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ot: Established in 2000 and bought by ADVFN in September of 2006, Investors Hub (iHub) is the brain child of Silicon Investor user Matt Brown.
Having identified additional functionality and a niche in the financial message board space, Matt created iHub, which soon attracted the interest of Bob Zumbrunnen of Silicon Investor. In 2002, Bob was appointed as iHub's President (CEO) and since then the site has come to dominate the financial message board arena. Alexa describes it as "one of the most popular financial message board destinations in the world."
Both Bob and Matt are highly experienced message board operators who specialise in developing and managing very large communities. This expertise has helped iHub achieve its current 84 million plus page views a month.
imagine the time and failed effort yesterday!! todays bid .006 ask .0065
..all of this non-stop effort and timing should be questioned imo!!
the hearing will determine the oucome, not anonymous message board posters with a agenda!!
ec...its nice to have a balanced view on this board, one that actually makes sense!!! jmho
binzur who provided this information to certain individuals and how was it obtained in order to be posted on message boards, while there is a ongoing investigation??
*Customers allegedly allowed to illegally profit by selling securities short
Updated: 7:17 p.m. ET March 14, 2007
WASHINGTON - Goldman Sachs Group Inc.’s clearing unit has agreed to pay $2 million in civil penalties to settle allegations that it allowed customers to illegally profit by selling securities short just before public offerings of stock, regulators said.
It marks the first settlement of a Securities and Exchange Commission and NYSE Regulation Inc. case alleging that a prime brokerage firm played a role in a type of abusive short-selling practice that has prompted some companies to launch a high-profile campaign against “naked” short selling. That involves selling borrowed shares without having first borrowed the shares.
“That is an important case and it reflects our interest in this area,” SEC Chairman Christopher Cox told reporters Wednesday after a speech to the U.S. Chamber of Commerce. He declined to say if the SEC is investigating other Wall Street firms for naked short-selling abuses.
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A Goldman Sachs spokesman declined to comment. Goldman Sachs Execution & Clearing LP, one of the biggest clearing firms on Wall Street and previously known as Spear, Leeds & Kellogg, settled without admitting or denying wrongdoing.
The regulators said that customers of the Jersey City, New Jersey, clearing unit made their trades through the firm’s direct access system, called REDI. Customers who were selling securities short — or selling borrowed securities in a bet on falling stock prices — had instead used the system to mark their trades “long,” regulators said, indicating that they were selling shares they owned. Customer agreements allow brokerage firms to rely on such representations.
But because the shares were not actually in the client accounts, Goldman had to lend shares to its customers in order to complete the trades, regulators said. The result was a pattern of illegal trading ahead of stock offerings from March 2000 through May 2002 that went undetected — but should have been investigated — by the brokerage firm, the SEC and NYSE said.
“A broker must have a reasonable basis to believe its customers’ representations that they own the securities they are selling,” said David Nelson, the director of the SEC’s office in Miami, in a statement.
“If, as in this case, there are significant trading disparities indicating that a customer may be lying to the broker, the broker must investigate the customer’s trading and review its trading records to determine whether it can reasonably continue to rely on the customer’s representations,” Nelson said.
For the past two years, the SEC has been focusing on abusive short selling that violates a regulation intended to prevent abuses that can occur when companies conduct secondary or follow-on stock offerings. Mostly, those cases have been brought against hedge funds or individuals, who have been accused of using improper tactics to cover short sales with stock they had purchased through such additional offerings.
Now, “this is the first case that we’ve brought against a broker,” said Teresa Verges, assistant regional director at the SEC’s Southeast regional office. She said Goldman was liable as a result of its role in executing the short sales.
The case grew out of an earlier action involving individual brokers. In 2003, brokers Ethan Weitz and Robert Altman agreed to pay more than $1 million to settle charges that they had engaged in short selling in advance of 15 stock sales. Securities rules prevent such trading on the theory that it can manipulate the prices that companies are able to generate through their stock sales. Although the two weren’t mentioned by name in the SEC’s case against Goldman, they were two of the clients who traded through the firm’s direct access system.
WHO WAS THIS 3RD PARTY?? " but instead with a third party distributor that was representing it was having the Cyberkey products delivered directly to DHS facilities in different locations. The Company has discovered that none of the products supposedly sold to this third party distributor had been delivered to DHS as had been represented repeatedly during 2006. And, it appears that none of the revenues from this contract ever were realized by the Company since this third party distributor apparently circumvented the Company's relationship with its manufacturer in China and secured direct payment and delivery of the Cyberkey products without paying Cyberkey anything."
WHO WAS THIS 3RD PARTY?? ANYONE???
whats the reason for the long disclaimer in the DD page?? whos looking to cover their azzes right now??
how many other sites on this board have the same disclaimer plastered on the main dd page??
Just got Alert from Bloomberg re NAKED SHORTING show tonight.. Check this link.
http://bloomberg.tveyes.com/expand.asp?ln=5986474&Key=Naked%20short%20selling&bu=sharonb%40h...
MUST WATCH TONIGHT...Bloomberg to tell the story that Dateline didn't
By Mark Faulk
March 12, 2007
It’s been almost two years since NBC’s Dateline caved in to corporate and/or
political pressure and delayed their own expose’ on naked short selling, or
stock counterfeiting, then aired a segment which this reporter <a href=
http://www.faulkingtruth.com/Articles/Investing101/1037.html>described</a> as:
“the most irrelevant piece of fluff ever aired in the history of television. It
would be the equivalent of spending a year putting together a documentary on the
Watergate scandal, and then editing it down to a ten minute piece about Nixon's
dog Checkers.”
Now, Bloomberg Television, is airing a half-hour special report that will
hopefully cover the issues that Dateline didn’t have the balls to tackle.
Entitled “Phantom Shares,” it airs tomorrow, Tuesday, March 13, at 7:00pm,
9:00pm, and 10:00pm EST.
This is how the network describes the groundbreaking event on their website:
Millions of shares of stock are being sold that may not exist. How? Through an
obscure trading strategy known as naked short selling. Bloomberg Television's
Special Report hosted by Mike Schneider explains what the strategy is, how it's
executed, which companies are targets, and what the SEC is trying to do to
control it.
This one should be well worth watching, and can be accessed on the internet at:
http://www.bloomberg.com/tvradio/tv/index.html
MUST READ....Special Report: Phantom Shares
Bloomberg Television premieres a half-hour Special Report called "Phantom Shares" on Tuesday, March 13, 2007 at 7:00pm, 9:00pm, and 10:00pm ET.
http://www.bloomberg.com/tvradio/tv/
Millions of shares of stock are being sold that may not exist. How? Through an obscure trading strategy known as naked short selling. Bloomberg Television's Special Report hosted by Mike Schneider explains what the strategy is, how it's executed, which companies are targets, and what the SEC is trying to do to control it.
ot:re:atlas cold storage, can shareholders harmed by the investigation sue the osc for damages?? can they sue to get the identity of the anonymous poster? can they sue to expose the trading record of the anonymous tipper? was this tipper SHORT THE STOCK or compensated by a third party to submit these false claims??
OSC DROPS CHARGES!
OSC drops Atlas charges
Lori Mcleod, Financial Post
Published: Wednesday, February 28, 2007
Tainted evidence from a key witness has led the Ontario Securities Commission to drop quasi-criminal charges against Patrick Gouveia, former chief executive of Atlas Cold Storage Income Trust, who was accused of misleading investors about the company's financial health between 2001 and 2003.
At a provincial court hearing yesterday the OSC discontinued its case against Mr. Gouveia, which included allegations that he and other company executives attempted to improperly inflate earnings and conceal losses at the warehouse operator.
The OSC reviewed the case, which was brought to trial last fall, after new evidence containing interviews with Atlas Cold Storage's forensic auditors was presented by a key witness on Feb. 2.
View Larger Image
An Atlas Cold Storage installation near Toronto. The OSC yesterday decided not to proceed with charges against the firm's former CEO.
Peter J. Thompson, National Post
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Font: ****"This evidence should have been produced to the OSC and the defence in 2005," the OSC said in a statement.
"After a comprehensive review of the new evidence, the OSC has determined that there is no longer a reasonable prospect of conviction because evidence of the key witness was tainted by the disclosure."
The announcement is a "total vindication" for Mr. Gouveia, who has consistently maintained his innocence, said Scott Fenton, one of Mr. Gouveia's lawyers.
The case started with an anonymous letter that triggered an internal forensic audit at Atlas Cold Storage.
This probe of the company's books found that receivables and capital assets had been overstated and expenses under-reported.
In June of 2004, the OSC charged Mr. Gouveia, along with Andrew Peters, the operating company's former chief financial officer; Ronald Perryman, former finance vice-president; and Paul Vickery, the former controller and director of business controls, with engaging "in a course of conduct generally intended to present an improperly improved picture of the financial performance of Atlas for the period including the financial years 2001, 2002, and the first two reporting periods of 2003."
lmcleod@nationalpost.com
© National Post 2007
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MUST READ..how hedge funds TORPEDO stocks...STOCKGATE TODAY
An online newspaper reporting the issues of Securities Fraud
Damn the Torpedoes - March 2, 2007
David Patch
As a kid I always thought torpedoes were these missiles shot from the hulls of submarines. It was a sign of war times and war movies. Little did I know that the guys on Wall Street had a different use for the term best associated with destruction and death.
Jim Cramer, in today's RealMoney.com blog identifies how short sellers would "break the market" through a process they labeled "torpedo". In the blog Cramer states:
"On days like today when I was short, I would come in with a lot of firepower and try to blast things down at 2:45. I wasn't alone. We were never organized, but we did get the call from the trading desks that other guys were torpedoing the tape."
Cramer drafts these words like they were a badge of honor and proceeds to say:
"And don't forget, it's fun for these guys to try to break the market. And there's a level of sport in the bigs that can't be denied."
This is the guy CNBC hangs their reputation on as being out there to protect the general investing population. Its fun for these guys [for which Jim was one] to destroy the portfolios of others as part of a game? I thought Jim was about making me money.
A closer look into this public dialogue raises some serious concerns over whether our regulators are really in touch with market operations, liquidity, and in general how hedge funds operate. These concerns are only exacerbated by the recent proceedings where a ring of traders, compliance officers, and hedge funds operated an insider-trading ring that has been going on for the better part of this decade.
According to Cramer he would go in and blast a stock [torpedo] to drive the stock price down. I guess that begs the question, when is aggressive trading no longer trading but manipulation? Blasting a stock down hoping to force others to panic and do the same seems to encroach on bear raid manipulation. In fact, lets read the laws straight out of the SEC handbook.
Rule 10b-5 of the Exchange Act of 1934 states that it is unlawful "to effect, alone or with one or more other persons, a series of transactions in any security registered on a national securities exchange or in connection with any security-based swap agreement (as defined in section 206B of the Gramm-Leach-Bliley Act) with respect to such security creating actual or apparent active trading in such security, or raising or depressing the price of such security, for the purpose of inducing the purchase or sale of such security by others."
If a torpedo was intent on driving out the "weak kneed investors" hasn't Mr. Cramer just admitted to fraud by my interpretation of this law as it had the intent of inducing fear into others and forcing them to sell? I think that would be for regulators to sort out but certainly you readers are welcome to formulate your own opinions.
It only gets better though.
To address the potential of such sudden volume shifts, the SEC created special exemptions to market makers and specialists to allow them opportunity to sell what they do not hold in inventory as part of bona-fide market making. The intent was to take out the sudden burst of buy side pressures by allowing Wall Street to temporarily sell shares that did not otherwise exist.
The implication of this exemption was that market makers and specialists would likewise temporarily purchase securities in a bona fide market if necessary to flatten out a sudden influx of sell side volume entering a market. Cramer's observations and practices would imply that the buy side protections required by market makers were not taking place. Torpedoes only work if the market makers and specialists walk away from the bid during the raid and Cramer claimed they worked so well they were detectable.
Today, under Regulation SHO we have massive levels of failed stock deliveries in the system where the market lobbyist and hired guns The Securities Industry and Financial Association (SIFMA) have lobbied regulators to ignore these excessive and long standing fails in the system as necessary for the market protections. These fails being excused as Wall Streets need to sell non-existent inventory to stop buy side enthusiasms.
SIFMA apparently wants to allow a Wall Street exemption on one side of a trade but also wants to ignore the lack of fiduciary duties on the other side. SIFMA wants Wall Street to be able to sell what they don't own, which is profitable as it comes with a payment for non-existent goods, but does not want to sure up the venue where they are expected to buy securities where such would require each to come up with the capital to pay for such a transaction.
I guess in understanding the shear magnitude of the trade settlement problem one concern I have would be whether these torpedoes resulted in timely settlement of the trades or whether these torpedoes resulted in a settlement failure. Imagine selling with firepower into a market, with the intent of breaking the market, and it turns out the tools used were not even legal tender, a certified and existing share. A bear raid leveraged off shares that did not even exist to sell in the first place would be a real novel game.
Bull's eye - another investor portfolio knocked dead for Wall Street revenue growth.
Finally, my dissections of Cramer's comments lead me to where he admits that the trading desk will notify a fund manager that "other guys were torpedoing the tape."
How does such proprietary information come to hedge fund managers?
Now traders can of course see how a market is moving and react to the data the market provides. But if traders are capable of picking up a "torpedo" the data has to tell them that it is a short sale intent on breaking the market. That is more data than simply; "we have a seller out here".
How come traders can pick up the signs of a torpedo that by all accounts appears illegal and yet the SEC, NASD, and NYSE market surveillance teams can't?
Were the hedge funds receiving the proprietary information of other investors in the market and what they were doing? If so that too is illegal. In fact, the DTCC and SEC have stated that a simple publication of the level of fails in any particular stock cannot be published daily because "the fails statistics of individual firms and customers is proprietary information and may reflect firms' trading strategies. The release of this information could be used to engage in unlawful upward manipulation of the price of the securities in order to "squeeze" the firms improperly."
Chairman Cox is about to embark on a campaign where his foundation is to defend that the SEC's " role is to be the investors' advocate. I want to make sure that every company understands that so long as they treat their investors well, the S.E.C. will be friendly to them."
I say it is about time he steps up to the plate then and advocate for the investor and not the lobbyists who protect the wayward industry and the hedge funds who brazenly manipulate our markets. If I were SEC Director of Securities I would make a call to Mr. Cramer post haste and get clarification on what he means when in his blog he states "and it will happen again" referring to the torpedo.
Damn the Torpedoes, Full Speed Ahead. There appears to be a war taking place in these capital markets and the investors appear to be fighting it with the butter knives supplied by Chairman Cox and his staff.
Thanks to Jim Cramer for so eloquently presenting exactly what is wrong with the US Capital Markets and the conflicts between the average investor and the greed of the wealthy.
Since the last time I wrote about Mr. Cramer I was presented with the threat of a lawsuit, I will disclose here that the comments made regarding illegal trading activities are my personal interpretations of Mr. Cramers comments and that I have no direct evidence of wrongdoing. I would not want Mr. Cramer to misinterpret this as anything otherwise where he feels compelled to again threaten my personal opinions with a lawsuit. We know that both he and I are way too busy to address such matters in a courtroom.
For more on this issue please visit the Host site at www.investigatethesec.com
Copyright 2007
funny 100 share at .006 drops the bid to .0055
orderly market, lock the bid and ask
ot:NEW YORK, March 1 (Reuters) - A subsidiary of E*Trade Financial Corp. (ETFC.O: Quote, Profile , Research) is being investigated by the U.S. Securities and Exchange Commission for its trading activities, the online brokerage said in a public filing on Thursday.
The SEC is conducting an inquiry into trading from 1999 to 2005 of specialist firms, including E*Trade Capital Markets LLC., the filing said.
The investigation is focused on securities regulations violations known as "trading ahead" -- which put public customers at a disadvantage by placing a specialist firm's dealer account between their buy and sell orders.
Potential sanctions could affect E*Trade's financial results, the filing said, adding the company was cooperating with the investigation.
ot:Inquiry Asks If UBS Ratings Were Leaked
By RANDALL SMITH
February 27, 2007; Page C8
Securities regulators are investigating whether hedge-fund stock traders may have improperly obtained advance word of stock ratings changes at UBS AG, according to people familiar with the case.
The probe, being conducted by federal prosecutors in New York and regulators at the Securities and Exchange Commission, is part of a wider-ranging case that could result in charges, one of the people said.
The regulators are probing whether a UBS employee in New York sold advance information about the ratings changes to traders at hedge funds, according to the online edition of Business Week, which reported the probe yesterday.
A UBS spokesman declined to comment.
The case comes as regulators intensify their scrutiny of possible means by which hedge funds may obtain market-moving information before other investors.
The probe is the latest example of the SEC's "extremely aggressive enforcement efforts regarding hedge funds, especially with respect to insider trading and informational advantages," said Jerry Isenberg, a former SEC official now at the firm of Alston & Bird in Washington.
Write to Randall Smith at randall.smith@wsj. com
not true i just had my garage insulated recently and its near zero degrees and glad i did this winter season!!
tri..you are on your 4th alias and your posts dont warrant a reply!!
anyone have any idea when trading resumes in bcit??
Senators Bring Pequot-Aguirre Matter to the Floor
By Christopher Faille, Senior Financial Correspondent | Thursday,
February 01, 2007
WASHINGTON (HedgeWorld.com)-The controversy over the Securities and Exchange
Commission's one-time investigator Gary Aguirre and the events that led to
the termination of his employment there in 2005 reached a new stage
Wednesday [Jan. 31]. Discussion of it moved out of committee hearing rooms
onto the floor of the United States Senate.
Sen. Charles Grassley (R-Iowa) took the floor to "update the Senate on the
interim Finance Committee findings of the joint investigation into the [SEC]
that was conducted by the Finance Committee on the one hand, and the
Judiciary Committee on the other, during the 109th Congress."
Mr. Grassley, who was the chairman of the Senate Finance Committee in the
last Congress, said that he and Sen. Arlen Specter (R-Pa.), last year's
chairman of the Judiciary Committee, have three main concerns: that the
SEC's investigation into suspected insider trading by Pequot Capital
Management was "plagued with problems from its beginning to its abrupt
conclusion," that Mr. Aguirre's termination was "highly suspect," and that
the investigation by the SEC's Office of Inspector General was flawed.
"The SEC should have taken Mr. Aguirre's allegations more seriously and very
seriously," Mr. Grassley said. "Instead, it does like too many agencies do
when under fire-it circled the wagons and it shot a whistleblower-an all too
familiar practice in Washington, D.C."
After those remarks, Mr. Grassley yielded the floor to Mr. Specter, who was
if anything more emphatic than his colleague, especially at the expense of
the SEC's Inspector General, Walter Stachnik. He was especially concerned
that Mr. Stachnik, in his effort to obtain the records of Mr. Aguirre's
contact with the committees, may have chilled whistleblowing.
"It is hard to find a strong enough word which is not insensitive to
describe the inspector general's conduct in trying to subpoena the records
of the Senate Judiciary Committee and the Senate Finance Committee," said
Mr. Specter. "It just made absolutely no sense."
The Pequot trades that Mr. Aguirre was investigating in 2005 involved the
purchase of Heller Financial stock and the short-selling of General Electric
stock in July 2001. At the end of that month, GE announced its plan to
purchase Heller for about $5.3 billion in cash.
Inside information wasn't, of course, the only possible reason for some risk
arbitrage on GE/Heller in July 2001. Such a deal had been the subject of
speculation for months, and the possibility had shown up in the pages of the
Wall Street Journal.
Nonetheless, the two senators said in a joint statement entered into the
record on Wednesday that in January 2002 the New York Stock Exchange
highlighted the Pequot trades as warranting further scrutiny. "But it
appears that the SEC did next to nothing to investigate these trades until
after [Mr.] Aguirre joined the Commission over two years later on Sept. 7,
2004."
The SEC, through a spokesman, said that it would carefully consider the
findings and recommendations of the two Senate committees. Nobody was
answering the phone at the SEC's Office of Inspector General early Thursday
afternoon.
Pequot has denied any wrongdoing, as have Mr. Aguirre's superiors at the SEC
Previous HedgeWorld Story.
CFaille@HedgeWorld.com
Sewer Pipes
Nathan Vardi 02.12.07
http://www.forbes.com/free_forbes/2007/0212/064.html?partner=yahoomag
Hedge funds are posting nice returns from deals that may involve ex-cons, stock scammers--even the Mob.
If your entrepreneurial venture were desperate for capital, would you get it from a hedge fund? Sometimes that's not such a good idea. Consider Laurus Master Fund. The Cayman Islands hedge fund opened with $5 million under management in 2001 and has grown to $1.6 billion making investments in so-called PIPEs, or private investments in public equities.
In those deals the fund invests in a cash-starved, thinly traded public company. In exchange it gets securities--notes that charge interest, warrants and options--convertible into common shares of the company. Laurus claims it has achieved an annualized net return of 18.5% since inception. The people running Laurus from New York--brothers Eugene Grin, 49, and David Grin, 37--are making out pretty well, too. In addition to the standard 2% of assets and 20% cut of profits, they also collect a closing fee, an average 3.5% of each deal, which they liken to points on a mortgage. As for the companies they invest in? Not so well. On average they lose 30% of their stock price within a year of signing a Laurus pipe, says PlacementTracker, a San Diego research service.
PIPEs are a big business, drawing $28 billion last year from hedge funds. Some of the companies raising the capital are large, but most are desperate indeed, too small or too weak financially to raise money with a public stock offering. Some of the hedge funds providing the money are not financiers that you would select if you had a choice.
Originally from Ukraine, Eugene Grin became a vacuum cleaner salesman when he landed in the U.S. in 1979. Then he worked as a broker of penny stocks, among other investments, at F.N. Wolf & Co., the boiler room shut down by regulators in 1994. At Wolf one of Grin's clients was Gilbert Bornstein, a 54-year-old unemployed man who invested $32,000 with Grin after being convinced he could safely double his money through penny stocks. (Grin says he never made that claim.) Bornstein was soon stuck with $27,000 in losses. Nine years later a New York State judge determined that Grin owed Bornstein $40,000. Grin has yet to pay that bill, and the judgment remains outstanding. "He was superwealthy," Grin shrugs, by way of an excuse. "There was money in the family."
Today Grin and his younger brother, David, still traffic in penny stocks. But they do so through PIPEs. Hedge funds love these deals because the shares they get are often priced at a discount to the market to compensate for the fact that they can't be traded until they are registered with the Securities & Exchange Commission, which can take months. Meantime, though, hedge funds can value those PIPE warrants and options pretty much any way they want and calculate their net asset value accordingly. The larger the gain in a fund's NAV, of course, the more attractive it is to new investors.
And the more attention these deals may draw from regulators. "Improper trading practices in connection with PIPEs is a concern," says David Markowitz, an SEC assistant regional director in New York. "It's an area that SEC enforcement is looking at." The feds have so far focused on the improper shorting of stock. It is mighty tempting for a PIPE buyer to double-cross the company it is investing in by shorting the company's stock and using the conversion privileges with the PIPE investment to cover its short position. That earns the investor a quick spread but wrecks the target's ability to raise more equity capital. Such shorting is forbidden by Section 5 of the Securities Act. In September a U.S. Attorney charged Hilary Shane, a former hedge fund manager, with insider trading, accusing her of shorting Compudyne's stock after learning that Compudyne was contemplating a pipe fundraising. On Jan. 4 Joseph Spiegel, a onetime portfolio manager for a New York hedge fund, settled SEC allegations of his using PIPE shares to cover short trades and paid a $110,000 penalty.
Andrew Worden, 41, runs Barron Partners, a $150 million hedge fund that has invested $85 million in pipes since 2003. The fund flogs its expertise in microcap companies. It doesn't promote the fact that Worden in 1994 pleaded guilty to wire fraud--he stiffed brokers on shares they bought for him that decreased in value--and served two years' probation. "I was 23 years old," Worden says of his indiscretions, which were not prosecuted for five years.
In March 2005 Barron Partners invested $1.5 million in Cordia Corp., a Winter Garden, Fla. Internet-phone outfit 54% owned by Alexander G. Minella, who in 1993 was sentenced to up to six years in prison. Minella, then president of broker Wakefield Financial Corp., pleaded guilty to having "secretly rigged the trading in certain Nasdaq securities" by getting brokers to trade among themselves to manipulate prices.
Corey Ribotsky, 36, heads N.I.R. Group, a handful of Roslyn, N.Y. hedge funds with $630 million under management. His first business partner successfully sued him for stealing away their marketing and consulting firm. The florist at Ribotsky's wedding filed a $7,275 claim against him for failing to pay the bill.
So how does he do as a hedge fund manager? A Ribotsky PIPE, on average, precedes a stock-price drop of 54% a year after the deal, according to PlacementTracker. That still works for Ribotsky because of the way he structures a PIPE: He receives debt securities convertible into discounted stock, in an amount determined by dividing the principal by the price of the shares at the time of conversion, less a steep discount. The further a stock falls, the more shares he gets.
Since Ribotsky invested $1.5 million in 2005, shares in Med Gen are down from $1 on the o-t-c bulletin board to a fraction of a penny. The Boca Raton, Fla. company had less than $1 million in sales from an antisnoring spray, diet pills and supplements. (Its biggest shareholder and chief executive is Paul B. Kravitz, the former president of AppleTree Cos., who paid a $25,000 penalty in 1996 to settle SEC claims that he failed to tell investors in an AppleTree offering that he planned to invest $250,000 in a gambling casino.) Ribotsky converted the debt into 171 million shares of Med Gen, at discounts of 40%, by September 2006. Did he sell his stake, triggering the stock-price plunge? N.I.R. lawyer Jonathan Schechter declines to say. "It is not us that makes a company lose its value--maybe a company hasn't executed its business plan," he says, adding that N.I.R. never shorts a stock.
One of Ribotsky's PIPEs, a $1 million investment in Roanoke Technology, a Rocky Mount, N.C. Web site designer, allowed N.I.R. to purchase newly issued shares at a discount of 50%; Roanoke's shares then traded hands on the o-t-c bulletin board at 12 cents. After Ribotsky sued Roanoke when it didn't meet its loan payments, Roanoke countersued, claiming that N.I.R.'s selloff of shares was destroying the company. Indeed, trading volume of Roanoke stock jumped from 180,000 to 2.4 million shares on the days Ribotsky's funds filed conversion notices, say court documents, and the stock price plunged to less than a penny. Both suits were settled. Roanoke chief David L. Smith Jr. ended up leaving the company and settling SEC charges in August 2006 that he improperly issued stock to consultants who sold them for $7 million and kicked back $4 million to him. Smith has been barred from acting as an officer or director of a public company.
When it comes to dicey partners, though, few are as accomplished as the Grins. They financed Francis O'Donnell, who has gotten to know the feds pretty well. Taking over as chief of Searchhound.com, an o-t-c bulletin board stock in 2003, O'Donnell changed its name to Coach Industries, quickly built up a controlling stake in the Cooper City, Fla. firm and started acquiring limousine companies. Laurus backed him with a $6 million loan. On Jan. 5 O'Donnell pleaded guilty to being an associate of the Genovese crime family. The indictment also claimed that an FBI agent posing as a drug dealer was asked to launder proceeds through Coach in exchange for a fee. In addition O'Donnell is accused of luring a victim to his office, where Clement (Clemmie) Santoro allegedly held a gun to his head and demanded a $1.5 million payment.
The Grins invested $1.5 million in April 2004 with Magic Lantern Group, which marketed Canadian educational videos. Their introduction to the company came through National Financial Communications, owned by Geoffrey Eiten, a Needham, Mass. newsletter writer who flogged companies and claimed to show readers "how to make 5,000%" on their money. Magic Lantern's biggest backer was Lancer Management Group, a New York City hedge fund that blew up amid accusations of fraud.
Magic Lantern, which lost $15.9 million on sales of $2.7 million in 2004, began to disintegrate. Eiten was sued in September 2006 by William Galvin, Massachusetts secretary of state, for engaging in "widespread 'pump and dump' transactions by publicly promoting certain stocks at the same time he was selling them." Galvin released chummy e-mails between Eugene Grin and Eiten's company suggesting they team up to sell Magic Lantern shares. Eiten denies any wrongdoing. Laurus managed to eke out what it calls "a nominal profit" before Magic Lantern's stock collapsed.
In November 2004 Laurus agreed to lend Thomas Equipment, which makes skid loaders and hydraulic equipment in Canada, $22 million to finance acquisitions and operations. At the time the stock traded at 88 cents. Most of Laurus' loans were convertible into stock at prices of $1.50 a share; the Grins also bought 2 million shares for a penny each and received options to purchase 4 million more for a cent apiece. Helped by a steady stream of press releases, Thomas shares touched $8.99 in January 2005 on light volume.
What was driving the stock? James Patty, former interim chief executive at Thomas and a current board member, says that David Grin was constantly focused on Thomas Equipment's share price, even though the lack of liquidity in the stock meant that Laurus could not sell too many shares without driving down the price. Word came down from David Grin, says Patty, "that he couldn't allow that type of hit to his portfolio." Why? "My assumption would be he was looking at a valuation of the company in order to attract additional money into his fund," Patty says.
Ridiculous, says Eugene Grin. The effect of Thomas' high stock price on Laurus' net asset value "was never material." His valuation model, he claims, discounts severely for the lack of trading volume in a stock like Thomas. A good thing for Laurus: Thomas Equipment's two main units have filed for insolvency in Canada; it was yanked off the American Stock Exchange and now trades for 8 cents.
Eugene Grin says he never shorts a stock. He also insists that Laurus provides a valuable service--and is more like a bank than a hedge fund. "We have tens of thousands of people working because of our investments," he says. "It's a beautiful thing."
OT:By: nanisback
28 Dec 2006, 10:19 AM EST
Msg. 68449 of 68808
(This msg. is a reply to 68443 by Vgolfmaster.)
Jump to msg. #
Vgolf, There are those (NOT YOU) on this board who "THINK" they are gods gift to man and are legends in THEIR OWN MINDS.
I find it laughable, the snotty-nosed arrogance of some of these mealy-mouth blathering new comers whos heads are up their oops where the sun don't shine, acting like self appointed monitors/crossing guards on this board.
I've been around RB since the beginning of time. I was part of the crew who helped design the TOS button and placement of options back in Rusty and John Cummings from RB's Waltham Ma.(terra-lycos) dayz.
All our input was video-taped/recorded @ an office in Cambridge Ma.
Maybe the "NEW" monitors of RB should dig out those tapes and review the many hours of meetings and discussion of what the purpose of these message boards and the "ORIGINAL" intent of the site builders.
I find it appauling, that TRUE, WELL LIKED, HONEST and INFORMATIVE members/posters like DueDillinger are exiled for nonsense, while blathering self-rightous fools are allowed their undeserved soapboxs.
RB is in a state of decay and will continue to faulter if they keep this foolish TOS policy in effect.
JMHO
Nan
ot:ragingidiot last night you said--"Some newbies seem to forget or don't know that This was a $450mil +/- capitalization company at one time which sold for $10 dollars.
Money like that doesn't just disappear, it changed hands,
Many questions remain unanswered"
this is a valid statement, but not strictly limited to telynx!! what about the thousands of OTCBB stocks that traded at $20..$30 per share in 2000 and the hundreds of internet stocks that traded in the $100's of dollars that are trading in the sub-pennies or are now BANKRUPT?? REFCO...is a prime example of the greed on wall st and how they create a artificial value ON stocks that can trade on the NYSE as a IPO and than go BANKRUPT within MONTHS and destroy the lives of employees and shareholders!! do shareholders deserve answers..OF COURSE...we do!! however, the current managament of telynx is doing everything possible to bring the company current and help the shareholders and the rebuild the company rebuild that was destroyed over years of abuse!! there are many unanswered question about the individuals you have named in your previous post...BUT if you want to follow the money as you say..look at the OUTCOME of the companies that they once invested in...YOU SEE A PATTERN?? how many companies survived the PIPE deals they provided?? YOU KNOW WHERE THE MONEY ENDED UP AND WHO THE VICTIMS ARE...you are attacking the wrong individuals and stereoptyping your anger at the wrong individuals!! its not about you, but when you attack others because of your beliefs, you in turn generalize your attacks on innocent people!! jmho
im out to redman..have a good night!!
redman..these people know where the money ended up, you just never hear them STATE THE OBVIOUS!! look at this case..these companies were destroyed the same way that thousands of other companies were victimized AND he asks WHERE IS THE MONEY!!
SOUND FAMILIAR???
it goes like this...a crime was committed(by hedge funds), problem is it took the law enforcement(SEC) 6 years to capture the RAPIST, when they knew what he did(NAKED SHORTED THE PIPE DEAL) and where he was AFTER he commited the crime...the problem is the VICTIM(IE:company) has been MURDERED(BANKRUPT or trading in the sub-pennies)!!
fine the hedge fund manager..who benefits from this companies already destroyed..have him pay back his ill-gotten gains(DO VICTIMIZED SHAREHOLDERS SEE A PENNY OR THE COMPANY?)
SEC Fines Fund Manager for Illegal PIPE Trades By Matthew Dublin
January 23, 2007
The SEC has settled fraud charges against a former portfolio manager at a New York-based hedge fund for an illegal trading scheme involving three PIPE offerings.
Joseph J. Spiegel, 35, agreed to settle charges that he engaged in illegal short sales of three separate PIPE offerings on behalf of his former employer, the Spinner Global Technology Fund. Without admitting or denying the allegations, Spiegel consented to a $110,000 civil penalty, as well as an injunction against future violations of federal securities laws. He has also agreed to a three-year ban barring him from associating with an investment advisor.
After agreeing to invest in the PIPE deals, Spiegel allegedly sold short the issuers’ public stock through naked short sales in Canada. He then allegedly used the fund’s PIPE shares to close out the short positions in direct violation of securities laws, stated the SEC.
“To avoid detection and regulatory scrutiny, Spiegel employed wash sales and matched orders to make it appear that he was covering (the Spinner Global Technology Fund’s) pre-effective date short positions with open market stock purchases,” the SEC claimed. “In fact, the covering transactions were not done with open markets shares because the hedge fund was on both sides of the trades and covered the short position with its PIPE shares.”
The three PIPE issuers involved in the illegal trades were Hypercom Corp., Novatel Wireless, and Tripath Technology. Spiegel used the same basic scheme in all three offerings, according to the Commission’s complaint.
The Tripath Technology scheme typified the defendant’s strategy of establishing and covering short positions with PIPE shares. According to the Commission, on January 25, 2002, Spiegel, on behalf of the hedge fund, invested $2,000,000 in a Tripath Technology PIPE offering. In the deal, the fund received 66,667 restricted Series A Preferred stock shares at $30 per share. Each Series A Preferred stock converted into 20 shares of common stock, resulting in a discount of 33% from Tripath’s current market price of $2.22 per share.
To take advantage of that sizable discount, Spiegel then sold short 362,300 common shares before the Commission declared the resale registration statement of the PIPE shares effective. Once the resale registration statement went into effect, he allegedly worked with a Canadian broker-dealer to complete those pre-effective short sales as cheaply as possible, stated the complaint.
Spiegel made the fund’s short positions in Canada because it did not own unrestricted shares and did not wish to incur the cost of borrowing such shares, charged the SEC. The lack of borrowing limitations, combined with the use of its PIPE shares to unlawfully close the pre-effective date short positions, enabled the hedge fund to net much larger profits than if it had adhered to PIPE securities regulations, charged the complaint.
To carry out his scheme, Spiegel allegedly coordinated the matched trades with the Canadian broker-dealer via phone calls and instant messaging, telling it to sell a specific number of PIPE shares from the fund’s domestic brokerage account at a particular price and time. The Canadian broker was then instructed to buy the same number of shares at the same time and price using the same broker, stated the complaint. The broker, on the fund’s behalf, would then allegedly close out the Canadian short positions using the PIPE shares that had been purchased from the fund’s domestic account, charged the Commission.
In all three cases, Spiegel told the issuers that the fund was purchasing the shares for its own account, omitting the very important fact that it intended to sell the securities.
“This representation was material to the PIPE issuers, who, as the securities purchase agreements made clear, relied on the investors’ representation in order to qualify for an exemption from the registration requirements for their private offering,” stated the SEC. “However, at the time Spiegel signed the securities purchase agreements on behalf of the hedge fund, he intended to distribute the restricted PIPE securities in violation of the registration provision of the Securities Act.”
The regulator acknowledged the assistance of the Investment Dealers Association of Canada in the investigation.
In late December of 2006, the Commission instituted proceedings against the Spinner Global Technology Fund and its investment advisor, Spinner Asset Management, LLC, for the illegal short sales. According to the proceeding, the fund netted $361,437 in ill-gotten gains through the PIPE trades Spiegel conducted. Spinner Asset Management agreed to a $60,000 civil penalty, and the fund was ordered to pay $361,437 in disgorgement and $74,159 in prejudgment interest.
This case marks one more in a string of illegal PIPE trading activity pursued by industry watchdogs. Earlier this year, the SEC fined investment firm Friedman, Billings, Ramsey & Co. $7 million over charges of improper trading involving the Compudyne PIPEs deal. In November of 2006, the NASD fined EKN Financial Services $200,000 for improper short selling involving three PIPE offerings. In addition to the fine, the firm also consented to a six-month PIPE transaction suspension.
who benefits now and who are the true victims??
ot:tRi you ask where the money went? SEC Fines Fund Manager for Illegal PIPE Trades By Matthew Dublin
January 23, 2007
The SEC has settled fraud charges against a former portfolio manager at a New York-based hedge fund for an illegal trading scheme involving three PIPE offerings.
Joseph J. Spiegel, 35, agreed to settle charges that he engaged in illegal short sales of three separate PIPE offerings on behalf of his former employer, the Spinner Global Technology Fund. Without admitting or denying the allegations, Spiegel consented to a $110,000 civil penalty, as well as an injunction against future violations of federal securities laws. He has also agreed to a three-year ban barring him from associating with an investment advisor.
After agreeing to invest in the PIPE deals, Spiegel allegedly sold short the issuers’ public stock through naked short sales in Canada. He then allegedly used the fund’s PIPE shares to close out the short positions in direct violation of securities laws, stated the SEC.
“To avoid detection and regulatory scrutiny, Spiegel employed wash sales and matched orders to make it appear that he was covering (the Spinner Global Technology Fund’s) pre-effective date short positions with open market stock purchases,” the SEC claimed. “In fact, the covering transactions were not done with open markets shares because the hedge fund was on both sides of the trades and covered the short position with its PIPE shares.”
The three PIPE issuers involved in the illegal trades were Hypercom Corp., Novatel Wireless, and Tripath Technology. Spiegel used the same basic scheme in all three offerings, according to the Commission’s complaint.
The Tripath Technology scheme typified the defendant’s strategy of establishing and covering short positions with PIPE shares. According to the Commission, on January 25, 2002, Spiegel, on behalf of the hedge fund, invested $2,000,000 in a Tripath Technology PIPE offering. In the deal, the fund received 66,667 restricted Series A Preferred stock shares at $30 per share. Each Series A Preferred stock converted into 20 shares of common stock, resulting in a discount of 33% from Tripath’s current market price of $2.22 per share.
To take advantage of that sizable discount, Spiegel then sold short 362,300 common shares before the Commission declared the resale registration statement of the PIPE shares effective. Once the resale registration statement went into effect, he allegedly worked with a Canadian broker-dealer to complete those pre-effective short sales as cheaply as possible, stated the complaint.
Spiegel made the fund’s short positions in Canada because it did not own unrestricted shares and did not wish to incur the cost of borrowing such shares, charged the SEC. The lack of borrowing limitations, combined with the use of its PIPE shares to unlawfully close the pre-effective date short positions, enabled the hedge fund to net much larger profits than if it had adhered to PIPE securities regulations, charged the complaint.
To carry out his scheme, Spiegel allegedly coordinated the matched trades with the Canadian broker-dealer via phone calls and instant messaging, telling it to sell a specific number of PIPE shares from the fund’s domestic brokerage account at a particular price and time. The Canadian broker was then instructed to buy the same number of shares at the same time and price using the same broker, stated the complaint. The broker, on the fund’s behalf, would then allegedly close out the Canadian short positions using the PIPE shares that had been purchased from the fund’s domestic account, charged the Commission.
In all three cases, Spiegel told the issuers that the fund was purchasing the shares for its own account, omitting the very important fact that it intended to sell the securities.
“This representation was material to the PIPE issuers, who, as the securities purchase agreements made clear, relied on the investors’ representation in order to qualify for an exemption from the registration requirements for their private offering,” stated the SEC. “However, at the time Spiegel signed the securities purchase agreements on behalf of the hedge fund, he intended to distribute the restricted PIPE securities in violation of the registration provision of the Securities Act.”
The regulator acknowledged the assistance of the Investment Dealers Association of Canada in the investigation.
In late December of 2006, the Commission instituted proceedings against the Spinner Global Technology Fund and its investment advisor, Spinner Asset Management, LLC, for the illegal short sales. According to the proceeding, the fund netted $361,437 in ill-gotten gains through the PIPE trades Spiegel conducted. Spinner Asset Management agreed to a $60,000 civil penalty, and the fund was ordered to pay $361,437 in disgorgement and $74,159 in prejudgment interest.
This case marks one more in a string of illegal PIPE trading activity pursued by industry watchdogs. Earlier this year, the SEC fined investment firm Friedman, Billings, Ramsey & Co. $7 million over charges of improper trading involving the Compudyne PIPEs deal. In November of 2006, the NASD fined EKN Financial Services $200,000 for improper short selling involving three PIPE offerings. In addition to the fine, the firm also consented to a six-month PIPE transaction suspension.
ot:tRi--"Some newbies seem to forget or don't know that This was a $450mil +/- capitalization company at one time which sold for $10 dollars.
Money like that doesn't just disappear, it changed hands,
Many questions remain unanswered"
this is a valid statement, but not strictly limited to telynx!! what about the thousands of OTCBB stocks that traded at $20..$30 per share in 2000 and the hundreds of internet stocks that traded in the $100's of dollars that are trading in the sub-pennies or are now BANKRUPT?? REFCO...is a prime example of the greed on wall st and how they create a artificial value ON stocks that can trade on the NYSE as a IPO and than go BANKRUPT within MONTHS and destroy the lives of employees and shareholders!! do shareholders deserve answers..OF COURSE...we do!! however, the current managament of telynx is doing everything possible to bring the company current and help the shareholders and the rebuild the company rebuild that was destroyed over years of abuse!! there are many unanswered question about the individuals you have named in your previous post...BUT if you want to follow the money as you say..look at the OUTCOME of the companies that they once invested in...YOU SEE A PATTERN?? how many companies survived the PIPE deals they provided?? YOU KNOW WHERE THE MONEY ENDED UP AND WHO THE VICTIMS ARE...you are attacking the wrong individuals and stereoptyping your anger at the wrong individuals!! its not about you, but when you attack others because of your beliefs, you in turn generalize your attacks on innocent people!! jmho
ot:SEC Fines Fund Manager for Illegal PIPE Trades By Matthew Dublin
January 23, 2007
The SEC has settled fraud charges against a former portfolio manager at a New York-based hedge fund for an illegal trading scheme involving three PIPE offerings.
Joseph J. Spiegel, 35, agreed to settle charges that he engaged in illegal short sales of three separate PIPE offerings on behalf of his former employer, the Spinner Global Technology Fund. Without admitting or denying the allegations, Spiegel consented to a $110,000 civil penalty, as well as an injunction against future violations of federal securities laws. He has also agreed to a three-year ban barring him from associating with an investment advisor.
After agreeing to invest in the PIPE deals, Spiegel allegedly sold short the issuers’ public stock through naked short sales in Canada. He then allegedly used the fund’s PIPE shares to close out the short positions in direct violation of securities laws, stated the SEC.
“To avoid detection and regulatory scrutiny, Spiegel employed wash sales and matched orders to make it appear that he was covering (the Spinner Global Technology Fund’s) pre-effective date short positions with open market stock purchases,” the SEC claimed. “In fact, the covering transactions were not done with open markets shares because the hedge fund was on both sides of the trades and covered the short position with its PIPE shares.”
The three PIPE issuers involved in the illegal trades were Hypercom Corp., Novatel Wireless, and Tripath Technology. Spiegel used the same basic scheme in all three offerings, according to the Commission’s complaint.
The Tripath Technology scheme typified the defendant’s strategy of establishing and covering short positions with PIPE shares. According to the Commission, on January 25, 2002, Spiegel, on behalf of the hedge fund, invested $2,000,000 in a Tripath Technology PIPE offering. In the deal, the fund received 66,667 restricted Series A Preferred stock shares at $30 per share. Each Series A Preferred stock converted into 20 shares of common stock, resulting in a discount of 33% from Tripath’s current market price of $2.22 per share.
To take advantage of that sizable discount, Spiegel then sold short 362,300 common shares before the Commission declared the resale registration statement of the PIPE shares effective. Once the resale registration statement went into effect, he allegedly worked with a Canadian broker-dealer to complete those pre-effective short sales as cheaply as possible, stated the complaint.
Spiegel made the fund’s short positions in Canada because it did not own unrestricted shares and did not wish to incur the cost of borrowing such shares, charged the SEC. The lack of borrowing limitations, combined with the use of its PIPE shares to unlawfully close the pre-effective date short positions, enabled the hedge fund to net much larger profits than if it had adhered to PIPE securities regulations, charged the complaint.
To carry out his scheme, Spiegel allegedly coordinated the matched trades with the Canadian broker-dealer via phone calls and instant messaging, telling it to sell a specific number of PIPE shares from the fund’s domestic brokerage account at a particular price and time. The Canadian broker was then instructed to buy the same number of shares at the same time and price using the same broker, stated the complaint. The broker, on the fund’s behalf, would then allegedly close out the Canadian short positions using the PIPE shares that had been purchased from the fund’s domestic account, charged the Commission.
In all three cases, Spiegel told the issuers that the fund was purchasing the shares for its own account, omitting the very important fact that it intended to sell the securities.
“This representation was material to the PIPE issuers, who, as the securities purchase agreements made clear, relied on the investors’ representation in order to qualify for an exemption from the registration requirements for their private offering,” stated the SEC. “However, at the time Spiegel signed the securities purchase agreements on behalf of the hedge fund, he intended to distribute the restricted PIPE securities in violation of the registration provision of the Securities Act.”
The regulator acknowledged the assistance of the Investment Dealers Association of Canada in the investigation.
In late December of 2006, the Commission instituted proceedings against the Spinner Global Technology Fund and its investment advisor, Spinner Asset Management, LLC, for the illegal short sales. According to the proceeding, the fund netted $361,437 in ill-gotten gains through the PIPE trades Spiegel conducted. Spinner Asset Management agreed to a $60,000 civil penalty, and the fund was ordered to pay $361,437 in disgorgement and $74,159 in prejudgment interest.
This case marks one more in a string of illegal PIPE trading activity pursued by industry watchdogs. Earlier this year, the SEC fined investment firm Friedman, Billings, Ramsey & Co. $7 million over charges of improper trading involving the Compudyne PIPEs deal. In November of 2006, the NASD fined EKN Financial Services $200,000 for improper short selling involving three PIPE offerings. In addition to the fine, the firm also consented to a six-month PIPE transaction suspension.
ot:Posted by: oreodiamonds...FYI President Bush just destroyed the "Grand Father" clause!
http://www.whitehouse.gov/news/releases/2007/01/20070118.html
In reply to: None Date:1/22/2007 1:49:14 AM
Post #of 245871
yeah..rruff!!
jtruth just like the $5 trade at .001 today and the 2000 share illegal trade at .0001 at 2 pm after the suspension was announced at 9:30 AM WORTH 20 CENTS!!
from pinksheets site tlyn is trading in: Other OTC
Or otherwise known as the "Grey Market" is the trading of a security that is not listed, traded or quoted on any stock exchange, the OTCBB or the Pink Sheets. Other OTC trades are reported by broker-dealers to their Self Regulatory Organization (SRO) and the SRO distributes the trade data to market data vendors and financial websites so investors can track price and volume. Since Other OTC securities are not traded or quoted on an exchange or interdealer quotation system, investor's bids and offers are not collected in a central spot so market transparency is diminished and Best Execution of orders is difficult.
elton..did you have any issues w/ the 2000 shares that went thru illegally after the suspension at .0001 at 2 pm the day of the halt which took place at 9:30 am taking the stock down 4500% when it closed the previous day at .0045..DID YOU HAVE A ISSUE WITH THAT ILLEGAL TRADE?
fringe thanks for keeping us informed!!
elton did you have a issue when they traded it down from .0045 to .0001 after the stock was suspended on a 2000 share trade??
taking the stock down as much as they closed it yesterday?
chris does the grey market have mms?? dont they match buyers with sellers when a stock trades on the greys??
it would appear that someone had to buy for someone to sell, so
who were those buyers?
"Its the stock market. Its an insane asylum. How is anything possible ?
I've given up trying to understand how things happen down in the bowels of the MM/execution system.
It does what it does for reasons unknown"
I WOULDNT HAVE A CLUE, BUT SOMEWHAT AGREE WITH YOUR STATEMENT
chris you did say it was redundant..i can agree..thats the beauty of the edit feature offered on ihub