The thing that showed up that matters most in the posts below, is that the history of the company IS tainted. It is not tainted because the fact of criminal activity under prior owners necessarily shows there is a problem with purposeful and ongoing criminal activity in KGLJ, but because the "trading shell" that it seems was bought by NAFG and sold to JP... seems to have been "permanently canceled"... ie, it did not exist to be sold... so ALL the downstream transactions based on or related to the securities are essentially fraudulent. KGLJ is not, therefore, a legitimately registered or legitimately tradeable security... and we need to know who is responsible and in what degree for the original fraud AND for its perpetuation.
The SECs complaint seems to be that "they", whoever "they" are, formed a new company with a name similar to one of the priors, and then highjacked the defunct "shell" of Sport of Kings? What kind of idiot would it take to BUY much less to highjack a permanently canceled shell with known ties to stock frauds and the mob? What lawyer gave that a green light? That still suggests that the problem is with whoever was FIRST to buy, and then also RESOLD the shell as a legitimate trading entity ?
What was paid for the "trading shell"? Who bought it ? Who sold it... and/or who manufactured it? Who gave the legal opinion that the shell was clean and would be OK to trade?
Disappointing, too, that NAFG and KGLJ didn't bother with doing any of the due diligence that would have prevented this, just by making sure the shell they bought was clean?
Without making any connection back to prior criminal activity, this suggests that at a minimum there was at least one quite deliberate fraud committed somewhere in the chain, and the questions are who, where, and when ?
The history of prior criminal association makes it pretty easy to guess that the source of the problem was there... that after having been shut down, the crooks still went ahead and sold off this shell as if it were functional and not permanently canceled? Maybe that is the entire extent of the problem ?
If thats it, then there is only a question of who is responsible and who gets to pay for a new CLEAN trading shell, and we re-register, disclose the financials, etc., and get back to trading with all the questions fully resolved.
Otherwise, if the fraud was knowingly continued beyond a first transaction by the original owners of the shell... then perhaps JP was defrauded by NAFG and/or the NV registered agent and/or "the lawyers" ? Or, NAFG was defrauded by whomever they bought the shell company from before perpetuating the fraud ? Of course, it is also still possible that they (NAFG and JP) knowingly bought (or simply incorporated a new company with one of those prior names and highjacked) a defunct tainted company the mob used for stock scams and re-registered it.
Maybe there are legitimate answers to these questions, and the SEC just needs to see the documentation that will answer these same questions to their satisfaction?
But, then, you add on top of the problem with past criminal associations in the apparently highjacked shell, the problems with stock manipulation that followed the company as KGLJ: Sales of large blocks of stock to overseas investors... pumping and dumping... obvious lack of internal control... massive dilution in a stock dividend... many known elements of typical stock fraud operations run by company insiders. Or, was the stock dumped only because there was a problem with a leak from within the SEC that allowed inside information about their investigation and concern to get out, which caused those who got wind of the investigation to sell their shares? An insider trading angle?
There is obvious cause for concern... but NONE of that means that there is any problem with direct criminal activity inside the company. It could be NAFG and JP were victims, even if cooperative victims, and others were responsible for the problems. JPs inability to take charge of his own company and be responsible for its problems is obviously not good, but it also suggests the structures and the people we see here perhaps were placed there by design, were intended to be manipulated, or to willingly help enable the manipulations by others?
I could make a good case that it seems there was perhaps not ever an arms length relationship between KGLJ and NAFG. Yes, the assets STILL appear to be real... but manipulation might alter who ends up owning or controlling them ? I expect it will be difficult for NAFG to escape their clearly obvious responsibility for helping to structure KGLJ, and doing so in a way that may have been designed to ensure it would fail, in the expectation the assets would return to NAFG, expecting the investors would have no recourse ?
The restructuring experts I've chatted with about this situation are straight forward in pointing out that ownership of the assets is now extremely clouded. It is clear that KGLJ owns outright all that they've already paid for... but the situation that exists now with the stock might make it hard for them to meet the need to make future payments to keep the undeveloped assets as KGLJs development rights. KGLJ probably can't sell the assets because of the terms of the MOU and the clouded title concern... but NAFG can't claim full right to develop them with others because of their own inherent responsibility for the problems that exist in KGLJs structure.
Those things KGLJ still has to pay for, under the terms of the MOU with NAFG... might not be validly withheld by NAFG to the degree that NAFG was itself responsible for creating KGLJ as a shell that was in fact not independent, and that has the obvious problems KGLJ has as a result of NAFGs own actions.
In essence, it seems it will likely be NAFG that is found responsible for defrauding KGLJs shareholders.
To the degree that KGLJ has committed a fraud of investors by misrepresentation, it seems it inherits that problem from NAFG. Given what I've seen thus far, my opinion is that KGLJ and NAFG may in fact be the same entity with both fully under the control of NAFG. It seems likely now that KGLJ probably does not even have its own employees... but may have fraudulently claimed to be operated separately from NAFG, and may have fraudulently claimed the results of successful NAFG efforts as resulting from their own independent efforts. That would mean NAFG is the operator... of the leases and wells, of KGLJ, and of the scams.
The result is that only because NAFG imposed the problems by structuring KGLJ as they did, KGLJ might not be able to meet its obligations... but since NAFG is responsible for KGLJs problems, NAFGs options are limited, and the ownership of and rights to the assets of both KGLJ and NAFG that are still to be developed under the MOU are in question.
Doesn't really make things much clearer, does it?