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e-bay is a place to sell tangibles, h24. A share of common stock, despite the many lies that have been told by the crooks behind the "naked short seller" scam, is not a tangible.
Well, no, the SEC doesn't agree with that. Within the confines of an SRO, there are many instances where naked short selling is restricted and/or banned. However, as a general rule, there is no prohibition against naked short selling. If you can find willing contra-parties, you can naked short sell securities to your heart's content.
Unfortunately, you've been scammed into believing what you've just posted by crooks who strive to divert attention away from managerial misdeeds and/or incompetence. It enables them to fleece tens of thousands of investors of hundreds of millions of dollars, over and over.
CMKM Diamonds is not the first instance of crooks who used the bogus "naked short seller" story to rip off investors; they probably won't be the last either.
There's nothing crooked about naked short selling, jimmy.
With what CMKM Diamonds has left, the shares are worth, at best, 0.00001 to 0.00002.
Anyone who managed to short at 0.0001 has an 80 to 90% gain.
(And probably more if nothing attachable is left of Casavant and the Entourage shares waste away.)
With everything that's come out the past week, I don't understand why you would derive any satisfaction from seeing that a naked short had taken place. Anyone who might have been lucky enough to naked short CMKM Diamonds made the right bet; they win.
(And I take it from the silence that Faulk wants nothing to do with your idea?)
I get the feeling that it was DeSormeau who was doing the soaking. $1.5 million for 3 years worth of work for a microcap is just absurd.
Furthermore, despite his demand in that letter for 15 billion shares, the Casavant lawsuit showed that he ended up getting 80 billion.
As is frequently the case with anything surrounding CMKM Diamonds, "VERY PECULIAR".
That demand letter from DeSormeau is really something special. $1.5 million for 3 years worth of playing solitaire for a pinkie?
He has almost as much chutzpah as Casavant.
I don't think so. There is nothing in the representations or warranties from the contract that I found that makes such a stipulation.
For the one contract I did find (the Hatchet Lake property) representing 15 million shares of Entourage, CMKM's duties were:
- to guarantee that they had the right to explore and develop the property
- to guarantee that there were no leins or claims on the property
- that their claims were recorded and in good standing
- that CMKM Diamonds was a valid and subsisting company (HEY! Maybe Entourage could snag them on this one...)
- that CMKM Diamonds had the right to convey, transfer, option or assign the property
... the list goes on, but all of the conditions fall within the framework of a company representing that it has clear ownership of the Hatch Lake property and that they had the right to transfer it.
This is all from 1.1 in this exhibit at the EDGAR site:
http://www.sec.gov/Archives/edgar/data/1092299/000107704805000578/ex10-1.htm
In 4.2, CMKM Diamonds agrees that they will make an effort to distribute the Entourage stock to her own shareholders, but given the arbitrary nature of the term "effort" it doesn't appear to be binding nor does it occur in that section of the contract that enumerates the conditions under which Entourage has entered the agreement. (That would be the section 1.1 mentioned above.)
The more you look at these contracts, the more it becomes clear that the only reason CMKM Diamonds could have had for even mentioning the effort to move those Entourage shares to the CMKM Diamonds shareholders was to limit Entourage's recourse if a dispute arose over the properties they acquired.
That clause is in the event that there's a dispute. Entourage got their property. CMKM Diamonds got their shares. I don't see anything to dispute.
They should just file a Form 144 and unload those shares.
But the content of the post right after yours (stockseekerok's), unfortunately, shows what would happen to that money upon the liquidation of those shares.
I've only been able to find one of the agreements. In the one I found, the Entourage shares "shall be issued to CMKM or to whoever it may designate as its agent or trustee". There is no language that I've found that compels CMKM Diamonds to distribute the Entourage stock to old CMKM shareholders. There are merely statements of their intent to do so.
Right now, those shares would appear to be an asset of CMKM. As such, West, in his role as CEO, should be able to direct the liquidation of that asset on behalf of the company.
Yeah, the creditors would shut that down in a heart-beat. No one was every going to distribute those shares directly to the shareholders. It was just part of their delay tactic.
Besides, it's insane to pay a quarter of a million dollars in transfer agent fees and administrative expenses to distribute them even if CMKM had no other liabilities.
I haven't looked at Rule 144 in a long, long time. If you're familiar with it, is there any reason why CMKM Diamonds couldn't just file a Form 144 and unload the shares?
jarta's post below yours spells out precisely what I fear is going to happen. If these CMKM shareholders hope to salvage anything at all, they should be kicking and screaming for West to find a way to liquidate the Entourage stock and shut the company down ASAP.
My only concern about opening this can of worms in the first place would be that West or anyone else at CMKM Diamonds might take the money from either a loan secured by the stock, or proceeds from the liquidation of the stock, and pretend that the company can be operated as a going concern. "Working capital" implies that CMKM Diamonds could "work" on something. You put "working capital" into CMKM Diamonds now and the same thing will likely happen to it as has happened the whole time the company's been in existence: It will be squandered away.
The best possible thing would be to find a way, ANY way, to liquidate those shares, settle their debts, and distribute whatever remains, a pittance though it may be, to the shareholders.
Obviously Entourage is going to have no interest in buying them back. West needs to get them to be freely tradeable. While Entourage would probably be none too pleased to have 45 million shares about to be dumped in the market for their common, I don't see how they could justify maintaining CMKM Diamonds' inability to liquidate their position.
If Kevin West had a brain in his head he would work to lift whatever restrictions may exist on those Entourage shares and dump them ASAP.
Then he should work in earnest to come to quick, reasonable settlements with the parties who have civil suits pending against CMKM Diamonds.
Finally, if he really believes there is any chance whatsoever of securing a judgement against attachable assets owned by Casavant and friends, he should set aside a small portion of what remains for legal expenditures and distribute the rest to the shareholders.
Of course, that would presume West is really interested in serving the shareholders.
I told you he wouldn't want any part of it.
This is the last round in my clip for the day. So if there's anything else to discuss along those lines, you know where to reach me.
That's rather Faulkian of you.
(And on that note, have you heard back from that clown yet?)
You're not getting this, nuf.
If Casavant took shares that he owned, xferred them into his trust, and then liquidated them out of that trust, there would be no funds to trace.
And now we come back to a question that STILL hasn't been answered dating back to when Fizzle first staged his silly "cert pull".
Where is the stock ledger for this company?
On one level, it's astonishing that a guy like Ebbers is doing time while Casavant walks this world as a free man.
Unfortunately, since CMKM Diamonds was never compliant with their filing requirements, Casavant can't be charged the way Ebbers was. And poor Ebbers... he actually HELD onto a lot of his own shares.
That's my concern, nuf. I suspect that there was no direct transfer of funds from the company to the trust. If Casavant owned shares (issued, of course, in lieu of cash for services rendered) and simply retitled them into his trust, then you don't have a trail of cash leading from the company to the trust.
Here's a great example of what I mean about the company issuing stock in lieu of cash for services rendered.
Check out Paragraph 26 in the complaint. Dave Desormeau does $1.5 million worth of "work" (HO HO HO) for CMKM Diamonds over three years and demands payment. The company issues him 40 billion shares and he dumps them into the market. Obnoxious? Yes, absolutely. However, obnoxious as it may be, you're not going to be able to unwind that share issuance in lieu of cash with a civil suit. That SINGLE issuance in lieu of cash represents over 5% of CMKM Diamonds' outstanding shares.
I think Fizzle has filed the wrong suit. Section F, "The Disappearance of Company Funds", could be rendered completely useless in this case.
Then what's this lawsuit of Frizzlepop's supposed to accomplish?
Maybe. The existence of the Trust alone, incriminating though it may be, isn't necessarily evidence of misappropriation.
I couldn't help but think of Eagletech and a number of other pinksheet disasters that have blown up and then blamed "naked short sellers" for investor losses. The language of that lawsuit implies that the shares that found their way into the hands of the public were issued directly by CMKM Diamonds.
The NevWest episode alone represents 250 billion shares. CMKM Diamonds needn't have received cash in consideration for the issuance of those shares. One very common practice that dilutes these pinkies is the constant issuance of shares in lieu of cash for services rendered, usually to corporate officers and other insiders. If the defendants can document that they received their shares in lieu of cash as compensation for services rendered, no matter how outlandish the price for the services may have been, then it could put a big hole in the case that Frizzlebee is trying to build.
I wouldn't spend much time looking at them if you're trying to figure out what Frizzie can squeeze out of the defendants (little to nothing).
Their value now would be for entertainment only.
There's no way to know yet whether or not the account has been closed. I would just hope that shareholders would not look at that account statement and think that it will translate into $8 million for their company.
It is a very remarkable item, that account statement that's been posted for us to examine. It's a very bizarre combination of cold shrewdness mixed with remarkable stupidity. Someone took the time and trouble to create a trust in an obvious attempt to shield assets that had been looted from CMKM Diamonds.
Then they took 2/3's of those assets and committed them to a pinksheet disaster which lost almost 95% of its value.
Well, you can start by looking at the biggest position in that account: Mobile Wireless Security.
That position, which had been worth $5.3 million or roughly 2/3's of the portfolio, is now worth about $300k.
Knowing what you (should) know now about how this game is played, why would Casavant or any of these other jokers leave equity in a property that could be taken from them by a court judgement?
It would have been a lot more fun for all of you if Casavant and friends hadn't raped your company. But he did. Don't be looking for anything fun as this all unwinds now. And don't be surprised if his Smith Barney trust account has been wiped out.
Probably mortgaged to the hilt.
Very nice find.
I wonder how much of it remains.
It's interesting that someone managed to get the Smith Barney account number to Casavant's Trust. Any rumors on how much is in it?
The rest of that list looks like a black hole.
I don't think I would be able to dedicate a block of undisturbed time to do it, especially during market hours. Besides, I highly doubt you could get Faulk to agree.
Then again, there's no reason not to have a debate like that in a text-based investors' forum.
I had actually discussed an appearance on CFRN with Reeves over a year ago. Initially, he seemed interested. This was around the time that he came to understand that CMKM Diamonds was nothing but a scam. At one point, he even told me he was going to clean up his forum and rid the place of the CMKM Diamonds pump'n'dump crowd.
Then, mysteriously, he changed his mind and I never heard from him again.
No, I did not make your point for you at all. It is one thing to say that there are no absolutes in the world of financial analysis.
It is another thing altogether to say that the tools used in the world of financial analysis are entirely arbitrary.
It rings a bell. I thought it was their warrants that one broker had shorted beyond the number issued and outstanding.
That was early to mid '90's, if it's the one I recall.
And that attitude is exactly what gets the people who buy into these scams clobbered.
There is certainly some leeway when it comes to interpreting the information contained within an SEC filing. The practice of financial analysis is as much an art as it is a science. It is, afterall, the skill of an investor to find unappreciated nuggets of information in those filings, and to draw shrewd conclusions from that information, that leads to above average investment returns.
But when you eschew that information altogether, you doom yourself to being a victim of these scammers over and over again.
Mine happens to be back by facts. And I missed your global warming statement.
It doesn't, but there's nothing about "naked short selling" that makes participants in the markets "scumbuckets".
Who cares if it was naked shorted?
Naked short selling, despite the lies you've been told, does not harm companies. It doesn't cause managements to rifle through all of their working capital, spend obscene amounts of money on SGA when the company has little or no revenues, or force managers to dump multiple rounds of secondaries on the open market.
From a corporate finance perspective, "naked short selling" is a non-event. But it's been used by crooked and inept managements and promoters to divert investor attention away from where it rightfully belongs: on financial fundamentals.
Perhaps you need some background on Global Links and Robert Simpson?
Why don't you find some of their 10-Q's and 10-K's and see what kind of a company Global Links happened to be.
Pay particular attention to the voting rights attached to their Preferred stock issues. (All owned by insiders.) Note the constant dilution that takes place with that company, especially for the 15 months that lead up to the Simpson event.
Then, after you've done that, do some research on Zann Corp. Note who their CEO is.
And take a look at their preferred stock issue.
Once you've done that, you may come to have an appreciation for what a scam the Global Links pump'n'dump was.
You mean Mike Schneider's piece?
He's a financial illiterate. Being a journalist, even for a financial media outlet, doesn't make you capable of reading or understanding SEC filings or financial statements. Look no further than Liz Moyer, another financial illiterate, for your proof.
I'm not the one who wrote the scam article on Global Links. (Along with a number of other deceptive stories he's penned.)
He has a long history of lying during his involvement in the "naked short seller" scam.