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not like in the past. transparency prevents that. we now see FTD data that 6 years ago was never available or looked at by the regulators.
I believe we have clear evidence of a decade old problem. i also think that some level of it exists today but at at different magnitude and for a different duration. to think hedge funds are not predatory is foolish,
But...transparency today is vastly different than a decade ago and so any abuses are short term and not long due to that.
i am not sure people pay attention to changes in the regulations. they seem to fall upon a decade old issue and apply it today.
you are right and wrong at the same time. SPNG was merely fraud from within.
You mean that the market price and SEC suspension are not accurate because the company has told you what is going on in unaudited press releases?
Tell me, what exactly do you know about this company? Ault has a history of legal issues and money issues, Rainbolt was an overnight CEO (literally) and there is ZERO third party verification on sudden well ownership, financing, and share structure.
And how do you know that you have not been proven wrong? Would you like the SEC to put out a press release claiming SPNG shareholders are fools for falling for this scam or would you prefer they take the more political tact of taking action against those who committed the fraud which is what they do. do police announce those they clear in an investigation or do they announce those they go after?
fine. i will take my spanking and you take your losses and lets see who feels it longer....oops that will be you as I am over it.
let me know when you get your official share count. until then you got bub-kiss.
Really? If I am not mistaken, shareholders have been telling the judge what to do on a regular basis.
whether my memo is entered into the courts officially or not, if the Judge read it the Judge can think about the views presented.
you keep believing that.
as for my letter, may not be entered but I guarantee it was read.
I wish I knew that one. It may come out in the criminal trial.
I am curious about that table load of orders they had on display last shareholder meeting. Wasn't it knee deep? I guess the margins must have been pretty bad to dilute so heavily with such a tremendous backlog.
I know Mark and consider him a friend. That however does not always mean we come to common conclusions. I was aware of the request made of him to draft this memo and we discussed the issues. Mark has certain opinions I disagree with but that does not make me right and him wrong, it just means we differ in views.
I believe the FTD data is quite clear on what issues this stock has/had and none has to do with NSS, ex-clearing, or anything else. It has to do with the billions of shares RME dumped into the system while claiming otherwise. The SEC did not come up with $51 Million by pulling a rabbit out of a hat, they did that my tracking RME trades and accounts.
It is sad how so many remain in a state of denial despite all the evidence. It was that same state of denial seen when it was 100% shown the customers were fake, it was 100% labeled a risk when the SEC suspended trading citing fake customers, it was 100% shown that it was a scam when the SEC issued a wells notice of violations longer than your arm, it was shown to be 100% a scam when all the advertisers were suing for being stiffed, and it was 100% shown when civil and criminal charges were filed.
But after all that, people still hang on to the NSS theory because the stock tanked - despite proof RME and the Mutts were the ones selling and despite the evidence that most trades settled on-time and those that didn't settled only days later (paper hitting street delays).
rdaily, if you want to chase fairy tales you have every right to. go seek out a lawyer and have at it. What you FAIL to recognize is that you are 100% assuming that your claims have not already been dismissed by the SEC which is why they have taken no action. It is NOT their obligation to inform shareholders of every venue they investigate and what the outcomes are. In fact, they NEVER do.
So if you want to chase down every conspiracy you can think of, do what every other shareholder group and/or company did, get a lawyer and sue. Problem here in SPNG land, shareholders don't have enough confidence to do that and whine to others hoping they will do their work for them.
The bankruptcy courts have nothing to do with your personal matters. the shares you own are not assets to the company. The company SOLD those shares no longer making them theirs. I am not sure why this is so hard for some to grasp, Silverman stated it clearly in a letter he posted on the SPNG bankruptcy web site. Too bad most just don't comprehend what they read.
drugmanrx, our society is paperless in so many ways. electronic transfer of money is paperless. You realize that right? That is why runs on banks kill, not as much cash in a bank as cash in accounts. LEGAL short sales create more owners than shares. your serial number tracking does not work because people own fractions of a single cert once it gets into the DTCC Cede and co. Those are FACTS.
If you chose to trade like it was back in the 30's go ahead. just realize that if you buy a stock on Monday you probably won't be able to sell it for a week or more because that serial number you want won't be available to you to deliver to the next guy. what serial number goes on a cert that is split into multiples. I have a single 100,000 share cert that sells to 10 people at 10,000 sh. ea. What serial number goes to each one?
feel free to use logic and process operations in your response. Your example of a prescription. once sold it is never sold again and never broken up. think about it.
drugman, when is it just the fault of the shareholders?
long before I knew about this stock there were those that exposed it for what it was. It took me 10 minutes to see it for what it was. And yet shareholders continued to buy and buy AFTER the suspension and AFTER the Wells Notice. Those people deserve no respect or pity; they deserve what they got - Losses! You can't blame any of that on the Govt. as the Govt. stepped in and showed you what they had.
drugman, I suggest you organize the shareholders and hire a lawyer to do exactly what you wish. Silverman has already told shareholders that he does not represent them and that they should seek private counsel. Not sure why none of you grasp that.
Really interesting group of shareholders in SPNG. They got conned all the while they were being well informed they were being conned. Now while denial remains intact, the courts keep telling them that they are seeking advice from the wrong venue and instead of listening they make it appear the courts are in on the gig.
It is interesting in this time of instant profits in Oil nobody wants these abandoned wells but a near bankrupt ZLUS. Why if this is such a bargain do none of the real players ant any piece of these great assets.
The fact is that Pike actually has 10 certs, representing a holding of 75 million shares.
Musicman must have cringed when he read this:
Why hasn't Mr. Silverman conducted a "forensic share count" or address the naked short sales?
Answer: As recognized by Bankruptcy Judge Bernstein and as provided by the Bankruptcy Code, as trustee, Mr. Silverman's authority only extends to the marshalling and liquidation of Spongetech's assets and the resolution and the payment of claims in accordance with the provisions of the Bankruptcy Code. Mr. Silverman simply does not have the authority to address the myriad criminal or securities issues raised by the conduct of Spongetech's former officers regarding the sale and/or transfer of real or illusory shares of stock.
Why are creditors and shareholders expected to hire their own counsel?
Answer: Mr. Silverman, as trustee, represents the Spongetech bankruptcy estate. Neither he nor his counsel can act as attorneys for any creditor or shareholder of Spongetech. Creditors, shareholders and interested parties are advised to act accordingly to protect their interests and claims.
That was amusing. now shall we discuss the tens of thousands that had a different result? I suggest starting at the SEC's website for delinquent filers. They will provide you with a continuous list of companies that sold a line of bull to investors when they had nothing to offer.
BTW..Youtube was offering something new. CYCA doesn't even have a new product, they are trying to sell something that already exists and has competition. Slightly different story.
OK jay, lets get down to brass tacks...
Here is the FTD data for Feb 2010 when PIKE was buying the stock. why didn't the fails show up?
20100216 849109103 SPNG 329630 Spongetech Delivery Systems, I 0.03
20100217 849109103 SPNG 329630 Spongetech Delivery Systems, I 0.03
20100218 849109103 SPNG 319630 Spongetech Delivery Systems, I 0.03
20100219 849109103 SPNG 170495 Spongetech Delivery Systems, I 0.03
20100222 849109103 SPNG 170495 Spongetech Delivery Systems, I 0.03
20100223 849109103 SPNG 287609 Spongetech Delivery Systems, I 0.04
20100224 849109103 SPNG 19896 Spongetech Delivery Systems, I 0.04
20100225 849109103 SPNG 180114 Spongetech Delivery Systems, I 0.04
20100226 849109103 SPNG 235054 Spongetech Delivery Systems, I 0.04
and early march settlement timeframe...
20100303 849109103 SPNG 50000 Spongetech Delivery Systems, I 0.05
20100304 849109103 SPNG 50000 Spongetech Delivery Systems, I 0.04
20100309 849109103 SPNG 329892 Spongetech Delivery Systems, I 0.04
20100310 849109103 SPNG 67796 Spongetech Delivery Systems, I 0.04
20100312 849109103 SPNG 77696 Spongetech Delivery Systems, I 0.04
So if there was something illegal about PIKE's purchases please show them to me. Looks to me like his trades settled properly. Shares purchased on Feb 24 would settle on March 1 and Shares purchased on Feb 26 would settle on March 3. By this spreadsheet there were ZERO FTD's on March 1 and only 50,000 on March 3.
you lost me, what does PIKE Form 4 have to do with share structure? PIKE was a fool who thought he was buying into good inside information and his greed came back to haunt him. As for those acquisitions, they would be electronic trades and thus would not show up at the TA cert reports (unless PIKE pulled his certs). But I am sure you know that right?
i believe the disgorgement can go back to victims but penalties and interest go to the SEC. In this case, the $50+ million in ill-gotten gains would go to the victims. Relative to victims, creditors are still above shareholders in the food chain. not sure how trustee fees factor in on this but it behooves shareholders to stop wasting their own money on dead ends.
you are right, this one is ready to fly on....huge revenues?
By all accounts, the company has never had a single dollar in revenues. As in ZERO. On the other hand, they company has paid a lot in consulting fees to highly unqualified people who just so happen to run equally pathetic revenue generating operations.
but this is a good investment to get into. You are after all putting your eggs into a basket of people who have been involved in several companies getting share registrations revoked (leaving shareholders high and dry)while investors believed in their 3-card monty of share issues.
this stock is a play and just make sure you are playing the same side as the company. sell into the pump, buy at the bottom of the dump.
Are you suggesting that something changed after December 2009 (Wells Notice) and April 2010 when the Mutt's were arrested?
care to explain the $51 Million in ill-gotten gains from RME? That would be $51 Million in stock SALES. Care to address what that volume of selling would do to the markets?
Jay, you come in with all sorts of distracted thoughts, how but giving up analysis or evidence to SOMETHING. Where have you seen conclusion that shares were canceled when we now know that RME DUMPED $51 Million worth of stock into gullible hands.
as evidenced by shareholders' failed efforts to receive stock certificates, extremely suspicious and conflicting statements by the trustee, and fails to deliver as reported by Buyins.net.
I had a falling out with BuyIns.net when it was clear that there analysis is based near entirely on the misunderstanding of short sale volume. After many attempts to make them correct their analysis, and they chose not to, that was enough for me. buyins.net wants to collect a fee regardless of the accuracy of their product and fortunately for them, they have no clients smart enough to ask for validation to their work. Real companies don't put up money for unqualified data - suggests that those that go this route have different motives.
it sure looks that way. the question is, how much of that stolen money can they recover.
April 9, 2011
The Honorable Judge Stuart M. Bernstein
United States Bankruptcy Judge
Southern District of New York
One Bowling Green
New York, NY 10004
RE: Spongetech Delivery Systems (Case No. 10-13647)
Honorable Judge Bernstein,
My name is David Patch and I approach this court on behalf of the public interests regarding the bankruptcy proceedings of Spongetech Delivery Systems. I seek justice with regards to the efficient use of public money in a case involving the alleged criminal acts of Spongetech executives.
Before I address my concerns, I must disclose that I am presently listed as a defendant in Spongetech Delivery v. NY Post Holdings et al. in the NY Supreme Court, Manhattan Bureau. Spongetech has sued me business interference regarding my efforts in disclosing to federal authorities the alleged criminal and civil fraud violations now playing out in US courts. In a striking parallel to this bankruptcy proceeding, that case languishes in distraction as the nature of that frivolous case has resulted in a failure by plaintiff’s attorney to serve 50% of the named defendants. The plaintiff’s attorney has likewise petitioned the courts for withdrawal only to be granted at the termination of this bankruptcy, and Steven Moskowitz, lead plaintiff, has filed a motion of discontinuance pending the results of this bankruptcy proceeding.
Trustee Silverman, and this court proceeding, continues to be similarly distracted by the efforts of individuals who simply fail to take responsibility for their bad decisions. The efforts of shareholders to make this bankruptcy into a securities fraud proceeding is beyond the scope of this court and as such, I ask that the courts dismiss all current and future efforts and expense in responding to such shareholder requests. With public dollars financing Trustee Silverman, I urge these courts to mandate that no future billable expense be granted in responding to unsupported shareholder demands.
The Truth:
Abusive naked short selling does not exist in Spongetech and never has.
Yes fails to deliver surfaced in the spring of 2009 but those fails to deliver were directly attributed to the alleged criminal actions of the executives of Spongetech and have nothing to do with alleged criminal market activities. This can easily be proven and is in fact analysis I performed in recognizing that Spongetech was a fraud back in 2009. Analysis I provided to the Securities and Exchange Commission and resulted in the retaliatory actions of the company in a legal court filing. It was similar analysis that intelligent shareholders used to terminate their investment and get out with minimal losses.
To give you a brief history on abusive short selling, in 2000 there were no regulations to stop the abusive practice. Wall Street and criminal enterprises could use a lack of transparency and a lack of compliance systems to manipulate public companies by selling stock that did not exist to settle. Regulators were in denial and were willing to let certain companies be abused into bankruptcy. One of the reasons regulators ignored the issue for as long as they did was because in their investigations they identified that most who claimed foul play by abusive short selling were in fact internally orchestrated fraud schemes. It took many years, a focused group of private individuals, and several Securities and Exchange Commission rule changes to address the abusive practice.
By 2009 the abusive practices of 2000 were significantly reduced. Transparency of fails to deliver were now made public on a 2-3 week delayed basis and failed trades are now under a higher level of scrutiny to be settled if late. In 2000 this was a missing component in detecting abuse but is no longer a missing component. What came with this transparency of data was a better ability to understand what was happening internally in a company.
Is the problem completely eradicated? No, like the war on any crime you can never completely remove the acts as criminals simply alter their process. But you can certainly make it harder to execute and harder to hide.
The shareholders of Spongetech do not wish to recognize the changes made to securities laws over the years and the changes made in higher transparency of trade data. Instead the shareholders hold on to a false conspiracy theory originated by the very individuals under federal indictment for securities fraud. These shareholders live in a belief of the past because it suits their agenda of placing blame elsewhere.
The Data:
Below is a table of the fails to deliver in Spongetech during the height of the alleged criminal fraud (May/June 2009). It is made available at www.sec.gov.
SETTLEMENT DATE CUSIP SYMBOL QUANTITY (FAILS) DESCRIPTION PRICE
20090504 849109103 SPNG 791,000 Spongetech Delivery Systems, I 0.02
20090505 849109103 SPNG 1,267,622 Spongetech Delivery Systems, I 0.02
20090506 849109103 SPNG 641,000 Spongetech Delivery Systems, I 0.02
20090507 849109103 SPNG 1,836,000 Spongetech Delivery Systems, I 0.02
20090508 849109103 SPNG 1,916,444 Spongetech Delivery Systems, I 0.02
20090511 849109103 SPNG 1,672,519 Spongetech Delivery Systems, I 0.02
20090512 849109103 SPNG 413,569 Spongetech Delivery Systems, I 0.02
20090513 849109103 SPNG 425,000 Spongetech Delivery Systems, I 0.02
20090514 849109103 SPNG 300,000 Spongetech Delivery Systems, I 0.03
20090515 849109103 SPNG 300,000 Spongetech Delivery Systems, I 0.03
20090518 849109103 SPNG 567,922 Spongetech Delivery Systems, I 0.04
20090519 849109103 SPNG 517,913 Spongetech Delivery Systems, I 0.05
20090520 849109103 SPNG 1,791,216 Spongetech Delivery Systems, I 0.04
20090521 849109103 SPNG 1,000,149 Spongetech Delivery Systems, I 0.05
20090522 849109103 SPNG 91,402 Spongetech Delivery Systems, I 0.04
20090527 849109103 SPNG 1,866,781 Spongetech Delivery Systems, I 0.04
20090528 849109103 SPNG 6,845,850 Spongetech Delivery Systems, I 0.04
20090529 849109103 SPNG 15,869,800 Spongetech Delivery Systems, I 0.04
20090601 849109103 SPNG 24,381,363 Spongetech Delivery Systems, I 0.04
20090602 849109103 SPNG 429,019 Spongetech Delivery Systems, I 0.04
20090603 849109103 SPNG 228,950 Spongetech Delivery Systems, I 0.04
20090605 849109103 SPNG 223,400 Spongetech Delivery Systems, I 0.08
20090608 849109103 SPNG 100,000 Spongetech Delivery Systems, I 0.1
20090610 849109103 SPNG 11,000 Spongetech Delivery Systems, I 0.14
20090611 849109103 SPNG 680,649 Spongetech Delivery Systems, I 0.17
20090612 849109103 SPNG 518,435 Spongetech Delivery Systems, I 0.24
20090615 849109103 SPNG 342,244 Spongetech Delivery Systems, I 0.17
20090616 849109103 SPNG 1,610,737 Spongetech Delivery Systems, I 0.15
20090617 849109103 SPNG 3,429,362 Spongetech Delivery Systems, I 0.14
20090618 849109103 SPNG 7,115,705 Spongetech Delivery Systems, I 0.14
20090619 849109103 SPNG 494,014 Spongetech Delivery Systems, I 0.15
20090622 849109103 SPNG 187,169 Spongetech Delivery Systems, I 0.17
20090623 849109103 SPNG 342,037 Spongetech Delivery Systems, I 0.16
20090624 849109103 SPNG 245,805 Spongetech Delivery Systems, I 0.15
20090625 849109103 SPNG 2,412,437 Spongetech Delivery Systems, I 0.15
20090626 849109103 SPNG 291,141 Spongetech Delivery Systems, I 0.13
20090629 849109103 SPNG 3,990,368 Spongetech Delivery Systems, I 0.12
20090630 849109103 SPNG 7,890,269 Spongetech Delivery Systems, I 0.11
This data has been published on the SEC website for the past few years as part of the short selling reforms I refer to. It was after hundreds of FOIA requests I personally made regarding specific stocks that the SEC recognized the value of this data and elected to make it public by law.
What the data describes is the aggregate daily fails to deliver in any trading security. By aggregate the SEC is very clear in detailing that the number presented on any given day represents the fails as tallied on that day including all new and all previously failed trades.
Fails to deliver on a given day are a cumulative number of all fails outstanding until that day, plus new fails that occur that day, less fails that settle that day. The figure is not a daily amount of fails, but a combined figure that includes both new fails on the reporting day as well as existing fails. In other words, these numbers reflect aggregate fails as of a specific point in time, and may have little or no relationship to yesterday's aggregate fails. Thus, it is important to note that the age of fails cannot be determined by looking at these numbers. In addition, the underlying source(s) of the fails-to-deliver shares is not necessarily the same as the underlying source(s) of the fails-to-deliver shares reported the day prior or the day after.
For example, on 20090601 the SEC data publishes a fail to deliver level in Spongetech at over 23 Million shares. Up nearly 9 million shares from the previously traded day. According to the SEC the 24 million carries some or all of the preceding 15 million shares from the previous day and includes all additional fails added since then. But more importantly, the next day the 24+ Million fails had all but settled as the fails to deliver on 20090602 was barely 400,000 shares.
The reason the fails for Spongetech were spiky is due in fact to the alleged illegal acts of the company officers. As the officers were allegedly dumping illegal paper in to the markets (sale of unregistered securities) the trade settlement of the paper exceeded the 3-day settlement period and resulted in a settlement failure. Only after the paper is converted to electronic shares will they settle within a normal settlement period.
Shareholders, BuyIns.net, and many others have inaccurately added the reported fails to deliver on a day-to-day basis and in doing so have derived some imaginary 50 Billion naked short numbers. Trustee Silverman has latched on to this number in his communications with shareholders and has reported it out to the court as being a possibility when in fact it is not at all possible. The data presented by the regulators prove that.
If there are 50 Billion naked shorts in the hands of long shareholders, how does the stock trade hundreds of millions of shares in November 2009 for example and have relatively few fails to deliver? Below are the numbers for the second half of the month of November 2009. The void representing 11/18 – 11/30 where no information is published implies that no FTD’s were in the system that day.
20091116 849109103 SPNG 1960 Spongetech Delivery Systems, I 0.05
20091117 849109103 SPNG 11960 Spongetech Delivery Systems, I 0.05
20091118 849109103 SPNG 1960 Spongetech Delivery Systems, I 0.05
20091130 849109103 SPNG 15000 Spongetech Delivery Systems, I 0.05
An analysis of this data perfectly illustrates how the reporting happens. On 11/16 there was 1960 aggregate fails. The next day the number rose to 11,960 representing an additional 10,000 shares failed settlement. Because 11/18 went back to 1960 shares it is logical to conclude that the 1960 shares failed for at least 3 days beyond the settlement period but the 10,000 shares of 11/17 required one additional day beyond the normal period to settle.
Statistically, at a ratio of 50 billion alleged illegal shares to 3 billion legal shares in the hands of longs, the odds of an illegal share trading far exceeds that of a legal share trading and yet no fails to deliver are being reported by the DTCC clearance and settlement system. None of the holders of the 50 billion illegal shares were being traded and only holders of the 3 billion were? Impossible!
All of this data and evidence has been provided to shareholders and regulators over the years. The federal authorities indicted the company executives and not the market participants once investigating the data. The shareholders, who failed to respond to public warnings by private individuals such as myself and from federal regulators thru trade suspensions, wells notices, and federal civil and criminal charges, remain in denial. By appeasing these shareholders pipe dreams the courts and trustee Silverman is wasting the public’s money.
Legal Grounds:
Beyond the basic presumption that the shareholders are not creditors to the bankruptcy, the court must likewise recognize that the company has no obligations to shareholders once the company has issued the shares to the open market.
A company chooses to go public in attempts to pay for their operations by selling stock to the public. Once sold, the stock is no longer under the control of the company. How it is sold, at what price, etc…is entirely up to the public markets and the only influences the company has on this stock is based on performance and future share issuances, in this case the near 3 billion shares issued by Spongetech. That is the legal and total public shares that any potential buyer of a public shell will use in the valuation of this shell.
If the shareholders are under the belief that there are naked short sales that have devalued their personal stake in this, these individuals have the rights of the civil court process to seek out personal counsel and seek legal action against those from the markets that have involvement in this. Those being the market participants, market makers, and any short sellers they can prove acted illegally. It is not within the legal rights of these shareholders to impose the cost of any investigative effort on the bankruptcy courts and the public as these entities is not a related party in this bankruptcy proceeding. The market participants are not debtors or creditors to the company in bankruptcy. They are merely the participants that are trading off the stock the company sold off to raise capital.
Conclusion:
The courts and Trustee Silverman have an obligation to the public to act within the boundaries of the proceedings and to do so with an efficiency that protects the public’s investment in this proceeding. Trustee Silverman should be restricted by the courts from billing any future hours to support the wild conspiracies of shareholders who seek nothing more than to waste the courts time and disrupt these proceedings. There has never been any real evidence provided by this group that wrongdoing took place. Everything to date is at best circumstantial and at worst simply delusional denials of poor decisions made. These people have shown their inability to grasp reality by implying on several occasions that everybody from your honor down to each trustee is involved in the conspiracy to cheat them.
Our markets are not perfect. The regulators need to take stronger action on fraud so that fewer victims are created. But the United States court system provides legal options to those cheated and use of the bankruptcy courts is not one of those options.
I urge you to stop this circus that has become the Spongetech Delivery System Bankruptcy and put a clear set of guidelines on how the courts and the Trustee will address future shareholder demands.
Finally, I urge this court to force trustee Silverman to address all cases pending before the courts in which Spongetech is identified as plaintiff. Those cases are now under the guidance of this trustee and as a defendant identified in one such case, my rights of claim against the counsel representing the case is on-hold until such time as this case is concluded. The cases were filed with the sole intent of imposing harm and injury on the defendants and trustee Silverman is obligated to either proceed forward or motion for dismissal to uphold the rights of the accused.
If these cases are to proceed, the legal expenses on these civil matters would make the counsel for these cases creditors to the bankruptcy and would thus require factoring when addressing creditor payouts.
David E. Patch
21 Pheasant Lane
Topsfield, Ma. 01983
cc. Ken Silverman, Spongetech Trustee
Brett Silverman
Anthony Acampora
Elizabeth Gasparini
In support of my credentials on this matter I have attached letters documenting my work with state regulators and the SEC OIG relative to naked short selling. I would similarly offer up a willingness to speak with the courts at expense should more details be necessary.
Interesting that the SEC has found 52 Million in ill-gotten gains and the shareholders blame this on short sellers. How exactly did RME obtain the ill-gotten gains? By dumping stock into the market as SALES.
As to what impact this had on overall shareholders, RME sold $52 Million worth of stock. In doing so they created selloffs that drove additional losses to everyone else. Unfortunately the law only requires that their personal profits are considered and not the losses their profiteering creates to a more open market. Some people made money in the fraud while others lost so to calculate total impact would be impossible.
So we have some support of our position from the community of creditors.
really? Mark and I are friends but that does not mean we always share common opinions. I disagreed with this memo and Mark knows that. We spoke BEFORE he submitted it.
Friendships do not require that you have one opinion. In this case I believe Mark is incorrect.
Why would the SEC take such action when it knows it will hurt current shareholders?
Because a suspension often causes a dramatic decline in the price of the security, the SEC suspends trading only when it believes the public may be making investment decisions based on false or misleading information. Suspensions give notice to current and potential investors that we have serious concerns about a company. A suspension may prevent potential investors from being victimized by a fraud.
As an interested party in all this I guess I must comment. I know Mark and we discussed this exact letter and we did not come to agreement on it’s value.
I do not agree with the assertions made because of several fronts but respect Mark for making his position understood:
1. NSS can not be proven. As stated before, there are no reported FTD;s and when there were they were timed with known paper hitting the markets. For a Judge to consider the existence there needs to be evidence and here there are none.
2. When considering a bankruptcy, shares hold no value to a company. Once a company has sold shares to the open market, they hold no rights to those shares. These shares are not assets and the price of the company sold as an asset is based on what a buyer is willing to pay. No buyer is paying for the shell as the shell has nothing to offer. It is not a clean shell fully reporting but a dirty shell carrying legal burden – value = zero
3. The bankruptcy judge has no legal authority to subpoena anybody for private records that are not a party to the bankruptcy. So without authority the judge has nothing to offer. The judge can’t legally compel the SEC to do anything and can’t compel the Broker-Dealers or federal authorities to hand anything over.
4. Finally there is this issue of shareholder responsibility. Shareholders are not creditors and they do not get a payout in a bankruptcy. If money exists beyond the sale of assets it goes into the company account until such time as the registration is revoked. It becomes a shell company. So if the shareholders want some sort of legal action it is they and nobody else that needs to fund the legal activity. The trustee does not work for shareholders, they work for creditors and shareholders are not creditors no matter how looney they get in thinking they are. You can’t be a creditor to something the company has no obligation and the company has no future obligation to shares sold to the public markets.
When the SEC halted trading, no one at ZLUS, from the CEO to IR had any idea. They were advised by shareholder phone calls.
Current management did not receive any correspondence from the SEC; past management did...and apparently advised no one.
and oil and gold are the fastest con's because every penny fool buys into the instant well or hidden mine.
If they said there was none there either, then explain the Govt negotiating in the background to collect fines from those who did the shorting and setting up an escrow to pay shareholders from.
I hate to be the downer here but that press release by Ault left some gaping holes in it.
1. The SEC has a delinquent filer program that revokes the registration of company’s that are not up to date in filings. They do not issue a 10-day trading suspension, it is longer. The periods of delinquencies are also much longer. With lots of companies delinquent for periods far greater than ZLUS, and still trading, why did the SEC take this action if that was all it was about? I definitely don’t buy Aults response to that issue. http://sec.gov/divisions/enforce/delinquent/delinqindex.htm
2. The CEO last year, it was Rainbolt. He was in the role since June 2010 so last year he had been in office less than 6-months before the SEC was asking him questions. Could the SEC questions have driven Rainbolt out of the company? Could Rainbolt have bolted because he figured he would be liable if he stayed?
3. If the SEC was addressing questions to Rainbolt last year, what were they? Rainbolt filed in August to start catching up. Because the PR’s about 18 wells is recent and clearly the SEC was looking at things before that PR, what issues is ault hiding shareholders from? What exactly was the SEC looking into from last year since it most likely had something to do with Ault?
Ault put out a PR that was pure window dressing and in reality said nothing. We will work on getting our filings up to date. Really? What has history told us before? What happened to – next filing in a couple weeks that Ault promised and has already failed to deliver on? Certainly that filing should be ready by now and a clear sign of good faith to the SEC right?
good great awesome...that makes it all real. Now, if it was pumped illegaly, what is a legit PPS?