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This has nothing to do with me, or Dave, or e-mails. It is simply the law. Look it up. Take a look at Sarbanes-Oxley. Look at who is personnaly, civilally and criminally liable for the company's books (one of the key items that need to be given tot he SEC). It ain't the independent directors. Neither Williams not Walsh are on the hook for fixing that problem.
But hey, don't listen to me. Look it up. Even better, call the SEC attorney.
Unless the officers are trying to deflect blame.
Heck, by your standards Diac had better worry since he was controling the company in 2008 and 2009.
...and you base this on your psychic ability? Get real. The only people the SEC wants to talk to are the officers. Companies had tons of people on thier boards. You really need to learn a little about the SEC and corporate regualtions and law.
It is not Dave that needs to be worried. He is not an officer. He does not have control. I will bet that the SEC has not even bothered to talk to him since he is not the person signing the 8Ks.
I think we are all reading into this. While I admit, with deference to DSU, that it is suspicious that of all the potentially fraudulant things that have happened with this company the one thing the SEC choses investigate is an innocent spike in the price that the company had nothing to do with. The fact remains that the company was, in fact, innocent of being behind the uptick in prices. The suspicious press release occured after the spike and was not paid for by the company.
That being said, if the company can put togther the required paperwork, which will be time consuming but not impossible, this stock will come back up on line within a reasonable period of time. As I understand it the MM does not have to guarantee the company is free of fraud, and they make money off the trades so they want it back on line.
The question comes up as to what happens with the information that is produced as part of the investigation? Does it become public. Will they be required to publically file the financials and the off-the-books deals that I am sure are plentiful.
In any case, I do think this stock will trade again in the near future. I just hope that the informaiton gleened from the investigation can be used to get the company leadership cleaned-up.
Removal of officers by SEC:
"Beginning in the spring of 2002, the Securities and Exchange Commission (the"Commission") set out to acquire the power to suspend or bar individuals from serving as an officer or director of a public company. ... With the passage of the Sarbanes-Oxley Act (the "Act" or "Sarbanes-Oxley") in July 2002,4 the Commission has apparently seen its dreams (on this issue) come true. First, the Sarbanes-Oxley Act now provides that, in order for a federal district court to enter a suspension or bar order, it need only find that the defendant before it is "unfit". ... The Act also provides that the SEC may now enter a suspension or bar order on its own in a cease-and-desist proceeding, rather than having to go to court. The applicable standard is the same as the standard now employed by the federal courts--"unfitness."
http://scholarship.law.wm.edu/cgi/viewcontent.cgi?article=1330&context=facpubs&sei-redir=1#search="SOX+SEC+remove+directors+officers+unfitness"
From what you said, this appears to be the financial requirements: "For non-reporting company listings on the Pink Sheets, please provide audited or non-audited financial statements. Provide the last 2 fiscal years, if applicable, for the issuer or any predecessor."
So, at a minimum, they need to produce non-audited financials for 2009 and 2010. They do not have to go back farther than that. I actually think this will not be that difficult. The more onerous requirements come under the paragraphs dealing with:
" For any private placements (past year or since inception) provide the details of the private offering including who solicited investors, how they were known to the solicitor, and how many individuals were solicited whom did not purchase.
Provide one full copy of the subscription agreement. Also provide the signature pages of all subscription agreements subscribed by each investor and any other pages that have writing on them indicating the dollar amount and number of shares subscribed in the subscription agreement. Include copies of all checks by the subscribers. If there were more than one offering memorandum/circular used, provide the same information requested herein.
Include any additional Form D's filed with the SEC.
The following items are needed when available:
Date the offering closed:
Number of shares sold:
Final offering price:
The date the certificates will be or where delivered to shareholders:
Provide a spreadsheet showing all relationships among and between every shareholder and the issuer and its predecessor, its present and prior officers and directors, and other shareholders."
This may not be as easy to produce or certify its accuracy.
Because he is not the CFO. Ms Pierce is.
I am sure that you don't see the distinction based on what you have said. Reasons do matter. In the business world there is something called ratification. It happens when a BOD ratifies the actions of a member or officer that would otherwise be improper once they become aware of it and they agree with it (usually based on its outcome). The mechanism exists because the real world is not always simple. Similarly, in criminal law there is the concept of means rea, the reason for the action. Killing someone is illegal, killing a murderer who is trying to kill you is forgivable. Reasons matter.
When a business person goes outside the normal path and wins they are seen as a visionary, not a criminal. In business, of all places, results matter and the ends do tend to justify the means UNTIL what is done is clearly illegal. Just look at the mess Wall Street keeps making of the economy yet no one screams too loud while they are still making money. Anyone who still believes that the last recession was caused by a mortgage crisis needs to look more closely into the insurance mechanisms behind corporate bonds and why AIG was one of the first companies in trouble. How many people are in jail because of that? How many people are being hired by another company to do the exact same thing again? But that is another matter.
I am not advocating any of these positions. I do not agree with them. If I can't convince you that the action I plan to take is the best one then I will continue to argue until I win, or accept your position if I am convinced that you are right, but the entire world does not work that way.
Again, I have to admit that you make some interesting points about the reasons behind the action ASSUMING that they were self-dealing. I am not a BIG conspiracy theorists because I believe people cant keep their big mouths shut. What I mean by big is a large or complex conspiracy. Little ones, like a bribe or a promise to be made part of a larger company if you help this little one fail, or I will give you a big job at T-Mobile it you agree to a poor deal for the shareholders ... yeah, that is possible.
But at this point I have no information that any of that has happened ... yet.
OK, What I was talking about was human nature; what you are talking about is criminal fraud. Having worked in large and small organizations I know that there are probably a thousand ways to proceed with any decision or way ahead. I think it ought to be course of action (COA) 1, you think COA 2 is right, HDY thinks COA 3 is the best, and Elis thinks COA 4 is the winner. We all honestly believe that our COA is the right path for the company and only time will tell which one is right, but each of use will fight, argue, coerce and cajole to get our COA approved. Again, this is not illegal, it is human nature. It is the reason for the business rule.
Now, if there were intent to self-deal then that is another matter. What matters it the reason behind the attempt to convince others. However, if you are purposely omitting information to other members of the BOD to get your COA approved then I question your competence. None the less, if your COA proves to be the best one then ... However, if not your are in deep Kimshi. In either case you have probably breached your fiduciary duty. That does not mean you did it for some nefarious purpose but it does mean that you need to find something else to do rather than run a publicly held company.
You started out inferring that the purpose of the misinformation was to do something "wrong". I just said they filtered information to their benefit.
I have to agree that, while normally I am not an advocate of putting out a press release on every little thing, this is something that warrants a simple statement. I imagine (or hope) that the officers of the company are busy fixing the problem seeing how it is in their best interest to fix this and that is why nothing has come out. They do not really know the extent of the damages and don't want to make what might be interpreted as false or misleading statements.
As far as the lawyer, my guess it is a matter of a Chinese phone call (with some constructive filtering). BOD Member A contacts lawyer and tells lawyer what they want them to know. Lawyer has no reason not to believe BOD Member A. Lawyer tells BOD Member A what to do. BOD Member A tells BOD Member B only what BOD Member A want BOD Member B to know, filtering out information not helpful to his or her position. Is that self-dealing, probably not. Is it improper, definitely. Should other officers of the company be concerned - definitely.
As much as I liked Turinni, I think it is time for him to resign as an officer of the company and probably as a member of the BOD. I believe that SOX probably has provisions to force such actions in cases like this where the inaction of the CEO and CFO have caused potential harm to the company. I believe there is personal liability for damages caused to the company. It may be time for him to cut a deal to leave with some of his assets intact. I know others here will want blood, but there is not time for that now.
JMHO
I agree that is how things aught to work, but I fear that reality is quit different. I doubt that the attorney has ever met the entire board and only knows the limited informaiton provided by whichever officer deals with him or her. Not an optimal situation
Thank you.
I think the people who need to worry are the CEO and CFO. There are laws about the actions they have failed to take.
So there is nothing illegal about posting here, is that what I hear you saying?
The law disagrees with you:
"Sarbanes–Oxley contains 11 titles that describe specific mandates and requirements for financial reporting.... Title III consists of eight sections and mandates that senior executives take individual responsibility for the accuracy and completeness of corporate financial reports. It defines the interaction of external auditors and corporate audit committees, and specifies the responsibility of corporate officers for the accuracy and validity of corporate financial reports. It enumerates specific limits on the behaviors of corporate officers and describes specific forfeitures of benefits and civil penalties for non-compliance. For example, Section 302 requires that the company's "principal officers" (typically the Chief Executive Officer and Chief Financial Officer) certify and approve the integrity of their company financial reports quarterly."
http://en.wikipedia.org/wiki/Sarbanes%E2%80%93Oxley_Act
It would not matter if Dave were directly involved in the actions of the company, it was not Dave's responsibility to do the financials. It was the officers job.
I reluctantly yield to your point of view. I believed that Turrini had more business acumen than I gave him credit for. My mistake.
Dave Williams was never "running the show". He is an independent director. The officers and managing directors run the company. Independent directors just try to keep them on the straight and narrow, but they (the officers) have to act.
I bet Ms Pierce is regretting her decision to accept Turrini's offer to become CFO since now she is on the hook for cleaning up the mess, at least as I read SOX. Turrini can always fly home if things go south (no pun intended) and leave her holding the bag. I certainly hope that, if the officers were planning on selling any shares they had a prospectus prepared with financials. I am not inclined to be using company funds (if such a thing exists) to defend them for their illegal actions.
While I still like Turrini as a face man it appears he does not seem to be able to run a company. This one they should have seen coming.
It will take me some time to digest the information. Ironic that, of all the shady things done in this company the one thing that raises the SEC's attention is one that is totally innocent - the run up being based on publicly available information and, from what I can tell, no insider profited directly from the spike. Can the calypso story get any stranger.
CLYW Disclaimer: Past performance is not a guarantee of future returns.
I agree. This is a game of stud poker and we have to play it out with the hand we are dealt. The BOD and the officers we have now will be the ones that take us through the T-mobile litigation. If we win that AND we actually receive some of the funds from that action then, and only then, can we begin to consider the next move.
History. There was a time long ago that he spent a large amount of his personal funds to bring an action against the company to force it to act properly. Whether Turrini will admit it or not, Dave is a large part of why he Turrini still has a job with the company (although some might dispute that statement). He also was the first one to regularly submit 8Ks and attempt to enforce accountability to the shareholders on the part of the company without spewing out the standard "the big deal is right around the corner" crap.
The original suit also involved forcing the company to hold a shareholders meeting but Dave wisely never enforced that ruling because he has enough experience with corporations to know what kind of expense to the company that actually involves. He would not destroy the company to get his way or to see Diac punished as some others would have. You can interpret that any way you wish but all of what I have said here should be verifiable through the Delaware court case filings and posts on this board.
I have never seen anything that indicates that his interests are anything more than those of a concerned shareholder.
I have to agree with DSU. There are a number of reasons why the BOD is hanging on by a thread, I just don't see Dave as one of them. DSU is right, every BOD needs someone like Dave, someone who asks the question no one wants asked.
I understand completely why we are where we are, and until the state court case is settled we probably won't get farther. But how long after that are we going to have to wait. I am still a big ban of Turrini for what he is good at, opening doors. He is just not a closer. He is not the guy who is going to make the hard deal. He will make the easy sale.
Dave is not polished but cussing someone is not an actionable offense. He is the guy you bring in to do the details of the deal - to make sure the deal is actually in the best interests of the SHAREHOLDERS - something often forgotten by people in small companies. But we still need a closer. Not sure Dave is that guy. Maybe we don't get that guy (or gal) until after T-Mobile.
In any case, the company needs Dave. No lawyer is going to replace him. Lawyers get paid to tell you what you wan to hear, but at the end of the day they are going to the bar and having a drink while you may be going to a small cell. The company needs Dave whether they like it or not.
The laser patent was a little more complicated and involved a question of whether or not he was trying to patent a law of physics rather than a process. But yes, there were those who profited from it that would rather have seen that patent never come into existence.
No, but it is to ensure accuracy of reporting.
Section 302 of the Sarbanes-Oxley Act requires the principal executive and financial officers of a company filing periodic reports to certify in each quarterly and annual report, among other things, that the report does not contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements made, in light of the circumstances under which such statements were made, not misleading, and the financial statements, and other financial information included in the report, fairly present in all material respects the financial condition and results of operations of the company.
Section 906 of the Sarbanes-Oxley Act adds a provision to the U.S. criminal laws that contains a separate certification requirement. This provision expressly created new criminal penalties for a knowingly or willfully false certification.
http://www.sec.gov/news/press/2003-39.htm
But again, it is a matter of what the SEC can afford to enforce. However, members of the BOD, even none executive ones, have enough authority to obtain legal counsel in the name of the company and force proper compliance.
IMO I still have faith in Dave, and the law is on his side. I still believe that Turrini needs the company to succeed. I still believe the lawyers want their cut. Notice that the rules apply criminal penalties not just to CEOs but also CFOs. The question comes down to how much personal liability ancillary players are willing to assume before they begin to realize that what is in the best interest of the company and what is in their best interest is actually much closer aligned than what they might have been led to believe.
IMO Diac won't consider settlement unless forced to. The hearing has to go against him first BEFORE he will reconsider the costs/benefits of going to trial.
Maybe I used a bad example, perhaps a non-business example will make my point. More like a schoolyard - a small group of people all vying for position as the center of attention. Except the center of attention is now the company, and the schoolchildren are the BOD and officer of the company.
In any case, human nature is human nature. People are not the saints that DSU would like them to be, but their actions may not always be as nefarious as he might think. Sometimes their actions are simply a matter of being human.
You are right about small companies - the SEC is not going to get involved. They are not funded at the level to be able to go after every penny company - congress makes the laws and take the credit for being hard on white collar crime but fail to provide the funding necessary for its enforcement. Plus, the rules for small corps are different than for larger ones (although I am not sure whether that changed in 2007 or not).
In any case, you are right about the required annual shareholders meeting. One should be held, and soon, but I think it might be best to take care of the state court case first.
I'm sorry, you lost me. It was a simple question. I am unfamiliar with any specific law that requires that a board member make his biography public. Not saying your wrong, just curious where it is from.
Not familiar with that law. What does it say?
I realize that only answer half of your question. The rest seems to be more a private matter between the parties. Disagreement is healthy as long as it remains civil, so I do not advocate abusive correspondence. Then again, being military, I am an advocate of Pattin's statement which I will paraphrase - "Give it to them loud and give it to them dirty and they will remember it". So again, to me, it depends on the motive behind the action, not necessarily the action itself.
My honest answer is, it depends on why they are doing it and what information is being presented. To me, this is no different than feeding a third party information and having them post it for you, an apparently much more common but no less deceitful tactic (not to be confused with a third party finding out information from a director and, after passing it through the lens of their own opinion, they post of their own volition).
If the information is intended to deceive shareholders or potential shareholders about the worth or status of the company, particularly if the purpose is to ingratiate the director at the expense of the shareholder, then it is wrong (and illegal but is will probably take a wiretap to prove it). If someone is trying to sway the shareholders to their side in an internal fight, but not identifying themselves, then I would find it gutless. If they are trying to gauge shareholder opinion without causing a panic, then I am start to see the value in it. If the information is innocuous and consists of information already in the public domain or consists of questions rather than answers then I don't see a problem with it.
The problem with a company like Calypso, or any ultra-small public corp is that on a day-to-day basis it runs like a mom and pop private company. In the case where the officers are not getting paid it is almost run like a hobby. Actions begin to get taken without the proper protocols. They begin to think of themselves as the owners of the company. They put years of their lives into the company; spent hours toiling away for no pay building something of value. They begin to see themselves as the kings of the castle. I think it is beneficial for the directors and officers to get out among the "common people" (shareholders) every now and then and monitoring a board like this is an efficient way of doing that, as long as the intent is not self-serving. Remind them that they are NOT the owners of the company and get some feedback without spending huge amounts of money on mailers.
This board has it share of nut jobs but often a good idea or two passes through here. I hope that someone from the company monitors it every now and then for reasons other than manipulation.
Besides, often people what to throw out an idea to see how it is received without identifying themselves. You know, create a new identity and toss out some bones to see who chases them. Sound familiar?
First, thanks for the civil response.
Second, I understand your ideals, and I don't want to say that you are looking for saintlike actions on the part of people whose primary motivation, being business people, is to make money, but ... you kinda are.
I have lived and do live in a world of much more grey than you. That does not mean I condone lying to shareholder or any breach of fiduciary duty. I do not. I left the law because of such personal concerns. I did not get to chose who I defended, I zealously advocated for whichever side paid my fee. That left a bad taste in my mouth so I moved on to other endeavors.
I will shy away from the specifics of our current disagreement (and of course, the devil is always in the details, or in this case, specifics). Lets just say that I believe Turrini is the best person we have at the moment (think of his as the devil we have, if you must), and Dave, being Dave, will find a way to ensure that everything is on the up and up, even if that means suing someone himself.
Since this post is pretty far off topic, I would ask that you "burn after reading" and delete it.
OK, I have to bite... Do you mean "do the right thing" in the Kantian absolute obligation to act for the sake of acting because the action is what is morally right? or do you mean "do the right thing" in the sense that the outcome of actions lead to the best possible outcome (for the shareholders)?
Must have standing before you can start any legal action.
If you are so inclined and you have the time can you shoot me an email at tbaquinas@gmail.com. Have an history question for you that is too far off topic for the board.
It deals more with ancient history than current events.
Sorry, that statement was not meant literally. It was a concern wrapped in a legal question, but my lawyering days are over, so I am afraid I was not much help. I leave it to Sosa to share if he feels that it is appropriate.
Great Info
I am not totally sure that there will be much movement in the SP. I am also not sure the hearing will go our way, even though it is sorta a win - win situation.
Even assuming it goes well, the spike will be short lived. It seems clear from the 8K that the company is preparing to move into the next phase, I just don't see it being in the company's best interest to make any announcement that could substantially increase SP until the trial.
That is just a guess of course. It just seems reasonable to keep a lid on things until the trial.