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Toxic Funders

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Last Post: 4/5/2022 10:23:03 AM - Followers: 55 - Board type: Free - Posts Today: 0

Toxic Funders are a common manipulative force in penny stocks trading. Hundreds of penny stocks are currently using toxic financing to fund operations and pay for insider expenses. These toxic instruments lead to massive amounts of dilution which is often accompanied by paid promotions (some with disclosed compensation and some without), social media pumps, and misleading/exaggerated/fraudulent press releases and public disclosures by the public Issuers.

The financiers target public Issuers that are rarely able to afford the funding and charge extremely high interest rates, processing fees, and penalties, but that’s the least of their clients’ problems. Upon conversion, the lenders enjoy a discount to market price that may be as high as 60 percent, and much higher in the event of default by the issuer. As the funder converts portions of the note and sells the resulting stock into the market in a series of tranches, the stock’s price plummets. That is why these kinds of instruments are called “death spiral convertibles.” Eventually, the dilution caused by the conversions may force the issuer to reverse split the company’s stock or even drive the company into bankruptcy.

Toxic funders have wreaked havoc with OTC companies for decades, but they’ve proved difficult for the SEC to rein in. In the past three years or so, however, the SEC has begun to pursue a new theory of these kinds of cases, invoking the funders’ failure to register as dealers. The SEC defines a dealer as “any person engaged in the business of buying and selling securities for his own account, through a broker or otherwise.” Individuals who buy and sell securities for themselves are usually considered to be “traders,” and are excepted from the dealer definition. What distinguishes a dealer from a trader is that the dealer “buys and sells as part of a regular business,” while a trader does not.

The bottom line is that toxic funders (i) don’t register as dealers, (ii) commit fraud by not making disclosures that they are not registered, (iii) wreak great harm on investors - (After all who buys the shares the funders dump?) and (iv) put thousands of businesses (including legitimate ones) out of business and/or force them into bankruptcy.

A handful of penny stock law firms have been involved in facilitating the sale of billions of shares of stock by the unregistered dealers, participating in both the preparation of the convertible notes and related agreements and arranging for other lawyers to provide legal opinions to facilitate the public sale of the shares.

This fo
rum will be used to keep a list of some of the most active toxic funders, the attorneys they use (when the information is available), and any SEC action taken against the toxic funders. Unfortunately, because many of the most common toxic funders purchase Notes from over 100 Issuers and not all Issuers disclose the names of the lenders they use, it would be an impossible task to track all the Issuers involved.

The Funders:
Adar Bay LLC / Adar Alef LLC  - Aryeh Goldstein and Samuel Eisenberg - related entity: GEL Properties LLC
Alpha Capital Anstalt - Konrad Ackerman
Armada Investment Fund LLC / Armada Capital Partners LLC / Emunah Funding LLC - Gabriel Berkowitz aka Charles Gabriel Berkowitz and Andrew Avitan
Auctus Fund LLC - Alfred Sollami and Lou Posner
Bellridge Capital LP -
Robert Klimov
BHP Capital NY Inc - Bryan Pantofel

Black Ice Advisors LLC - Brent Fouch
Blue Citi LLC - Robert Malin and Linda Malin
Bridgeview Capital Partners LLC - Michael Dobbs
Cavalry Fund I LP - Thomas Walsh
CareBourn Capital LP - Chip Rice and Logan Rice - related entities: CareBourn Partners LLC, Booski Consulting LLC, BlackOaks Capital LP
Carpathia LLC / JP Carey Irrevocable Trust / Machiavelli LTD LLC / JPC Enterprises - Joseph Canouse - Jahoco LLC - James Canouse - Anvil Financial Management LLC - Jeffrey Canouse
Cereberus Finance Group Ltd / Service Trading Company LLC - Alberto Dayan
Chicago Venture Partners, LP / Iliad Research and Trading, LP / St. George Investments LLC / Tonaquint, Inc / Typenex Co-Investment LLC - John Fife - (sued by the SEC on September 3, 2020)
Concord Holding Group LLC / APG Capital Holdings LLC - Nochum Greenberg
Coventry Enterprises LLC / BNA Investment Capital LLC / Heritage Ventures Ltd - Jack Bodenstein
Crown Bridge Partners LLC - Seth Ahdoot
Crossover Capital Fund I LLC - Ken Lustig and David Whitlock
DiamondRock LLC - Neil Rock
Eagle Equities LLC / Union Capital LLC - Yanky Borenstein
East Capital Investments LLC - Chris Danzi (associated with Essex Global Investments/Benjamin Conde)
EMA Financial LLC - Felicia Preston
Emerald Coast Capital LLC - Spencer Payne

EROP Capital LLC - Vince Sballa
Essex Global Investment Group - Benjamin Conde (charged by the SEC on 9/23/2019 and Indicted)
FireRock Capital Inc - Seth Fireman
FirstFire Global Opportunities Fund LLC - Eli Fireman +  Seth Fireman
Fourth Man LLC - Edward Deese and Kenneth Hall

GHS Investments LLC / Panache Capital LLC - Mark Grober, Matthew L Schissler, and Sarfraz Hajee
GoLock Capital LLC - David Whitlock
Granite Global Value Investments Ltd - Tony Toffolon
GPL Ventures Inc / Black Bridge Capital  - Alexander Dillon
GS Capital Partners LLC - Gabe Sayegh
Iconic Holdings LLC / Tangiers Global LLC / Tangiers Investment Group LLC - Michael Sobeck and Robert Papiri

JDF Capital Inc - John D Fierro (sued by the SEC on February 26, 2020)
Jefferson Street Capital LLC - Brain Goldberg
JMJ Financial - Justin Keener (sued by the SEC on March 24, 2020)
JSJ Investments Inc - Sameer Hirji
Kodiak Capital Group LLC - Ryan Hodson (also advises Triton Funds LP)
L2 Capital LLC / Oasis Capital LLC / Old Main Capital LLC - Adam Long
Labrys Fund LP - G Lane Murphy and Thomas John Silverman
Leonite Capital LLC - Avi Geller
LG Capital Funding LLC - Joseph Lerman
LGH Investments LLC - Lucas Hoppel
Livingston Asset Management / Oscelata Partners LLC / Tarpon Bay Partners LLC / Trillium Partners LLC - Stephen Hicks
M2B Funding Corp - Daniel Kordash
Magna Equities I Inc / Magna Management LLC / MEF I LP - Joshua Sason
Mammoth Corporation - Brad Hare
Mercer Street Opportunity Fund LLC - Jonathan Juchno - related entity: Mercer Street Capital Partner LLC
Microcap Equity Group LLC - Ibrahim Almagarby (sued by the SEC on November 17, 2017)
More Capital LLC - Mike Wruck
MorningView Financial LLC - Max
NorthBridge Financial LLC - Samuel Oshana
Odyssey Capital Funding LLC / One44 Capital LLC - Ahrom Fraiman
Optempus Investments LLC - Scott Sand (despite a 2011 SEC penny stock ban)
Osher Capital Partners LLC - Ari Kluger aka Yisroel Kluger
Peak One Opportunity Fund LP - Jason Goldstein
Platinum Point Capital LLC - Brian Freifeld
Power Up Lending
Group Ltd / Geneva Roth Remark Holdings Inc / Vis Vires Group LLC - Curt Kramer
Quarum Holdings LLC - Dennis Ringer
RB Capital Partners Inc / Rosen Capital LLC - Brett Rosen
RedStart Holdings Corp / Geneva Roth Remark Holdings Inc - Gregg Solomon
Redwood Management LLC / RDW Capital LLCRed Diamond Partners LLC - John DeNobile
River North Equity LLC - Edward M Liceaga
SBI Investments LLC (aka Sea Otter Global Ventures LLC) - Peter Wisniewski, Hammin Abdullah, and Jonathan Juchno - related entities: WHC Capital LLC
SpotFin Funding LLC - Sean Evan Wright
TCA Global Fund / TCA Fund Management Group
- Robert Press (sued by the SEC on May 11, 2020 - now in Bankruptcy)
Tiger Trout Capital LLC - Alan Masley
TKF Investments LLC - Chad Friend
Tri-Bridge Ventures LLC - John Forsythe III

Triton Funds LP - Ashkan Mapar, Jares Alexandria, Arnold Nunez, Casey Barrraza
Vista Capital Investments LLC - David Clark
World Market Ventures LLC - Chad Curtis

Recent SEC Actions:

9/27/21 - Chip Rice (Carebourn Capital LP) - https://www.sec.gov/litigation/litreleases/2021/lr25223.htm
8/16/21 - Alexander Dillon and Cosmin I Panait (GPL Ventures LLC) - https://www.sec.gov/litigation/litreleases/2021/lr25169.htm
9/3/20 - John M Fife (Chicago Venture Partners, LP, Iliad Research and Trading, LP, St. George Investments LLC, Tonaquint Inc., and Typenex Co-Investment LLC - https://www.sec.gov/litigation/litreleases/2020/lr24886.htm
5/11/20 - TCA Global Fund - https://www.sec.gov/litigation/complaints/2020/comp-pr2020-110.pdf

3/24/20 - Justin W Keener (JMJ Financial) - https://www.sec.gov/litigation/litreleases/2020/lr24779.htm
2/26/20 - John D Feirro - (JDF Capital Inc) - https://www.sec.gov/litigation/litreleases/2020/lr24748.htm
9/23/19 - Benjamin Conde (Essex Global Investment Corp) - https://www.sec.gov/litigation/litreleases/2019/lr24609.htm
2/19/19 - Joshua Sason (Magna Equities I Inc) - https://www.sec.gov/litigation/litreleases/2019/lr24403.htm
11/27/17 - Ibrahim Almagarby (Microcap Equity Group LLC) - https://www.sec.gov/litigation/litreleases/2017/lr23992.htm

The Attorneys:
Anthony LG - (Laura Anthony, Chad Friend, John Cacomanolis) - Auctus Fund LLC, Carebourn Capital LP, More Capital LLC, Crown Bridge Partners LLC, FirstFire Global Opportunties LLC, Power Up Lending/Vis Vires Group LLC, TKF Investments LLC,
L2 Capital LLC, SBI Investments LLC/Sea Otter Global Ventures LLC, Labrys Fund LP, EMA Financial LLC, Peak One Opportunity Fund LP
Tomer Taj (New Venture Attorneys / Investors Counsel Attorneys PC) - LG Capital Funding LLC, Adar Bay LLC/Adar Alef LLC, GS Capital Partners LLC, Eagle Equities LLC/Union Capital LLC, JDF Capital Inc, Coventry Enterprises LLC/BNA Investment Capital LLC/Heritage Ventures Ltd, RY Capital LLC
Lucosky Brookman LLP - TCA Global Fund, BHP Capital NY Inc, Armada Capital Partners LLC, Jefferson Street Capital LLC,
Mattheau Stout - Livingston Asset Management/Oscelata Partners LLC/Trillium Partners LLC

The Coalition:
In January 2021, the Small Public Company Coalition (SPCC) was incorporatd in Virginia to lobby for the interests of Toxic Lenders. The recent annual report for the SPCC at the Viriginia SOS shows Marc Indeglia (legal advisor to the Triton Fund LP) as its president and Chris Stalcup (employee of John Fife at Chicago Ventures Partners LP) as the treasurer. 

We define the financing as "TOXIC" because:

1) Most of these Issuer have no ability or means of paying back the Notes, and the lender knows this before providing the funding, making these Notes predatory in nature.

2) The Notes come with interest rates that often increase through multiple instances of default that represent abusive lending practices and in some cases violations of usury laws.

3) The Notes often include fees disguised as service fees though no services are provided (for instance, the lender gets a $100,000 Note but only provides $75,000 in actual funding).

4) The Notes often contain clauses that dictate how the Issuer must conduct their business, which result in further penalties if not followed, arguably making the lender an insider.

5) The Notes often include default penalties if not repaid before the default date, even though the Issuer and lender both know the Issuer has no real means of paying back the loan in cash.

6) The Notes all contain toxic-dilutive terms for conversion of the Note into discounted free trading stock, often 50% - 60% or more below the lowest trading (or bid) price over the past 10 - 30 days.

In the end, a company borrowing $75,000 can result in a balance owed to the lender many times higher than the original Note ($150,000 - $400,000 or more) because of interest and fees, which, after being converted at a huge discount to the market price, ends up resulting in losses of $400,000 - $900,000 or more to retail shareholders.

#122   Murphy from Labrys Fund has a new one JohnnyThundersLAMF 04/05/22 10:23:03 AM
#121   a deal with the devil: Check out his disclaimer JJALLDAY 01/27/22 07:14:28 AM
#120   Down Goes Keener! https://twitter.com/otclawyers/status/1485742591425581061?s=21 JJALLDAY 01/24/22 05:55:37 PM
#119   $PCTL VS AUCTUS FUND https://www.pacermonitor.com/public/case/43256345/PCT,_Ltd_ dade 01/21/22 09:06:12 AM
#118   Fife Streeterville just funded $15 million to SHMP, uber darthium 12/30/21 10:27:18 PM
#117   https://www.linkedin.com/posts/markbasile_fife-denied-motion-to-dismiss-enforcem JJALLDAY 12/22/21 10:09:54 AM
#116   Based on GHS' history with SHMP...I would say YES. JoshTaeger 12/21/21 10:18:35 PM
#115   It gets even crazier with SHMP. Do a JoshTaeger 12/21/21 03:42:29 PM
#114   Sounds like SHMP and Fife are exactly what JoshTaeger 12/21/21 03:26:10 PM
#113   Well, he's currently being sued by the SEC janice shell 12/21/21 02:54:49 PM
#112   This guy, John M Fife https://www.securitieslawyer101.com/2020/sec-says-toxic-fu uber darthium 12/21/21 02:07:26 PM
#111   Is Streeterville Capital, John M Fife, President, a uber darthium 12/21/21 12:28:47 PM
#110   My bad, I meant investors don’t know. JJALLDAY 12/09/21 09:15:28 AM
#109   On the contrary, these people know exactly what trader59 12/09/21 09:07:36 AM
#108   PHIL is selling convertible notes to Power Up JJALLDAY 12/09/21 08:14:35 AM
#107   Insane! Have any of these issuers restructured their JJALLDAY 12/06/21 07:24:59 PM
#106   Brett Rosen is whining he's not being treated tdbowieknife 12/04/21 01:14:21 PM
#105   I suspect so. They are selling a LW89 12/01/21 09:40:04 PM
#104   Toxic Convertible Note Lenders Not Just For the janice shell 11/24/21 03:59:31 PM
#103   What about Canaccord Genuity? The Very Good Yahoo4Google 10/02/21 07:37:28 PM
#102   UBQU CEO James Ballas gave GPL Ventures (Alex Joe Burmeister 10/01/21 06:07:05 PM
#101   Do you know if these two companies are fromtheuk 09/21/21 10:19:31 AM
#100   Wow just landed here. This sounds like MikeyMayhem 09/12/21 08:10:52 PM
#99   So looks like the bigger name of the Flippingflip 09/11/21 07:36:55 PM
#98   TRITON FUNDS LP and White Lion Capital, LLC JT1962 09/02/21 10:39:59 AM
#97   TRITON FUNDS LP is provides toxic equity line JT1962 09/01/21 11:55:37 AM
#96   A Tale of Two Toxic Convertible Note Lenders janice shell 08/31/21 08:33:40 PM
#95   SEC nails GPL Ventures LLC (Alexander Dillon + nodummy 08/14/21 11:45:53 PM
#93   Lmao Yea, traditional convertible loans at well above market namtae 08/02/21 09:37:08 PM
#92   The TRUTH: Brett Rosen has provided friendly, low-interest, CyberJ 08/02/21 08:24:07 PM
#91   It was SIML (Simlatus), now BRBL (Brewbilt Brewing Company). janice shell 08/02/21 07:55:26 PM
#89   I'm stumped. Let me know if you remember. JohnnyThundersLAMF 08/02/21 07:46:11 PM
#88   No, it wasn't. It was another, from perhaps janice shell 08/02/21 07:40:46 PM
#87   That could be FBEC Worldwide. If I remember JohnnyThundersLAMF 08/02/21 07:38:10 PM
#86   Yes. More recently he was involved in a janice shell 08/02/21 04:51:01 PM
#85   He's served as a CEO himself in the past. JohnnyThundersLAMF 08/02/21 04:36:57 PM
#84   Yes, there're also CEOs like the ones you janice shell 08/02/21 02:57:21 PM
#83   Very informative. Thanks. JohnnyThundersLAMF 08/02/21 11:08:20 AM
#82   Some reading on SEC actions against toxic funders: janice shell 08/01/21 01:58:46 PM
#81   Is an issuer liable for using the same equtz 06/29/21 07:08:08 PM
#80   VNDM market maker is back Nebuchadnezzar 06/29/21 05:16:08 PM
#79   Additional RB Capital activity with PCTL (PCT Ltd) namtae 05/31/21 09:22:25 AM
#78   Optempus Investments (Scott Sand, Anthony Super) has now JohnnyThundersLAMF 05/13/21 05:15:02 PM
#77   Info from the IBOX (updated) nodummy 05/03/21 07:07:10 AM
#76   BOY.... How are you not related to them?? Your smallcapwealth 04/13/21 01:57:28 PM
#75   "Rosen has also been pumping ISWH and says loanranger 04/11/21 10:30:31 AM
#74   Yorkville should definitely be on there along with JT1962 04/07/21 04:54:14 PM
#73   I see that there is a list of WebSlinger 04/07/21 09:32:59 AM
#72   Continuation Capital run by Paul Winkle, GARY KOMPOTHECRAS, JT1962 04/06/21 10:56:48 AM
#71   https://www.otcmarkets.com/stock/PHBI/news/Pharmagreen-Removes-Convertible-Debt- TB 03/23/21 09:54:14 AM
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