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Toxic Funders

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Last Post: 3/1/2021 11:38:17 AM - Followers: 31 - 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 / JGP Consulting / Jahoco LLC / Machiavelli LTD LLC / Anvil Financial Management LLC / JPC Enterprises - Joseph 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
DiamondRock LLC - Neil Rock
Eagle Equities LLC / Union Capital LLC - Yanky Borenstein
EMA Financial LLC - Felicia Preston
ROP Capital LLC - Vince Sballa
Essex Global Investment Group - Benjamin Conde
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
Granite Global Value Investments Ltd - Tony Toffolon
GPL Ventures Inc / Black Bridge Capital  - Alexander Dillon
GS Capital Partners LLC - Gabe Sayegh
JDF Capital Inc - John D Fierro (sued by the SEC on February 26, 2020)
Jefferson Street Capital LLC - Brain Goldberg (possible links to Joe Canouse)
JMJ Financial - Justin Keener (sued by the SEC on March 24, 2020)
JSJ Investments Inc - Sameer Hirji
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
Livingston Asset Management / Oscelata Partners LLC / Tarpon Bay Partners LLC / Trillium Partners LLC - Stephen Hicks
Magna Equities I Inc / Magna Management LLC / MEF I LP - Joshua Sason
Mammoth Corporation - Brad Hare
M2B Funding Corp - Daniel Kordash
Mercer Street Opportunity Fund LLC - Jonathan Juchno - related entity: Mercer Street Capital Partner LLC
Microcap Equity Group LLC - Ibrahim Almagarby
More Capital LLC - Mike Wruck
MorningView Financial LLC - Max
NorthBridge Financial LLC - Samuel Oshana
Odyssey Capital Funding LLC / One44 Capital LLC - Ahrom Fraiman
Osher Capital Partners LLC - Ari Kluger aka Yisroel Kluger
Peak One Opportunity Fund LLC - 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

World Market Ventures LLC - Chad Curtis

Recent SEC Actions:

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 Feiro - (JDF Capital Inc) - https://www.sec.gov/litigation/litreleases/2020/lr24748.htm
2/19/29 - 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

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.

#61  Sticky Note Updated List/INFO (from IBOX): nodummy 02/21/21 04:32:37 PM
#63   are there any judgments? TB 03/01/21 11:38:17 AM
#61   Updated List/INFO (from IBOX): nodummy 02/21/21 04:32:37 PM
#60   I've seen Brett Rosen pumping a bunch of nodummy 02/21/21 04:16:14 PM
#59   Thanks for some of your recent posts. nodummy 02/21/21 03:57:39 PM
#58   This forum got referenced in the SEC case nodummy 02/21/21 03:53:01 PM
#57   Joel Cohen is a toxic death spiral funder JT1962 02/16/21 04:32:43 PM
#56   The gteh crew is completely unaware of gpl Mustachio 02/15/21 11:46:53 AM
#55   Brett Rosen at RB Capital Partners, Inc. is JT1962 01/25/21 03:38:55 PM
#54   Exactly. the maturation date is meaningless. janice shell 01/16/21 01:27:14 AM
#53   Kramer probably has more than a few other gitreal 01/16/21 01:19:49 AM
#52   Seems Gregg Solomon is Redstart's resident agent. janice shell 01/16/21 01:15:48 AM
#51   https://www.sec.gov/Archives/edgar/data/1300938/000118518518002097/ex_128566.htm gitreal 01/16/21 01:09:16 AM
#50   Seems likely... Though it isn't necessarily illegal. janice shell 01/15/21 11:18:17 PM
#49   You can bet something shady is going on. gitreal 01/15/21 11:17:53 PM
#48   Well, he got a payment of $95K upfront. janice shell 01/15/21 11:10:09 PM
#47   It would not surprise me if there was gitreal 01/15/21 11:07:19 PM
#46   I don't think I've ever heard of them janice shell 01/15/21 10:38:17 PM
#45   I'll try that. gitreal 01/15/21 10:36:14 PM
#44   You could find out by searching for PowerUp's janice shell 01/15/21 10:35:18 PM
#43   I just wonder if there are other notes gitreal 01/15/21 10:33:46 PM
#42   PowerUp is run by Kurt Kramer. He sold janice shell 01/15/21 10:26:01 PM
#41   Anybody have any idea why one toxic lender gitreal 01/15/21 07:05:50 PM
#40   Rock Bay Partners Jamie Nelson is a toxic funder JT1962 01/14/21 12:01:19 PM
#39   GPL Ventures is the correct spelling, not GPL JT1962 01/12/21 09:47:08 AM
#38   May want to add Premier Venture Partners to trader59 12/16/20 01:05:39 PM
#37   Surprised you dont have these two: Packman43 12/16/20 12:42:04 PM
#36   Here is a classic example of a toxic surfkast 11/28/20 11:23:45 AM
#35   They could do that, but why would they? janice shell 11/27/20 07:18:16 PM
#34   Post Content : Toxic Debt / FAQS / Q&A saggs 11/27/20 06:54:40 PM
#33   They could take the toxic funder to court nodummy 10/29/20 01:06:03 PM
#32   What recourse, if any, does an issuer have equtz 10/28/20 05:48:19 PM
#31   BRTXQ: 300 buh-buh-billion Authorized Shares with warrants to Renee 10/27/20 09:16:21 AM
#28   For your Auctus file: trader59 10/26/20 09:49:11 PM
#27   Very interesting nodummy! kennypooh 10/22/20 11:17:04 AM
#26   GTEH registered up to 2,000,000,000 shares for sale nodummy 10/21/20 01:15:03 PM
#25   nodummy, is what I see with GPL Ventures Slojab 10/21/20 11:35:18 AM
#24   Actually I noticed that Microcap Equity Group LLC mdimport 10/15/20 02:21:30 PM
#23   I didn't take the time to research and mdimport 10/15/20 02:02:56 PM
#22   thank you! nodummy 10/15/20 01:02:26 PM
#21   There's one more name to add to your mdimport 10/15/20 12:54:27 PM
#20   Excellent and on this one, you need to clarify a bit 236T568 10/14/20 04:20:08 PM
#19   Updated List/INFO: nodummy 10/14/20 03:28:09 PM
#18   JSJ Investments Inc - Sameer Hirji is from JT1962 10/14/20 03:20:12 PM
#17   The only add to the ibox I’d recommend Skiluc 10/03/20 01:08:43 PM
#15   Great suggestions with OZSC and add DSGT :). tknuncle 09/29/20 01:53:42 PM
#14   Excellent info, and thanks for setting this up. fromtheuk 09/29/20 07:45:11 AM
#13   nodummy, as I mentioned on the DD board, 236T568 09/15/20 01:12:23 PM
#12   Excellent information on toxic funders in the Show Renee 09/15/20 09:01:42 AM
#11   Toxic funder start up by the Mezey clan? surfkast 09/11/20 12:16:36 PM
#10   Thanks ND! Great Board, very informative! DaReal 09/10/20 01:09:50 PM
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