1 other voted for this review
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