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omni any technical advice on TLXX/CNCG new 52 week highs where is the resistence on each?
L2 please for TLXX,new 52 week high, which mms are on the bid and ask?
TLXX/CNCG new 52 week highs anyone following these 2?
CNCG..anyone notice the move lately new 52 week high
bb you like ctkh here? whats a good entry? 50/200 nearing soon
TLXX L2 bid ask please?
PTSC...any technical advice?
omni..any advice on a ctkh entry into this pullback?
thanks deedee, anyone holding tlxx? any thoughts or technical advice?
CNCG..breaking out of trading range, anyone following it? .045 bid .05 ask, highest asking price in a long time, anyone have any technical resistance info?
any explanation for these small print TLXX trades? last was 250 shares, several printed under 1000??
eddie sorry..fyi it was released this morning w/26th date
News for 'TLXX' - (Free and Clear Press Corps: Telynx, Inc. introduces new
Chief Financial Officer)
Ottawa, Quebec, Canada, Dec 26, 2003 (M2 PRESSWIRE via COMTEX) -- Telynx.
Inc.,
formerly Cambio, Inc., a publicly traded company quoted on the pink sheets
under
the symbol TLXX.PK, has announced that J.P. Siouti has joined the company
as
Chief Financial Officer.
J.P. Siouti is a Certified Investment Manager in Canada. He earned his
first
Bachelor of Commerce with a concentration in Finance and Marketing in
April 1998
from the University of Ottawa in Ontario.
In April 2000, he earned his second Bachelor of Commerce with a
specialization
in Accounting from the University of Ottawa. J.P. has been working with
Welch &
Company LLP Chartered Accountants in Ottawa since 2000.
He previously held finance and research positions in public service
organizations.
J.P. is currently pursuing his Chartered Accountant, Chartered Financial
Analyst
and Certified Public Accountant designations.
CONTACT: DPE Consulting, LLC e-mail: PR@dpeconsulting.com
M2 Communications Ltd disclaims all liability for information provided
within M2
PressWIRE. Data supplied by named party/parties. Further information on M2
PressWIRE can be obtained at http://www.presswire.net on the world wide
web.
Inquiries to info@m2.com.
(C)1994-2003 M2 COMMUNICATIONS LTD
-0-
CNCG....breakoutnew 52week high
CNCG..broke out of sub-penny range now .045 new 52 week high anyone following it?
what does a 100 share signal mean?
CNCG new 52 week high ask now .045 broke out yesterday
CNCG moving was sub penny now .045 ask new 52 week high
CNCG .03 brokeout yesterday..bid up premarket new 52 week high any thoughts?
CNCG broke out above .02 new 52 week high..bid up to .035!!
re:CNCG breakout yesterday anyone have any technical advice?
CNCG...035 up 133% breaking out off its low, anyone following it?
CNCG
CNCG...up 133% hod, anyone follow it?
CNCG..appears to be on the move anyone follow it?
CNCG...appears to be on the move any comments? anyone follow it?
re:CNCG anyone follow it?
re:tlxx any technical opinions?
re:tlxx what site would show mms for pinksheets? what mms are covering tlxx?
omni re:TLXX..whats your technical opinion short medium and long you have any target prices?
re:TLXX any technical advice out there on the short-medium and long term resistance levels are? thanks
re:TLXX....any thoughts about telynx..thanks!!
has anyone spoken with anyone at ibcl? do they know what returning a investors call means? has anyone been lucky to have thier call returned, please update us..thanks!! if they can afford the call they can call me collect!! just kidding!!
OT:VERY INTERESTING RE:GECC LAWSUIT VS RAGINGBULL BASHERS
6. Defendant John CUMMINGS, of Boston, Mass., in the period of June through September, 2002, worked for defendant TERRA LYCOS in the unique position of managing TERRA's "RagingBull" network. KIRK, through his corrupt connection to CUMMINGS, could manipulate accounts on RagingBull so that persons "questioning" the message traffic of the defendants there had their messages removed and accounts cancelled. Complaints to RagingBull regarding the activities of the defendants were corruptly deflected or shielded by CUMMINGS. Having left the employ of defendant TERRA NETWORKS in late Septembe, 2002, it is not alleged that CUMMINGS activities extended beyond his separation from such employment with TERRA NETWORKS.
OT:a must read...IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF ARKANSAS
FAYETTEVILLE DIVISION
SIENNA BROADCASTING CORPORATION, )
[formerly Golf Entertainment, Inc.] )
Plaintiff, )
v. ) No. 02-5133
) JURY TRIAL DEMAND
Carla S. HOHENHOUSE, )
Robert F. KIRK, a/k/a )
"Robin KIRK," a/k/a )
"Robert CHURCH," a/k/a/ )
"Richard CHURCH" )
LEONARD VAUGHN MAUCK, a/k/a )
"Lenny MAUCK" )
Scott H. WILDING )
John CUMMINGS, Jeffrey WOOD, )
TERRA NETWORKS, S.A., )
d/b/a "RagingBull®" )
John Doe #1, a/k/a )
"coolwaterar," a/k/a )
"coolwaterar0" )
Defendants. )
2nd AMENDED COMPLAINT
Plaintiff Sienna Broadcasting Corporation (the "plaintiff" or "Sienna") alleges as follows:
Summary
1. The plaintiff brings this civil fraud action against the defendants pursuant to the below listed provisions of the Securities Act of 1933, as amended and the Exchange Act of 1934, as amended, and various regulations promulgated by the U.S. Securities and Exchange Commission pursuant to the statutory authority imputed by way of those two Acts. Plaintiff was, at times material hereto, headquartered in Springdale, Arkansas.
2. This lawsuit was originally filed under the provisions of the federal Racketeer Influenced and Corrupt Organizations Act. Plaintiff was ordered, sua sponte, by the Court to amend this pleading. Immediately following the issuance of that Order, the United States Supreme Court announced its decision in Scheidler et al. v. National Organization for Women, et al, docket number 01-1118, 537 U. S. ____ (2003). Accordingly, and until the effect of Scheidler can be further determined, the RICO claims against the defendants are removed by way of amendment to the Complaint.
3. This lawsuit stems from a compendium of interrelated and unlawful fraudulent schemes set in motion by the various defendants in the manners described below. The events opened with a Hobbs Act (extortion) violation in June, 2002, by one defendant that then grew into a stock manipulation and shorting scheme by other defendants. The defendants subsequently joined forces and have since utilized elaborate and well-planned schemes which were and are designed to attack the plaintiff corporation through means and avenues of interstate commerce, the goal being to injure the price of plaintiff's marketable securities, and facilitate the operation of a stock-fraud/shorting scheme by several of the defendants. All defendants have violated and are in ongoing violation of 17 CFR § 240.10b-5.
Defendants
4. Defendant Carla Sue HOHENHOUSE, of Richmond Hill, Georgia, starting on or about June 3, 2002, designed and executed a scheme whereby she eventually tried to extort an employee of Sienna into "inaction" regarding a stock swindle perpetrated by an associate of her’s (defendant WILDING) that had been reported to the plaintiff by a shareholder. She initiated telephone contact with an employee of plaintiff and later demanded she be issued "free trading" shares of plaintiff's common stock in exchange for her silence about matters she felt were pertinent to the employee's past. HOHENHOUSE then violated 18 USC Section 875 (d) when she made an internet extortion threat to the same employee. In the intervening period, HOHENHOUSE has repeatedly disseminated false, misleading, inaccurate, incomplete or untrue statements regarding plaintiff, all in an effort to depress the trading price for plaintiff's securities. HOHENHOUSE has previously held a license issued by the National Association of Securities Dealers. She is a close associate of defendants Leonard Vaughn MAUCK and Scott H. WILDING.
5. Defendant Robert KIRK (a/k/a “Robin Kirk,” a/k/a “Robin Kirk, Ph.D.,” a/k/a “Robert Church,” a/k/a “Richard Church”) of Tampa, Florida, is a self-styled "gonzo journalist." KIRK has also described himself as a licensed psychologist. He is associated with defendant Leonard Vaughn MAUCK and their business associate Mahmood Sahsavar in the maintenance and operation of an internet website called "longandshortreports.com," which functions as a stock tout/bash website. When defendants MAUCK and KIRK desire, they promote or hype stocks through their private mailing lists. When they are shorting a stock, they bash it using the same facility. KIRK, in June, 2002, through the present, closely allied himself with defendants WILDING, MAUCK, and HOHENHOUSE as they engaged in "stock bashing" of plaintiff on the electronic message system operated by defendant TERRA NETWORKS. KIRK is alleged to have corruptly influenced defendant John CUMMINGS.
6. Defendant John CUMMINGS, of Boston, Mass., in the period of June through September, 2002, worked for defendant TERRA LYCOS in the unique position of managing TERRA's "RagingBull" network. KIRK, through his corrupt connection to CUMMINGS, could manipulate accounts on RagingBull so that persons "questioning" the message traffic of the defendants there had their messages removed and accounts cancelled. Complaints to RagingBull regarding the activities of the defendants were corruptly deflected or shielded by CUMMINGS. Having left the employ of defendant TERRA NETWORKS in late Septembe, 2002, it is not alleged that CUMMINGS activities extended beyond his separation from such employment with TERRA NETWORKS.
7. Defendant Leonard Vaughn MAUCK, of Dallas, Texas, is ostensibly the editor of the electronic stock tout/bash website "longandshortreports.com." The electronic "magazine," as such, is edited from MAUCK's apartment in Dallas, Texas. He collects and transmits information to and from the other defendants at that location. MAUCK, like HOHENHOUSE, was formerly licensed by the National Association of Securities Dealers. MAUCK, until 1999, was actively employed in an NASD member firm where he worked as a securities broker. MAUCK and KIRK together contrived an elaborate con scheme designed to mistakenly make inquirers believe they operated from a fictional "international headquarters" in New York City, New York, and that their supposed parent company, "The National Group of Companies," was headquartered in Winnipeg, Ontario. Defendant MAUCK has publicly boasted of being "short" 27-million shares of stock in plaintiff corporation - at a time when the total authorized shares were only 25-million and the known total issued shares were 22-million. MAUCK's claim is, however, credible in that he can easily be "naked short" any number of shares in any public company, provided he has sufficient contacts with any brokerage willing to flout NASD rules, or he could accomplish the same by dealing with a Canadian brokerage. MAUCK and his associates are therefore highly motivated to destroy plaintiff corporation since, if they do accomplish such, it is unlikely they will ever be forced to cover their short position. Defendant MAUCK is alleged to have derived profits from selling securities of plaintiff that MAUCK did not own, nor had borrowed in accordance with SEC rules prior to its sale.
8. Defendant Scott H. WILDING, of Pembroke Pines, Florida, is a professional stock manipulator/promoter. WILDING's method of operation, as demonstrated in a succession of recent transactions, is to con a publicly traded company or large-block independent shareholder of a public company into giving him free-trading shares of stock in the victim company in exchange for "consulting services." After WILDING receives the stock, he immediately dumps it on the market place, eventually collapses the price of the stock, and never provides any actual service to the victim. WILDING is currently on felony probation in Broward County Florida, supervised by the Florida Department of Corrections, following a drug conviction.
9. Defendant JOHN DOE#1, a/k/a "coolwaterar" and "coolwaterar0" is identified by his known aliases as represented through his activities and message traffic posted via the internet to defendant TERRA NETWORKS "RagingBull" message system. He is reasonably believed to be a resident of Benton County, Arkansas, and cannot be definitely identified until successful discovery with defendant TERRA NETWORKS has resulted. "coolwaterar" has joined forces with the professional manipulators, commencing on August 28, 2002, and continuing through the present. This defendant utilizes the internet to post false and misleading messages regarding the plaintiff, and, based on the contents of his message traffic, is in close communication with defendants KIRK, WILDING, HOHENHOUSE and MAUCK.
10. Defendant Jeffrey WOOD, of Fayetteville, Arkansas, is employed by an entity described as "Northwest Arkansas Business Journal." Defendant WOOD, beginning in June or July, 2002, developed an intimate working relationship with defendants KIRK, MAUCK and HOHENHOUSE. Thereafter, defendant WOOD used his position as a writer or editor with the publication employing him in order first to author and then publish materially false, misleading, inaccurate, untrue, incomplete and fraudulent claims regarding plaintiff, all the while knowing that it would likely chill plaintiff's ability to pursue its business plan, and, at the same time, depress the market for plaintiffs marketable securities. Defendant WOOD is alleged to have well known of the falsity of a number of statements he has publicly made since August 16, 2002 and continuing through the present.
11. Defendant TERRA NETWORKS, of Madrid, Spain, is a public corporation based in Spain. It owns the "RagingBull" internet computer system, and exercises all control over access to the system; the contents of the system; and the existence of the system. TERRA is a publicly held corporation that is traded on the Madrid Exchange, and, on NASDAQ. It has sub-offices in the United States at various places. Defendant TERRA has been apprised, repeatedly since June, 2002, that it is maintaining an electronic venue that is a "virtual hangout" for persons congregating and associating there via electronic proxies, all for the purpose of violating the anti-fraud provisions of the federal securities acts. TERRA, after being notified that U.S. federal civil and criminal violations regarding plaintiff were occurring on its electronic premises, and after due demand by plaintiff to cease and desist, has continued to provide sanctuary and an "electronic" or "virtual" venue to the defendants complained of herein. Additionally, TERRA has repeatedly refused to enforce its own published "terms of service," both during and after the tenure of defendant CUMMINGS.
12. From early June, 2002, through the present, the defendants, acting in concert with each other, fraudulently obtained a "naked short" position in the securities of the plaintiff. Thereafter, in an effort to unjustly enrich themselves, they engaged in a massive and well-orchestrated disinformation campaign against plaintiff, its employees, officers and directors. Additionally, as outlined above, several of the defendants attempted to utilize extortion to obtain securities and utilized extortion to try to manipulate the plaintiff through its employees. The defendants all participated at one time or another in the period of early June, 2002, through the present, in the making of proscribed statements regarding plaintiff, thereby violating the anti-fraud provisions of the federal securities acts, and rules and regulations made by the SEC under the statutory authority of those acts.
13. By and large, the most visible manipulations of plaintiff's stock has occurred on "RagingBull," a website popular with stock investors, financiers, lenders and the business community. Beginning in early June, 2002, and continuing through the present, the defendants knew that by constantly dominating the "board" associated with the plaintiff, they could easily manipulate investor sentiment and attitude. To that end, defendant KIRK has adopted over a dozen aliases within the RagingBull system, which he has used and still uses to post defamatory, false or 10b-5 proscribed statements about plaintiff or its employees. Likewise, defendant HOHENHOUSE has adopted several aliases and engaged in like conduct. Defendants MAUCK, JOHN DOE#1 and WILDING have engaged in the same conduct. Defendant KIRK used his corrupt influence and connection with defendant CUMMINGS to manipulate RagingBull system users "off" the system, when they became critical of any of the defendants. In addition to canceling their accounts, defendant CUMMINGS in many cases removed the message traffic that the other defendants requested removal of. Upon information and belief, defendant CUMMINGS is alleged to have altered records and logs at RagingBull to falsely reflect "IP" (internet point of access) points of various persons accessing the RagingBull system, when such alterations were consistent with the conduct which is described in this suit.
Related 10b-5 Violations by defendants Wood, Kirk & Mauck
14. At the same time, KIRK, MAUCK and WOOD contrived an intricate and well-timed adverse publicity campaign, designed to disseminate false and misleading information through three main venues:
a.) "longandshortreports.com"
b.) "nwabusinessjournal.com"
c.) "The Northwest Arkansas Business Journal"
The effect on the plaintiff has been gravely injurious; adversely affected interstate commerce; and has violated the anti-fraud provisions of the federal securities acts. Table 1 below is a rendition of some of the activities attributed to defendants KIRK, MAUCK and WOOD as reflected from statements they have published in the three particular venues (and physically distributed in Arkansas) identified immediately above:
TABLE 1
Local Penny Stock Violates SEC Rules
Northwest Arkansas Business Journal - Cover Stories - Jeffrey Wood - 8/19/02
Misleading financial statements, suspicious relationships and a questionable lawsuit appear to have helped Golf Entertainment Inc. turn a company shell into a shell game.
Springdale Penny Stock Violates SEC Regulations
Arkansas Business - Cover Stories - Jeffrey Wood - 8/19/02
Misleading financial statements, suspicious relationships and a questionable lawsuit appear to have helped Golf Entertainment Inc. turn a company shell into a shell game.
Transactions Inflate Value of Golf Assets
Arkansas Business - Jeffrey Wood - 8/19/02
A series of transactions triples the value of the assets of Golf Entertainment Inc.
Golf Entertainment Evicted From Headquarters
Daily News - Jeffrey Wood - 8/26/02 9:21:15 AM
Golf Entertainment Inc., the Springdale penny stock under investigation for an apparent conspiracy to defraud shareholders, is served with a notice of eviction from its headquarters.
Golf Quarterly Report Verifies Lack of Cash
Daily News - Jeffrey Wood - 8/26/02 9:23:02 AM
Golf Entertainment Inc., the Springdale penny stock under investigation for apparent violations of SEC regulations, files a first-quarter report that appears to contradict earlier claims about the company’s financial position.
Golf Entertainment Sued, But Law Officials Remain Silent
Arkansas Business - Cover Stories - Jeffrey Wood - 8/26/02
A penny-stock company in Springdale whose principals have a history of filing civil lawsuits finds itself on the receiving end of a suit filed in a Florida federal court.
Securities Department Orders Investigation of Golf Entertainment
Daily News - Today's Headlines-Front Page - Jeffrey Wood - 8/29/02 7:35:58 PM
Arkansas Securities Commissioner Michael B. Johnson orders a full investigation into the business dealings of Golf Entertainment Inc. of Springdale.
Morning News Articles Talks Lawsuit Against ABPG
Arkansas Business - Outtakes - Lance Turner - 9/2/02
The Morning News reports that Golf Entertainment Inc., the penny-stock company that operates KAVQ-LP, Channels 20/71, in Springdale, will be suing Arkansas Business’ sister publication, Northwest Arkansas Business Journal.
Law Enforcement Yet to Move on Golf
Northwest Arkansas Business Journal - Jeffrey Wood - 9/2/02
Since the compilation of an Aug. 19 exposé on Golf Entertainment Inc., two executives associated with the broadcasting company have resigned.
Golf Story is Intriguing (Jeff Hankins Publishers Note)
Northwest Arkansas Business Journal - Opinion - Jeff Hankins - 9/2/02
Golf Entertainment Inc. of Springdale first appeared on my radar screen early this year, and today it’s more than a little blip.
Former Golf CEO Says He’s Cooperating With Feds
Arkansas Business - Today's Headlines-Front Page - Jeffrey Wood - 9/3/02 11:44:14 AM
The former CEO of Golf Entertainment Inc. responds to foreclosure action by saying he is cooperating with federal authorities.
Securities Commissioner Orders Golf Entertainment to Stop Selling Stock
Daily News - Today's Headlines-Front Page - Gwen Moritz - 9/10/02 5:27:38 PM
Arkansas Securities Commissioner issues cease-and-desist order against Golf Entertainment Inc. of Springdale.
Golf Doesn’t Tell Shareholders About SEC Probe
Arkansas Business - Whispers - Arkansas Business staff - 9/16/02
The Arkansas Securities Department apparently moves a lot faster than Golf Entertainment Inc. of Springdale.
Golf Entertainment Is Mum to Investors on SEC Probe
Northwest Arkansas Business Journal - Whispers - Northwest Arkansas Business Journal staff - 9/16/02
The Arkansas Securities Department apparently moves a lot faster than Golf Entertainment Inc. of Springdale.
Golf Loses Control of Station
Daily News - Today's Headlines-Front Page - Jeffrey Wood - 9/18/02 12:21:50 PM
Wednesday morning sees embattled Golf Entertainment Inc., the publicly traded Springdale broadcasting company, lose its deal to purchase low-power television station KVAQ-LP, Channels 20/71.
Golf Takes a Mulligan
Northwest Arkansas Business Journal - Whispers - Northwest Arkansas Business Journal staff - 11/11/02
TTwo officers from Golf Entertainment Inc. of Springdale appear to have started a new business at 100 E. Emma Ave.
Golf Sues Securities Department
Daily News - Today's Headlines-Front Page - Jeffrey Wood - 1/3/03 11:44:42 AM
Penny stock Golf Entertainment Inc. adds the Arkansas Securities Department to the list of entities it claims tried to manipulate its stock price.
Defendants Wood, Kirk & Mauck, from August 16, 2002 through the present, utilizing printed and electronic media, deliberately and knowingly disseminated false and misleading information regarding plaintiff which included deliberate false claims that:
TABLE 2
8-19-2002 Plaintiff had “violated SEC rules” (10b-5 violation)
8-19-02 Plaintiff had fraudulently “inflated the value of its assets” (10b-5 violation)
8-26-02 Plaintiff had “been evicted” and was under investigation for “conspiring to defraud shareholders” (10b-5 violation)
8-26-02 Plaintiff was under “SEC” investigation (10b-5 violation)
8-26-02 Plaintiff had been “sued in a Florida court” and that “law officials remained silent,” inferring that an imminent criminal proceeding was about to befall plaintiff (10b-5 violation)
9-2-02 False statement that an imminent “law enforcement” action was pending against the plaintiff. (10b-5 violation)
9-16-02 Plaintiff had somehow failed to disclose the existence of a non-existent “SEC investigation.” (10b-5 violation)
Related Violations by Defendants on “RagingBull”
15. Since early June, 2002, through the present, defendant HOHENHOUSE has utilized the RagingBull message system to post approximately 700 false, misleading, extortionate, materially untrue or incomplete messages, the contents of which, under the circumstances then present, are proscribed by 17 CFR § 240.10b-5. Defendant HOHENHOUSE is alleged to have operated and to be operating other RagingBull accounts, and, engaging in the same proscribed conduct, and has posted an unknown number of proscribed messages. Defendant HOHENHOUSE made proscribed message postings regarding plaintiff on RagingBull containing materially false, untrue or misleading information; did so knowing the contents of the messages regarding plaintiff to be false or misleading; did so intentionally, with fraudulent intent and well knew that such message traffic violated applicable federal law. Such RagingBull message traffic includes, but is not limited to the following:
Table 3
Date/Time (Eastern) Nature of False Statement/Violation
6-12-2002/6:38 PM Misstated application of SEC reporting rules (10b-5)
6-13-2002/6:14 PM 18 USC § 875(d) violation (extortion)
6-13-2002/6:30 PM 18 USC § 875(d) violation (extortion)
6-13-2002/7:16 PM Alleged company was “nothing but phones” (10b-5)
6-13-2002/7:56 PM Falsely alleged plaintiff CFO was “convicted felon” (10b-5) and falsely alleged that company was concealing material information required to be disclosed to public under SEC guidelines. (10b-5)
6-14-2002/4:38 PM Renewed extortionate threat to obtain relief from this lawsuit - In context: 18 USC § 875(d) violation (extortion)
6-14-2002/10:34 PM Boasted of being involved in a “bash attack” on plaintiff - described countermeasures employed by defendant HOHENHOUSE to assure success of “bash attack.” (18 USC § 875(d) violation - extortion and 10b-5 violation)
6-15-2002/5:17 AM 18 USC § 875(d) violation (extortion) and fraudulent claim that company had not filed are required Form 8-K with the SEC.
16. Since August 28, 2002, through the present, defendant JOHN DOE#1 ("coolwaterar" and "coolwaterar0") has utilized the RagingBull message system to post approximately 400 false, misleading, extortionate, materially untrue or incomplete messages, the contents of which, under the circumstances then present, are proscribed by 17 CFR § 240.10b-5. Defendant JOHN DOE#1, upon credible information and belief, is alleged to have operated and to be operating other RagingBull accounts, and, engaging in the same proscribed conduct.
Table 4
Date/Time (Eastern) Nature of False Statement/Violation
8-28-2002/1:27 PM Stated CEO Tim Brooker was engaging in a stock scam (10b-5)
8-28-2002/3:34 PM Stated CEO Tim Brooker was pending service of a federal prison sentence (10b-5)
8-30-2002/11:15 AM Stated the existence of federal, state, county “investigation” and claimed officers/directors of plaintiff were “going down hard.” (10b-5)
9-2-2002/10:49 PM Stated CEO Tim Brooker had “scamed” (sic) a bank in connection with a real estate mortgage (10b-5)
9-2-2002/12:50 PM Stated that plaintiff was a vehicle for funding “the Washington County Militia (10b-5)
9-10-2002/1:45 PM In context: implied that plaintiff’s staff were pending transportation to a federal prison (10b-5)
9-11-2002/11:29 AM Stated that plaintiff had perpetrated a fraud upon the U.S. District Court in connection with a separate civil action (10b-5)
9-18-2002/1:48 PM Stated that plaintiff had been “kicked out” of office premises; that assets had been repossessed; that plaintiff was filing a lawsuit against TV station owner (10b-5)
9-18-2002/6:42 PM Stated he had knowledge that plaintiff’s employees were about to be “indicted” within a period of 1-3 weeks; that plaintiff’s employees were “criminals,” that plaintiff was a “scam” (10b-5)
9-18-2002/10:51 PM Stated that company officers were “stealing” from the plaintiff (10b-5)
17. Since early June, 2002, through the present, defendant Robert KIRK has utilized the RagingBull message system to post approximately 4,000 false, misleading, extortionate, materially untrue or incomplete messages, the contents of which, under the circumstances then present, are proscribed by 17 CFR § 240.10b-5. In this regard, defendant KIRK has demonstrated himself to be a hydra-headed source of ever changing aliases. As of this filing, plaintiff has identified in excess of a dozen aliases (e.g., "Robert Church," "Richard Church," "Robin Kirk, Ph.D.," "tycoma1," "haybail out," "senior paid basher," "robot cloaks," “I-hunt_truffa,” "slam ufl", "james crim," “rat_james_rat,” and more).
Table 5
Date/Time (Eastern) Nature of False Statement/Violation
6-13-2002/11:54AM Falsely stated that plaintiff is “a shell with no operations trying to float a discount CD issue (alias “haybail_out) (10b-5)
6-13-2002/4;20 PM Admits association with an organized stock bashing operation called “FAKEbash” (alias “haybail_out) (10b-5)
6-13-2002/6:29 PM Falsely states effect of SEC regulations; implies plaintiff has deliberately concealed material information otherwise required by SEC to be reported. (alias “haybail_out) (10b-5)
6-13-2002/6:31 PM Falsely stated plaintiff CFO is “a criminal” (alias “haybail_out) (10b-5)
6-13-2002/7:11 PM Falsely stated that plaintiff CFO is a “convicted felon” and that plaintiff deliberately concealed adverse information required to be reported under SEC regulations (alias “haybail_out) (10b-5)
6-13-2002/7:16 PM Admits that he is posting message traffic with the specific intention of “A basher's job is to confuse issues. Which CFO are you talking about?” (alias “haybail_out) (10b-5)
6-16-2002/9:58 PM Falsely stated plaintiff CFO is a “convicted felon” (10b-5)
8-9-2002/8:34 PM Stated all plaintiff’s employees “have a criminal or bankruptcy background” (alias: senior_paid_basher)(10b-5)
18. Since early June 2002, through the present, defendant Leonard Vaughn MAUCK, using the aliases “ljvmauck” and “longandshortreports” and others, has utilized the RagingBull message system to post approximately 100 false, misleading, extortionate, materially untrue or incomplete messages, the contents of which, under the circumstances then present, are proscribed by 17 CFR § 240.10b-5.
Table 6
[NOTE: Subsequent to the filing of the original Complaint in this case, defendant CUMMINGS and defendant TERRA NETWORKS have “removed” or concealed the message traffic previously posted by defendant MAUCK using the alias “ljvmauck” on the RagingBull system. The proscribed messages previously posted by defendant MAUCK are still available from defendant TERRA NETWORKS upon discovery. Plaintiff respectfully avers that it cannot further plead with particularity the required events until discovery with TERRA NETWORKS has concluded regarding this defendant.]
Using the alias “longandshortreports,” defendant MAUCK posted the following proscribed messages:
Date/Time (Eastern) Nature of False Statement/Violation
7-13-2002/9:39 PM Defendant claims a short position of 15 million shares “as a gratuity for bashing it of course (10b-5 violation)
7-15-2002/11:27AM Claimed that plaintiff had “falsified state registration records” (10b-5 violation)
7-15-2002/12:22 PM Claimed compensation to “bash stocks” including stock of plaintiff (10b-5 violation)
7-17-2002/10:32 AM Claimed plaintiff was acting in concert with a shareholder to actively conceal beneficial ownership of plaintiff (10b-5 violation)
7-18-2002/6:07 PM Claimed plaintiff had hired “promoters” directly (10b-5 violation)
7-18-2002/8:17 PM Used “RagingBull” to reprint an “article” written by defendant KIRK (who used the alias “Dr. Robert Church”) and redirected RagingBull readers to the website owned/operated by MAUCK. The reprinted “article” implying wrongdoing and fraud by plaintiff (10b-5 violation)
7-18-2002/9:49 PM Stated plaintiff was operating without a required “broadcast license,” a federal offense (10b-5 violation)
7-18-2002/9:52 PM Again stated plaintiff was operating without a required “broadcast license,” a federal offense (10b-5 violation)
19. Since early June, 2002, through the present, defendant Scott H. WILDING, using the alias “radarpicks,” among others, has utilized the RagingBull message system to post approximately 100 false, misleading, extortionate, materially untrue or incomplete messages, the contents of which, under the circumstances then present, are proscribed by 17 CFR § 240.10b-5.
Table 7
Date/Time (Eastern) Nature of False Statement/Violation
6-7-2002/11:19 AM Posted a bogus excerpt from what was represented as a part of a Form 8-K filing by plaintiff (10b-5 violation)
20. Defendant TERRA NETWORKS SA, from early June, 2002, and continuing through the present, has knowingly, willfully and intentionally aided and abetted each of the above named defendants in the 10b-5 violations complained of herein, in violation of 17 CFR § 240.10b-5. Defendant TERRA NETWORKS SA is fully aware that the 10b-5 violations set out in Tables 2-7 (inclusive) were and are occurring and have taken no action to report to federal authorities, to interdict or to mitigate such violations. Defendant TERRA NETWORKS, SA, since on or about June 10, 2002, through the present, has been repeatedly notified that the above listed violations were occurring in its venue. Likewise, defendant CUMMINGS aided and abetted the other defendants in the RagingBull activities complained of.
21. By engaging in such conduct each of the defendants TERRA NETWORKS SA and CUMMINGS violated various provisions of the federal securities laws as set forth in this Complaint including 17 CFR § 240.10b-5, and unless restrained and enjoined, will continue to violate such provisions. The damages occasioned will likewise continue unabated to the detriment of plaintiff.
Jurisdiction and Venue
22. Two defendants, WOOD and JOHN DOE#1, reside in the Western District of Arkansas. The other defendants reside as set forth above. This Court has jurisdiction over this action pursuant to 17 CFR § 240.10b-5; 15 U.S.C. § 77v(a) and 15 U.S.C. § 78j(a)(1), (b); 15 U.S.C. § 78aa; and 28 U.S.C. §§ 1391 (b)(1),(3); (d), & (e)1. Venue is properly laid in the Western District of Arkansas in that substantial events have been occasioned here as a result of the direct actions of several of the defendants; all defendants have a substantial prior and ongoing nexus of contact with the District and events occurring here.
23. All defendants, knowingly and intentionally, directly and/or indirectly, have made use of the means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national securities exchange in connection with the transactions, acts, practices and courses of business alleged herein. The defendants have each, from time to time, deliberately violated 17 C.F.R. § 240.10b-5 as they manipulated the price of the common and preferred stock of the plaintiff, a publicly traded, fully reporting company under SEC governance.
24. From on or about June 1, 2002 through the present, defendant HOHENHOUSE violated 17 C.F.R. § 240.10b-5; 18 U.S.C. §1951 and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; by travel to and within the District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance.
25. From on or about June 1, 2002 through the present, defendant WILDING violated 17 C.F.R. § 240.10b-5; 18 U.S.C. §1951 and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; by travel to and within the District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance.
26. From on or about June 1, 2002 through the present, defendant KIRK violated 17 C.F.R. § 240.10b-5; and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance.
27. From on or about June 1, 2002 through the present, defendant MAUCK violated 17 C.F.R. § 240.10b-5; and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance.
28. From on or about June 1, 2002 through September 29, 2002, defendant CUMMINGS violated 17 C.F.R. § 240.10b-5; and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance.
29. From on or about June 1, 2002 through the present, defendant WOOD violated 17 C.F.R. § 240.10b-5; through use of avenues of interstate commerce; through publication of purported news articles created, printed and disseminated within the District; through the making of materially false and untrue statements in such articles about plaintiff, a publicly traded, fully reporting company under SEC governance. Additionally, defendant WOOD caused publication of such purported articles in interstate and international commerce. Defendant WOOD resides in the District.
30. From on or about August 28, 2002 through the present, defendant JOHN DOE#1, a/k/a "coolwaterar" and "coolwaterar0" violated 17 C.F.R. § 240.10b-5; and 18 U.S.C. §875(d) through use of avenues of interstate commerce; through contact with an employee of plaintiff residing in this District; through the making of materially false and untrue statements about plaintiff, a publicly traded, fully reporting company under SEC governance. Defendant JOHN DOE#1 resides in the District.
31. From on or about June 1, 2002 through the present, defendant TERRA NETWORKS S.A. violated 17 C.F.R. § 240.10b-5 through the intentional and deliberate provision of a physical and virtual venue known as "RagingBull.com." This venue was maintained by the defendant TERRA NETWORKS S.A. when and while it knew that the venue was being utilized by persons using it to further and foster violations of 17 C.F.R. § 240.10b-5. Additionally, TERRA NETWORKS S.A. allowed its employee defendant CUMMINGS to falsely manipulate the venue in such a fashion and manner as to conceal the true identity of many of the affiliates and sponsors of the defendants and to eliminate any questioning or challenging of them as they occasioned the violations complained of herein. TERRA NETWORKS S.A. specifically knew that the 10b-5 violations were occurring against the interest of plaintiff, a publicly traded, fully reporting company under SEC governance, and adopted the actions of the other defendants.
32. As the result of their actions, each defendant, including the defendants residing in this District, have had substantial contact with the District. Defendant WOOD and his employer previously publicly acknowledged an in-depth “working relationship” with defendant KIRK.
33. All of the defendants, unless restrained and enjoined, continue to engage in the acts, practices and courses of business alleged herein, or in transactions, acts, practices and courses of business of similar purport and object.
First Claim
(Violations of 17 CFR § 240.10b-5 by defendants Wood, Kirk and Mauck)
34. Plaintiff SIENNA hereby incorporates 1 through 33 as if fully set forth herein.
35. Defendants WOOD, KIRK and MAUCK, at a time when defendant MAUCK maintained a naked short position in the securities of plaintiff, with the intent to induce others to sell SIENNA’s securities, did knowingly or recklessly misstate material facts and omit material facts when WOOD, KIRK and MAUCK created in whole or in part the news articles described in the previous paragraphs and when defendants WOOD, KIRK and MAUCK caused the press articles described in the previous paragraphs to be issued to the investing public in print and electronic form.
36. Defendants WOOD, KIRK and MAUCK engaged in transactions and practices or courses of business that operated as a fraud or deceit upon purchasers and sellers of SIENNA’s securities when they caused purchases and sales of SIENNA’s stock to be executed based on spurious, false, misleading and materially untrue news articles to be released.
37. In the manner described above, defendants WOOD, KIRK and MAUCK, in the offer or sale of securities, by the use of means or instruments of interstate commerce or by the mails, directly or indirectly (a) employed devices, schemes or artifices to defraud; (b) obtained money or property by means of untrue statements of material facts or omissions of material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (c) engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon purchasers of securities, in violation of 17 CFR § 240.10b-5 and 15 U.S.C. § 78j.
Second Claim
(Violations of 17 CFR § 240.10b-5 by all defendants)
38. Plaintiff SIENNA hereby incorporates 1 through 37 as if fully set forth herein.
39. Defendants HOHENHOUSE, KIRK, MAUCK, WILDING, WOOD, CUMMINGS, JOHN DOE#1, TERRA NETWORKS, with the intent to induce others to purchase or sell SIENNA’s securities, did knowingly or recklessly misstate material facts and omit material facts when the defendants, in the manners and dates and times set out above, in the “RagingBull” internet venue, caused informational releases described in the previous paragraphs to be issued to the investing public.
40. Defendants HOHENHOUSE, KIRK, MAUCK, WILDING, WOOD, JOHN DOE#1, aided and abetted by TERRA NETWORKS and CUMMINGS, engaged in transactions and practices or courses of business that operated as a fraud or deceit upon purchasers or sellers of SIENNA’s securities when they caused hundreds of purchases and sales of SIENNA’s stock to be executed based upon the false and fraudulent public representations they made via RagingBull.
41. In the manner described above, defendants HOHENHOUSE, KIRK, MAUCK, WILDING, WOOD, JOHN DOE#1, aided and abetted by TERRA NETWORKS and CUMMINGS, in connection with the purchase or sale of securities, by the use of means or instrumentalities of interstate commerce or of the mails, directly or indirectly (a) employed devices, schemes or artifices to defraud; (b) made untrue statements of material facts or omissions of material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; or (c) engaged in transactions, practices or courses of business which operated or would operate as a fraud or deceit upon persons, in violation of 17 CFR § 240.10b-5 and 15 U.S.C. § 78j.
Third Claim
(Aiding and Abetting by Cummings & Terra Networks, S.A.)
42. Plaintiff SIENNA hereby incorporates 1 through 41 as if fully set forth herein.
43. Defendants CUMMINGS and TERRA NETWORKS, S.A. knowingly or recklessly provided substantial assistance to defendants KIRK, MAUCK, WILDING, HOHENHOUSE, JOHN DOE#1 violations of Section 10(b) and Rule 10b-5 of the Exchange Act and 17 CFR § 240.10b-5 by among other things, providing them a public venue; by CUMMINGS corruptly manipulating various aspects of RagingBull’s logs and access provisions at the direction and urging of KIRK. TERRA NETWORKS, S.A. knowingly, deliberately, willfully, wrongfully and with the intent to further the conduct complained of herein, furnished a venue of both physical and electronic substance to the other named defendants in order to facilitate the violations complained of herein.
44. In the manner described above, defendants CUMMINGS and TERRA NETWORKS, S.A. aided and abetted defendants HOHENHOUSE, KIRK, MAUCK, WILDING, and JOHN DOE#1 in their violations of Section 10(b) and Rule 10b-5 of the Exchange Act by knowingly providing substantial assistance to such defendants in violation of 17 CFR § 240.10b-5 and 15 U.S.C. § 78j.
Fourth Claim
(Extortion by defendants Hohenhouse and Wilding)
45. Plaintiff SIENNA hereby incorporates 1 through 44 as if fully set forth herein.
46. From on or about June 1, 2002 through the present defendants HOHENHOUSE and WILDING, acting in concert with each other and with others, knowingly, willfully, wrongfully and intentionally undertook to violate 18 USC §§ 875(d) and 1951, 2 & 3, through direct and indirect attempts at and actual violations of the stated extortion statutes. It was part of their course of conduct that these defendants would and did, from time to time in the Western District of Arkansas and elsewhere, utilizing means and avenues of interstate commerce, effect, operate, plan, and further various extortionate schemes; engage in extortionate demands upon plaintiff and an officer and employee of plaintiff, and attempted to unlawfully coerce or otherwise direct the actions of an employee of plaintiff as the result of extortionate demands. In concert with such schemes, these defendants engaged in deliberate violations of 17 CFR § 240.10b-5 and 15 U.S.C. § 78j as outlined above as part of the reprisal element of the extortion scheme.
Prayer for Relief
WHEREFORE, the plaintiff SIENNA respectfully requests that this Court enter a judgment:
(i) permanently enjoining all defendants, and their agents, servants, employees, attorneys, and those in active concert or participation with him, who receive actual notice by personal service or otherwise, from violating 15 U.S.C. § 78j and 17 C.F.R. §§ 240.10b-5, and, from violations of 18 USC §§ 875(d) and 1951, 2 and 3.
(ii) for actual damages, jointly and severally, in the amount of $15,000,000 dollars for injury to plaintiff occasioned by securities fraud, common law fraud, lost business opportunity, diminished market capitalization, contractual interference, defamation and harassment.
(iii) for punitive damages, jointly and severally, in the amount of $15,000,000 dollars as compensation for the conduct described above, and to serve as a deterrent from further such conduct in the future.
(iv) for costs of the action and reasonable attorney fees.
(v) for such other relief as this Court may deem just and appropriate.
Dated: March 5, 2002
SIENNA BROADCASTING
CORPORATION, PLAINTIFF:
by:__________________________________
John Dodge, Attorney at Law
Ark. Bar No. 78041
101 North Mill Street
Springdale, AR 72764
479-751-2300
479-751-2273 (fax)
are we as shareholders protected against these actions?OT:read how canadian shorting IMPACTS SHAREHOLDER "19. Rhino sold short 350,500 shares in the Canadian account during this period. The shares were not delivered by settlement date. The Canadian broker-dealer neither bought nor borrowed stock to cover these sales and continued executing short sales. Rhino's short selling in the Canadian account continued to put downward pressure on Sedona's stock price. Between March 1 and April 16, Rhino, through the two accounts it controlled on behalf of the Client, accumulated an open and undelivered short position in Sedona stock of 1,193,296 shares."
this company is currently using bioshield technology..look at the results
http://www.maidsintheusa.biz/mel-websitebiz2_012.htm
http://www.maidsintheusa.biz/mel-websitebiz2_010.htm
OT: sec lawsuit against short seller.....
United States District Court
Southern District Of New York
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Securities and Exchange Commission,
Plaintiff,
v.
RHINO ADVISORS, INC.
and THOMAS BADIAN,
Defendants.
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: Civil Action No. __________
Complaint
Plaintiff Securities and Exchange Commission ("SEC" or the "Commission") alleges:
Nature of the Action
1. This case involves manipulative trading in the common stock of Sedona Corporation ("Sedona") by Rhino Advisors, Inc. ("Rhino"), an unregistered investment adviser based in Manhattan, NY, that manages investments for two foreign entities. Rhino's president, who directed all of its trading activities, is Thomas Badian ("Badian"). Rhino and Badian contributed to a decline in the price of Sedona's stock price by engaging in large scale short selling.
2. Rhino and Badian manipulated Sedona's stock price to enhance a client's economic interests in a $3 million convertible debenture (the "Debenture") that Sedona issued on November 22, 2000. Sedona issued the Debenture to one of Rhino's clients. The Debenture, negotiated by Badian, prohibited Rhino's client from selling short Sedona's stock short while the Debenture "remained issued and outstanding." Despite this contractual provision, Rhino engaged in extensive short selling and pre-arranged trading on behalf of its client prior to exercising the conversion rights under the Debenture. This short selling increased the supply of shares in the market and depressed Sedona's stock price. As a result of the depressed stock price, Rhino's client received more shares from Sedona when it exercised its conversion rights under the Debenture than it otherwise would have received. Following the conversions, Rhino engaged in wash sales and matched orders to cover the short positions and conceal the client's involvement in the scheme.
Jurisdiction and Venue
3. This Court has jurisdiction over this action pursuant to Sections 20, and 22 of the Securities Act of 1933 ("Securities Act") [15 U.S.C. §§ 77t and 77v] and Sections 21(d), 21(e) and 27 of the Securities Exchange Act of 1934 ("Exchange Act") [15 U.S.C. §§ 78u and 78aa].
4. Rhino and Badian, directly or indirectly, have made use of the means or instrumentalities of interstate commerce, or of the mails, or the facilities of a national securities exchange in connection with the transactions, acts, practices and courses of business alleged herein.
5. Rhino's principal place of business is located in this District. Badian resides in this District and conducts business in this District.
6. Rhino and Badian will, unless restrained and enjoined, continue to engage in the acts, practices and courses of business alleged herein, or in transactions, acts, practices and courses of business of similar purport and object.
Defendants Rhino Advisors, Inc. and Thomas Badian
7. Rhino is an unregistered investment advisor. Rhino is controlled by Badian, its president. Rhino manages funds for two overseas clients. Generally, it caused its clients to purchase debt securities directly from issuers, often securities convertible into common stock. On behalf of its clients, Rhino subsequently traded the common stock, often selling it short before converting the debt securities.
8. Badian, age 33, resides in New York. Badian controls all of Rhino's operations with the assistance of a small staff of employees.
Other Entities and Persons
9. Amro International, S.A. (the "Client") is a Panamanian corporation, headquartered in Zurich, Switzerland, that provides convertible and equity line financing to companies in need of capital. Badian and Rhino acted as investment advisers for the Client.
10. Sedona Corporation is a Pennsylvania corporation headquartered in King of Prussia, Pennsylvania. Sedona produces and distributes customer resource management software for small to mid-size businesses. Sedona's stock is registered pursuant to section 12(g) of the Exchange Act and is listed for trading on the Nasdaq SmallCap Market. Sedona is one of many issuers to whom Rhino's clients provided financing.
Relevant Facts
Background
11. On November 22, 2000, the Client and Sedona entered into a Convertible Debenture and Warrants Purchase Agreement (the "Purchase Agreement"). Under the terms of the Purchase Agreement, the Client provided Sedona $2.5 million in financing as consideration for Sedona's issuance of a $3 million 5% Convertible Debenture (the "Debenture"). The Debenture obligated Sedona to pay the Client $3 million on March 22, 2001. The Debenture granted the Client the right to convert all or any portion of the Debenture into Sedona common stock at a price equal to 85% of "the volume weighted average price [VWAP] of the Common Stock on the [Nasdaq Small Cap Market] during the five trading days immediately prior to the Closing Date or Conversion Date, as the case may be." Based on this formula, the lower Sedona's stock price during the five-day period prior to the Client's exercise of its conversion rights, the more shares the Client would receive on conversion. The Purchase Agreement expressly prohibited the Client from selling short shares of Sedona's stock while the Debenture remained "issued and outstanding." Sedona filed the Purchase Agreement and Debenture on its Form 8-K with the Commission on November 28, 2000.
Badian and Rhino Engaged in Short Selling that Depressed the Price of Sedona's Stock
12. Between March 1 and March 29, 2001, Rhino and Badian directed a series of short sales of Sedona stock through an account at a U.S. broker-dealer held in the Client's name and controlled by Badian.
13. At the time, the Client owned no Sedona stock. Rhino did not deliver the shares that it was selling short by settlement day and the broker neither bought nor borrowed stock to cover these sales.
14. In violation of the Purchase Agreement's prohibition against short selling, Rhino placed orders with the U.S. broker-dealer, who thereafter placed sell orders with another broker-dealer (the "Cooperating Broker-Dealer") in Sedona stock. Each day in March 2001, the Cooperating Broker-Dealer executed sales of Sedona stock in its proprietary account. The Cooperating Broker-Dealer often placed these sales through various electronic communications networks (ECNs), which provide anonymity to traders wishing to conceal their identity from the market. At the time of these sales, the Cooperating Broker-Dealer did not possess any shares of the Sedona stock that it was selling.
15. The Cooperating Broker-Dealer covered its short sales through the ECN's by purchasing the shares from Rhino's client's account at the U.S. broker-dealer. The Cooperating Broker-Dealer executed the purchases after the sales had been effected through the ECN's and after the market had closed. The Cooperating Broker-Dealer would purchase the shares at prices slightly below the average prices of the sales through the ECN's, thus ensuring itself a profit. As a consequence, these purchases were not printed to the NASDAQ tape and were not included in reported volume for the day.
16. Because the Client owned no Sedona stock, these transactions resulted in short positions in the Client's account. However, because its sales were not reported or printed to the NASDAQ tape, the short sales were not reported to the market.
17. Rhino continued to execute short sales in the Client's account, despite repeated failure to deliver shares by settlement date. In sum, in March 2001, through Badian's trading, the Client sold short 872,796 shares of Sedona stock. Of those shares, the Client sold short 785,536 shares prior to its first exercise of its conversion rights under the Debenture. These failures to deliver triggered clearing failures at Depository Trust and Clearing Corporation ("DTCC"). As a result of the clearing failures, on March 22, 2001, the National Association of Securities Dealers ("NASD") placed a short restriction on Sedona's stock, which required that any future sales of Sedona would be subject to a mandatory close-out if there was a failure to deliver the securities after 10 days.1
18. After the NASD placed the short restriction on Sedona's stock, Rhino sold short Sedona shares from an account he controlled on behalf of the Client at a Canadian broker-dealer. Canadian broker-dealers are not members of the NASD and are not subject to its short sale restrictions. Beginning on March 30 and continuing through mid-April 2001, Rhino executed short sales through the Canadian account.
19. Rhino sold short 350,500 shares in the Canadian account during this period. The shares were not delivered by settlement date. The Canadian broker-dealer neither bought nor borrowed stock to cover these sales and continued executing short sales. Rhino's short selling in the Canadian account continued to put downward pressure on Sedona's stock price. Between March 1 and April 16, Rhino, through the two accounts it controlled on behalf of the Client, accumulated an open and undelivered short position in Sedona stock of 1,193,296 shares.
Rhino's Short Selling Increased the Number of Shares the Client Received on Conversion
20. Rhino's short selling through the Client's accounts depressed Sedona's stock price during the five day trading periods prior to each conversion on which the VWAP of Sedona's stock was calculated. Between January 26 and March 1, 2001, Sedona's average closing price was $1.43 per share. By March 23, 2001, after three weeks of Rhino's constant short selling, Sedona's stock had declined to $.75 per share. On March 27, 2001, Badian, on behalf of the Client, tendered the first notice of conversion under the Debenture and received 127,517 shares of Sedona stock at a VWAP of $.9384 and a conversion price of $.79764. During the five trading days prior to March 27, Badian's trading averaged in excess of 25% of all shares traded during the period.
21. Based on the conversion formula in the Debenture, the lower the VWAP, the more shares the Client received from Sedona on conversion. Between March 27 and April 16, 2001, the Client exercised its conversion rights under the Debenture on three more occasions. On April 5, 2001, the Client exercised its right to receive 395,337 shares of Sedona stock at a VWAP of $.75762 and a conversion price of $.64398. On April 10, the Client exercised its right to receive 761,342 shares of Sedona stock at a VWAP of $.7884 and a conversion price of $.67014. On April 16, 2001, the Client exercised its right to receive 329,988 shares of Sedona stock at a VWAP of $.91022 and a conversion price of $.77369. As a result of the sustained sell pressure placed on Sedona's stock price, the VWAP for each of the Client's conversions in April was lower than the VWAP for its first conversion on March 27, which increased the number of conversion shares that the Client received from Sedona under the Debenture.
22. Rhino deposited the conversion shares that the Client received from Sedona into another account he controlled at a second U.S. broker-dealer designated to receive the conversion shares (the "Conversion Shares Account"). By April 16, 2001, Rhino received 1,614,184 shares of Sedona stock on behalf of the Client in the Conversion Shares Account. The majority of these conversion shares were used to close the open and undelivered short position at the first U.S. broker-dealer where the short selling occurred and to significantly reduce the open and undelivered short position at the Canadian broker-dealer.
23. Instead of delivering the shares directly to broker-dealers where the short sales occurred, Rhino effected wash sales and matched orders out of the Conversion Shares Account to the short selling accounts. This created the appearance that the accounts that had short positions were purchasing shares in the open market and not covering short positions with shares obtained through conversion of the debenture. On at least ten occasions during April, 2001, Badian directed transactions involving no change in beneficial ownership of shares of Sedona stock or placed buy orders for shares while simultaneously placing sell orders of substantially the same size and price.
24. On May 1, 2001, Badian exercised the Client's right to receive 261,587 shares of Sedona stock at a VWAP of $.94474 and a conversion price of $.80303. On May 15, 2001, Badian exercised the Client's right to receive 303,399 shares of Sedona stock at a VWAP of $1.19 and a conversion price of $1.01. Badian continued to engage in short selling in May, selling 25,000 shares in one account and 560,800 shares through another. Badian and Rhino failed to deliver these shares to the accounts were the sales occurred, thereby triggering clearing failures at DTCC.
The Client Profited From Badian's Scheme
25. Rhino's trading allowed the Client to profit from the scheme in at least two ways. First, the short sales locked in a sale price for the Sedona stock that was higher than the conversion price for the shares ultimately used to cover the open short positions. Second, Rhino's short sales increased the supply of Sedona shares in the market and depressed the price. As a result of the depressed market price, the Client converted the Debenture to a greater number of shares of Sedona stock, which were already discounted to the market, and which it then used to cover its previous short sales made at higher prices.
Rhino Failed To Respond To A Commission Order
26. Rhino failed to tender a sworn response to an order issued pursuant to Section 21(a) of the Exchange Act [15 U.S.C. § 78u].
First Claim for Relief
Violations of Section 10(b) of the Exchange Act and Rule 10b-5 Promulgated Thereunder
[15 U.S.C. § 78j(b) and 17 C.F.R. § 240.10b-5]
By Defendants Rhino And Badian
27. Paragraphs 1 through 26 are realleged and incorporated herein by reference.
28. From at least March 2001 through May 2001, Defendants Rhino and Badian, directly and indirectly, by use of the means and instrumentality of interstate commerce, and of the mails in connection with the purchase or sale of the securities, as described in this Complaint, have been, knowingly, willfully or recklessly: (a) employing devices, schemes or artifices to defraud; (b) making untrue statements of material facts and omitting to state material facts necessary in order to make the statements made, in the light of the circumstances under which they were made, not misleading; and/or (c) engaging in acts, practices and courses of business which have operated, are now operating and will operate as a fraud upon the purchasers of such securities.
29. By reason of the activities described in the paragraphs above, defendants Rhino and Badian directly or indirectly, have violated and, unless enjoined, will continue to violate Section 10(b) of the Exchange Act, 15 U.S.C. § 78j(b), and Rule 10b-5, 17 C.F.R. § 240. 10b-5, thereunder.
Second Claim for Relief
Violations of Section 17(a)(1) of the Securities Act
[15 U.S.C. § 77q(a)]
by Defendants Rhino and Badian
30. Paragraphs 1 through 29 are realleged and incorporated herein by reference.
31. From at least March 2001 through May 2001, Defendants Rhino and Badian, directly and indirectly, by use of the means or instruments of transportation or communication in interstate commerce and by use of the mails, in the offer or sale of securities, as described in this Complaint, have been, knowingly, willfully or recklessly employing devices, schemes or artifices to defraud.
32. By reason of the activities described in the paragraphs above, Defendants Rhino and Badian directly and indirectly, have violated and, unless enjoined, will continue to violate Section 17(a)(1) of the Securities Act, 15 U.S.C. § 77q(a)(1).
Third Claim for Relief
Defendant Rhino Violated the Commission's Order Lawfully Issued Pursuant to Section 21(a) of the Exchange Act
[15 U.S.C. § 77u(a)]
33. Paragraphs 1 through 32 are realleged and incorporated herein by reference.
34. On June 17, 2002, the Commission lawfully issued an order pursuant to Section 21(a) of the Exchange Act to Rhino.
35. Rhino failed to comply with the terms of the Order and has therefore violated the Order.
PRAYER FOR RELIEF
WHEREFORE, Plaintiff SEC respectfully requests that this Court enter a judgment:
(i) permanently enjoining Defendants Rhino Advisors, Inc. and Thomas Badian from violating Section 10(b) of the Exchange Act [15 U.S.C. §§ 78j(b)], and Rule 10b-5 thereunder [17 C.F.R. §§ 240.10b-5 ];
(ii) permanently enjoining Defendants Rhino Advisors, Inc. and Thomas Badian from violating Section 17(a)(1) of the Securities Act of 1933 [15 U.S.C. § 77q(a)];
(iii) ordering Defendants Rhino Advisors, Inc. and Thomas Badian to pay, on a joint and several basis, a civil money penalty under Section 21(a) of the Exchange Act [15 U.S.C. § 78u] in the amount of $1 million U.S. dollars;
(iv) ordering Defendant Rhino Advisors to comply with the Commission's order, issued pursuant to Section 21(a) [15 U.S.C. § 78u] of the Exchange Act, directing it to provide sworn answers to the questions directed to it; and
(v) granting such other relief as this Court may deem just and appropriate.
Respectfully submitted,
_________________________
Thomas C. Newkirk (TN7271)
James M. McHale (JM8286)
James T. Coffman
Melissa A. Robertson
Christopher C. Ehrman
Counsel for Plaintiff
Securities and Exchange Commission
Mail Stop 9-11
450 Fifth Street, N.W.
Washington, D.C. 20549
(202) 942-4588 (McHale)
(202) 942-9581 (fax)
Dated: Washington, D.C.,
February 26, 2003
Endnotes
1 Section 11830 of the NASD's Uniform Practice Code requires that a short seller's broker-dealer must close out a short sale of a specific security 10 days after normal settlement date if the client does not deliver the shares. Securities subject to close-out requirement are those with an aggregate "clearing" short position of 10,000 shares or more that equals or exceeds one half of one percent of the total shares outstanding. The NASD will identify these securities daily based on data from the DTCC and compile a "restricted list." Any subsequent short-sale transaction in a security on the list that is not completed by delivery of shares within the prescribed time frames will be subject to mandatory close-out if a "fail-to-deliver" situation exists 10 days after normal settlement date.
http://www.sec.gov/litigation/complaints/comp18003.htm
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OT:read how canadian shorting IMPACTS SHAREHOLDER "19. Rhino sold short 350,500 shares in the Canadian account during this period. The shares were not delivered by settlement date. The Canadian broker-dealer neither bought nor borrowed stock to cover these sales and continued executing short sales. Rhino's short selling in the Canadian account continued to put downward pressure on Sedona's stock price. Between March 1 and April 16, Rhino, through the two accounts it controlled on behalf of the Client, accumulated an open and undelivered short position in Sedona stock of 1,193,296 shares."
ot:from the show trezf trezac corp found naked short position in canada of 700,000 shares and their float is 1.9 million!! listen in very interesting re: short selling!!