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Was CBAI on a "Global Lock" and then had that removed or just on a "chill"? It is possible (at least theoretically) to have a Global Lock removed, but still be chilled and designated "trade for trade".
As I understand, the Global Lock is just a full chill version where all DTCC services are denied or restricted and a "chill" will be only certain sevices like WT's or most common kicking the stock out of the CNS system (designating trade for trade).
That is where the issue comes in. Penson says the hell with them completely and risks are of other in house brokers following their lead and do with some stocks.
As long as the volume stays low (which causes lack of liquidity for traders), I believe they are more inclined to handle certain chilled stocks. But when you get regular heavy volume or trading with dubius promoted pinks with their erroneous finances and share structure, some brokers could and will quickly put their own "chill" on.
Hundreds or thousands of trades need to go through where literally only one trade was required before (due to being kicked out of the CNS). Many of the responsibilties or costs that go with that fall on the broker instead of the DTCC and of course may be passed on to the trader. Why Penson has decided to have no part of it.
Alex Livak has been listed on BNPD PR's since April last year. He also handles other garbage pinks in the Oil, gas, and mineral area including Gougers other POS oil stock MXXH and mineral companies that have gone through criminal litigation with the SEC (in which promoters were fined and banned from penny stocks for years).
No biggie, got it now on my Chrome browser, will set that up for IH.
Are you using Chrome or different browser other than Explorer? It seems that it's readily available for free on Chrome, but not for IE.
Such a salesperson. Honestly it's very annoying and one more reason to NOT use Etrade. But really it is just an ad and premium members shouldn't have to put up with it or have a way of getting it off and not have it showing up.
Trading platforms that online traders are using with charts, screens, right clicks with the mouse, etc are the way and all this is for is trying to get new customers basically. Nothing wrong to trying to make a buck, but have it for non premium members or have a disable function with it. It just feels like a virus and dirty.
Ah, the old and one of the oldest pinky scams in the business. Upgrading to the OTCBB, having a GAAP Certified accounting audit, and becoming fully reporting. Of course it's always in the future and gets dragged out literally forever never to happen.
Looks like not a whole lot of people falling for it. Still zero volume on such great news. Maybe someone will kick them a bone or two to make it show up on the ticker again. LOL
Gouger better get his other paperwork in gear, still in violation with the state of Texas and still no oil wells that are pumping anything, just a bunch of drying up or dried up wells that aren't worth the money and maintenance to pump them.
Both CRWV dollar volume and trade volume is a fraction of what it was 5 months ago. The pps has lost 90 something percent of its value. Hope and belief are not a good CRWV or any other stock investment strategy or trading philosophy. To believe just because a stock is not at absolute ZERO yet that it's just fine and not a bad CRWV investment is a fallacy. 90+ percent loss in pps and volume IS the relative going to nothing. It becomes dead money and 1000's of percent increase necessary and unsurmountable odds to get back even.
There is obvious signs of low volume and lack of liquidity and the chill the DTCC just put on it will make that worse. The numbers back that up. That's the very meaning of the name "chill". The numbers don't lie and spinning that to "CRWV isn't at trips yet or hasn't once had zero volume" won't change that negative.
There are hundreds and hundreds of stocks that just die a slow death, drift around some particular pps, and don't actually hit that .0001 or no bid to be a scam, the SEC, FINRA, and DTCC actions are chocked full of them. The majority of the pinky market works this way. To wait for the very moment of no bid or a zero volume day before realizing there is something amiss and CRWV is a bad investment is quite misguided to say the least.
Sometimes the truth hurts, and its not pleasant to hear, but that won't change the truth about CRWV and the fact that it is already lost most of it's volume and value. And other than a little spike here and there the odds are overwhelming that CRWV is going to continue it's slow death. The tighter to holding on to CRWV shares, the harder the lesson it will be.
It doesn't matter if a tower is under 200 feet or not (I was just giving tower searches as example), the FCC will have regulations and approvals to anything with communication in this field even though different for different applications. Could go on and on about different regulations, the fact there is always something.
And FCC isn't the only authorities that have to have notice or record of things. It sure seems strange that no one has any knowledge of anything with MDGC in Boise area with the exception of what's on fluff PR's and message boards. Nothing can be verified through proper official sources. That may not be 100%, and admittedly the pinky game preys upon the .01% chance idea, but it's pretty telling.
I would give the people I know in that area the respect of some sophistication, they do use real phones with real services that are recorded and information is readily available about those companies or services.
That would include information that was available long before any of the services were in place and just being planned, constructed, or even used or applied for (even if it was going to be utilizing what was already in place). That's just part of the real world sophistication.
In this instance we only have repeated company PR's and statements and that's it.
Your on the wrong board.
http://www.mail-to-order-bride.com/
"stupid is as stupid does"
It's probably been posted before, but the FCC site has a lot of great links and search options. All communication anywhere in the US has to go through and be recorded with them. This would include towers (applications, construction, or granted, denied, etc), information on providers, complaints, and so much more.
Don't want to post every link the FCC site has, but just for examples:
http://www.fcc.gov/guides/getting-broadband
http://www.fcc.gov/wireless-telecommunications-bureau
http://wireless.fcc.gov/index.htm?job=towers_antennas
http://wireless2.fcc.gov/UlsApp/AsrSearch/asrResults.jsp?searchType=TRL
Of course finding MDGC in any of it might be an daunting task, a little hard to find something invisible or non existent.
As more people realize the short fallacy is just BS, learning the requirements, realizing the daily short data is erroneous, and the lack of shorting that is going on with low end pinks (absolutely ZERO with MDGC), the new promotional tool is to try to convince the gullible that it is being done from other countries.
Of course the idea that foreign brokers can do what ever they want here in the US with stocks like MDGC is just as big as fallacy. A foreign broker still needs to be registered and involve SRO's sponsorship for the ability and are under all the requirements of any American broker in order to trade through the exchanges and OTCBB in the USA.
Still has to be reporting, still has to have the $2.50 a share backup, still has to find shares to short, and when were talking trip Zero stocks such as MDGC where one would need 10 of millions of shares to make any money, with absolutely minimal if any volume or liquidity, it's a joke.
Like I stated the aggregate of "shorts" for MDGC on the last report was ZERO and have been only 1% or less that has not settled transitioning through the next cycle or period.
http://www.otcmarkets.com/stock/MDGC/short-sales
Insiders sell shares all the time in the pinkies. More probable that this will run more south before the toxic convertible becomes due. The debt will pick up more shares for low, then maybe a quick Pump and Dump to get rid of them. There might be a little day or two pop before that and people better trade quick. The upside down holders that were gullible enough to buy and keep at the top of the last run might want to think about taking advantage if it happens and cut losses. Combine that with all the people that don't want to be snookered and dragged along from the extended financing and sell on any news or just get rid of their position and go elsewhere. Might go a bit flat, but overall the indications are not positive for the pps.
NOTE 7 - NOTES PAYABLE
At fiscal year ended September 30, 2011, the Company had notes payable in the amount of $239,512, compared to $260,695, in the prior fiscal year. The notes included a note payable to an unaffiliated party in the amount of $165,790, which,is not secured by collateral of the company, carries accrued interest of 6%and is due on demand by the holder. The second note payable is to an affiliated company of our President in the amount of $23,338, is not secured by collateral of the company, carries no interest, and is due on demand by the holder. The third note payable is to an unaffiliated party in the amount of $50,333, is not secured by collateral of the company, carries interest of 8%, is due May 3, 2012, and is convertible into common stock at a 45% discount to market.
Of course if BA wants to and has the ability to suddenly get rid of some, they won't care about anyone or anything, and just dump.
17 instances of issuing shares for debt occurred in just 9 months of last year, and AQLV is talking about getting a whole lot more debt. We also don't know when the other debt they have now is going to change to paying off in shares and could be any time "on demand".
Now admit Janice. You really are a Secret Agent for the Government and you are put in these illegal boiler rooms to expose all the naked shorts. LOL
Some of these people only remind me of the scarecrow; "if he only had a brain".
"What about Big Apple and their 20 MILLION plus AQLV shares - what happens if they decide to sell to pay off their SEC fines?
What about Gary - who HAS sold shares between 2010 and 2011?
Those are the ones to be worried about. Unless of course they were the ones selling into the run and now all you have are the few here trying to hold up a whole lotta nothing until the financing news.
It ain't gonna happen.
Did you happen to notice the percentage change in Big Apples position but no change in the number of shares. You KNOW what that means right?"
My calculator knows what that means. LOL
Could easily be another 20 MILLION with future toxic debt payoff with just the May 3 convertible. The toxic debt that isn't stated as convertible and just "due on demand" most of the time just goes to issued shares one way or another and more 10's of millions of shares. Some may have even been part of the last run.
NOTE 7 - NOTES PAYABLE
At fiscal year ended September 30, 2011, the Company had notes payable in the amount of $239,512, compared to $260,695, in the prior fiscal year. The notes included a note payable to an unaffiliated party in the amount of $165,790, which,is not secured by collateral of the company, carries accrued interest of 6%and is due on demand by the holder. The second note payable is to an affiliated company of our President in the amount of $23,338, is not secured by collateral of the company, carries no interest, and is due on demand by the holder. The third note payable is to an unaffiliated party in the amount of $50,333, is not secured by collateral of the company, carries interest of 8%, is due May 3, 2012, and is convertible into common stock at a 45% discount to market. The Company recognizes this third note payable as a derivative liability and has accounted for it as follows:
It goes right along with my point I was making
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71438346
This is how it's done and is nothing new for AQLV
NOTE 8 – STOCKHOLDERS’ DEFICIT
In December 2008, the Company completed its spin-off by distributing 1,167,170 common stock shares to stockholders of CSBI. The remaining 4,832,830 common stock shares previously owned by CSBI were returned and canceled.
On April 12, 2010, the Company issued 115,572,170 post-split shares of Common stock for $30,000 in cash and a note receivable to the Company’s subsidiary, IAI, in the amount of $170,000. The transaction resulted in a change of control of the Company and was identified in the 8-K filed on April 16, 2010.
On May 7, 2010, the Company issued 20,000,000 post-split shares of Common stock for $20,000 in consulting services.
On May 7, 2010, the Company issued 30,000,000 post-split shares of Common stock and 250,000 shares of Preferred stock as part of an acquisition agreement for Focus Systems, Inc. from Propalms, Inc. The transaction was recorded on the Company’s books at $310,000. The transaction was reported in the Company’s 8-K filed April 21, 2010.
On May 7, 2010, and in conjunction with the Focus acquisition agreement, the Company issued 500,000 shares of Preferred stock for an investment receivable in the amount of $250,000.
On May 14, 2010, the Company completed a 10:1 forward split of its Common stock.
On August 2, 2010, the Company issued 5,000,000 shares of Common stock for $30,000 in consulting services.
On August 2, 2010, the Company issued 5,000,000 shares of Common stock for $20,000 in consulting services.
At September 30, 2010, the Company recorded the impairment of the unexercised investment receivable from the Preferred stock issued May 7, 2010. 464,352 shares of Preferred stock were returned to the Company.
In October 2010 the Company issued 9,500,000 shares of Common stock to repay $5,000 in debt.
In December 2010 the Company issued 400,000 shares of Preferred stock for the purchase of 50% interests in AquaLiv, Inc.
In December 2010 the Company issued 3,750,000 shares of Common stock in exchange for 24,000 shares of Preferred stock valued at $24,000.
In January 2011, the Company issued 90,000 shares of Preferred stock for $45,000 in cash.
I n January 2011, the Company issued 100,000 shares of Preferred stock for $50,000 in cash.
In April 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.
In May 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.
In May 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.
In June 2011 the Company issued 10,000,000 shares of Common stock to repay $5,000 in debt.
In June 2011 the Company issued 3,947,368 shares of Common stock to repay $15,000 in debt.
In June 2011 the Company issued 2,380,952 shares of Common stock to repay $10,000 in debt.
In July 2011 the Company issued 3,200,000 shares of Common stock to repay $8,000 in debt.
In July 2011 the Company issued 11,500,000 shares of Common stock to repay $5,750 in debt.
In July 2011 the Company issued 4,095,238 shares of Common stock to repay $8,600 in debt.
In August 2011 the Company issued 12,000,000 shares of Common stock to repay $6,000 in debt.
In September 2011 the Company issued 6,500,000 shares of Common stock to repay $3,250 in debt.
In September 2011 the Company issued 7,500,000 shares of Common stock to repay $3,750 in debt.
In September 2011 the Company issued 10,000 shares of Preferred stock for $5,000 in management fees.
In September 2011 the Company issued 50,000 shares of Preferred stock for $25,000 in cash.
In September 2011 the Company’s subsidiary received $5,414 in cash in exchange for previously issued Preferred stock related to the AquaLiv, Inc. acquisition.
http://www.otcmarkets.com/stock/AQLV/financials
BA owning shares in any company has been a big issue. AQLV is not immune toward this type of thing. BA just happens to be one of the worst offenders and biggest detrimental dumpers there is. They have acted criminally with the way they have done business, many have already known this for some time. BA doesn't have shares to not dump at some point in time and it will be at the expense of AQLV shareholders value. That is just a given.
But according to the PR's that some want to spin into something good, BA won't be the end of much more toxicity to come. Any financing if it comes (it won't ever be anything close to the amounts PRed), will be in form of more toxic debt, more A/S, and more degradation to any shareholders valuation.
May get more P&D, very short term trading, but long or even mid term will be just assassination to the pps.
Of course the company isn't going to reveal that, they are going to do nothing but push and try to manipulate the idea that all of that is not an issue. Just normal pinky and "magic water" crud (whoops, I guess it's magic pills or beans now).
I have a feeling (and the feeling seems to be playing out) that the share selling businesses like CRWV are going to be scrutinized more and more. This exaggerating gold mines, phony financials, R/M, etc and then doing P&Ds, toxic financing, and the like just aren't going to cut it as it once did. About time I say.
Geesh. And people wonder why a company like THRA gets a chill or lock. Cry and moan that the DTCC won't give out a reason. Pretty obvious really when you get financial accounting such as that.
Guess that's why only a couple of thousand bucks can be called "high volume" for these type of stocks. About all it leaves is a dozen or so trades to jump and down for. LOL
Got to love the video
Buy the dips and load the boat before you miss the bus!
BNPD PUMP and DUMP Chart
Classic P&D chart.
8+ months now of false promises since inception
8 months of "ticker change" (not that that does anything for the company).
8 months of no oil production or profits for shareholders.
8 months of loosing 95% of pps value from the high of pump.
8 months to ZERO volume and/or liquidity and lower price from when they started the pump.
8 months to get to beating up dead horses.
I guess the SEC is getting tired of charity. You know, not in the bit guilty or doing anything wrong and just "agreeing" to give money to the Authorities. Well, at least owing them. LOL
"Like I say, no one who has been around penny stock scams for more than five minutes can have the slightest doubt about how all this will unfold."
Well, unfortunately it takes some a bit longer, but still same end result. Just classic pinky technique, and this "loan" will go on and on and on and on. Just a long as AQLV can nurse the idea. It will be next month, soon, even next week over and over again.
The criteria to get this type of farm lending is just completely out of AQLV's league. Longevity of profit and experience, operation, value of land, what the money is for, are just a few things that has to be contended with. The criteria and scrutiny of the governmental authorities over the lending banks have changed forever at this point.
Lending for unproven "magic water" is not part of the system. That kind of money comes from pink toxic financing and destruction of share value involving companies like BA, not institutional banks.
The only manipulation causing CRWV being on the list will fall solely with the insiders and company of CRWV. They would be the ones who manipulated this into where they are now. I would agree that is a negative for them.
CRWV and it's insiders are the only ones who are responsible for the share structure, business, and promotional practices. If CRWV was following guidelines set up by the SEC, DTCC, FINRA, proper business and reporting standards, etc., they wouldn't be on the list. Any "efforts" must come from the companies like CRWV in how they conduct themselves in the pinky market.
As far as discussion of other stocks, a better venue would be somewhere else. Here is a good link to DTCC requirements and board to maybe look to.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68938706
That answer probably falls with Gouger, guess he's the one that got shareholders money (or at least a good portion). Indicative to his MO and his involvement with his stocks.
He doesn't take care of his other responsibilities either and the RCC will yank his license, permits, and leases if he doesn't get it together.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71264152
http://investorshub.advfn.com/boards/replies.aspx?msg=71264152
FBI and Attorney General Involved with Oil SCAM
Another Executive Convicted of Oil and Gas Investment Fraud
Northern District of Texas Successfully Prosecuted Numerous Individuals for Fraud in Connection with Oil and Gas Investments in Recent Years
http://www.fbi.gov/dallas/press-releases/2012/another-executive-convicted-of-oil-and-gas-investment-fraud
"In fact I bet anything they settled in the first place, but remains to be seen until the new report comes out."
Well, didn't have to wait long, the new report just came out. Absolutely ZERO short interest for CRWV.
http://www.otcbb.com/asp/OTCE_Short_Interest_popup.asp?Symbol=crwv&StlmtDt=01/13/2012
No implication, just the data and place to observe and/or be informed of any information about the oil well and the stock including the permit in which you were commenting on. When and if the well ever gets drilled the activity will have to be recorded at the state and abilities to get that information will be there.
If your talking about my PR's or company statements remark, many times PR's and company statements do not jive with the official recordings or not fully disclose the information that is readily available at the Texas authorities.
"Mr. D'Amaro, who is already serving a three-year sentence in a Miami jail for the scheme, agreed to the ban and to a $217,903 disgorgement order to settle the case. While he did not admit to any wrongdoing in settling, he pleaded guilty to parallel criminal charges in March, 2010."
That's classic, like he had any choice but to "agree". I remember reading somewhere where the authorities were trying to eliminate the ability to "not admit to any wrongdoing". That's such a joke.
Looks like internet privileges should be scrutinized in the jails a bit more also.
Oil and Gas Well Scams are One of the Most Common Con Games in America.
"Typical oil and gas scams are handled by swindlers......"
Looks like the lawyers have a good business for the oil news as well.
http://www.oilandgasfraud.com/
Actually the best and official place for ANY action or drilling, oil production, etc is the State of Texas
http://www.rrc.state.tx.us/data/online/index.php
http://webapps.rrc.state.tx.us/DP/drillDownQueryAction.do?fromPublicQuery=Y&name=SANGER%2BHEIRS&univDocNo=486479312
http://webapps.rrc.state.tx.us/DP/viewW1PdfFormAction.do?submit=permitPdf
The drilling permit that Gouger just keeps renewing over the years hasn't anything going on there. Everything that is done with oil and gas has to go through the Railroad Commission of Texas and get reported.
The specific data for Gouger (Tejones and Sanger) for Queries is:
Operator & P-5 # 841338
Permit # 711831
API # 42-297-34985
Lease Name SANGER HEIRS
Field Name and # WILDCAT 00004001
Again anything that has to do with oil in the State of Texas has to be documented on a regular basis, including any Severances (violations) and it doesn't matter what any PR or company states.
I remember talking about this back in Oct 11 and of course it was tried to be dismissed as nothing. I guess the Sept statement pretty much put an answer to it. BA owning shares is NOT a good thing, they will Pump and Dump one way or another. If they can't it will only be due to legal issues and that will not be any positive either for AQLV.
Well obvious Big Apple was involved and makes it an issue. There is no confirmation that any involvement is indeed only in the past. There very well might be current involvement. That was the question and no reasonable answer has been given that past associations with an otc company is not included in the fact that the odds that it can possibly effect current issues of any company. As it so many times does in the sub-penny world.
I know the article is given to be a positive, and I guess it's a small step in the right direction, but the numbers given of amount of employees (ie: only double in twenty years), amount of cases, etc are quite minute to the problems at hand.
One statement is true though;
"Nationwide, the SEC has fewer than 4,000 employees, Mr. Bustillo said, "very small considering the size of the industry we oversee.""
In reality it would probably take ten times that to make a dent in issues that the SEC is in charge of. Only in our dreams I'm sure. A change to the better is better than no change at all I guess.
ZERO connection to any oil industry news.
In fact a lot of ZEROs for BNPD
ZERO short interest for last period.
http://www.otcbb.com/asp/OTCE_Short_Interest_popup.asp?Symbol=BNPD&StlmtDt=01/13/2012
ZERO oil pumping on last report
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=70979937
ZERO volume so far today
ZERO income and assets not worth counting for BNPD
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68547508
ZERO profit for shareholders
ZERO filings with OTCBB
http://www.otcbb.com/asp/Info_Center.asp
ZERO follow through or transparency with any of BNPD's fluff PR's
I could go on but there is ZERO reasons for investing in this and paying any attention to foolishly trying to connect BNPD with oil industry news.
But they have a nice R/S planned for anyone that wants it and will probably be the only thing Gouger makes good on. Followed by dumping and destruction of the pps of course.
Talk about the long arm of the law. Guess some won't hide there anymore. Seen these sites like Megaupload be shut down, and within days are up again. Many like the free movie streaming, but there is definitely another side of it. Should be some middle ground somewhere. There is a lot of well known large corporations advertising at sites with nothing but the links to these type of infringement problems.
Third and fourth parties, pumpers, promo groups, etc get their share of the loot. You can search through the DTCC notices and this list is a pretty good one. I feel it is more accurate than any other. The guy has done pretty good with it.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=71208053
No, BNPD is not chilled. Should be, and may very well be in the future. A name change will definitely not solve it's problems, in reality the constant shell name and ticker changes in these dirty pinks are part of the problem. That reverse will be just part of the rinse and repeat game. No real companies, just shell stock selling.
This thing is barely staying on the board. Exciting price hold, LOL. Very minimal volume and 2/3 of that has sold today so far has been at .002, over 16% lower than yesterday close.
Not that it matters, BNPD might as well be on the grey sheets or chilled by the DTCC for all the action it's getting.
Someone throw another C note at it, wake it up. LOL (Sarcasm intended of course)
Not their job or responsibility. Those guidelines are already there. Just follow SEC, FINRA, and common business and trading practice rules. Shady companies like CRWV that have conflicting financials, irresponsible business practices, and lack of their own company transparency don't fit into those guidelines.
Yes, practices like CRWV is exhibiting have been gotten away with in the past. There is bigger money in selling shares and ideas of gold (for example like CRWV), or hopes and dreams to investors than it is to carry out a real business. Lot easier and quicker too. The SEC and other governing bodies are way under staffed or underfunded and can't even get to all the offenders (in fact just a very small percentage). The insiders and owners of shells know this and abuse it. These shells and companies like CRWV have been going amok.
So it's no surprise when a company like CRWV falls into the chills. The odds of a "good company" falling into it would be rare without not following the necessary guidelines that are already known, just not enforced.
Many want to blame the DTCC, but it's not their fault, it's the companies. The DTCC actually does a pretty good job considering all that they do. Monopoly, maybe. But that's the American market way and some entity has to do it. The way the trading system is set up and controlled, it would be very hard to have multiple systems or different companies doing it.
At this point it's over 99% chance they will never get reinstatement. But if they miraculously beat the less than 1% odds, you'll be able to tell by the overall trading and brokers.
The DTCC actually does give a reason, it's just not what people want to hear. It's called risk assessment. CWRV is too much risk. That's not quite the same risk that traders or investors have. The DTCC is in business of getting shares (or securities) and monies for those securities of a company (CRWV) through the system.
When there is problems with those securities, such as CRWV has, it creates possible losses for DTCC who has responsibilities of making sure those securities of CRWV are valid and paid for.
It could take years for reinstatement and one of the reasons that it almost never happens (giving credence to there may be one or two that has done it). Usually pinky companies like CRWV don't last that long and the shells get passed from one company business to another after degrading pps, increased A/S then R/S rinse and repeat games, etc.
CRWV company has only made it's presence for about 6 months now out of nowhere, been Pumped and Dumped, and lost about 98% of it's value. It has big issues with it's securities and claims of it's business. But the issues with it's securities are a major one with the DTCC and it's process and DTCC's business.
A good flow chart of how CRWV has to be processed by the DTCC (DTC and NSCC) and where CRWV is or isn't now on that system and why it's a problem for CRWV and the rest of the Chilled list is shown in this post.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=68106685&txt2find=DTCC
Stanford Told ‘Lie After Lie’ to Investors, U.S. Prosecutor Says
January 25, 2012, 12:23 AM EST
SEC Asks Judge to Order Payout Plan for Stanford Investors
Allen Stanford’s Prospective Jurors Probed for Bias by Judge
UBS Customer, Insider Trading, Deutsche Boerse: Compliance
Galleon, JPMorgan, Gupta, Apple, Merrill, UBS in Court News
Stanford Investors Endure ‘Living Hell’ on Eve of Fraud Trial
By Andrew Harris, Laurel Brubaker Calkins and Tom Schoenberg
Jan. 25 (Bloomberg) -- R. Allen Stanford engaged in a long- term fraud scheme and lied repeatedly to investors to “live the life of a billionaire,” a U.S. prosecutor told jurors as the financier’s criminal trial started in Houston.
Stanford, 61, was the ringleader of a $7 billion investment fraud, the U.S. said in a 14-count indictment accusing him of mail fraud and wire fraud, crimes that carry maximum sentences of 20 years in prison. He’s also charged with conspiracy to commit mail fraud and wire fraud and to obstruct a U.S. Securities and Exchange Commission probe.
“I plead not guilty to every count,” Stanford, wearing a light gray plaid suit and a white dress shirt and no necktie, told the jury yesterday.
Stanford has been in federal custody since being indicted in June 2009. His trial was postponed three times because of changes to his legal defense team, the after-effects of a jailhouse beating and a subsequent prescription-drug addiction.
In Washington yesterday, the SEC urged a judge to order the federal Securities Investor Protection Corp. to create a claims process for Stanford’s alleged victims.
Stanford stole from investors “so that he could live the lifestyle of a billionaire,” Assistant U.S. Attorney Gregg Costa said in his opening statement in the Houston courtroom. “He told them lie after lie after lie.”
The scheme stretched over 20 years of “lying, cheating and bribing,” Costa told the jury of 10 men and five women, including three alternates.
‘Real’ Empire
“Mr. Stanford’s financial empire was real and did make a lot of money and did pay every penny of what was owed to depositors for 22 years,” Robert Scardino, one of Stanford’s court-appointed lawyers, told the jury in his own opening remarks.
Scardino and defense lawyer Ali Fazel have previously said they will use the records of Houston-based Stanford Group Co. and Antigua-baed Stanford International Bank Ltd. to prove their client never intended to defraud anyone.
No investor lost money until the SEC sued Stanford and obtained a court order to take control of his businesses in February 2009, the defense has said.
Costa called the $7 billion in deposits once held by Stanford’s Antigua bank “a real number.”
“How did Mr. Stanford get so many people to give him so much of their savings?” Costa asked. “That’s where the lying comes in.”
Stanford lied to depositors about the liquidity of their investments, about whether his bank ever loaned those proceeds and about who was managing their money, the prosecutor said.
‘Compound Fraud’
“You’re going to see the power of compound fraud,” he said.
The financier lied about committing $700 million of his own money to shore up the bank’s finances in 2008, while he was actually pulling money out, Costa said.
Stanford also “waved his magic wand” to increase the value of an unimproved island property from $63 million to $3 billion during the worst economic downturn since the Great Depression, according to the prosecutor.
The financier is accused of bribing his now-dead auditor and an Antiguan banking regulator who received cash, National Football League Super Bowl championship tickets and use of Stanford’s private jets.
Costa told jurors they would hear from investors who lost their life savings. These witnesses will tell, “how his lying, stealing and bribing have taken that money and the dreams they had with it.”
‘Complete Picture’
Scardino told jurors the U.S. didn’t have full access to Stanford’s business records and wasn’t presenting “a complete picture” of his client’s business. He said Stanford invested more than $100 million to improve the island and obtain licenses that made the property more valuable.
The defense lawyer called his client “a Texas boy” and “a very resourceful businessman” who became a billionaire. He said the jury may hear from his client during the trial, without being more specific.
Stanford’s lawyer told the panel that the certificates of deposit sold by the Stanford bank weren’t securities and that Stanford’s clients had no say over how their money was invested.
The bank’s CDs were sold only in tranches valued at $50,000 or more, to investors with either a net worth of more than $1 million or an annual income of more than $200,000, the defense lawyer said.
Scardino called those CD purchasers “sophisticated investors” whom he said “know what a CD was and what it wasn’t.”
‘Legitimate’ Business
They also received promotional materials from Stanford’s business disclosing that past performance was no guarantee of future success and that an investor could lose the entirety of an investment.
“We’re going to prove this was not a Ponzi scheme at all,” Scardino said. Unlike frauds in which money from later- arriving investors is used to pay off earlier speculators, he said, “this one was legitimate.”
Marc Nurik, a Fort Lauderdale, Florida, attorney who has been following the Stanford proceedings, called the defense decision to hold out the prospect of Stanford’s testimony a risk. Stanford isn’t required to take the witness stand.
“The traditional wisdom is that you don’t set up for failure,” he said.
An opening statement is tantamount to the making of a promise to the jury, he said. Stanford’s failure to take the stand would breach that promise.
Nurik said Stanford might be pressing his lawyers to let him testify.
Jury Selection
Jury selection began Jan. 23 at Houston’s Bob Casey Federal Courthouse with U.S. District Judge David Hittner’s interview of 80 prospective panelists, many of whom said they had read or heard reports about the case and some of whom told the judge they didn’t know if they could be impartial.
The 15 men and women selected yesterday include a retail optician, an environmental engineer, two accountants, a kindergarten teacher, a chef, a land surveyor, a pawn broker and a retired hairdresser.
The trial may last about six weeks, Hittner said.
In Washington, SEC lawyers asked U.S. District Judge Robert Wilkins during a hearing yesterday to require SIPC, a nonprofit corporation funded by the brokerage industry, to start a liquidation proceeding in federal court in Texas to handle more than $1 billion in possible claims related to the alleged Stanford fraud.
Judicial Review
“Ultimately, what we’re seeking here is to provide a forum where claimants can seek judicial review of their claims,” Matthew Martens, the SEC’s chief litigator, told the judge during a three-hour hearing.
At issue is whether more than 7,000 brokerage customers who invested in the alleged Ponzi scheme run by Stanford are entitled to have their losses covered by SIPC.
SIPC, a congressionally chartered group that insures customers against losses caused by broker theft, says the Stanford investments don’t fit into the confines of the federal law that governs who’s eligible for the payouts. Investors and their advocates in Congress say SIPC is deliberately taking a narrow view of the law to protect brokers from higher assessments.
In June, the SEC ordered SIPC to start a process that could grant as much as $500,000 for each Stanford client -- the same maximum amount it offers in any case. After SIPC balked, the SEC for the first time sued the group in federal court in Washington.
Individual Investors
SIPC is responsible for providing coverage for individual investors who lose money or securities held by insolvent or failing member brokerage firms. It has agreed to cover losses sustained by victims of Bernard Madoff’s multibillion-dollar Ponzi scheme and investors who may have lost money in the October collapse of commodities broker MF Global Holdings Ltd.
SIPC doesn’t guarantee an investment’s value or protect against fraud, the agency said in court papers. It also doesn’t cover investments with offshore banks or non-member firms.
Stephen Harbeck, SIPC’s president, has said that SIPC shouldn’t get involved in the Stanford case because investors received actual CDs after the brokerage passed their money to a bank. What happened after that isn’t under SIPC’s purview because the Stanford account holders have possession of their securities, he told a court-appointed receiver in 2009.
The criminal case is U.S. v. Stanford, 09-cr-00342, U.S. District Court, Southern District of Texas (Houston). The civil case against Stanford is Securities and Exchange Commission v. Stanford International Bank Ltd., 09-cv-00298, U.S. District Court, Northern District of Texas (Dallas). The SIPC case is Securities and Exchange Commission v. Securities Investor Protection Corp., 11-mc-00678, U.S. District Court, District of Columbia (Washington).
--Editors: Peter Blumberg, Michael Hytha
To contact the reporter on this story: Andrew Harris in Houston at aharris16@bloomberg.net
To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net
http://www.businessweek.com/news/2012-01-25/stanford-told-lie-after-lie-to-investors-u-s-prosecutor-says.html