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Puppy, it will be interesting to see if AR declared the income booty on his tax returns.
The IRS could end up getting him like they did Al Capone.
Puppy, FaulkHill (Mark Faulk) posts on Yahoo are even funnier
Mark discribes what the FaulkHill alias stands for:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_E/threadview?bn=6542&tid=65805&mid=65834
Mark even hyped and pumped Xybernaut:
http://messages.finance.yahoo.com/Business_%26_Finance/Investments/Stocks_%28A_to_Z%29/Stocks_X/threadview?bn=20335&tid=306532&mid=306647
Mark Faulk embraces Richard Altomare on CFRN to battle naked shortselling
audio here: http://heavensembrace.org/ft041307.mp3
Q. Who's Bud Burrell?
A. I respectfully decline to answer that question based upon my constitutional rights as guaranteed to me by the 5th Amendment of the United States Constitution and the same rights provided to me in the Constitution of the State of Florida.
Q. Is Bud Burrell on the Universal Express payroll?
A. I respectfully decline to answer that question based upon my constitutional rights as guaranteed to me by the 5th Amendment of the United States Constitution and the same rights provided to me in the Constitution of the State of Florida.
Q. Didn't Bud Burrell have a company called the Quantum Matrix that you were paying $4,000 to every so often?
A. I respectfully decline to answer that question based upon my constitutional rights as guaranteed to me by the 5th Amendment of the United States Constitution and the same rights provided to me in the Constitution of the State of Florida.
A - DEPOSITION OF RICHARD ALTOMARE (NOVEMBER 27, 2007)
http://www.usxp.com/Receiver/Richard_Altomare_Depo_11_27_07.pdf
O.J. case a chance to shed light on corruption in Vegas courts
by Donny Ferguson
December 05, 2007
O.J. case a chance to shed light on corruption in Vegas courts
by Donny Ferguson
Fox News, CNN, Court TV and the gang will soon descend on Las Vegas as tabloid mainstay O.J. Simpson goes on trial facing charges of armed robbery and kidnapping allegedly committed with accomplices so shady the prosecution fears their testimony against Simpson could work in his favor.
But reporters looking for an even shadier cast of characters should venture down the hallway into other courtrooms. There, they could find those accused of nefarious deeds ranging from blackmail, mob ties and fixing cases to line their own pockets are behind the bench, rather than in front of it.
Las Vegas courtrooms have earned a reputation as some of the most compromised in the nation, where rulings are often based on personal relationships and financial benefit, rather than the letter of the law.
In fact, influence peddling and improper relationships are so rampant among Las Vegas judges The Los Angeles Times did a feature series on rampant corruption in the Las Vegas judicial system 12 months ago. The investigative report revealed a court system so thoroughly tainted, and rulings so completely corrupted, they make Simpson’s acquittal on murder charges look like a fixed traffic ticket. The expose did result in more financial disclosure among senior judges, the Las Vegas judicial system remains one of the most compromised in the nation.
For all the talk of reigning in activist judges, ensuring the right of jury nullification and tort reform, the single greatest threat to jurisprudence in America is simply the lack of basic oversight of judges. And Las Vegas courtrooms are a glaring example of the problem taken to the extreme.
The Times uncovered one Las Vegas judge James Brennan, actually resigned his position as a Nevada state judge to avoid indictment by a federal grand jury on blackmail charges in which he tried to steal $56,000 from the family of a deceased friend. Shamelessly, Brennan returned to the bench, with a promotion to senior judge, and ruled on 16 cases involving participants in his real estate deals.
Las Vegas senior judge Joseph Pavlikowski officiated the wedding of notorious mob boss Lefty Rosenthal, played by Robert DeNiro in the movie “Casino.” Rosenthal returned the favor to his friend by giving the judge a discount on his daughter’s wedding at a casino he ran.
That didn’t stop Pavlikowski from presiding over a case against the mobster, in which he overruled Nevada authorities and allowed Rosenthal a license to operate a casino. The state denied the license because Rosenthal, as a known Mafia figure listed in the state’s List of Excluded Persons, was prohibited from having a gaming license. Pavlikowski fought the state, issuing orders prohibiting the denial of the license and even ordering his friend de-listed as a Mafia figure.
Another judge, James Mahan, awarded nearly $5 million in judgments and legal fees to friends such as a business partner and campaign treasurer, as well as a former law partner he owed money to and provided him with free legal assistance. The Times found that in other cases he appointed his business partner, who ran an Internet porn business, to the lucrative position of court-appointed manager to several businesses.
But the worst of the Times bunch is senior judge Stephen L. Huffaker, who routinely ruled in cases involving businesses he held financial interests in. In one case a real estate investment consortium sued 63-year-old widow and Greek immigrant Carol Pappas and her children, who refused to hand over their home to it could be bulldozing and a parking garage built on top of it. Pappas filed a countersuit, claiming her property was improperly seized for private use.
The case was brought to Huffaker’s court, who heard the case for an amazing 21 months, eventually ruling against the widow and allowing the demolition to proceed. Only after his ruling, nearly two years after taking the case, did Huffaker admit he held 12,000 shares of stock in the company.
The widow’s attorneys sued and requested his ruling be overturned, given the massive ethical violations and conflicts of interest on the part of Huffaker. The Las Vegas court refused to dismiss the corrupted ruling, and the case was resolved only when the city settled for $4.5 million.
The Times also found five cases in which Huffaker heard and ruled on cases involving the Golden Nugget casino, which had given his son an $11,000 scholarship to Yale.
Huffaker also presided over five suits against other Wynn family casinos and a law firm, both of his employed his son. In one case, a jury awarded a $5.8 million judgement to a man savagely beaten and robbed at the Wynn’s Mirage hotel. Huffaker called the jury’s judgement “absolutely shocking” and reduced it to just $1.5 million, never publicly revealing the scholarship to his son.
In all, the Times feature lays out a Las Vegas judicial system in which mob ties and business interests, not the letter of the law, decide cases. Innocent citizens and businesses hoping a even odds in Las Vegas courtrooms often face a stacked deck. Reporters looking to report on the real assault and heist in Vegas should try looking in some of the city’s other courtrooms.
It’s a virtual criminal enterprise that makes stolen footballs look like an unpaid traffic ticket. Rampant disregard for basic judicial ethics, crystallized by the nearly ethically crippled Las Vegas judicial system, is more of a threat to citizens than activist federal judges or the latest tort reform du jour.
Donny Ferguson is a professional political fundraiser and campaign consultant, and Editorial Chairman of the Libertarian Party of Virginia.
http://www.freeliberal.com/archives/003089.html
Securities regulators move to tighten rules for promoters
David Baines, Vancouver Sun
Published: Tuesday, December 04, 2007
If I were one of the many Vancouver promoters who has floated stock deals on the licentious U.S. over-the-counter markets, I might want to consider a new vocation, or at least a new venue.
B.C. securities regulators are making it a whole lot tougher for Vancouver promoters to bypass B.C. securities rules in the creation and promotion of companies quoted on the OTC Bulletin or the pink sheets.
Judging by the package of rules that B.C. Securities Commission officials rolled out Monday, I expect there will be a lot of promoters who will be pretty bummed out by the whole thing.
They will most likely get their lawyers to squawk loudly, invoking all sorts of perceived attacks on the free market system. These lawyers will be glad to parrot their complaints because this business has been very lucrative for them, and they don't want to lose it.
But in my view, this market desperately needs to be reined in. It has been subsumed by greed and avarice. If anything, regulatory intervention has been long overdue.
Until now, promoters have been able to bypass the B.C. regulatory regime by selling shares under exemptions to B.C. registration requirements (usually by selling shares to close friends and family).
Once exempted from registration, these companies do not have to follow any of the rules that apply to B.C. reporting issuers. For example, they do not have to file financial statements or insider trading reports. They are essentially treated as private companies.
But they are not private companies. Typically, they register their shares for re-sale in the United States, usually through the bulletin board or the pink sheets.
These are not exchanges, they are simply quotation systems. There is very little oversight. There are no minimum financial requirements. Disclosure is minimal. News releases are not scrutinized. Trading is not monitored.
So although many of these companies are run from offices in downtown Vancouver, they manage to circumvent most of the rules that apply to Vancouver companies that, for example, trade on the TSX Venture Exchange.
This is the regulatory gap that has spawned so much stock market mayhem in Vancouver. Promoters float sham business ventures, with sham share distributions. After they register the shares for trading in the U.S, they gather them up, so they control the entire float and can easily manipulate the share price. Then they start trading on the bulletin board or pink sheets, causing much financial harm to investors and reputational damage to Vancouver.
These companies have been multiplying like fishes and loaves, alas, with none of the religious connotations. At last count, there were 700 B.C.-connected companies quoted on the U.S. over-the-counter markets, representing 70 per cent of the Canadian total.
After years of abuse, the commission is finally moving to plug this regulatory loophole and stem the flow of shoddy OTC companies. It is proposing a new regulatory regime that will essentially make all these companies B.C. reporting issuers.
Securities regulators move to tighten rules for promoters
David Baines, Vancouver Sun
Published: Tuesday, December 04, 2007
The criteria for inclusion is very broad: A company will be considered an "OTC issuer" if it has an office here, or the business is administered here, or the directors are here, or the control person is here, or the promoters are here, or the majority of the public float is here, or the investor relations activities are carried out here.
Indeed, the proposed definition of an OTC issuer is so broad that the commission will probably be accused of exceeding its jurisdiction and have to fend off legal challenges. But after years of thumb-twiddling, it is refreshing to see the commission on the attack.
On Monday, commission officials held an information session at the Metropolitan Hotel. Martin Eady, the commission's director of corporate finance, didn't mince words. He told the 50-odd people in attendance that many OTC companies have sham businesses and make "ridiculous claims."
He said many professional facilitators -- accountants, lawyers and geologists -- "shut their eyes" to the problem. He warned that the commission would report professionals who knowingly aid and abet sham deals to their professional organizations.
Eady said many OTC companies don't have "real shareholders," rather they have "fake shareholders" who in some cases don't even know they have been listed as shareholders. They are simply stooges for the promoters.
To stop this sort of stock-rigging, the commission is proposing rules to make it illegal for seed shareholders in B.C. to sell back their stock to the promoters. Instead, they will have to sell their shares through a broker, from an account in their own name, into the market. This will move all this share dealing from the back room into the public domain, where people can see what's going on.
Brokers will also have to comply with a whole new set of rules relating to OTC stock dealings. They must, for example, make sure they know who beneficially owns the stock before they trade it. They are also prohibited from accepting delivery of OTC stock until that delivery is approved by a designated compliance person. This will presumably curb the use of B.C. brokerages as conduits for share manipulations and money-laundering.
B.C. is the only province to propose new rules for OTC companies. There is good reason for this: B.C. is the OTC scam capital of Canada. Still, it is unusual in these days of rule harmonization to see a provincial commission go it alone in any area. The commission should be commended for putting investors first.
Of course, opponents will complain that the new rules will drive promoters to friendlier jurisdictions, such as Alberta. To these people, I say good riddance.
At the moment, these are just proposed rules. Industry participants have until Dec. 31 to file written comments. I usually worry that, in the absence of any real consumer lobby, producer interests will prevail. But I think the commission knows this problem is like the sorcerer's apprentice: if they don't deal with it, it will come back at them again, and again, and again.
dbaines@png.canwest.com
© The Vancouver Sun 2007
=DJ IN THE MONEY: Autopsy Of A Naked Shorting Poster Child: USXP
Thursday, November 29, 2007 3:18 PM
By Carol S. Remond
A Dow Jones Newswires Column
For more than four years now, Universal Express Inc. (USXP) blamed its less than stellar financial performance on illegal trading. A very different picture is emerging from recent court documents.
The company, which had ambitions to one day list on the New York Stock Exchange, has gone from being a poster child for investors upset about supposed illegal short-selling of stock to one now in liquidation. Two executives are facing civil charges, and criminal ones may follow.
Four years ago, the luggage delivery company and its outspoken chief executive, Richard Altomare, declared war on "naked short selling" - an illegal way for investors to bet against a company's stock rising. Since then, Universal Express repeatedly blamed this abusive trading and complacent regulators for its tattered finances.
When Altomare first made these claims, he told Dow Jones Newswires that a series of "announcements and acquisitions" would soon qualify his company, then trading on the Over-the-Counter Bulletin Board, for a listing on the New Stock Exchange.
Universal Express never made it on the Big Board. In fact, Altomare has now lost control of his company, and a court-appointed receiver is in the process of trying to liquidate whatever assets are left after years of financial mismanagement.
And Universal Express' CEO and corporate counsel Chris Gunderson might soon face criminal charges on top of the civil contempt charges now in front of them.
Short sellers borrow shares to sell them, hoping that they will be able to replace them with shares bought at a lower price later. Trading without a borrowing agreement is called naked short selling.
The Securities and Exchange Commission sued Universal Express, Altomare, Gunderson and three others in March 2004, accusing them of selling 500 million of unregistered shares into the market, using erroneous press releases to prop the company's stock price.
The civil case was delayed for several months as criminal prosecutors also took an interest in the company and its executives.
Earlier this year, a federal judge in the Southern District of New York sided with the SEC, finding that Universal Express, Altomare and Gunderson violated securities registration and antifraud provisions. The judge enjoined the defendants from further violations and ordered them to pay $21.9 million. The judge also barred Altomare from serving as an officer and director of a public company.
By the SEC's calculations, from January to March 2007, in apparent violation of a preliminary injunction, Universal Express issued 5.4 billion shares in exchange for money or services. Neither Altomare nor Gunderson denied the shares were issued or that they helped issue them. Instead, they said much of the unregistered stock issued wasn't sold but exchanged for services, a point that didn't sit well with Judge Gerald Lynch, who acquiesced to the SEC's request to appoint a receiver.
"Appointing a receiver is an extraordinary remedy, but this is an extraordinary situation," said Lynch in his order. "Defendants continue to violate court orders, and there is no one who is responsible, willing and able to manage Universal Express."
Jane Moscowitz, the receiver, took control of the company in September. In two reports filed with the court, she found that the company was behind on its rent and owed more than $3 million in account payables. During her first visit to the company on Sept. 7, she told employees that there wasn't enough money to meet payroll, only to be rebuked by Altomare, who later told employees there was enough money but that the receiver didn't want to pay them.
Despite the company's lackluster performance, Altomare was well-compensated. He told the receiver that his annual salary was either $1.2 million or $1.3 million. Meanwhile Altomare's wife, Barbara, was paid $70,000 annually. Barbara didn't work at the office, and Altomare wasn't able to tell Moscowitz what his wife did to earn her salary.
The receiver also found that while Altomare had several personal credit cards paid by Universal Express, there is no record of any reimbursement by the CEO. Personal items, such as clothing, were accounted for as added salary, and all hotels, airfares and meals were paid by the company and accounted as business expenses.
Universal Express also paid for Altomare's bling. From April 2006 to May 2007, the company paid almost $559,000 to a jeweler in Boca Raton, Fla. The SEC and the receiver managed to recover the jewels in October, but not before Altomare was able to get $500,000 in cash by selling them to another jeweler who is now contesting the seizure.
The SEC found that Universal Express sold almost 21 billion shares in unregistered stock in 2007 alone. While trading records indicate that the stock was worth about $18 million, the company only received about $9.5 million.
Raising even more questions about the way Altomare and Gunderson were using Universal Express shares to raise cash, is the fact that some investors listed as having bought shares this year deny ever doing so.
The Competitive Enterprise Institute, a conservative think tank based in Washington, D.C., and listed as having invested $35,000, told Dow Jones Newswires that it returned that amount to Universal Luggage Inc., a subsidiary of Universal Express, in early January. General Counsel Sam Kazman said the institute, which never owned any Universal Express shares, returned a corporate contribution that it decided it couldn't accept.
Canadian company York Holdings Inc., listed as having invested almost $1 million, also denied being a Universal Express shareholder.
Meanwhile, the largest stock acquirer listed, Ohio-based Emerald Asset Advisors LLC, couldn't be reached as its phone number has been disconnected.
Universal Express share ownership aside, the receiver is finding that some of Universal Express' assets are worth much less than expected. Moscowitz said that two court judgments for a total of about $700 million are mostly uncollectable. The judgments, obtained in uncontested trials, were touted by Universal Express and Altomare as proof that the company had been abused by short sellers.
Meanwhile, Michael Jackson memorabilia recently sold by Universal Express had also been overvalued. Moscowitz noted in her second report that while the company estimated the value of the memorabilia at between $30 million and $200 million in a May 2007 press release, an auction held soon after fetched only $580,110.
Altomare bought himself some time in October, delaying a finding of contempt and possible jail by agreeing to resign and to pay $30,000 of the $1.4 million he was fined by Judge Lynch in March. But his legal woes aren't over.
In an Oct. 11 letter, Arthur Tifford, an attorney for Altomare and Gunderson, told Lynch that Assistant U.S. Attorney Rhoda Jung informed him in September that the two executives were under criminal investigation. The lawyer asked the court to delay further court proceedings against Altomare and Gunderson because of a pending federal grand jury investigation. He also complained that his clients' cases are being prejudiced by the fact that criminal investigators benefited from the extensive SEC investigation.
Tifford wasn't immediately available for comment. Because the renewed criminal probe raised a nonwaivable conflict, Tifford stepped down as Gunderson's lawyer. Lawrence Garvey, Gunderson's new lawyer, wasn't immediately available to comment.
In recent days, the three other defendants in the case - Mark Neuhaus, George Sandhu and Tarun Mendiratta - settled with the SEC. A hearing on whether Altomare and Gunderson should be jailed for contempt is scheduled for Jan. 11.
(Carol S. Remond is an award-winning columnist who won a Gerald Loeb Award in 2005 for best news service content with "Exposing Small-Cap Fraud," a series of articles that described how three small companies unscrupulously pumped up their stocks.)
-By Carol S. Remond, Dow Jones Newswires; 303-997-5783; carol.remond@dowjones.com
TALK BACK: We invite readers to send us comments on this or other financial news topics. Please email us at TalkbackAmericas@dowjones.com. Readers should include their full names, work or home addresses and telephone numbers for verification purposes. We reserve the right to edit and publish your comments along with your name; we reserve the right not to publish reader comments.
(END) Dow Jones Newswires
11-29-07 1518ET
Copyright (c) 2007 Dow Jones & Company, Inc
Bellevue lawyer charged with securities fraud, tax evasion
THE ASSOCIATED PRESS
SEATTLE -- A Bellevue lawyer finds himself on the wrong side of the law. Tolan S. Furusho has been charged in U.S. District Court in Seattle with conspiracy to commit securities fraud and two counts of failing to file federal income tax returns.
The charges were filed Wednesday, and Furusho is scheduled to enter a plea Wednesday afternoon.
Prosecutors say that as a lawyer he falsely certified that stock in a company called America Asia Energy Corp. could be freely traded, contrary to federal securities rules. The company purported to be involved in developing coal-mining properties in Wyoming.
The company sold $88,000 worth of stock last year.
Furusho has been licensed to practice law in Washington state since 1995. He did not immediately return a call seeking comment.
re:George Sandhu
Consider the case of STARTRONIX INTERNATIONAL (OTC Bulletin Board: STNX). This "leading provider of Internet-related products" is being sued by its own Reg S investors. That's because in early November, the company halted conversion of its privately convertible preferred. Company officials think their investors were actually manipulating the company's shares. As StarTronix chief executive Greg Gilbert told Dow Jones News in late December, "It got so that we could predict the day when a tranche [of securities] was coming in [to be converted] because our stock would drop 20%" just beforehand.
George Sandhu is an officer with Baytree Associates Inc., the New York-based private placement firm that has been doing Reg S deals since 1990. His company underwrote the deal for StarTronix. He argues that this deal soured mainly because the company's representations to his firm "weren't exactly truthful."
He said StarTronix couldn't even meet the next week's payroll when Baytree came to them. "You tell me whether it's in the benefit of shareholders to rescue a company and give it some life," Sandhu said. "I think it was in the benefit of them. And I don't think the company has acted correctly. The stock did not fall because of anything that investors did. I think on the other side of it, the company was trying to do other things besides really make this product work... I think they were more interested in where their stock was going than where their products were going."
Sandhu said the that if you really looked at the trading pattern of StarTronix's stock, there's no basis to believe that the Reg S investors destroyed it. StarTronix attorney Ken Bloom of Gartner & Bloom could not be reached for comment.
Sandhu added, however, that the proposed rule changes won't hurt Baytree's business. "To us Regulation S was just a way that made it simpler and easier to distribute stock to overseas investors.... Even without Regulation S, our business will continue." He said that the company usually works with mid-size companies and that the StarTronix deal was Baytree's first private placement for a firm listed on the OTC Bulletin Board.
He pointed out, though, that deals are structured based on the risks involved. "You can structure deals that don't incentivize the investor to take the stock down. When you're dealing with companies that are larger and of better quality, you usually structure a deal so that you don't allow that to happen." He said that restricting sales of Reg S securities to a year or more will effectively increase the cost of capital for small companies that continue to do such deals. "Now if someone's got to hold for a year, an investor might ask for a larger discount or some other thing that makes it more cost-prohibitive to the small company."
Of course, one could argue that some companies don't merit further public financing and that, in any case, the rules for private placements under Regulation S ought to allow current shareholders to know what's going on if their equity is about to be diluted.
It's not clear whether the new SEC proposals will completely resolve all the problems associated with Reg S offerings even if they are passed in the present form. Indeed, the numerous questions posed by the Commission in the documents currently available for public comment show the SEC is anxious to close loopholes that lead to manipulation while at the same time making sure that the new rules are not unnecessarily onerous.
Still, the SEC seems prepared for real changes. The proposals call for eliminating the recently imposed rule that requires companies to file a Form 8-K within 15 days of a Reg S offering. Companies could now simply report that information in the quarterly 10-Q filing. But -- and this is a huge improvement over the existing law -- the sale of equities offered under Reg S could not be resold into the U.S. market for at least one year, possibly two years.
That's because the Commission has proposed treating these Reg S equities like other restricted securities that fall under Rule 144 of the securities laws. The SEC has simultaneously suggested that the holding period for such securities should be dropped from two years to one year. Under this new proposal, then, the investment community will lose in terms of the timeliness of disclosure, but the longer holding period means the shares can't be almost immediately flipped into the market.
The Commission will also place new restrictions on hedging activity associated with Reg S offerings, but it seems to believe that changing the holding period is the crucial element in discouraging speculation and market manipulation. "Maintaining a hedge for one or two years, as opposed to 40 days, is more costly and may be impossible for many of the illiquid securities sold in abusive cases," the proposal argues.
The new proposals also indicate that the use of promissory notes is inconsistent with the intent of Regulation S to allow companies to raise capital from overseas investors. But the proposals remain rather tentative both in regard to promissory notes and to the troubling issue of convertible equities. On the one hand, the Commission is "aware that many Regulation S abuses have involved the use of convertible or exchangeable securities or warrants." But as the proposal points out, many companies "legitimately offer under Regulation S either convertible or exchangeable debt securities, or warrants for common stock as a unit with other securities, to lower their costs of capital."
J. William Hicks, securities law professor at Indiana University Law School in Bloomington, thinks the SEC is on the right track. Hicks literally wrote the book on Resales of Restricted Securities, and he has long been critical of the loopholes offered by Regulation S.
"I've been critical right from the beginning and actually recommended, as soon as there was some indication that there was going to be abuse, that they treat these [securities offered under Reg S] as restricted securities," he said. "When I made that recommendation in my book, I really didn't think that it was likely to be embraced just because the trend seemed to be in the opposite direction," toward a market-driven system where the SEC would just step out of the way. "But I think they've suddenly realized that there are far more abuses than they anticipated and that the seriousness of these abuses are such that they need to be a little bit tougher."
Still, Hicks indicated that most of the cases involving Reg S that have been serious enough to attract government action or journalistic scrutiny involve more than mere registration problems. They involve violations of federal anti-fraud provisions of the securities law.
"So you've got a lot of misleading press releases that are blowing up the price back home to handle that influx of those securities," he said. "That, to me, is still going to remain a problem. What the SEC is doing with this is just removing one of the very strong incentives for taking advantage of this kind of loophole."
Hicks is optimistic that the proposed changes will help. He also said that he doesn't think legitimate companies will be hurt by the new requirements since qualified institutional investors that participate in the private offerings conducted by larger companies generally are making long-term investments. Still, he's realistic.
"It seems to me that no matter how creative regulators are, and I think this was a very creative move on the part of the SEC to come up with Reg S... the creativity and imagination of those that don't want to follow the rules seems equal to it."
Though Rogue has often been critical of Barron's, it's clear that the weekly financial paper has done yeoman work in keeping up with those taking advantage of Regulation S. Jaye Scholl and other Barron's reporters have in the last year offered a number of first-rate exposes into how some companies and investors have abused this relatively arcane rule. The new SEC proposal actually cites these articles in footnotes.
One issue lurking at the edge of the proposed rule changes is the larger matter of whether the SEC is, even now, as sensitive to issues of corporate disclosure as it should be. With the increased access to online communications, the time may be ripe for investors to ask for all private placements to be accompanied by a contemporaneous notification from the issuing company. Even if the shares are restricted, don't all investors have a right to know when the companies they own plan to sell more shares?
The SEC is currently accepting comments on the proposed rule changes. Letters should be submitted in triplicate form to Jonathan G. Katz, Secretary, U.S. Securities and Exchange Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. Online investors might find it easier to submit letters electronically to <rule-comments@sec.gov.> Comments sent by e-mail will be posted on the SEC's Web site.
--Louis Corrigan (RgeSeymour@aol.com)
http://www.fool.com/Rogue/1997/Rogue970307.htm
Puppy, Bud Burrell's touting USXP disclosure is quite clear. Bud Burrell does not have to disclose his touting loot because it is "privileged"
Reply: I provided litigation support to the in house General Counsel for over 4 years. What they owe me is privileged.
This isn't over yet. We need to watch and listen, while looking for patterns.
=======================================================
Re: For General Comments and Questions from Today Forward.
By Sandy on 9/8/2007 6:54 AM
Bud,
You worked for Universal Express?
What do they owe you and what work did you do fo Universal Express?
They where lucky to have a man like you that is so knowledgeable about shortie.
Thank you Bud for all that you do for us.
Sandy
Reply: I provided litigation support to the in house General Counsel for over 4 years. What they owe me is privileged.
This isn't over yet. We need to watch and listen, while looking for patterns.
BURRELLsBlog/tabid/84/EntryID/637/Default.aspx'>http://www.thesanitycheck.com/Blogs/BudBURRELLsBlog/tabid/84/EntryID/637/Default.aspx
Universal Express Overstated Courtroom Victories: Receiver
By Christopher Faille, Senior Financial Correspondent | Friday, November 16, 2007
BOCA RATON, Fla. (HedgeWorld.com) —The actual value of what remains of Universal Express may be even less than what the court-appointed receiver thought it was in September. That is the inference readers will draw from the receiver's report to the U.S. District Court in Manhattan, filed on Wednesday [Nov. 14].
Universal Express Inc. is a logistics and transportation company that, according to the Securities and Exchange Commission, has made illegal unregistered distributions to the public of hundreds of millions of shares of stock. Its receiver, Jane Moscowitz, filed her second report on its assets this week, for the benefit of the judge presiding over the SEC's case against Universal Express, Gerald E. Lynch.
Mr. Lynch appointed Ms. Moscowitz in August Previous HedgeWorld Story, and in her first report, the following month, she noted that Universal Express claimed among its assets two court judgments against "various stock manipulators and ‘naked shorters,'" totaling, with interest, approximately $700 million. Both judgments were obtained in uncontested trials. In this second report, Ms. Moscowitz painted a still gloomier picture. She made note of rumors surrounding these judgments, rumors that seem to have sustained Universal's shareholders in the false hope of a big payday.
"One was that early on the Company had located and was about to collect $183 million of the judgments. That rumor is wholly without foundation," she wrote. "Shareholders have also written that they were told that $15 million had recently been offered by [one of the defendants, Ronald] Williams. No such offer was made."
In general, Universal Express' characterization of the judgments as substantially collectible doesn't appear to be correct, she concluded.
The company's assets also formerly included a collection of memorabilia of entertainers Michael and Janet Jackson. This asset, too, was overvalued. In a press release in May, the Universal Express estimated the value of the memorabilia at between $30 million and $200 million. An auction held soon after realized only a little less than $600,000.
"The morass of litigation and money owed surrounding the acquisition and auction of this collection makes it highly unlikely that any funds will be realized. . . ," Ms. Moscowitz wrote. "The Receiver is, instead, seeking to minimize liabilities."
There has also been a flurry of filings in recent days with regard to the SEC's case against co-defendants: individuals who served as go-between in the corporation's allegedly illegal issuances of stock.
These individuals are Mark S. Neuhaus, George J. Sandhu and Tarun Mendiratta. Their attorneys couldn't be reached for comment Friday afternoon [Nov. 16]. The SEC claims that they received stock from the company at a substantial discount to the public market price. They then re-sold the shares to the public for a quick risk-free profit and used the proceeds to finance subsequent stock purchases as the scheme rolled forward. The dilutive effect of the issuances lowered the stock's value, according to the SEC.
The recent flurry of filings has involved what are known as motions "in limine," i.e. motions by one party to ban another party from introducing certain specific items in evidence, or producing the testimony of specified witnesses.
The attorney for Mr. Sandhu, for example, has asked that the court preclude the testimony of three members of the SEC staff, on the ground that they don't have any personal knowledge of the facts at issue on the one hand, and they aren't qualified as expert witnesses on the other.
Consequently, "they are hearsay witnesses who can only offer speculation," Mr. Sandhu's attorney claimed in the motion.
CFaille@HedgeWorld.com
"“The collection also consisted of some master tapes of various Jackson family recordings. Those items have not been located, and there is reason to believe Altomare has them in his possession and is seeking to sell them.” "
"The unanswered question now is whether the Justice Department will file criminal charges. "
Most likely just keeping them for safekeeping lol
Feature | Hot Couture: Black Chandelier founder Jared Gold reaps what he sews
http://www.slweekly.com/index.cfm?do=article.details&id=3F11E074-9D7B-1E8E-D9B1B06C00CFF84C
By Stephen Dark
Posted 11/15/2007
The punch caught Jared Gold on the side of the face, sending his coke-bottle glasses flying. The 20-year-old fell to the ground, almost unconscious, as rednecks kicked him, shouting, “Fag!” “Pussy!” and “Faggot!”
He ended up on his back in the rear of his parents’ motor home. Gold could hear the young women he’d driven with to a Rexburg, Idaho, nightclub that Friday night in 1992 screaming at the thugs to leave him alone. Almost blind without his glasses, Gold rolled over onto his side and fumbled for his father’s chainsaw. The fledgling fashion designer had encrusted it with rhinestones for a photo shoot to promote clothes he had designed for a rave.
Jumping out of the motor home, he chased after his fleeing assailants, while struggling to start the chainsaw. “Talk about justice being served,” he says now of the dramatic turn in events.
The four youths piled into a pickup and pulled rifles from the gun rack. Gold fled back to his camper, flung himself into the back, dropped the chainsaw and climbed over the screaming women into the driver’s seat.
He headed for the freeway, while the pickup came up from behind and swerved at him, trying to force him into oncoming traffic. When he got onto the freeway, the pickup rammed the camper’s back, the cabinetry splintering, as passengers and chainsaw bounced left and right each time the truck slammed into the motor home. Finally, Gold’s pursuers got bored and peeled away.
This wasn’t the first time Gold, who grew up in southern Idaho, suffered at the hands of his neighbors. His final years in Idaho Falls Junior High were plagued with emotional, psychological and physical abuse from, he says, “the popular Mormon kids.” They seemed dead set on driving him to suicide. The only difference between his classmates and the rednecks, Gold argues, was the driver went to jail for attempted manslaughter.
Visit Gold’s Black Chandelier clothing stores in Salt Lake City and Provo, and you’ll find silk-screen printed imagery that suggests a fascination with violence. There are diamond-encrusted knuckle-dusters, sugary cutthroat razors and even images of Victorian chainsaws emblazoned across expensive T-shirts, hoodies and ruffled shirts. But the designs are so whimsical, they seem more objects of barbed parody than distress.
Self-described witch, artist and childhood friend, Los Angeles-based Darcy Megan Stanger, who legally changed her name to Dame Darcy, describes Gold’s aesthetic vision as “hillbilly rococo, gothic dark fantasy, high haute couture.” That doesn’t include influences such as the psychedelic ’60s, Victorian restraint, circus imagery, King Ludwig of Bavaria, children’s puppets and a fascination with all things sweet and decadent. Stir all this together, and you get a hint of Gold’s world.
Gold’s vision is fundamentally a product, he says, of mixing “unlike elements to scare them into something new.” Last year, for his first Salt Lake City fashion show, Gold melded polygamy and witchcraft for his eerily beautiful, if at times abrasive, Quiet Army collection.
But breaking in from the fringes of fashion design hasn’t been easy. He’s battled chronic bad timing and meddling investors. Part of Gold’s dynamic also includes an attraction to situations many others would find intolerable. “It seems like I do really well in scenarios with no resolution, open-ended, semiproblematic, [that] maybe have no end in sight,” he says.
Some of these raw tensions show up in his features. His conservatively styled Mohawk and obelisk-shaped ear studs seem to vibrate with the intensity with which he feels and interacts with the world around him. At the same time, his delicate, high cheekbones and dazzling blue eyes suggest a fiery, childlike innocence. Think Antoine de Saint-Exupery’s Little Prince gone punk.
Such contradictions spill over into his life. Take The Church of Jesus Christ of Latter-day Saints. Gold, who’s gay and in a relationship, says he’s Mormon and ardently follows LDS Church teachings on, for example, not drinking alcohol. But, only 18 months ago, he turned his back on church attendance for good, he says, in part because of its destructive impact on his personal life.
Then there’s Gold’s decision to locate himself in Utah. His avant-garde conceptual design work when he lived in east Los Angeles for 10 years helped pioneer the contemporary Los Angeles fashion scene, says Apparel News’ L.A.-based journalist Alison Neider. While some might scratch their heads at such a creative force moving to a town where avant-garde is, for many, a dirty word, for Neider, his move to the Beehive State makes sense. In Salt Lake City, “he doesn’t have to tailor collections to meet the needs of his retail audience. He’s built his own retail audience.”
Gold came to Utah to make, he says, “beautiful things.” But the takeover in 2006 of Black Chandelier by Nexia Holdings, a Salt Lake City company whose penny shares are traded on the Over-the-Counter Bulletin Board, has left him little time for creativity. Indeed, Nexia’s plan to turn Black Chandelier into a national chain has Gold at full stretch. He oversees merchandising, the four Wasatch Front stores and the Website. And now he’s preparing the dark Nordic lines of his next runway collection, Caspian, which debuts in the Grand Hall at The Gateway on Dec. 7. “I have the burners turned up on me on high all the time,” he says. “I have no room to go any further.”
Investors, he says, like to keep him scared and frantic. That way they get the most out of him for the least money. Several financial backers have sucked the soul out of him, says Los Angeles friend and America’s Next Top Model scriptwriter Clint Catalyst. But then, Gold says, “having money troubles making stuff, that’s all fashion ever is.”
Nexia, however, is a departure for Gold. Owner Richard Surber was also Gold’s first serious lover. Such is their level of trust, it seems, that Gold has no employment contract with Nexia.
“This is a very dangerous game we’re playing,” Gold says about Black Chandelier’s expansion plans—particularly given that, so far this year, the design house has racked up $750,000 in losses, due in part to investment in the stores. Such figures only up the pressure on Gold to produce merchandise for holiday sales that will turn the year around financially. “Got to make sure the goose gets fat,” he says. For a man who says he has a strangulating urge to create, Gold seems to thrive on pressure.
Aspects of his current financial and working situation might sound “bleak and depressing and, believe me, sometimes I’m there,” Gold says. However, he continues, “I get to do marvelous things and that’s really what my life is all about.”
Black and Blue
Los Angeles Magazine’s style editor Laurie Pike traces Gold’s aesthetic to his LDS upbringing in Idaho. “A lot of the greatest fashion talent comes from small towns where you create your own world, instead of reading Vogue,” she says.
Gold grew up in Idaho Falls, the second son of five children of a devout LDS couple, Susie and Gary Gold. “You got new clothes once a year when school started,” Gold recalls. “Three shirts and two pants, and those were the clothes you wore all year.” Coming from a modest background, “makes you a little more ballsy,” he continues. “You’re not afraid of [poverty] happening to you, because you’ve already been there.”
Not that he had time to think of himself as poor. He and his two brothers would get their father to zip them up in garment bags and roll them down the Idaho sand dunes for hours on end. His mother read the entire L. Frank Baum’s Oz series to them. Gold’s logo of a monocled bunny for Black Chandelier’s high-end Jared Gold line is a riff on characters from the series. Baum’s books “were such an education on my creativity, seeing how far it could go,” he says.
When Gold was 10, he met 11-year-old Dame Darcy. They spent summers hunting ghosts in abandoned houses that other children would have been terrified going into. Along with ghost hunting, Gold nurtured from an early age his passion for experimenting with fashion grounded in his thrift-based values and upbringing. As a teen, he took apart a broken antique mantle clock and stuck the screws all over his shoes. Then he drew a virus on a men’s dress shirt from a thrift store. “I thought what I was doing was interesting, that people would understand that.”
All that fellow junior high students understood, however, was that Gold was different. Their bullying peaked during his senior year. Posters advertising fun events, parties, a trip to Lagoon, would always have a sneering caricature of Gold in a corner saying he was doing something different. When Gary Gold went to the school to complain to the principal about his son’s treatment, he wept at the sight of the posters.
“One person acted like his friend, then hit him in the face,” his mother remembers. She feels part of her son does not open up because of those experiences. Gold agrees it changed him. “But I wouldn’t be what I am right now if I hadn’t gone through what I did.”
He graduated from school in 1990 two weeks early and went to Brigham Young University-Hawaii to study piano and languages. But when he decided he didn’t want to compete in music, he returned to Idaho. There he organized raves with themes like “Alice in Wonderland.” He turned the inside of a large building into a two-story house of cards with snails that people could ride around in. In his garage he designed court-jester hats and T-shirts with screen-printing ink you could taste. Then, at 19, he jetted to Lollapalooza concerts all over United States selling rave clothing.
When he was 21, he moved to Salt Lake City and made “spacey-looking lingerie,” he says, for Blue Boutique. One night in 1993 at a club, Gold’s stuck-on horns, yellow shirt and platform shoes caught the eye of 21-year-old Richard Surber.
Brain Melt
Surber came to Utah from Florida at age 17 to study finance and law and work with his uncle, Allen Z. Wolfson. In the late 1970s and 1980s, Wolfson was convicted of, among other things, bank fraud and making illegal political contributions, the latter resulting in him doing two years in jail. Convicted in 2003 of securities fraud, Wolfson has spent the last four years in a Brooklyn jail awaiting sentencing. But when Surber and Gold met, uncle and nephew were enjoying happier times working together to turn around troubled businesses.
Surber and Gold dated for two years. If a mutual sense of ambition brought them together, Gold says, differing emotional needs eventually split them up, but they still remained friends. In 1996, Gold left Salt Lake City to go to Otis College of Art & Design in Los Angeles. With 70 hours of homework a week his first year, there was no time for work. “I was practically starving,” Gold says. “I stayed up all night making party dresses for rich girls so I could eat.”
In his second year at Otis, Gold worked at Los Angeles’ famous high-end clothing store, Fred Segal. Its renowned buyer, Mara White, urged him to strike out on his own.
Pike was the only journalist at Gold’s first runway collection in 1998, entitled “Haunted Wallpaper.” It was “the very essence of why I thought L.A. fashion was so exciting at that time,” she says. The models’ dresses featured Victorian silhouettes, and they sported live Madagascar hissing cockroaches. Gold’s approach was from “this twisted carnival point of view that was so fresh,” Pike recalls. “It was definitely one of the best fashion shows I’ve ever been to.”
When Gold was offered a crack at a major runway show by the Gen Art Foundation in spring 2001, he decided he would give the fashion industry both barrels with his Black Dahlia collection.
In his design statement for that collection, Gold wrote that, without focusing on the infamous 1947 murder of Hollywood starlet Elizabeth Short, “we move directly to the point in which her separated spirit and body were alone in the Hollywood Hills with the darkness, crickets and hushed breeze.” Gold had models walking down the runway with their teeth blacked out, wearing masks that mimicked marionettes hanging from their outstretched hands.
Some journalists were less than impressed. “Usually, when people get an opportunity like this, they want to make it sellable,” he recalls one critic saying about his show. “But Jared came out and melted our brains.” The show, Gold says, did exactly what he wanted. “I called [the fashion industry] out: This is what I want, this is what I like, and this is what we’re going to do, and that’s final.”
Death From Above
In New York City’s Gramercy Park Hotel on Sept. 9, 2001, Gold and his mother sat at twin Yamaha grand pianos and played a duet by Aram Khachaturian to the crowd assembled in the Wedgewood Room to see his Golden Syndrome collection.
The collection was about “the quiet dusty moment before the rain begins,” he wrote at the time. Earlier that year, he’d set up Black Chandelier as a T-shirt line. With his darker ideas shifted to the T-shirts, Gold pursued a sensual, sexy mood with Golden Syndrome. The dresses were light, their lines clean and he used colors new to his work like turquoise and pomegranate.
The New York Times’ Amy Spindler wrote it was “the most charming show ever witnessed.” Japanese buyers were flying in to buy “the most beautiful collection I’ve ever done,” Gold says. “Everything was going perfectly for me.”
When he and his boyfriend woke up in a New York hotel room on Sept. 11, the world had changed. His parents, frantic at the TV coverage of the World Trade Center Twin Towers’ collapse, burst into his room. They all went down to Hudson Street to see for themselves what had happened. An army of white zombies emerged from the inferno’s dust storms, their eyes red from the dust and crying. Body parts littered the street, the smell of burning flesh and hair hung heavy in the air.
The Japanese buyers never made it to New York. The collection was stuck in Gold’s hotel. “It vaporized into the strata,” he says.
He went back to Los Angeles, but his luck didn’t improve. “I went from group after group of people trying to use me to make their company look like it had any validity in the fashion world.”
Those investors, he says, “were kind of the end of me in L.A.”
In 2003, Gold retreated to Salt Lake City. “I wanted to come here, I needed the support [of nearby family and friends].” All he had to his name was a beaten-up car, which exploded shortly after he reached Utah, and the Black Chandelier trademark.
Surber was happy to see his ex-lover. He’d always wanted to start a business with a boyfriend. Now he had the chance, he says, to help a friend. Surber owned a public-company shell Gold could use to set up funding for selling his clothes wholesale to stores like Barneys in New York City. The financier helped fund clothing production. Despite having been burned by past investors, Gold saw his business partner in a different light. “Richard has no interest in the creative part of it, so it’s perfect,” Gold says, adding, “as perfect as it could be, I guess.”
Gentlemen’s Agreement
Gold became president of the shell, which was renamed Dark Dynamite, and reverse-merged Black Chandelier into it in 2004. Surber sold the shell to a Chinese amusement park company in November 2005. Shortly after, Gold’s wholesale business collapsed after just one season. “We were really struggling being in Utah,” Gold says. He couldn’t get the fabric he wanted or communicate with his contacts.
In 2006, Surber, as first creditor, foreclosed on Black Chandelier’s assets, including the logo, and took them into Nexia, along with Gold. “In my mind, I’m thinking, ‘Once again I lose everything,’” Gold says. But it’s OK, he adds. He trusts Surber to ensure that he will receive his financial due in the end. The designer recently received $250,000 in Nexia Class C stock. Surber owns all the Class A voting stock.
Before foreclosure, partly on a whim, partly to test the market, Gold and Surber leased out, for the 2004 holiday season, space in Trolley Square. While Gold says all they need is a good Web-based store, Surber has pushed to open three more stores in Utah. Surber admits that the three stores openings were “maybe a little too fast.” But Nexia, Gold adds, had to open the stores to show investors they were growing.
Surber says his “interest lies in building a forest.” That forest will consist of both Black Chandelier stores and new branches of a hair salon run by Matthew Landis in downtown Salt Lake City, of which Nexia is the majority owner. “Between the egos of Matthew Landis and Jared Gold, if we can get them in line, it will be a forest,” Surber predicts. “If we can’t get that in line and in control and structured properly, we will have a train wreck.”
Egos aside, raising development capital, which is Surber’s job, is a crucial issue. But “it’s proving really difficult,” Surber says, to finance Black Chandelier and Landis’ expansion. Two stores in Seattle and Los Angeles closed down because of management and cash-flow issues respectively. Surber’s been trying to raise money by selling Nexia stock to a hedge fund but the Security Exchange Commission has spent more than two years analyzing Nexia’s paperwork on the deal. The slap on the wrist Surber received from the SEC in 2003 over late filings for 14 shell companies he owned or had been associated with couldn’t have helped advance his cause, either.
Despite Black Chandelier’s current financial woes, an independent auditor valued Black Chandelier at $1.7 million in 2006. But an evaluation based on potential future earnings doesn’t help Gold much. He goes months without getting paid so other bills can be met. When Gold enters Surber’s office to complain of his unpaid rent or hunger, the financier cuts him a check. Gold says he’s willing to make sacrifices because of his loyalty to his staff, Surber and his own aesthetic vision.
Gold’s family and friends worry about his vulnerability. “All my friends and family think I’m being victimized here,” he says. “I come to work every day, don’t I?” And, were he to quit, in all probability, Black Chandelier could not survive, which seems to reinforce the unspoken power-balance between the two friends.
Surber is adamant “there’s no way in hell [Gold]’s being taken advantage of.” The financier has gone $1 million in hock betting on expanding Black Chandelier into a national chain. “What does Jared lose if the whole thing fails?” he says. “Nothing.”
Fashion writer Pike thinks the relationship adds up. “It’s very hard to stay true to yourself and have a financial partner,” she says. “The challenge is to get married to someone and not have to compromise.”
Words of Wisdom
When Pike attended Gold’s spring collection show earlier this year in Los Angeles, she says people screamed from beginning to end. When a friend who’d never attended a fashion show before asked if this was normal, “I lied and said, ‘Yes.’” There’s an innocence to his shows, Pike adds, that stands out in a city where everybody’s so jaded.
Perhaps because of that very innocence, fashion leaves Gold wanting. “I don’t want to become callous, hardened, making this entire living based on making superficial things, clothing and how people look,” he says. So, he searches for ways to balance his career with deeper meaning. In Los Angeles, after years of being inactive, he’d become nostalgic for LDS ward life. Once back in Utah, he returned to his church.
He adores many aspects of Mormonism. During weekday lunch hours inside the LDS Tabernacle on Temple Square, Gold sometimes hunches over a drawing pad, sketching out his latest designs while the daily organ recital thunders out hymns. Gold marries everything together, he says, while “my bowels shake with the music.”
Then there is his passion for Deseret Industries, the LDS Church’s thrift stores. “I’ve bought quite a few pieces from the DI which we’ve replicated in my vision,” he says.
Follow him around the dress racks at his favorite DI store just off State Street, and he forensically analyzes dresses that catch his eye.
Anything mind-blowingly hideous, he says, is undoubtedly a bridesmaid’s dress. One neckline-challenged dress he decries as “for a scared, neurotic woman.”
A seemingly shapeless black-wool gabardine piece, however, has him drooling. He posits its former owner would have had a “fierce pair of shoes,” and jewelry “that would just own it.” This dress, he says, “is this woman’s getting-down-to-business dress. [She’s] going to find a man right now, and this dress would do it for her.”
But if he’s at home in the DI, other aspects of LDS culture make him less comfortable, notably the church’s position on homosexuality. While the church accepts gay members, they are expected to be celibate. As a gay Mormon, he says, “I felt a lot of guilt, self-hatred and loathing, and there didn’t seem anybody interested in just banning those feelings.” The church’s attitude, he says, was “you need to feel that because you are broken, and you need to fix it.”
When he moved to Salt Lake City, he dated a gay Mormon man. At the same time as they were having a sexual relationship, Gold’s erstwhile partner also was, he says, judging him for being gay. “That was really the end of me and the church.”
If his sexuality, he says, “was pretty much shame-based up until two years ago,” it only changed because he started to realize “the shame, the judgment placed on you was unfounded, it was nobody’s business but your own.”
If church failed to provide the safe harbor he sought, neither did visiting the Salt Lake City location of Ream’s Foods.
Whether to punish himself for fashion’s shallowness or to reconnect with the poverty of his childhood or to witness what he describes as “the humbling struggle of people living their lives,” for a time, Gold shopped at the bargain supermarket three times a week. While pushing his cart around, he followed people who interested him, looking for wedding rings and examining the contents of their baskets to spin stories about their lives. “In my mind, I’m twisting it into something that it’s not supposed to be,” he admits. With his quick eye for detail, Gold notes the way people buy ground beef, lettuce, white bread, milk “and a horrifying treat-like snack, and you can tell it’s their week of shopping.”
One day, he realized his fascination with Reams was becoming unhealthy. “I’d become this person that was now plodding along with the tiny little portions of food in the basket,” he says. He switched to Smith’s where, he says, he found people his own age with careers.
Fashion War
To bring his sense of spiritual wonder to the world, Gold says, “You have to fight to carve out what you need and what you want to do, because it doesn’t exist yet.”
If Black Chandelier doesn’t succeed, he will pick himself up and carry on fighting. “I have no fear of failure, because success and failure are a hair’s breadth apart.”
The same fearlessness Gold displayed chasing down rednecks with his rhinestone chainsaw might also be on display come Dec. 7 when he premieres his Caspian collection in Salt Lake City. “I’m going down a vein I’ve never gone before,” he says. Whether it’s exhaustion or the expectations of fans and critics alike, he says the collection “is beyond dark, a nightmarishly opulent black.” He listened to Norwegian death-metal bands while drawing the clothes, which feature beautiful screen prints of a 19th-century Copenhagen at dusk. But beyond the beauty, he says, there’s a sense of vengeance in this collection. Ask against whom and he says, “I don’t know. Maybe everybody.”
Whether a distillation of all his struggles over the last year or a reflection of where he finds himself now in Utah, the Caspian collection finally is what Gold is all about: making clothes that take the eye and the senses to places that unveil strange, sensual worlds only Gold can imagine.
Each season, Gold finds a quote to put on his clothing tags. He says the quotes reflect his struggles. One, “Fashion is fleeting, but Black Chandelier is forever,” suggests a yearning for the success that has as yet eluded him. Another, “Beauty is the start of a terror we can hardly bear,” from early-20th-century writer Rainer Maria Rilke, hints at both the anarchist and the aesthete in Gold’s personality. But it is this year’s slogan that best evokes Gold’s ambiguity as to who he is and what he does: “Anything is possible—but it has its price.”
C Austin Burrell and the 86 thousand dollar discovery. lol
1/12/2005 F:Mohr Hackett Pederson Blakley Randolph P C $86,541.26 One Time Principal Satisfied
A: C Austin Burrell
A: Lois Burrell
----------------------------------------------------
BB: A company CEO was under investigation by the SEC for beginning in `96. This was never disclosed to me. I only found it out as a result of litigation some three years later. It's the only litigation I've ever been in related to my work. And it was not for anything related to the company. I had a dispute with him over an employment agreement. But I did it specifically to gain discovery. Cause what they had purportedly done was to destroy the books and records of the corporation inadvertently by discard. The real issue was several of the officers and directors of the company had taken out, ripped the books and records of the company. They provided them to me. They had previously provided them to the SEC. The SEC refused to act. I provided it to the SEC, again stonewalled, no action. And it was clear to me that in watching how the company developed that not only was there insider selling, which was proven by the transfer agent later. You know, two, three years later. But there also was a partnership between the pump and dump sellers and the short sellers. The short sellers control the access of the pump and dump players to the market. And what they basically had done, they acted like they were adversaries when in fact they were, they were right and left hands of the same problem.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=24543697
Case Information
Case Number: CV2004-020653 Judge: Nothwehr
File Date: 10/27/2004 Location: Downtown
Case Type: Civil
Party Information
Party Name Relationship Sex Attorney
Mohr Hackett Pederson Blakley Randolph P C Plaintiff Dennis Skarecky
C Austin Burrell Defendant Male Dennis Wortman
Lois Burrell Defendant Female Dennis Wortman
Charles Schwab & Co Inc Garnishee Defendant Pro Per
Case Documents
Filing Date Description Docket Date Filing Party
2/13/2006 005 - ME: Hearing 2/13/2006
2/8/2006 SJU - Satisfaction Of Judgment 2/9/2006
2/8/2006 RQW - Rel/Quash Writ Of Garnishment 2/13/2006
2/8/2006 SJG - SATISFACTION OF JUDGMENT AS TO GARNISHEE ONLY 2/13/2006
2/7/2006 046 - ME: Hrg Set Objection To Garnishment 2/7/2006
2/7/2006 REL - Reply 2/10/2006
NOTE: BURRELL TO RESPONSE TO OBJECTION TO JUDGMENT
2/7/2006 ANS - Answer 2/8/2006
NOTE: NOTICE OF APPEARANCE ON BEHALF OF DEFENDANTS/ PAID
1/31/2006 RES - Response 2/3/2006
NOTE: MOHR HACKETT'S TO OBJECTION TO AMENDED APPLICATION FOR JUDGMENT AGAINST GARNISHEE ON WRIT OF GARNISHMENT AND REQUEST FOR HEARINGS
1/26/2006 046 - ME: Hrg Set Objection To Garnishment 1/26/2006
1/20/2006 JAG - Judgment Against Garnishee 2/1/2006
NOTE: AMENDED
1/20/2006 OBJ - Objection/Opposition. 1/26/2006
NOTE: TO AMENDED APPLICATION FOR JUDGMENT AGAINST GARNISHEE ON WRIT OF GARNISHMENT AND REQUEST FOR HEARING
1/16/2006 002 - ME: Hearing Vacated 1/16/2006
1/5/2006 REQ - Request 1/12/2006
NOTE: TO VACATE JANUARY 9 HEARING
1/4/2006 ANG - Answer Of Garnishee 1/9/2006 Garnishee Defendant(4)
12/28/2005 ANG - Answer Of Garnishee 1/4/2006 Garnishee Defendant(4)
12/28/2005 LET - Letter 1/10/2006 Garnishee Defendant(4)
12/7/2005 087 - ME: Order To Show Cause Issued 12/7/2005
12/6/2005 JAG - Judgment Against Garnishee 12/21/2005
11/22/2005 AWG - Application For Writ Of Garnishment 12/2/2005
NOTE: AMENDED
11/14/2005 WGS - Writ Of Garnishment and Summons 11/17/2005
11/14/2005 ANG - Answer Of Garnishee 11/17/2005 Garnishee Defendant(4)
11/9/2005 AFS - Affidavit Of Service 11/10/2005
11/3/2005 AWG - Application For Writ Of Garnishment 11/9/2005
11/3/2005 MOT - Motion 11/8/2005
NOTE: FOR ORDER TREATING AS CONTEMPT THE FAILURE OF LOIS BURRELL TO COMPLY WITH THIS COURT'S ORDER OF AUGUST 23 2005
11/1/2005 RQW - Rel/Quash Writ Of Garnishment 11/8/2005
10/31/2005 WGS - Writ Of Garnishment and Summons 11/7/2005
10/31/2005 WGS - Writ Of Garnishment and Summons 11/7/2005
10/31/2005 AFS - Affidavit Of Service 11/2/2005
10/31/2005 AFS - Affidavit Of Service 11/2/2005
10/25/2005 AWG - Application For Writ Of Garnishment 10/31/2005
10/25/2005 AWG - Application For Writ Of Garnishment 10/31/2005
9/20/2005 RQW - Rel/Quash Writ Of Garnishment 9/26/2005
8/26/2005 022 - ME: Order Signed 8/26/2005
8/23/2005 ORD - Order 9/2/2005
NOTE: COMPELLING PRODUCTION OF DOCUMENTS
7/21/2005 094 - ME: Oral Argument Set 7/21/2005
7/7/2005 STA - Statement 7/15/2005
NOTE: OF ACCOUNT RE GARNISHMENT AS OF JUNE 30 2005
6/29/2005 MTC - Motion To Compel 7/11/2005
NOTE: DOCUMENTS AT SUPPLEMENTAL PROCEEDINGS
4/27/2005 039 - ME: Judgment Debtor Exam 4/27/2005
4/8/2005 STA - Statement 4/13/2005
NOTE: OF ACCOUNT RE GARNISHMENT AS OF 3/31/05
4/6/2005 004 - ME: Hearing Continued 4/6/2005
3/9/2005 ORD - Order 3/15/2005
NOTE: REGARDING SUPPLEMENTAL PROCEEDINGS
3/9/2005 AFS - Affidavit Of Service 3/14/2005
2/25/2005 MOT - Motion 3/3/2005
NOTE: FOR SUPPLEMENTAL PROCEEDINGS
2/18/2005 AFS - Affidavit Of Service 2/22/2005
2/18/2005 WGS - Writ Of Garnishment and Summons 3/2/2005
2/14/2005 AWG - Application For Writ Of Garnishment 2/18/2005
2/7/2005 NOT - Notice 2/11/2005
NOTE: RELEASE OF WRIT OF GARNISHMENT BY PLAINTIFF
1/25/2005 WGS - Writ Of Garnishment and Summons 1/28/2005
1/25/2005 AFS - Affidavit Of Service 1/31/2005
1/20/2005 AWG - Application For Writ Of Garnishment 1/26/2005
1/12/2005 JUD - Judgment 1/21/2005
NOTE: Notice of filing and entry provided to the parties
1/4/2005 SOC - Statement Of Costs 1/7/2005
NOTE: PLAINTIFF'S
1/4/2005 MAJ - Mot/Aff Entry Def Jud W/O Hear 1/6/2005
1/4/2005 ASR - Affidavit in Support of Attorney Fees 1/7/2005
11/30/2004 AAD - Application And Affidavit Of Default 12/6/2004
11/8/2004 SUM - Summons 11/16/2004
11/8/2004 AFS - Affidavit Of Service 11/15/2004
NOTE: C AUSTIN BURRELL AND LOIS BURRELL SERVED 10/28/2004
10/27/2004 COM - Complaint 11/1/2004
10/27/2004 CCS - Cerificate Arbitration - Subject To 11/1/2004
Case Calendar
Date Time Event
4/4/2005 13:30 Judgment Debtor Exam
4/25/2005 13:30 Judgment Debtor Exam
8/23/2005 11:00 Oral Argument
1/9/2006 11:00 Order To Show Cause
1/31/2006 16:00 Garnishment Objection Hearing
2/7/2006 13:30 Oral Argument
Judgments
Date (F)or / (A)gainst Amount Frequency Type Status
1/12/2005 F:Mohr Hackett Pederson Blakley Randolph P C $738.00 One Time Attorney Fee Satisfied
A: C Austin Burrell
A: Lois Burrell
1/12/2005 F:Mohr Hackett Pederson Blakley Randolph P C $297.80 One Time Costs Satisfied
A: C Austin Burrell
A: Lois Burrell
1/12/2005 F:Mohr Hackett Pederson Blakley Randolph P C $7,247.83 One Time Interest Satisfied
A: C Austin Burrell
A: Lois Burrell
1/12/2005 F:Mohr Hackett Pederson Blakley Randolph P C $86,541.26 One Time Principal Satisfied
A: C Austin Burrell
A: Lois Burrell
"The first company that I am aware of that actually made a documented complaint on naked short selling in its stock was a company called Universal Express. And it has been roundly slandered by the SEC. It's been sued. They have actually been the only company to actually sue the SEC in federal court. And the bottom line is, they're now going to 11th Circuit. And could I tell you something? "
http://www.ncans.net/files/bud3.rtf
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CFRN Investigates: Interview with Bud Burrell, Part 3
Dwayne: . . . Radio Network. And my special guest this morning is industry expert Mr. Bud Burrell. Mr. Burrell is an expert in the area of naked short selling counterfeit shares on Wall Street. We've had several interesting discussions so far this week. And it is a pleasure and an honor to welcome you back to the show again this morning. Good morning Bud. You're live on CFRN.
Bud Burrell: Thank you Dwayne.
D: How are you today?
BB: Very good.
D: Great. I've got your e-mails. I'm gonna get, that's some good stuff there. I'm gonna get it posted on the website.
BB: I'd be happy to have you do that. I could give you a lot more too.
D: Okay. You send them over and I'll post them.
BB: Very good.
D: Tell me where you want to go this morning?
BB: Well first of all, one topic that I would like to get forward to your CMKX related listeners is where they're going after CMKX. That's one point. And the other thing I'd like to talk about is I would like to try to address some of the questions, I know, you've gotten online directly. Not just related to CMKX, but about some of the technical issues involved in the shorting scandal. Uh, C -
D: Now, I've got that same question. I've been asking that question for quite some time.
BB: Uh-huh.
D: What, is there life after CMKX? Because so many people seem to be, they have this tunnel vision for CMKX as being the only way they're ever going to prosper. And I don't want to, I don't want to rain on anybody's parade, but I have to. I'm in a position where I have to ask, well what if it doesn't happen? Then what?
BB: Can I tell you, whether it happens or not. What CMKX has caused to be created is the largest and most active and cohesive group of shareholders behind a single stock in this cause. If not, it may be a more cohesive group than all shareholders in all these causes. And if they've acquired a standing, a platform for comment and a position, then I bluntly think it would be a tragic waste if all they did was focus on CMKX. And then after its settlement, allow themselves to be dissolved. Bluntly, the cause needs the CMKX group to remain cohesive for its own leaders to emerge from the cause and to continue on. Because bluntly, for CMKX short position, while I'm certain it's the largest one at depository trust, is hardly the only one. And there are literally millions of shareholders who've seen their assets stripped from them by this group of criminal manipulators. Which is highly, highly interlinked. And the bottom line is that at this particular point, CMKX really has the potential, irrespective of what comes out of this, you know, rumored settlement, to be a force. And I'd like to encourage all of the CMKX shareholders, their activists and their followers, to stay together as a unit. I would not let the CMKX name disappear. I would keep it in the face of the regulators and the market. You know, not for months or not for weeks or months, but for years after this is, you know, comes to some resolution, good or bad. That's the first point I would like to make.
D: Okay. Well let me, let's expound on that.
BB: Yeah.
D: Now, I provide a forum, Christian Traders Online forum, and I've asked the question, hey once the CMKX issue is over, are you all going to leave? Are you gonna stick around? And of course everybody says well we're gonna stick around. But you know, people will need a central meeting place, a point of connectivity, a point of contact if we are going to continue in this effort beyond CMKX to effectively correct the wrongs on Wall Street. So I encourage, or I'll just make this statement. Christian Traders, the online forum, will be around for, till Jesus comes back. And I'll leave it at that.
BB: Well I think it's a very, very important issue. Again, I don't think anyone has the perspective on all of the cases, both nationally and internationally. And I could tell you, there is no other unit like the CMKX community group. And maybe become CMKX shareholders opposing counterfeiting.
D: I have never seen a body of investors come together the way the CMKX shareholders have. It really boggles my mind. It does.
BB: Well it's very interesting. Irrespective of whether or not, you know, Irvin Casanvant is good, bad or indifferent, a criminal or not. Irrespective of his taste in some of his professional associates previously and currently. This community, the shareholder community, is again, there's nothing like it in the industry right now. And bluntly, 65,000 shareholders have traction. And that doesn't even note, can count how many shareholders are offshore that we don't, that no one even knows about. Or people who bought their stock through X clearing and no one knows about. I've got to tell you, that many people. If just a, if just 5,000 of the CMKX shareholders would file pro se, meaning self-represented lawsuits, in federal district court over the counterfeiting issue and naked short selling, bluntly it would break the back of the U.S. federal court system entirely. 5,000 lawsuits. The SEC told Sedona directly that they could not handle 50 Sedona type cases. 50. Try to imagine what would happen if 500 CMKX shareholders filed or groups totaling 500 filed 500 lawsuits in every district court in America over the issue of counterfeiting. It would create a fire storm. And [indiscernible] right now.
D: Tell me this Bud. Let's say I want to start a movement today. And you've got me thinking. And perhaps I will. I've got several attorneys on retainer. If I wanted to file such an action as you're speaking of, how would I go about it? When I call up my attorney, what would I say to him?
BB: Say you're, the attorney can't represent the person pro se. They can't even be involved in the drafting of the thing. But he might be able to give them model complaints.
D: Uh-hmm.
BB: Bluntly they're ou there.
D: Okay.
BB: Eagle Tech Communications is one example. Represented itself pro se when the SEC moved to deregister Eagle Tech.
D: What would be the basis of my case?
BB: Your basis is that you were defrauded a value. Remember you have to specify how much money you lost specifically because of the misconduct.
D: Misconduct by who?
BB: The, you could name one of the brokers. The broker dealer that put you into CMKX or one of the parties you know have been guilty of manipulating CMKX.
D: Okay.
BB: And then at that point, put a, list 100 John Does after the first, you know, real names you have. At that particular point, you've opened a Pandora's Box. Because believe me, the CMKX manipulation has to include the rating hedge funds, their supporting broker dealers, the clearing houses, the brokerage firms, depository trusts, the SEC itself. And the bottom line is at this particular point, again, there's nothing like the CMKX shareholder group out there. And it would be a tragedy if that group came together. And bluntly I tell you too, the reason there's even a rumor of a prospective settlement is the fear that is within the CMKX company itself that these shareholders are gonna rise up and figuratively lynch them. Illegally or criminally, you know, civilly, if they don't do the right thing to take care of those shareholders. And you know, something that, that fear is the only reason anyone's gonna get, if they get anything. The only reason they will ever have gotten it is because they acted in a unified manner for a specific objective.
D: Okay. Now Debbie, I just saw your comment pop up on my screen. I would like to ask you, Noah, Van, Sandera if he's willing to get together this afternoon, once we adjourn from this broadcast and put your heads together. Let's get our, let's get our ducks lined up. And let's do exactly what Bud is encouraging us to do. Because the problem is folks, there's too many Americans sitting back and doing absolutely nothing. Or they're going to chat rooms or message boards and they're whining all day. Okay, it's time to stop whining. It's time to get up and do something. So I challenge you guys. I don't challenge you. I encourage you. I ask you to support me in this. Help me put it together. And let's move forward.
BB: I'm gonna do one more thing today too. I supported several authors, one of whom has written a book that is looking for a publisher right now. It's called Assassins on Wall Street. And the bottom line is at this particular juncture, I provided him with an enormous amount of historical communications on these topics. And Dwayne, I'm gonna give these to you to be put up on your website.
D: Okay.
BB: These are literally hundreds of articles.
D: Okay. You're gonna e-mail those to me?
BB: I am. They include not just my work, but everything that I've seen that was appropriate in the space for some three plus odd years that I supported the Wes Christian and John O'Quinn team.
D: You know, a question keeps popping up on my screen. Are you still a consultant to Wes Christian?
BB: Only indirectly. They've had some budget issues. And the point that I look at my particular contribution to the cause, I told him that, you know, I would not [indiscernible] a direct supporter unless, especially after some other issues that came up. But um, I am friendly with Wes. And I don't think he is the core of what's going on with some of the legal issues here. He's clearly been instrumental. He's the only game in town. I'll say this to you that way. Until some other law firm, an attorney, emerge who put their real money on the table and produce real results. Um, I'm not gonna be supporting any specific counsel. Now I would say to you one point. See a lot has been made of the fact that they've been slapped down a number of times in their legal actions. They won't be slapped down on Sedona Corporation. I can tell you Rod Young is not going to be slapped down whether Wes Christian and his guys are still supporting him or now. They are now currently. But they did not in the delisting, deregistration actions. What I would say to you is that this is exactly what happened to all of the plaintiffs' lawyers in the silicone breast implant cases and the tobacco cases. They went through years of being defeated, you know, facing motions to dismiss. Motions to change venue. Motions against standing. Being forced into discovery finally and then having the parties refuse to provide discovery. Having those parties in turn be forced to go into court to get a motion to compel discovery. I mean, so the pattern you've seen and the responses of the defendants here are exactly what's happened in every major plaintiffs' action in history. And too much has been made of the fact that these guys have not been successfully generally in court, except on the. They have gotten production of discovery on Eagle Tech Communications. And I won't talk about this here, but I will tell you that that discovery produced in, for Eagle Tech included accounts that no one even knew the importance of at the depository trust.
D: Now, Bud, you're obviously not a newcomer to this whole issue. You've been onto this for some time. Tell us exactly what you said to the president of the American Stock Exchange back in July of 2000?
BB: I happened to be the number two person in a small dot com. I had very specific IT credentials. You'll see that in my CV which I'll send to you.
D: Okay.
BB: A company CEO was under investigation by the SEC for beginning in `96. This was never disclosed to me. I only found it out as a result of litigation some three years later. It's the only litigation I've ever been in related to my work. And it was not for anything related to the company. I had a dispute with him over an employment agreement. But I did it specifically to gain discovery. Cause what they had purportedly done was to destroy the books and records of the corporation inadvertently by discard. The real issue was several of the officers and directors of the company had taken out, ripped the books and records of the company. They provided them to me. They had previously provided them to the SEC. The SEC refused to act. I provided it to the SEC, again stonewalled, no action. And it was clear to me that in watching how the company developed that not only was there insider selling, which was proven by the transfer agent later. You know, two, three years later. But there also was a partnership between the pump and dump sellers and the short sellers. The short sellers control the access of the pump and dump players to the market. And what they basically had done, they acted like they were adversaries when in fact they were, they were right and left hands of the same problem.
D: Partners in crime so to speak?
BB: As they are today. Every deal out there. Now the bottom line is I was very, I caught the NASD lying to me about a spamming allegations they had made against the company.
D: Uh-hmm.
BB: We had done a corporate strategic partnership with a major telecommunications company. We had the gold standard of, you know, of vendors to Sun, Cisco, Quest, Oracle, EMC. We were the first Cisco and EMC corporate strategic partnerships with a non-venture backed company. And the result was the company eventually bankrupted some five months after I left. But in mid-July 2000, it became apparent to me the NASD was blocking the American Stock Exchange from getting access to the best or, you know, credentialed technology listings. When I caught the NASD in the lie to me, which I documented in the form of an affidavit I provided to my counsel and which has been sent to the White House, among many others. I called the head of, the then head of listings with the American Stock Exchange and asked for a meeting with Peter Quick who was then the AMEX President. I knew most of the people on the exchange from the years I spent in New York and the trading I had done on that floor. I came up and I told them about the issue of the NASD obstructing my listing application to go to the AMEX. And I wanted the AMEX not NASDAQ. Because I'd seen the NASDAQ manipulations. And I told Peter Quick that DTC was dirty on the shorting issue. I did not know when I told him this that he was on the board of DTC. He subsequently resigned from that board. I can't say I'm the only reason that happened. But I can promise you that that was on the back of his mind in terms of it being a contributing element to his resignation. As a result, when the first lawsuits came down against DTC, he wasn't named. All the other directors were, but not him. Now I say this to you because, because it's some, if this kind of corruption is pervasive at that level, and if industry officials know that they can't even say something about it when they are running a major exchange, then you and I as individual shareholders or small individual operators have no chance. The only way we can have a chance is to act in a unified manner and to raise our voices basically. Civilized behavior is meaningless to these people. They're sociopathic in their conduct. They're arrogance is without boundary. In fact I can only attribute their arrogance to one, one issue. Someone in the regulatory, some group of people in the regulatory processes have told them that they've got a pass for this kind of behavior. That's got to stop. And as I've said yesterday, in my first conversation with you Dwayne.
D: Uh-hmm.
BB: This cat is out of the bag.
D: What was the president's response to you?
BB: He blushed and then he left the office.
D: And that's it?
BB: Yeah. After that, the head of listings who's been, since left the exchange, told me. He said, well you probably embarrassed him. And I said, I didn't, it wasn't my intention. It was just to make him aware of the fact that there's people out there. I wasn't surely the only one, who knew that there was a manipulation of the markets going on at that point in time. This was July 2000. And one of the things I'll give you to put up on your website is the affidavit I prepared for my counsel in which I articulated the catching, the specific market regulation person at the NASD I caught lying to me. And it was unnecessary. All they had to do was tell me they had a problem with my CEO, which I think was the underlying issue. And instead they left me hanging out. If they'd told me that they had him under investigation, I would've removed him as CEO. Put him on the sidelines. Instead they allowed, you know, a $350 million company to be destroyed. You know what? They don't care. 155 people put out of work. Now magnify the 155 people, it was an average number, which is not unrepresentative, times the six or seven thousand dot coms that were bankrupted by the short raiding related to the crash. Which was really a raid. And you have some real, you know. Susan Trimbath, the woman who was the DTC speaker on the podium said, well you know, $6 billion a day in fails. Pretty soon you're up to some real money. So that's my particular format on that.
D: Well, uh, you're really opening our eyes to so many things. And I've got some questions for you.
BB: Uh-huh.
D: That have come across. And I'm not going to pick and choose. The list is not too terribly long. So I'm just gonna start at the top and give them to you exactly the way they came in. What is the likelihood that the DTC will be successful in removing paper certificates from the market? Furthermore what can we do to stop this?
BB: Eventually in order, the grand long term goal of all the settlement entities and the brokers clearing houses [indiscernible] is to go to a complete electronic paperless system. With the ultimate goal of reaching a point where we have a thing called straight through processing. Sometimes know by the initial STP. Which is effectively instantaneous delivery versus payment. What the custodians have shown themselves to be is irresponsible. And the reason a lot of this hasn't happened already is because too much money is being made off of the electronic manipulation of these positions in the various depositories. Not just in this country, but overseas. If you want, you know, support for that, Schroder, the German Prime Minister, removed the head of the Frankfurt Stock Exchange for criminal lending of securities.
D: Now can you define criminal lending of securities for us?
BB: It means he was lending securities under traditional margin rules were not lendable. He was lending stock from cash accounts. And from type 2 institutional safekeeping cash accounts. From excess margin positions. He was even lending restricted stocks before the restriction came off the stock. It wasn't just stocks he was lending too. What you have to know is that this shorting issue, this electronic counterfeiting is pervasive to the fixed income markets. Indeed, quietly it may be bigger in the fixed income markets which are, dwarf the equity markets. Than anyone has any idea of. So the point is that right now, this objective of straight through processing, there's nothing wrong with that. Bluntly I've been asked to run an exchange platform service provider from Switzerland which offers just that. But guess what? You can't short on that exchange.
D: Hmm.
BB: Why? Because if you're instantaneously settling, you can't sell something that's not in, that hasn't been dematerialized in the system. And if you sell it, it's out of your account instantly. And you pay for it instantly because you can only sell it, okay, if the buyer has real cash and the same custodian structure to buy the stock for cash.
D: So would that be, would that be an unhealthy thing for the markets if people were no longer able to short a stock?
BB: There's no one that knows the answer to that. The type of, a lot of the hypothetical arguments about short selling have come from academics.
D: Uh-hmm.
BB: Most of whom have, don't have any practical experience actually trading securities and are not aware of the manipulations that can occur in short selling. And the key is right now that no one's goal here is to see stocks trade on wider spread with less liquidity. But having said that, there's some price trade off point where creating artificial liquidity to narrow spreads, okay, increases volatility in the market generally. And one of the great canards of the SEC and NASD is they had to protect the short sellers against manipulative players on the long side. Well who's protecting the long players? Who's, why would a person who has bought a share for log term appreciation allow those shares to be loaned to someone who's betting against that very appreciation? It's illogical. There's a reason why we had the securities restrictions on short selling. To go back to the `33 and `34 acts. And it's because bluntly, nothing hypothetical, no objective opinion. There were short sale raiders operating in both the `29 and `37 crashes that operated in large pools holding hands conspiratorially. And those pools were so effective, they crashed the stock market 90% of its value. Okay, essentially without even owning the stock. Now this was where, you know, the 30, our great grandfathers and great grandmothers weren't idiots. And the rules in the `33 and `34 acts that prohibited short selling are there specifically for a reason. And that reason is that they cannot have it both ways. Short selling was prohibited and needed to be limited because they knew that it was subject to grotesque manipulation. It's just that simple. And for the chutzpah in the situation is that these new guys, these new lawyer regulators, again none of whom have had a real job in their lives. Okay, not one. Okay, those guys are sitting there making these arbitrary judgments about what's gonna be good for the market. Okay, just as right now they're experimenting with 1,000 of the most liquid stocks with no, eliminating short sale rules entirely.
D: Uh-hmm.
BB: Could I tell you something? That's gonna be a catastrophe. Why don't they let someone run a parallel test right to it, that allows no shorting of a stock? None.
D: Uh-hmm.
BB: You know why? Cause they're afraid of the result.
D: And what would that result be?
BB: It would mean that only real shareholders would be in the market.
D: Uh-hmm.
BB: Okay? And I'm not saying that's the optimal solution. But compare the results of the two markets if you pull the short sellers out of it.
D: Well in my opinion, only real shareholders should be in the market.
BB: Well it's a very interesting thing. The hedge funds have been created off of these academic constructs of market neutral strategies. Everyone's trying to get a return they don't deserve for risk, for less risk than they, than is being taken appropriately. I would tell you at this juncture, clearly, okay, these rule changes that have been made, have been made to accommodate a small part of the total investment community. It's the hedge funds. They're 7% or 8% of total assets in this country. And what they're gonna drive is a move from an American investment away from investment for long term return, which has been the backbone of small company structure. To what is called in Europe, an arbitrage economy. When I first came on Wall Street in 1973, there was no capital markets in Europe. There wasn't, there wasn't even long term fixed income paper. There was five year term notes and that was it. There was no such thing as an equity market or a long term bond market. And what the hedge funds are trying to drive is giving them control of the economic marketplace. And if it happens, there will never again be another Microsoft. Another Intel. Another Cisco. Another Oracle. Those are parallel underlying issue. And that is the venture capital community does not want small public companies to have, small public companies to exist, one. Or entrepreneurs to have capital structure, capital formation alternatives to them. Now the practical issue is, there isn't enough venture capital in this country to support the creative drive of Americans. You know, if all these companies fail, you bet. It's the old Babe Ruth analogy. If you want to hit home runs, you better be able to strike out a lot. They are trying to eliminate strike outs from the market. And it's economically impossible. Now a good example is, particularly one of the largest venture firms and extremely recognized and credible is a firm called Draper Fisher Jervitson out of Silicone Valley. They're a global firm.
D: Uh-hmm.
BB: Draper Fisher brags that they get 12,000 business plans submitted to them a year.
D: Wow.
BB: How many do they fund? Fifteen.
D: Hmm.
BB: Now does that mean that those other, of the other plans left that they didn't fund that there were no credible ideas, no creative force? You'd have to then remember what happened with Bill Gates when he founded Microsoft. I heard every slander he could have directed at him by the very people. There's no new slanders in the short selling arena. Dates with a college dropout. This guy's never gonna beat IBM. Yada, yada, yada. Okay? Larry Ellison, Larry Ellison's a lunatic. He can't be trusted to go to the bathroom by himself. Okay? He'll never build a company. Well let me tell you something, 60% of all the millionaires in this country didn't graduate from high school. 60% of all millionaires in this country have been bankrupt not once but twice.
D: Ben Franklin went bankrupt five times.
BB: Five times. Could I tell you something? If they tried to screw around with the fundamental economics of the American entrepreneurial architecture. And the entire, and to try to destroy the capital formation process as it's existed for, you know, a hundred years for small public companies. Okay. They're gonna destroy the small company job formation process. Now one statistic that they never like to hear be bandied about is the Fortune 1000 in the last four years has dematerialized 40 million jobs. Where do the jobs come from that, to replace the jobs liquidated by the major companies from the small public company arena? Any politician who ever has the nerve to say this to me is gonna get it shoved down his throat. It's economic illiteracy. And I say this to you because you know, this is a passionate issue. They want to, they want to screw around with this, they better be ready to take the personal, not institutional, but personal responsibility for the destruction of American capital markets for small public companies.
D: Hmm.
BB: So. This is a hot button for me so.
D: Well I understand. But I'm, I am, I'm such an incredible proponent for the small business, the small businessman. Not even so much into the public arena, but-
BB: All small public, all small companies, you bet.
D: Yeah, when a little restaurant opens up in my neighborhood and I go in and I meet the mom and pop, or the young couple that are starting it, I know how difficult it is to start a business and to be successful and to be profitable. So not only do I give them my business, but I tell my friends. I mean, that kind of, that's the way I was raised.
BB: Could I tell you something?
D: Sure.
BB: That's the story of Kentucky Fried Chicken.
D: Oh really?
BB: Harlan Sanders started Kentucky, was a twice bankrupt food product salesman. You know, this is a food processing product salesman. He came up with the concept of Kentucky Fried Chicken cooked in this, you know, pressurized steamer. He was on the US Highway 25, which was the main road from Chicago to Florida that people drove down every, you know, winter. He opened up his first store with his first social security check at age 65. The rest was rote.
D: He was 65 when he opened it?
BB: 65 when he opened the store that he finally got the equation right on.
D: Well I tell you what, after Greenspan's comments this morning a lot of 65 year old people are gonna have to start opening some kind of business.
BB: That's right.
D: Because the government is getty ready to rob everybody of their retirement. And I am, I was so upset this morning when I read those comments. I mean, you know, people have worked all of their lives. Lived the American Dream. Did the right things. You know, went to work, paid their taxes -
BB: Put their money away.
D: Put their money away. Yeah. All the things that good Americans should do. They finally reach the golden years, retirement. And the government snatches it out from under them. I'm up, now I've still got a ways to go to retirement. I'm only 47. I was one of the latter day baby boomers. But the first baby boomer retires next year.
BB: I could tell you right now that they're messing around with the found, causing a revolution in this country. You know, I look at what Greenspan did. What he did in loosening money out to the 2001 World Trade Center event was genius. It's the only reason we haven't been through a 30's style depression in this country. But having said that, the world elitist financiers do not believe that America should be allowed to be so dominant financially. This country's economy drives the world. You want a perspective on size? Our economy is ten times larger than the economy of Britain. Ten times. If this country were to stop consuming foreign product, the world would collapse financially.
D: I agree. And -
BB: It'd be worse than, it'd be a worse effect than what happened in `29, cause we weren't the principal consumer of the world's quality products and goods.
D: I mean, there's not a day that goes by on this radio network that I do not remind every listener why this country is as blessed as it is. And how if we're not careful, God can remove his hand and his covering from us just as quickly as he put it underneath us.
BB: Well as I said, you know, my concern is back in 1787 a man named Alexander Tyler wrote a book on the American democracy. And he said in that book, democracies have a lifespan of 200 years. And he's decided that from the Greek examples. And it's, you know, as another great commentator, P.J. O'Rourke said you know, democracy, the government of a democracy must be more than two wolves and a sheep voting on what to have for dinner.
D: I like that. Next question on the list and this may already be in the e-mail that you've sent me. Someone wants to know the link to the transcripts for the recent conference in D.C.?
BB: It is, it's on the nasa.org website. Go into www.nasaa.org.
D: Okay. And that'll give us a complete transcript?
BB: Yeah. The electronic transcript. So you can pull the link up right there. And eventually there will be, they'll make available written transcripts, I'm sure, for a fee.
D: Okay. Next question. Let's say company XYZ is trading on the OTC at 50 cents a share and has an outstanding share count of 50 million. One day Shorty starts running them into the ground until they are forced onto the pink sheets. This only makes Shorty continue his raid until the stock is .001. Can some insiders or the CEO step in and buy the outstanding shares? Then can XYZ PR they are paying $1 per share as a divident or buyout next week. What would happen and has it ever happened?
BB: To the best of my knowledge, it's never been allowed to happen. There's been repeated instances where companies that were subject to shorting had a potential buyer come to them. And when the buy, transaction was about to be coming through, the SEC would deregister the company, thereby killing the deal. There is an absolute concerted and orchestrated effort to protect the short sellers if things go against them.
D: Why? Why, why are we so determined to -
BB: Again, it's corruption. There's no other answer. I'm afraid that the Americans. You know, American society as a whole, Enron and WorldCom were. Could I tell you they were speed bumps compared to what has gone on in the short selling scandal.
D: Yeah. Are there still any active cases in process against the DTC?
BB: Yes, there are two.
D: Two?
BB: Yeah. And the bottom line is, there will be more. I believe at some point the states themselves will sue them. Because there's, here's the core question. Why should any company be denied the right to access and have knowledge of its investors by name? CD & Co and DTC would block that access. They do block that access. And there's a thing called the customer protection rule in the Securities Acts of `33 and `30. There's elements in `34 too. That say that a company must communicate with its shareholders on a timely basis as part of the regulation of fair disclosure that was implemented in 2000. The bottom line is at this point what has happened is, there's a concerted attack on the rights of shareholders as owners of an asset. They want to be able to give other people the right to counterfeit their shares. To vote shares that don't exist. To deny companies the right to access their shareholders on two corporate communications issues. And it is completely, you know, it stinks to high heaven. And the bottom line is at some point. You know, I stepped away from this on two separate occasions after receiving threats against myself. And I will tell you something. I'm not gonna be threatened again. And not by any nameless, faceless, gutless, you know, scum. This is not gonna happen. But I would tell you something. These people are behaving with this arrogance because someone in the regulatory structure has told them they're getting a pass. And you know what? Those regulators that have been guilty of this are aiding and abetting in the commission of Class B and Class A federal felonies. And they should be facing life in prison. Tricky part about it is you can't. If the American public knew how much money has been stolen from them by how small a group of people. How much money has been stolen from their retirement systems. We would be seeding a revolution in this country.
D: Well my call for a Deep Throat from inside the DTC still stands. I bring it up on the air quite often. And I've yet to have anyone take me up on that.
BB: I would say that you need to keep that call out there. One of the supporters, a former chairman of the DTC, has been a supporter of Wes Christian's. The woman who outed the 341 company survey where they found excess voting rights on all 341 companies of a survey, is a former director of Depository Trust.
D: Hmm.
BB: You got to keep those calls out there. I've talked to former Depository Trust officials who are appalled by what's going on at Depository Trust. They feel it's a, that their entire life's work has been humiliated by these people. And at some point, they can talk about the greater good, but you're dealing with socialist Stalinist analogies. To make an omelet, you have to break a few eggs. That was a Nazareth argument against the certificate only delivery. They had to stop that. They had 300 companies that had applied to go to certificate only delivery. Well you know, their goals of straight through processing and electronic paperless systems was gonna be shot in the head. Well guess what? Is that more important than the fundamental integrity of our system? Hardly. And she was basically making a very condescending, socialist argument. Okay? Which I consider to be un-Christian. And she can say what she wants. But the bottom line is she was saying, well if we have to see a few small public companies be bankrupted because they've been. You know, if that's for the, we may have to allow that to happen for the greater good of straight through processing. This is insanity. You know, and people must stand up on their hind legs. I will say this. I've come to the conclusion that there's enough information out there now that if someone isn't on board with this cause about stopping this abuse.
D: Uh-hmm.
BB: They're not part of the solution. They're part of the problem.
D: I agree.
BB: Open your mouths. The only way we're gonna fix this is through enough people to scream loudly enough, this must stop.
D: I agree. And the solution, or the quickest solution -
BB: God hates a coward. That's my old favorite line.
D: Well you know, it's true. Gideon, Gideon tried to take that route and God wouldn't hear of it. He says you're going to war. Now you made a comment the other day about urban, buying back 700 billion shares of CMKX. Was that a rumor and -
BB: Pure rumor. And he doesn't confirm it. But he says he's no longer the controlling shareholder. This was fed to me yesterday by a former IR person.
D: Okay.
BB: And, like I said, one of the problems CMKX has had is they should've gone reporting. That alone would've outed this entire crisis. But for whatever reason, I think that some of the parties involved in CMKX had managed to, you know, dirty their skirts. And it's a tragedy because the bottom line is, I do believe that eventually people will go to prison over CMKX.
D: Hmm.
BB: But I don't know who. And I sure as hell don't know when. Generally speaking.
D: Uh-hmm.
BB: The SEC and the government take small steps slowly. They're just now, I saw the indictment yesterday. Give you some perspective on timing. They indicted a pump and dump artist who ripped $43 million out of his own company. Dumping shares from offshore accounts he controlled. Somehow they got access to the offshore account information control positions.
D: Uh-hmm.
BB: And when he did it, he took out $43 million. Well they just indicted him for this conduct in `99, 2000.
D: Uh-hmm.
BB: Just indicted him. What's the date today guys? It's November 2005.
D: Wow.
BB: Six years.
D: Well the government is typically slow to move. But I can say this, once they do lock and load, uh, things can happen.
BB: Problem is that the government right now is taking a position that is intended to accomplish two objectives. One is to get the bad guy, great. But you know what they've also done is during that period of time when they conducted their, you know, very slow investigations, the civil rights of the abused shareholders have all expired. The statute of limitations has gone by. Why did they do that? Cause they don't want all the civil suits flooding the federal district courts. This has been a systematic pattern throughout all of these cases. The federal government, you know, typically. I've never seen a federal government investigation take less than two years, unless it's on something like Enron.
D: Uh-hmm.
BB: And like I say to you, all of you. And I say this to every person who listens in on the Christian Financial Radio Network. This is no accident. These things move like molasses because it's serving someone's interest. And the interest they're serving is the court system. Because they are terrified of 5,000 lawsuits coming in over the issue of naked shorting and counterfeiting. The SEC itself. I could break their back. If I had $10 million I'd break their back tomorrow. I'd file 5,000 actions in 400 courts nationally.
D: Uh-hmm.
BB: I'd start Appeals Court actions. You know, cause the Circuit Courts. And the bottom line is that, you know what? The whole system would lock up. These guys don't have the capacity or the technical skills to process that kind of paper. These guys aren't IBM. They're not Microsoft. Okay? Microsoft if, you know, look at the attack. More money by a factor of ten has been spent by the government for suing Microsoft than was spent pursuing Osama bin Laden.
D: Well now that is an interesting point.
BB: Okay? So where are their priorities? Well the only people, there's only one group of people who can change their priorities and that's the people who've been the victims of having their retirement accounts raped. And I say that with absolute focus.
D: So a two point plan. File the suits and request your certificates
BB: Correct. You have no choice. But if you don't get your certificate, you're playing into the hands of the scum.
D: Hmm. Now another question. I understand that the comment about CMKX trying to get a settlement for the shareholders is fear they will lynch Urban or something similar was your opinion. And the listener is asking the question, do you know Urban? If so, do you think that he would need this kind of prodding? He has a reputation with his shareholders of wanting to do the right thing. And since we don't ever get any news, people tend to hang on every word. And this listener just wanted to know if you could maybe clarify that?
BB: I do not know Urban. I have never spoken to anyone connected to him, except the former IR for the company. When I was at, he got my number. He was given my number actually by Dr. Jim DeCosta.
D: Oh, Dr. D. Yes. I've have him on the show before.
BB: Dr. Jim is very knowledgeable. And he's very commercial. He's not really interested in doing this unless he gets paid for it. I've, bluntly I have to take the same approach. At age 59 I don't have a lot of pro bono time to give anybody.
D: Yeah. Cause they're getting ready to steal your retirement from you.
BB: Yeah, exactly. And the point I'm trying to make to you all is that, you know, there's an old line. If it walks like a duck and it quacks like a duck and it looks like a duck, it's probably a duck. Okay? I say to all of you. Okay, you have to be not only skeptical, but demanding. I'm not saying that CMKX doesn't have assets. I don't think Roger Glenn was sent into the company by Citi Group to determine whether or not there were assets. He just wanted to know how big the assets were. But I could be wrong. You know what? There's been so many lies told by so many people here. That there are people including me, you know, just say step away. And that doesn't mean I don't believe in the CMKX shareholders and the community. But, you know, you guys have got to be looking at life after CMKX. I mean, to allow yourselves to be diasporaed out to the rest of the world and stop talking to one another would be a bigger tragedy than CMKX, you know, whether it lives or dies.
D: Well I had a listener this morning, or someone in our live trading room. They uh, they said because of what's transpired, they're never gonna put another dime into the markets.
BB: Yeah, could I tell you that I've heard that hundreds of times. American investor confidence has been decimated. And the tragedy is, many of the, you know, you don't know this. But the friends and family round, first round when you weren't, the companies weren't even eligible for venture capital is what has caused all these companies you depend upon today to be formed. Bill Gates got his original money. My God, you know, his original funding was 25 grand. It came from friends and family.
D: What a wonderful story that is.
BB: It is. That's not even the greatest part of the Microsoft story. It's how many millions of people he made millionaires.
D: He did. He really did.
BB: Try to imagine. He's made ten people billionaires. He's made ten, he's made hundred people centi millionaires. That's $100 million.
D: Uh-hmm.
BB: He's made, I don't even know how many peoples he's turned into, made $10 million for. And I know that the number of millionaires is a million.
D: That's, that -
BB: I mean these are staggering numbers. You know, this is the whole issue.
D: And this came out of a garage. This was, this was the American Dream as it was meant to be.
BB: That's correct. Well guess what? That'll never happen again in our system.
D: Hmm.
BB: Not without the venture. If you go to a venture capital guy today for $3 million with a start up idea, he'll want 80% of the company, anti-dilution provisions, dual liquidity event priorities. My God. Might as well be dealing with armed robbery.
D: Uh, a Shylock I think -
BB: That's right. They are finding ways to try to circumvent. They think because of the 70's and 80's which they've benefited from, but didn't have a great deal to do with. That they're entitled to a 35% return on their capital per annum. And they're gonna get it, no matter what it costs anybody else.
D: If they have to steal it.
BB: Yeah, that's right.
D: Okay. Another listener asks can you elaborate a little bit more on the 5th Amendment concerning naked shorting?
BB: I have given you some articles on the 5th Amendment. The 5th Amendment is the particular part of the Constitution that protects property rights. I've talked to this point directly. A stock is actually, a stock certificate is actually a grant of rights to the holder, the owner.
D: Correct.
BB: And the bottom line is, there's an orchestrated attack on property rights in this country. You've seen it in the eminent domain suits in New LONDON, Connecticut. Now also in Riviera Beach, Florida. But that's not where it stops. There's been a, they want to be able to parse your rights to the right to have, the meaning of title. A share is a, is a form of title. And believe me, if they say that they have the right to take owners take control of title without your knowledge or understanding. And to lend that title to other people as an asset without your approval. To create counterfeit longs and allow people to vote shares they own no, in companies they have no legitimate interest in. Believe me, the 5th Amendment is what this whole thing can come down to. And there are, there is one Circuit Court appeal that's gonna be structured off of that issue, pertaining to one company. The first company that I am aware of that actually made a documented complaint on naked short selling in its stock was a company called Universal Express. And it has been roundly slandered by the SEC. It's been sued. They have actually been the only company to actually sue the SEC in federal court. And the bottom line is, they're now going to 11th Circuit. And could I tell you something?
D: You bet.
BB: These guys have a case. I've seen their statistical evidence. They asked the SEC for help. The SEC told them to pound sand. Work it out with the market makers. Well the market maker had no intention of allowing them to work it out. None.
D: Hmm.
BB: I say this to you because at some particular point in time, people are not going to put up with this anymore. And the bottom line is, you know, the entire Bill of Rights is under assault. Every day.
D: I agree.
BB: And the key is right now, somebody's got to stop that.
D: Someone commented that the Federal Reserve itself has become unconstitutional. Now also let me clear this up. I made a mistake. When I mentioned that Dr. D had been on the radio show before, you were referring to a gentleman by the name of DeCosta, correct?
BB: Right. I think he's an oral surgeon in either Portland now? Portland, Oregon.
D: Okay. The gentleman who was on my show who goes by Dr. D on the message boards is Frank Hudson out of Kentucky.
BB: Yeah. I don't know him.
D: Okay. Yeah, he has been on the show. And apparently he has done a tremendous amount of due diligence. And he's a bit of a go to guy I think for a lot of CMKX shareholders. I haven't spoken with him personally in probably a year now. Okay. Now here's a question from Debbie. And I'm at the end of my list -
BB: Well -
D: Today. But I love this question, Debbie. Do you think the recent turnover at the SEC is going to truly clean house? Or have we simply put new lipstick on the same pig?
BB: That's a horrible thing to say. But I'm afraid you're right, Debbie. Bluntly I think that you're seeing an exit of a lot of senior, 11 or 12 senior officials have left just in the last six months. And I think part of it is they're getting out of Dodge before the lynch mob shows up. And bluntly, it began with Steve Cutler, but and Nazareth now of course is an SEC Commissioner which appalls everyone I know.
D: Let me ask you this. If I were, if I were willing to -
BB: Well I have to tell you what. Nazareth is well married. She's married to the Vice Chairman of the Federal Reserve Bank.
D: Hmm.
BB: Little fact a lot of people are not aware of.
D: I didn't know that.
BB: Or seemed to ignore.
D: If I were to arrange a conference, possibly here in the Phoenix area with some people like yourself and Dave PATCH, possibly Mark Faulk. Fly those guys in. Would you be willing to sit down and, and do a meeting?
BB: In a minute. In a minute.
D: Okay. And then we could video that.
BB: You know, bluntly I'll tell you, when I found out you were located here locally, forgive me, but I didn't know that you were local.
D: Uh-hmm.
BB: I've been in Phoenix Scottsdale residence since `92.
D: Oh okay. I've been here since `86.
BB: Well I had many, many friends here going back to the 70's. And I would be happy to, by the way, I know every person you just mentioned.
D: Do you?
BB: Yeah. Dave PATCH and I are good friends.
D: Okay then.
BB: Mark Faulk and I have had plentiful communications so.
D: Yeah, when you, it's when you Google my name on, I think one of the first things that comes up and it kind of freaked me out one day. Because I wasn't familiar with it. I was quoted I guess on the Faulking Truth. Which by the way is F-A-U-L-K-I-N-G. And somehow that got ranked real high in Google when you put my name in there.
BB: Uh-huh. Well Mark is a good man. You know, his family and professional background comes from, you know, I would call it entertainment production. I think that, you know, he is bluntly working with at least two different people to produce scripts for movies and made for TV event, documentaries. I have great respect for Mark. David PATCH is the most important communicator outside of possibly myself to come into this issue. He does the stock aid today pieces. I have been a close supporter of Dave from the beginning. I'm the person that wrote, I sent you a piece in which I'm, I first communicated with him back in April of 2003. At which point in time he was talking about a billion dollar fraud. I said, well I said you've got the fraud right. But it's a trillion dollars. And [indiscernible] actually I said it could be as much as three and a half to four trillion. And I explained why. And that piece is something that should get some traction on your website. You'll see it.
D: Okay. Well I'm gonna ask Noah or Van or Debbie or someone to organize all those articles you sent me on the message board and get those up today. And you know Bud, you've been very kind to come on the radio. But our listeners love it. Will you come back again next week?
BB: Yes, absolutely.
D: Okay.
BB: Especially after you get some of the articles up and they can see it. You know, bluntly I will tell everyone, I stepped away from this for awhile, not for my security, but for that of my family. And I've realized now the best security I can have is to have a group like the people who listen into your show know I'm here and know that if anything happens to me, they can raise bloody hell with the people who are supposed to be responsible.
D: Alright Bud.
BB: Fair enough.
D: We're gonna keep you in our prayers brother, because you are making some statements that, that could well as you said, there have been threats so. Lot of good praying folks listening to this radio show today. And I encourage each and every one of you to keep Bud in your prayers. And keep the future of our nation, our economy, keep it in your prayers. God did indeed create the greatest nation on the face of the Earth. And folks, if we don't get up off of our couch and start doing something about it, we're gonna all be speaking Chinese.
BB: Let me give you a tip real quickly.
D: Sure.
BB: I did my concentrations when I was at West Point, as a cadet. And one of them was China. And I'll tell you right now that the Chinese are coming on like a freight train. And we either clean up the corruption in this country or they're gonna absolutely decapitate us within 20 years. That means your children are going to be speaking Mandarin. I bluntly have told all of my relatives kids to learn how to speak Mandarin. Cause the juncture I see right now, I see no leadership in this country. And I would give you one last talking point about the cohesion and the unity of the CMKX shareholder group. Whether you know how to write formally or not.
D: Uh-hmm.
BB: If each CMKX shareholder and each listener on this show were to simply write a one paragraph letter to their congressman and senators. One paragraph. Doesn't have to be technically sophisticated. But say this is, this corruption must stop. And send it to the press, send it to their, you know, just get on the fax machine and spend five minutes sending a one paragraph protest to every person in this country that has any authority. You know what would happen? In a year these guys' offices, they wouldn't be able to hold the paper in their offices. It doesn't take a lot of work. I've done radically more than that. But I've got traction now. And this issue has traction. It isn't going to go away. But you can make a difference about how fast somebody does something about it by you know, quietly screaming. What's a quiet scream? Don't talk. Put it in writing. If you can write a question to Dwayne about what's going on here, write a one paragraph. That's five sentences. Five sentences. Opening, three sentences of body and a closing. And say stop the crap. Okay?
D: Yeah.
BB: Cause if you don't do that, we're all, we're all done.
D: Hey Bud on behalf of all the listeners of CFRN and all the members of Christian Traders and every American investor that has been ripped off and robbed, we owe you an incredible debt of gratitude for taking the time to come on the air, share your knowledge, your experience with us. And together, and listen to me folks. If we work together, we can make a difference. And Bud I will talk to you Monday morning at 8:00 a.m. Arizona time, 10:00 a.m. Eastern Standard Time.
BB: Alright. Take care everyone.
D: God bless. Thanks so much Bud.
BB: Bye.
BUD BURRELL AND DEBI ON USXP ( CFRN.NET )
http://heavensembrace.org/debibudcfrn.mp3
BUD BURRELL'S CMKX NAKED SHORT SELLING BK ASSET STRIP THEORY:
D: Now, another question. And this one loves to float around the message boards and everywhere else. And I don't know if you can answer it. But is CMKX a sting operation?
BB: I believe that there's a component of what was going on with CMKX. I think that inadvertently possibly Casavant stumbled into a major asset find in Saskatchewan. It's an entire province is a giant alluvial plain. There is a productive gold mine, sorry, diamond mine up there being run by the people out of DeBeers etc. Oppenheim. The key element is this. I smelled an asset raid. Many of the so-called naked short bankruptcies were created with the specific intention of trying to strip out a valuable asset from the hands of parties who controlled it through these small public companies. A great example of one of these is Rod Young's Eagle Tech Communications. Many people don't know but he holds the primary patent in this country for what is called multiple destination single call number forwarding. That means you call a single number and it checks seven or eight or ten or however many phone numbers flicking for you. This is also known as the digital assistant concept. When his company was hit by the shorts, it was with the specific intent, not just to bankrupt the company but to steal the asset out of the bankruptcy for pennies on the dollar. Bluntly I think overstock.com was being targeted similarly.
http://www.ncans.net/files/bud2.doc
Bud Burrell on disclosure of USXP loot:
Bud BURRELL says about USXP: Reply: I provided litigation support to the in house General Counsel for over 4 years. What they owe me is privileged.
This isn't over yet. We need to watch and listen, while looking for patterns.
=======================================================
Re: For General Comments and Questions from Today Forward.
By Sandy on 9/8/2007 6:54 AM
Bud,
You worked for Universal Express?
What do they owe you and what work did you do fo Universal Express?
They where lucky to have a man like you that is so knowledgeable about shortie.
Thank you Bud for all that you do for us.
Sandy
Reply: I provided litigation support to the in house General Counsel for over 4 years. What they owe me is privileged.
This isn't over yet. We need to watch and listen, while looking for patterns.
BURRELLsBlog
http://www.thesanitycheck.com/Blogs/BudBURRELLsBlog/tabid/84/EntryID/637/Default.aspx
Remember when AR was interviewed on MN1?
-----------------------------------------------
Market News First under shadow in penny stock analyses
MN1 founder barred from trades; conflicts alleged in analyses
11:45 AM CST on Tuesday, November 13, 2007
By BRENDAN M. CASE and MICHAEL GRABELL / The Dallas Morning News
While CNBC and Fox Business Network vie to cover big business, Dallas' Market News First is bringing broadcast coverage to the penny stock world, a bazaar of volatile and often risky shares.
Also Online
Ties between analysts, firms examined in penny stock analyses
The start-up streams live video from its Web site, www.MN1.com, marketing its news as help that will make viewers better informed and more profitable investors. It bills itself as "News You Can Trust."
But viewers beware.
MN1's 33-year-old founder and top executive, self-made millionaire Joshua Lankford, was recently barred from the securities industry. His companies have also been major shareholders in several of the stocks the site has spotlighted over the years. Some featured stocks have been tied to his friends and business partners.
In one instance, a stock rated a "strong buy" on MN1 was the focus of a lawsuit in which investors accused Mr. Lankford of manipulating the share price.
Mr. Lankford's attorney, Spencer Barasch, said MN1 strives to be as transparent as possible.
"MN1 goes to every effort to disclose any potential conflict of interest or any interest that any employee in MN1 might have in any company that's featured on MN1," he said.
For Mr. Lankford, MN1 is the latest in a career that includes a lucrative stint as a broker at Oak Lawn brokerage Barron Moore Inc., lawsuits alleging he orchestrated stock frauds – even an arrest for leading Dallas police on a chase in his orange Lamborghini.
Now he's competing with a growing number of news sites, chat rooms and online bulletin boards offering to help investors make sense of penny stocks. These tiny micro-cap stocks sell for as little as a few cents a share on loosely regulated exchanges such as the Over-the-Counter Bulletin Board and the Pink Sheets LLC.
"He wanted to cover this market in a very professional and upstanding manner," Mr. Barasch said. "It was a market that was not well-served in the financial news world, and it was under-covered. Some of the outfits that purported to cover it weren't necessarily on the up and up."
Because of their generally low prices and volatile trading, these stocks can quickly generate big profit multiples, and the Internet has made them increasingly accessible to ordinary investors. Still, they remain one of the murkiest corners of the investment world.
"If you think of the New York Stock Exchange as the Cadillac and the Nasdaq as the Lexus, then the Bulletin Board is the thrift shop and the Pink Sheets is the stuff that's left on the curb for the junkman to take," said James Angel, a finance professor at Georgetown University in Washington, D.C.
Mr. Lankford envisions MN1 as the anchor of Lankford Media Group, a company he started with $4.5 million of his own money, he told the Dallas Business Journal earlier this year.
Like TV
Viewing MN1's Web site is like watching TV. Using streaming video, the site offers news reports, interviews and talk shows. MN1 even scored four one-hour interviews with O.J. Simpson last summer, making national news.
That mix has already attracted potential suitors. The company has held preliminary talks with media companies and venture capital firms with a possible interest in buying MN1, Mr. Barasch said.
In addition to news stories and video streams, viewers can read financial analyst reports about penny stock companies that are similar to the lengthy reports Wall Street produces about big companies. Nearly all the reports, prepared by MN1 TV personality Michael Willingham (nicknamed "Mike the Analyst"), carry "buy" ratings, recommending that investors purchase the stock.
Mr. Willingham has picked some winners, including one stock that has quadrupled in price since his report on it. Most of his picks sell for less now than when he chose them. Still, some of those losers rose for a while after his reports, meaning investors could have profited by taking the advice, then selling at the right time.
Mr. Willingham is another veteran of Barron Moore, Mr. Lankford's former employer. But he was fired in 2006 because he "attempted to open a stock account at another broker dealer in order to trade penny stocks without prior written notification to Barron Moore," according to the Financial Industry Regulatory Authority, or FINRA.
Mr. Willingham declined to comment for this story.
Barron Moore's president and chief executive, Katherine Moore, also declined to comment.
Mr. Willingham's reports often come at a price for the company being analyzed. An April report on Miami-based American Ammunition Inc., for example, was actually a "paid advertisement" that cost $30,000, according to fine print at the bottom of the report.
The climb up
Mr. Lankford grew up on South Padre Island and left high school in the ninth grade (he later earned his GED).
He joined the Navy and served in Iraq after the first Gulf War but was discharged for chronic alcoholism in 1995, he said in a 2006 deposition. (He has also achieved a longstanding recovery and has been sober more than 10 years, he said.)
He then worked odd jobs – waiter, car dealer, catering truck driver, circulation contractor for The Dallas Morning News.
For a time, he ran a company that sold neckties in downtown office buildings. In the late 1990s, he worked in sales for a local Web site development firm.
But he seemed to hit his stride when he earned his broker's license in 2003. In one year at Barron Moore, he earned $400,000 and eventually owned nearly 25 percent of the brokerage's parent company, executives said.
Living large
Mr. Lankford's standard of living improved. In 2005 and 2006, he bought two $1 million houses in Preston Hollow and sold his $220,000 northwest Dallas house to an investment firm controlled by his half-brother.
Other acquisitions included a Big Dog motorcycle and the Lamborghini.
In 2005, police tried to pull Mr. Lankford over after clocking the Lamborghini going 80 mph in a 35-mph zone. According to the police report, Mr. Lankford led officers on a car chase in the Knox-Henderson area, got out at a bar, threw his keys to a valet and fled on foot. When caught, he told police he was laughing throughout the chase, the report said.
The felony charge was erased from his record this summer after Mr. Lankford completed probation. His lawyer, Mr. Barasch, declined to comment on the incident. Mr. Barasch described Mr. Lankford as a dedicated family man with three young children.
Also in 2005, Mr. Lankford was questioned by the U.S. Securities and Exchange Commission. It's unclear about what.
But the SEC has requested numerous records from Barron Moore in connection with the possible manipulation of dozens of stocks by a Dallas-based network of lawyers, brokers, investors and consultants referred to by the SEC as the "shell creation group."
Mr. Lankford and Barron Moore have denied any wrongdoing. The SEC has not brought any action against either him or the firm.
On Oct. 24, however, Mr. Lankford was barred from the brokerage business by FINRA, the industry's main private-sector regulator. Authorities expelled him because he failed to provide testimony and documents in an inquiry that began in 2005.
Mr. Lankford did not admit or deny wrongdoing. Regulators declined to say why they wanted to talk to him.
There have been other controversies.
Addison-based Consolidated Sports Media Group Inc., which made a Girls Gone Wild-style video shot at NASCAR races, filed suit against Mr. Lankford, accusing him of helping to prepare a junk fax in 2004 designed to pump up the company's stock price. Shareholders, including several companies controlled by Mr. Lankford's half-brother, stood to benefit, according to the suit.
Mr. Lankford denied the allegations in a deposition.
The lawsuit was settled after other defendants in the case agreed to pay Consolidated Sports $4.8 million.
Mr. Lankford also became embroiled in a legal dispute with a group of investors in MicroTrak Inc., a Dallas-based maker of GPS mapping devices for cars. The company saw its stock jump from 40 cents on Dec. 8, 2005, to $2.29 in early January 2006 before steadily falling.
The investor group alleged that Mr. Lankford, through an investment vehicle called Shocker 100 Index LP, had barred it from selling its stock so he and his friends could sell their own shares first, before the stock deflated.
In a later court filing, the group said Mr. Lankford told it he had caused the price spike. He promised to manipulate the price again and asked the group to drop its lawsuit, the group alleged.
Shocker 100 denied the claims in court filings, and Mr. Barasch echoed the denial. "I can't believe that Josh would have said that, and I can't believe that Josh would have done that," he said.
Shocker 100's lawyer, Jules Slim, also noted that one of the investors is a convicted felon once described as "one of central Florida's most notorious criminals" by the Orlando Sentinel. The legal dispute, which settled earlier this year, was not disclosed in MN1's May 2006 analyst report about MicroTrak, a company now called Tracking Corp.
The report gave the stock a "strong buy" rating, predicting the price would shortly zoom from its dip to 63 cents back up to $2.44.
The stock declined steadily in the ensuing months. It now trades at about 7 cents a share.
tkalantzis, Matbe you could explain why Bud Burrell has not disclosed his compensation and his relationship to USXP as he touted it on his blogg and the CFRN/faulkingtruth radio show?
The U.S. Securities and Exchange Commission Regulation 17(b) states:
“It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof.”
Here is Bud posting under Magicre on SI. Even though Bud told the flock on CFRN in an show with Debi that he does not post online the opposite seems to be true.
Here is one of Buds big woppers. AR's litigation consultant. lol. AR may use a defence that he was only basing his actions based on the worldrenown authority Bud Burrell.
"First, Re: DTCC, it makes over $1 Billion a year from shorting of stocks."
How many other companies has Bud not disclosed about as he touted them"
" didn't name any companies, simply because I am prevented from doing so by my agreements"
http://siliconinvestor.advfn.com/readmsg.aspx?msgid=20790606
To: MacRandy who wrote (88241)
11/22/2004 10:47:01 AM
From: magicrecall Read Replies (17) of 101369
I'm leaving because I am too busy for this, and for no other reason. Looks like I partly misread you. Well, I tried, but there is the old rag, "No good deed shall go unpunished."
First, Re: DTCC, it makes over $1 Billion a year from shorting of stocks. They have pending RICO actions against them, and the actions aren't going away quietly. Do you understand re-hypothecation? DTCC is selling its seats/shares in its control via nominal ownership more than once, just like overbooking, except they get paid for the ticket just like it was used.
Maybe we can partly agree on that. You should find and read the Nutek/Datascension filing. Read it cold, as if you had never heard the name before. Then, read the Nanopierce filing in Nevada State Court, specifically on the NSCC and the Stock Borrow program. I do no work for either company, but I can assure you their cases are non-trivial on a precedent level.
I didn't name any companies, simply because I am prevented from doing so by my agreements. But, want another name that is in the open, who I don't do work for? SEDONA CORP. Two felony indictments, one UFAP, and a lot more to come unless Andreas Badian wants to spend most of his life in prison, while his brother hides in Austria.
Want 60+ more names? Look at Rhino Advisors' companies, connected to the Badians and Doctor Doctor Batliner, probably the best known major money launderer in the entire world. How many more companies are there?
Dateline has a piece coming sometime in the future. Another company name or two will come out then. Watch the piece. Part of the piece is on a Company Elgindy hit, and helped to virtually destroy, the company surviving only on the sheer will of the founder.
Surrounding prosecutions and litigations on shorting manipulation, my acquaintances and professional relationships have no fewer than 500 companies who have inquired about manipulative shorting of their companies' stocks. TWO-THIRDS are NYSE, AMEX and NASDAQ NMS companies.
I tried to be constructive in my answer to your question. You want names? Do a Pacer/Lexis/Nexis search. Last time I looked there were about 60 civil and criminal actions in this space, including 40 Federal Criminal prosecutions. One set of cases in Western US has already produced 20 plea convictions. I have read them all. Have you?
There were at various times a total of about 600 members on the site, most of whom were silent. The number comes from Elgindy, including the number of hedge fund members. It is in the literature. I have read it. Have you?
You are very aggressive. The best defense to a lack of knowledge of the facts is to grind some research. Sign up for Investrend.com free site. They have published the names of 113 companies that have applied to exit DTCC, complained publicly about shorting, etc., and given identity to the tag "Stockgate" to the description of this crisis. They have put out innumerable articles on the shorting scandal.
Subscribe to The PIPES Report, the best out there on PIPES deals, virtually all of which have been shorted. Read the articles of Judith Burns of Dow Jones. See if someone can get you copies of Dave Patch's pieces on regulations and settlement.
I sold and managed units involved in settlement and clearing services, and I can tell you there isn't so much as a minor technical error in Patch's pieces on settlements. How did he get the information? He took a novel approach, he actually read the regulations. Have you? I can recite them by Section/paragraph number. Can you?
Looks like your good question may have been an accident, but you shouldn't let it be. Stay objective. You don't have all the facts. I don't, and I am years ahead of your power curve on just reading alone, forget relationships in the industry. I had trouble believing what I saw when I started this hard in 2000. As much as I know now, I don't think I have even 10% of what is really going on.
You want more names, do some of your own work. This isn't Quantum Physics. If you can't find a hundred names of companies whose shareholders have been screwed by shorting no one has even noticed, find another line of endeavor. If you can't find the history of how the 33 and 34 Acts came to have restrictions on shorting, simply go to Google and do keyword searches. It is all there. Who was the first Commissioner of the SEC and why was he picked? I know the answer, do you?
I didn't think it would be this hard to disconnect, but this is good housekeeping. This is a sticky site.
Stick with the views of the objective posters who actually back up their opinions with fact. You will be better served. You aren't exactly championing John the Baptist or Ghandi in supporting Elgindy.
I won't be answering anymore messages. Good luck. I would have sent this to you privately, but my service level is 1 and I see no reason to continue for now. I have got what I needed.
Contrary to your impression, this is not a crusade for me. I am not an interested party to any litigation initiated so far, I am just a paid industry consulting expert. I am not a Federal Agent, nor am I agent of any police or investigative agency. Maybe this will quell some of the shattered nerves out there that seem to be so raw, but then again, what are they nervous about?
Keep your head up and don't be collateral damage to this.
Do you have a link to where Bud said that?
Thanks
Bud Burrell says: "Let's wait and see."
Re: Altomare and Gunderson Court of Appeals Brief Link, re: USXP Action.
By TheSimpsons on 11/5/2007 2:02 PM
What do your DOJ contacts have to say about Universal Express Bud?
Are they going after the naked shorters?
Reply: Let's wait and see.
http://www.thesanitycheck.com/Blogs/BudBurrellsBlog/tabid/84/EntryID/664/Default.aspx
NASCAR team owner Gene Haas gets two years in prison in tax fraud
15 hours ago
LOS ANGELES - A NASCAR team owner was sentenced Monday to two years in federal prison after he pleaded guilty to defrauding the government of more than US$34 million in taxes.
Gene Haas, the 54-year-old owner of Oxnard-based Haas Automation and NASCAR's Haas CNC Racing, was ordered to begin serving his term on Jan. 14, the U.S. Attorney's office said.
Haas pleaded guilty in August to a felony conspiracy charge for orchestrating a plan to list bogus expenses that could be written off as business costs and save Haas Automation millions in taxes. The company makes computerized machine tools.
As part of his plea agreement, Haas paid a $5 million fine, plus more than $70 million in back taxes and interests.
"Mr. Haas has now paid the government more than twice the amount of taxes he attempted to avoid paying," U.S. Attorney Thomas P. O'Brien said in a statement.
"This huge monetary penalty, as well as the two-year prison term, should reassure law-abiding citizens that tax evasion can and will be rooted out, and that there are significant ramifications for those who attempt to cheat the government," he said.
Darren Saunders may be in movie
---------------------------------------
SCREEN PAYOFF FOR FRAUDSTER
October 10, 2007 -- CRIME does pay - at least for Jordan Belfort, the high-flying stock scammer who ripped off investors for hundreds of millions of dollars to fund his coked-up, sex-fueled life of excess.
Belfort, who used his "boiler room" STRATTON OAKMONT brokerage firm to fraudulently "pump and dump" stocks, ended up serving 22 months in the slammer. But he's on the fast track again.
The Queens-born schemer just published "The Wolf of Wall Street," which has been optioned by Martin Scorsese. Belfort, who'll be played by Leonardo DiCaprio, will serve as consultant. And he's already pounding out a sequel.
Belfort owes his victims $107 million in restitution, and his guilty plea to charges of securities fraud and money laundering requires him to turn over half of all future earnings to them.
But during the years he was cooperating with the feds to convict many of his partners in crime, he lived like a king in Southampton, a few houses from Henry Kravis, and entertained lavishly at home while wearing an ankle monitor. Now he's even more comfortable in Southern California, although he doesn't see it that way.
"My life was utterly destroyed and wrecked by this. I've been lower than pond scum, and I feel terrible about what I've done. Hopefully, I'll get to pay everybody back," Belfort, 45, told Page Six.
"I was on drugs. I lost my wife and kids and my freedom. And if I had done all of this legitimately, I would have made 10 times more money and I'd still have my family. Luckily I've been given a second chance."
Luck is right. During his first go-round, Belfort smuggled money into Switzerland, was addicted to high-priced hookers, piloted a chopper while high on cocaine, sank a 170-foot yacht in the Mediterranean, and woke up in restraints on a flight to Switzerland after groping a flight attendant.
Belfort denied rumors he has tens of millions stashed away in the Cayman Islands and is secretly making more as a mortgage broker: "I make my money as a writer. Look, crime doesn't pay. What I did is still a huge burden that weighs on me. I live modestly."
Meanwhile, "The Sopranos" executive producer Terence Winter is busy on the movie script. Does Belfort have tips for DiCaprio? "He'll have to learn how to get stoned and stumble around like a moron," he told us.
"In 1989 my brother-in-law got me to be a job as a "cold-caller" at Stratton Oakmont in Lake Success, NY. "
.....Darren Saunders
http://www.faulkingtruth.com/Articles/FaulkingAround/1054.html
FINRA Expels Franklin Ross, Inc. for Systemic Violations of Anti-Money Laundering Rules
Firm's Current and Former Presidents Fined, Suspended for Failing to Investigate and Report Numerous Suspicious Securities Transactions
Washington, D.C. — The Financial Industry Regulatory Authority (FINRA) announced today that it has expelled Franklin Ross, Inc. (FRI) of Princeton, NJ from FINRA membership for repeatedly violating anti-money laundering (AML) rules. FINRA also imposed fines and suspensions against two of the firm's principals - its former president, Mark G. Ross, Jr., and its current president, Kevin K. Herridge. By federal statute, a firm must be a FINRA member in order to conduct a public securities business.
FINRA found that FRI repeatedly violated anti-money laundering (AML) rules by, among other things, failing to investigate and report numerous suspicious transactions; failing to obtain adequate background information on new customer accounts; failing to conduct an independent test of its AML program; and failing to provide AML training. FRI and Ross also violated supervisory, recordkeeping and registration provisions.
"Suspicious Activity Reports provide law enforcement with information that is critical for investigating and prosecuting money laundering, terrorist financing and other financial crimes," said Susan Merrill, FINRA Executive Vice President and Chief of Enforcement. "FRI's failures to investigate red flags allowed it to serve as a 'safe haven' for individuals seeking to capitalize on highly suspicious or illegal stock transactions without detection."
AML rules, as well as FRI's written procedures, mandated that the firm - under the direction of its AML Compliance Officers (Ross and then Herridge during the relevant period) - investigate "red flags" indicating possible suspicious activity and then file Suspicious Activity Reports (SARs) for suspicious customer activity and transactions. Notwithstanding the continuous pattern of suspicious activity presented by a number of the firm's customers, FRI, Ross and Herridge never complied with this important AML program requirement.
FINRA found that, at various times from February 2004 through September 2006, FRI's clientele included notorious stock promoters and others who had been barred by FINRA or disciplined by the Securities and Exchange Commission (SEC) or had criminal histories - including one customer who had been convicted for the sale of an illegal controlled substance and money laundering. The same individual had been previously convicted for his role in a "smurfing" scheme, a commonly-used money laundering technique involving the splitting of a large financial transaction into smaller transactions to avoid scrutiny by regulators and law enforcement.
FINRA further found that in at least a dozen instances, FRI customers sold large blocks of penny stocks that were linked to allegedly fraudulent schemes. The SEC had filed at least two enforcement actions charging federal securities laws violations involving penny stocks that were later sold through FRI and other firms. In one instance, an individual who had previously been barred by FINRA delivered over 1.8 billion shares of a penny stock issued by a company that was contemporaneously the subject of a pending, and publicly released, SEC complaint alleging manipulation and other securities laws violations. In the following 10-month period, this customer sold the shares for approximately $8 million in 155 separate sales, wiring the proceeds out of his account after each sale.
FINRA also found that certain larger securities transactions effected through FRI had many hallmarks of suspicious activity, including journaling of securities into accounts followed by immediate liquidation, as well as numerous unexplained wire activities in customers' accounts that included wires to known tax havens. In some instances, customers deposited securities and/or funds into accounts that greatly exceeded their known income or resources.
FINRA found that FRI should have identified these transactions as suspicious. FRI had tools at its disposal to identify the transactions. For example, FRI's clearing firm provided it with exception reports that could have been used to detect many of the red flags. FRI, however, did not utilize those reports and never conducted an appropriate investigation or reported any of this activity. During the relevant period, FRI's annual gross revenues grew from approximately $500,000 to $2.5 million. FINRA also found that FRI and Ross violated supervisory, recordkeeping and registration provisions. For example, they failed to properly review the transactions and correspondence of the firm's registered representatives and conduct inspections of branch offices. Moreover, they allowed certain individuals who were not actively involved in the firm's securities business to "park" their securities registrations with FRI.
In addition, FINRA found that FRI failed to maintain and preserve internal e-mail communications relating to the firm's business as required by the federal securities laws and FINRA rules. From at least January 2004 through November 2005, FRI had no system, written procedures or policies relating to retention of electronic communications. Indeed, the firm did not maintain a central server for such communications. Instead, its registered representatives used their personal e-mail accounts to transmit business-related messages to firm customers. As a result, FRI failed to maintain and preserve any electronic communications during that period. From November 2005 through March 2006, FRI also failed to enforce, with respect to the one representative in its Sarasota, FL branch office, its policy prohibiting the use of external e-mail accounts for business-related e-mails. As a result, many business-related e-mails sent to and from the Sarasota branch office were not otherwise retained by the firm.
In addition to expelling the firm, FINRA suspended Ross for two years in a principal capacity and 90 days in all capacities and fined him $35,000. FINRA suspended Herridge for six months in a principal capacity and 30 days in all capacities and fined him $25,000. FINRA also ordered both individuals to obtain substantial additional AML training over the next two years.
In concluding this settlement, FRI, Ross and Herridge neither admitted nor denied the charges, but consented to the entry of FINRA's findings. Investors can obtain more information about, and the disciplinary record of, any FINRA-registered broker or brokerage firm by using FINRA BrokerCheck (formerly known as NASD BrokerCheck). FINRA makes BrokerCheck available at no charge. In 2006, members of the public used this service to conduct more than 4.7 million searches for existing brokers or firms and requested more than 207,000 reports in cases where disclosable information existed on a broker or firm. Investors can link directly to BrokerCheck at www.finra.org/brokercheck. Investors can also access this service by calling (800) 289-9999.
FINRA, the Financial Industry Regulatory Authority, is the largest non-governmental regulator for all securities firms doing business with the U.S. public. Created in 2007 through the consolidation of NASD and NYSE Member Regulation, FINRA is dedicated to investor protection and market integrity through effective and efficient regulation and complementary compliance and technology-based services. FINRA touches virtually every aspect of the securities business - from registering and educating industry participants to examining securities firms; writing rules; enforcing those rules and the federal securities laws; informing and educating the investing public; providing trade reporting and other industry utilities; and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web site at www.finra.org.
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Court Deals Blow To SEC’s PIPES Enforcement Effort
November 5, 2007
By Nicolas Morgan and Perrie Weiner
Judge Graham C. Mullen of the United States district court for the Western District of North Carolina dealt the Securities and Exchange Commission a serious set-back in its efforts to impose trading restrictions on hedging activity in the market for private placements in public equities. And with any luck, Judge Mullen’s ruling, issued Oct. 24, may be the beginning of the end for the SEC’s attempted application of Section 5 of the Securities Act of 1933 to PIPEs.
According to the SEC’s complaint, in the fall of 2001, John Mangan—then of Friedman Billings Ramsey, and later to found hedge fund Mangan and McColl Partners, which has since closed its doors—allegedly purchased for a client 80,000 shares of Nasdaq-listed company CompuDyne Corp. in a PIPE. Like many participants in the PIPEs market in 2001, Mangan hedged the PIPE investment by selling short an equal number of CompuDyne shares.
CompuDyne later filed a registration statement for the resale of its PIPE shares and, after that registration statement became effective, Mangan purportedly used the PIPE shares to cover the short position. The SEC also alleged that Mangan’s short sales amounted to insider trading. However, in an approach departing from that of some other cases in the area, the SEC did not allege that Mangan engaged in “matched orders,” “wash sales” or “naked shorting” through Canadian brokers, which the SEC claims are indicators of a deceptive intent.
Nor did this case present the added complications of 10b or 10b-5 charges, bootstrapped to an otherwise “pure” Section 5 claim, where there are alleged misrepresentations in the deal documents such as breached investment intent or a lack of a shorting provision.
What Mangan did not know (and arguably could not have known) in 2001 is that five years later the SEC would allege that, by covering his pre-effective short positions with PIPE shares, Mangan violated Section 5, which essentially requires that every offer or sale of securities must either be registered or exempt from registration.
Beginning in 2005, the SEC began bringing enforcement actions against PIPE traders like Mangan, alleging that short sales prior to the effective date of a registration statement were “effectively” or “deemed to be” unregistered and nonexempt sales of securities if the short positions were later covered by PIPE shares after the registration statement became effective.
Before Mangan
Although academics and practitioners in the area questioned the viability of the SEC’s novel Section 5 theory, for years no court had an opportunity to scrutinize the theory: Like most other SEC enforcement actions, every such Section 5 defendant settled before the case went before a judge. In most cases, the SEC used the threat of a bar from the investment-adviser or broker-dealer industries to exact agreements from these defendants. As a result, the cost and risk involved in challenging the SEC’s Section 5 theory in court often outweighed the monetary penalties levied in the settlements.
However, Mangan decided to fight back. The SEC brought its action against his on Dec. 28, 2006, and he promptly filed a motion to dismiss the complaint, arguing, among other things, that nothing about Section 5 prohibited the conduct he was alleged to have engaged in, and the SEC was, in effect, trying improperly to impose new regulations through litigation that would greatly expand existing law.
Dismissed In Its Entirety
On Oct. 24, Judge Mullen, the first judge to weigh in on this issue, agreed with Mangan and dismissed the SEC’s Section 5 claim in its entirety. Ruling from the bench in Charlotte, N.C., Judge Mullen said:
The government’s allegation of a Section 5 violation is certainly creative. And while there seems little doubt that the defendant sold short anticipating the receipt of PIPE shares to cover the short, it’s also true that in any case he would have had to cover with the shares purchased in the open market should the PIPE fail to close or been withdrawn or otherwise not be available to produce those shares. Anybody who bought at the sale of the securities got CompuDyne. They got what they bought.
And what we have here, it seems to me, is a post hoc ergo propter hoc argument by the government that because the PIPE in fact was not registered and because the PIPE shares were later in fact used, he in effect sold the PIPE. Well, maybe, but I don’t think he did anything illegal. In short, no sale of unregistered securities occurred as a matter of law. And since that is this court’s ruling, there is no need to parse the various Olympian rumblings from the SEC and compare them to the Commission’s startling publications in the Federal Register or otherwise to come up with some notion about how he had notice after all because I’m holding as a matter of law there was no alleged Section 5 violation and the motion to dismiss as to that is granted.
As to the SEC’s insider trading claim, the court denied Mangan’s motion to dismiss, noting that the decision was “a close case—dare I say, very close case—particularly in view of the apparent nonevent that the announcement of the PIPE seemed to be.” Although the court’s analysis of the insider trading issue appeared to focus on the particular facts and circumstances of this case, including the timing of Mangan’s short sale order versus the execution of that order, the judge’s conclusion that the announcement of the PIPE was a “nonevent” does not suggest confidence in the SEC’s position.
Will SEC Appeal? Will It Eventually Reevaluate?
It remains to be seen what impact, if any, this ruling will have on the SEC’s enforcement activity in the PIPEs area. At the heart of Judge Mullen’s ruling is the recognition that buyers on the opposite side of short sales receive issuer stock regardless of what method is later used to cover that short position.
Despite that keen judicial observation, the SEC may appeal the ruling, and, certainly, the agency continues to assert its Section 5 theory in other active cases in other jurisdictions. Indeed, the next court to weigh in on this issue likely will be the United States District Court for the Southern District of New York, where the SEC has sued Gryphon Partners using the same Section 5 theory asserted in Mangan’s case but with more egregious allegations of “wash sales,” “matched orders” and “naked shorting” through Canadian brokers.
Like Mangan, Gryphon has moved to dismiss the SEC’s claims. Since earlier this year Gryphon’s motion has been fully briefed by both sides and awaits the court’s decision. If the New York court also decides that the SEC’s Section 5 theory has no merit, we might expect and hope that the SEC will reevaluate its enforcement program in this area.
Nicolas Morgan and Perrie Weiner are partners at international law firm DLA Piper.
Altomare and Gunderson Court of Appeals Brief Link, re: USXP Action. http://www.thesanitycheck.com/Blogs/BudBurrellsBlog/tabid/84/EntryID/664/Default.aspx
Location: Blogs Bud Burrell - Front and Center
Posted by: bburrell 11/3/2007 10:42 AM
Read this brief. The SEC must answer within 20 work days, after which the defendant appealing gets one more round.
http://www.mediafire.com/?9nuy0bos92u
For those of you not familiar with Bankruptcy Code, here is a bit of an education.
Copyright ©2007 Bud Burrell
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Re: Altomare and Gunderson Court of Appeals Brief Link, re: USXP Action. By Anthony on 11/4/2007 8:39 AM
Bud , why is it the SEC failed to get a temporary restraining order" TRO" against USXP in march of 2004
http://sec.gov/litigation/litreleases/lr18636.htm
Reply: The SEC tried to bend the rules inappropriately. It ain't over till it's over.
Re: Altomare and Gunderson Court of Appeals Brief Link, re: USXP Action. By Anthony on 11/4/2007 8:44 AM
Judge Lynch chose to reject the BK excuse.
"Altomare and Gunderson cannot use a decade old bankruptcy order as an indefinite liscense to break federal securities law and commit fraud with impunity"
if Lynch so easily ignored the BK excuse ...what's stopping the appeals court from rejecting it as well ?
Is Tifford trying to misdirect the SEC in forcing them to challenge the BK law directly ?
Reply: Our system of law is about law, and only about justice secondarily. Bankruptcy Code trumps everything but the Supreme Court. The SEC had this testimony for months, and agreed to the Jury Trial by email. Read the brief.
There is no guarantee this pleading will be successful, but the appeal has standing for another appeal if necessary, to the Supreme Court.
Re: Altomare and Gunderson Court of Appeals Brief Link, re: USXP Action. By Mike on 11/4/2007 11:09 AM
If bancruptcy law is higher as the SEC why Lynch can ignore it ????
"Altomare and Gunderson cannot use a decade old bankruptcy order as an indefinite liscense to break federal securities law and commit fraud with impunity"
If they can and it is legal why Lynch does not see it that way ? Why the bankruptcy court does not step in ?
Reply: Lynch stated he viewed the SEC as just another Gov't bureaucracy. I can show you other cases where Federal District Court Judges and the SEC tried to get around Bankruptcy authority, with uniformly negative results including threats of sanctions.
Lynch said this was too complex a space (NSS) for a jury to understand it. Sorry, but that isn't our legal system. Two juries and two different judges found otherwise.
Two wrongs don't make a right, even in a worse case. Bluntly, whatever was done or not done by Altomare causes no change in the controlling laws. The SEC would like to have it that way, and be able to get away with the same kind of crap another infamous 3 letter agency does. This infamous agency has a Commissioner who says SCOTUS has no authority over them. The SEC wants it the same way.
The SEC was a blackmail and extortion racket from its inception and it was used as like a Dog by Joe Kennedy Sr. when he was Chairman, to attack anyone getting in his way.
The SEC is sponsoring the legendary criminal Sam Antar to tour US Attorney offices to educate them on the very crimes he committed. Count on Antar to spin it his way.
Finally, where are the superceding indictments in all the cases as promised. There HASN'T BEEN A SINGLE ONE. The responsible parties have determined they can now lie to all of the people, all of the time. Let them explain that to the MOB of victims they have royally screwed, while benefitting economically from the very crimes they have suborned and protected. This entire financial equation we call our monetary system is swinging from broken pylons. One more manipulative scandal like the sub prime fiasco, and those in charge should be tried for Treason, not given $160 million bonuses.
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Edwards Angell sued for role in BCI stock purchase agreement
Sheri Qualters/Staff reporter
The National Law Journal
May 24, 2007
California natural fiber product company BCI International Holdings Inc. is suing Edwards Angell Palmer & Dodge and New York partner D. Roger Glenn for $3 million over an allegedly mishandled stock purchase agreement that led to a lawsuit against the company.
BCI's lawsuit claims that because of Glenn's stock transfer mistake, its multi-party joint venture never obtained ownership of foreign properties it was supposed to hold.
BCI is suing the Boston-based firm for negligent training and supervision, and asking the court for $3 million in damages plus disgorgement of at least $300,000 in legal fees. BCI International Holdings Inc. v. Edwards Angell Palmer & Dodge LLP, No. 07-3892 (S.D. N.Y.) The company is also suing Glenn, who was a director and chief legal counsel of the company and a partner at Edwards Angell at the time of the transaction, for legal malpractice and breach of fiduciary duty.
Glenn and the firm declined to comment on the case.
Our CEO, Gary Walters has very diligently evaluated our stock, stated Ross. "The
fact is that the CEO of this once fledging company has put a floor back under
the company's trading as it has demonstrated an average trading volume for the
last 30 days of 191,000 shares daily, with the shares fluctuating between one
tenth of a penny and $.05 per share. Having known all of this is public
knowledge our management considered alternatives for the benefit of our
shareholders and the Company by obtaining a recent commitment, and ongoing
negotiations to reach the final agreement for our targeted acquisitions, two of
which could be completed by year-end. This would provide to the dividend paying
company, JUMP Automotive Experts, Inc. assets of approximately $600 million and
$30.1 million EBITDA. This would be enough to attract the attention of other
larger investment banking firms. The market cap is expected to be approximately
$620 million with a book value of approximately $5.00 per share. That equates to
a $.05 share of RAMO receiving a $5.00 dividend of JUMP Automotive Experts,
Inc., a contemplated Small-Cap Company. In all honesty if we can make this
happen for our shareholders what a blessing this would bring to the holidays,"
said Richard Ross, newly appointed President of RAMOIL Management, Ltd.
RAMO **NEWS** Board Approves Key Liquidating Spin-
B: RAMOIL Management, Ltd. Board Approves Key Liquidating Spin-off of its
Subsidiary, JUMP Automotive Experts, Inc., and 'Cautions Shorters'
LAS VEGAS, Dec 4, 2001 /PRNewswire via COMTEX/ -- RAMOIL Management, Ltd. (OTC
Pink Sheets: RAMO) last night reached a decision with the Board of Directors
that it is in the best interest of our shareholders to liquidate and pay a
dividend to the shareholders of RAMOIL Management, Ltd. by year-end.
The newly elected President, Richard Ross said, "The dividend would be allocated
and distributed after the JUMP Automotive Experts subsidiary spin-off through an
'F' reorganization plan which would leave the survivorship of a targeted, OTC
Small-Cap Nasdaq company. As part of the final definitive agreement, once
accepted by both the Board of Directors and our select Team of highly recognized
automotive managers, the 'Team' would then take complete charge of the surviving
entity which is still to be known as JUMP Automotive Experts, Inc., however, as
an OTC Small-Cap Nasdaq publicly traded company. The dividend paid to the RAMOIL
Management, Ltd. shareholders could happen near Christmas, although the dividend
paid out will be considerably higher than the current trading price of RAMO
shares. Therefore, the end result we could see is that the nineteen (19) market
makers that participated in a quad print trading market from 1997 to year-end
2000 will leave us all curious as to how they will cover their short positions."
Our CEO, Gary Walters has very diligently evaluated our stock, stated Ross. "The
fact is that the CEO of this once fledging company has put a floor back under
the company's trading as it has demonstrated an average trading volume for the
last 30 days of 191,000 shares daily, with the shares fluctuating between one
tenth of a penny and $.05 per share. Having known all of this is public
knowledge our management considered alternatives for the benefit of our
shareholders and the Company by obtaining a recent commitment, and ongoing
negotiations to reach the final agreement for our targeted acquisitions, two of
which could be completed by year-end. This would provide to the dividend paying
company, JUMP Automotive Experts, Inc. assets of approximately $600 million and
$30.1 million EBITDA. This would be enough to attract the attention of other
larger investment banking firms. The market cap is expected to be approximately
$620 million with a book value of approximately $5.00 per share. That equates to
a $.05 share of RAMO receiving a $5.00 dividend of JUMP Automotive Experts,
Inc., a contemplated Small-Cap Company. In all honesty if we can make this
happen for our shareholders what a blessing this would bring to the holidays,"
said Richard Ross, newly appointed President of RAMOIL Management, Ltd.
Safe Harbor Forward-Looking Statements
Except for historical information contained herein, the statements in this
release are forward-looking statements that are made pursuant to the safe harbor
provision of the private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
that may cause the company's actual results in future periods to differ
materially from forecasted results. Such risks and uncertainties include, but
are not limited to, market conditions, competitive factors, the ability to
successfully complete additional financings and other risks.
For further information, please contact Richard Ross, President of RAMOIL
Management, Ltd., +1-702-696-9579.
MAKE YOUR OPINION COUNT - Click Here
http://tbutton.prnewswire.com/prn/11690X82534769
SOURCE RAMOIL Management, Ltd.
CONTACT: Richard Ross, President of RAMOIL Management, Ltd.,
+1-702-696-9579
URL: http://www.mergersmedia.com
http://www.prnewswire.com
Copyright (C) 2001 PR Newswire. All rights reserved.
-0-
KEYWORD: Nevada
INDUSTRY KEYWORD: AUT
ENV
CHM
SUBJECT CODE: OTC
Securities and Exchange Commission v. Ramoil Management Ltd. et al., Case No. 01 CIV 9057 (SC) S.D.N.Y
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20350 / October 30, 2007
Accounting and Auditing Enforcement Release No. 2748 / October 30, 2007
Securities and Exchange Commission v. Ramoil Management Ltd. et al., Case No. 01 CIV 9057 (SC) S.D.N.Y
Court Orders Civil Penalty, Injunctions Against Corporate Attorney Who Submitted False Filings to Commission
The Securities and Exchange Commission announced that on October 25, 2007, the United States District Court for the Southern District of New York issued a Decision and Order finding Defendant Moneesh K. Bakshi, former corporate counsel to Ramoil Management Ltd., liable for securities fraud for having submitted false and misleading documents to the Commission. Following a trial, the Court found Bakshi violated the federal securities laws, and aided and abetted Ramoil's violation of the securities laws, by (1) submitting a false and misleading Form10-KSB for the year ended December 31, 1999, which included a phony audit opinion; and (2) filing four false and misleading Forms S-8, which fraudulently issued shares of Ramoil stock to four offshore consulting firms in exchange for non-existent "consulting services," and included false attorney opinion letters by Bakshi. These filings were available to the public on the Commission's EDGAR database.
In the filings, the Court found that Bakshi "was intentionally misrepresenting material information." The Court ruled that Bakshi violated Sections 17(a), 5(a) and 5(c) of the Securities Act of 1933; Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder; and aided and abetted Ramoil's violation of Section 15(d) of the Securities Exchange Act and Rule 15d-1 thereunder.
The Court enjoined Bakshi from future violations of the securities laws, ordered him to pay a $100,000 civil penalty, and enjoined Bakshi from representing clients before the Commission and filing any documents with the Commission. "Bakshi knowingly violated numerous securities laws, and did so repeatedly," the Court concluded. "While he testified that he has no intention of practicing in the securities field in the future, he did not acknowledge the wrongfulness of what he has already done. The Court therefore finds injunctive relief appropriate."
http://www.sec.gov/litigation/litreleases/2007/lr20350.htm
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Home | Previous Page Modified: 10/30/2007
"The SEC actually threatened people who were offering funding to the company," Burrell says, adding that the SEC's allegations are unsubstantiated
Naked short sellers don't bother borrowing shares. As a result, more shares of a company's stock can trade than actually exist. In effect, the naked short sellers are counterfeiting shares, says Bud Burrell, Altomare's litigation consultant. The overload puts downward pressure on the stock price, sometimes turning into a rout. Universal is just one of many companies victimized by naked short sellers and the SEC has done nothing about it, Burrell says.
"It's the biggest financial scandal of my lifetime," he says. "I think his [Altomare's] problem with them is that he's embarrassed them over the short-selling issue."
HEARD OFF THE STREET
BUSINESS
THIS CASE MAY PROVE SEC'S CALL FOR PSYCHOLOGIST IS JUSTIFIED
LEN BOSELOVIC
965 words
19 July 2004
Pittsburgh Post-Gazette
SOONER
B-1
English
Copyright (c) 2004 Bell & Howell Information and Learning Company. All rights reserved.
The Securities and Exchange Commission, overworked and under fire, wants to hire a psychologist to counsel its embattled employees and keep a lid on burnout and stress. But why pay someone when Richard Altomare will do the job for free?
Altomare is chairman, president and chief executive officer of Universal Express, a penny stock concern with the balance sheet to prove it. New York City-based Universal, which provides services to independently owned postal stores, has rung up losses of $46 million over the years, including a $6.1 million deficit for the nine months ended March 31.
Despite his responsibilities for staunching the red ink, Altomare volunteered to be the SEC's shrink in a July 9 press release. He may have some problems getting an interview, at least a job interview. But there are some questions the SEC would like to ask him about earlier press releases.
The SEC accuses Universal of illegally issuing millions of shares of stock to associates who unloaded the shares after its stock price rose on the heels of what regulators maintain were four false press releases issued by the company. Among other sanctions, the SEC is seeking disgorged profits and civil fines, and barring Altomare from serving as an officer or director of a public company.
Altomare, who is Universal's only officer and director, could not be reached for comment. In court papers and press releases, he tells a different story, accusing the SEC of trying to suppress his First Amendment rights on the issue of naked short selling.
First, some background. Short sellers bet a stock's price is headed south. Usually, short sellers borrow shares and sell them at today's prices. When the stock drops, they repay the loan by purchasing the shares at the lower price, pocketing the difference as profit.
Naked short sellers don't bother borrowing shares. As a result, more shares of a company's stock can trade than actually exist. In effect, the naked short sellers are counterfeiting shares, says Bud Burrell, Altomare's litigation consultant. The overload puts downward pressure on the stock price, sometimes turning into a rout. Universal is just one of many companies victimized by naked short sellers and the SEC has done nothing about it, Burrell says.
"It's the biggest financial scandal of my lifetime," he says. "I think his [Altomare's] problem with them is that he's embarrassed them over the short-selling issue."
A few weeks before the SEC sued him, Altomare struck in federal court in Miami. His lawsuit, which at one point identifies SEC Chairman William Donaldson as "Wayne," accuses the agency of harassing Universal because of his outspoken criticism of its failure to police naked short sellers.
"The SEC actually threatened people who were offering funding to the company," Burrell says, adding that the SEC's allegations are unsubstantiated.
According to the SEC, Universal issued more than 500 million shares since April 2001 by selling them at a discount to a small group of buyers who regulators refer to as "the resellers." The group quickly sold the discounted shares for a risk-free profit and used the proceeds to purchase more discounted shares.
The resellers were particularly active each time press releases announced the company had obtained funding commitments that totalled $885 million, commitments the SEC says weren't made. One potential lender told Universal to set the record straight, which the company never did, according to the SEC.
The last of the announcements involved Universal's offer last fall to purchase an air charter company called North American Airlines. The deal required Universal to make a $1 million deposit. The money was provided by one of the resellers, race car driver Mark Neuhaus. In return, Universal gave Neuhaus 20 million of its shares as well as 20 million restricted shares. Universal announced the pending acquisition in an Oct. 12 press release.
The next day, Universal's shares traded as high as 13.1 cents, more than double their previous close. According to the SEC, Neuhaus sold more than 1 million shares that day and continued selling an average of 1 million shares daily for several weeks. He recouped his $1 million payment by Oct. 22 and pocketed another $1 million by Nov. 6, the SEC says.
In addition to lying about financing, falsifying records and deceiving auditors, the SEC says, Altomare diverted about $1 million the resellers paid for their discounted shares to family members and personal accounts.
Universal made only a passing reference to its SEC problems in a quarterly report filed in May. It said it was selling Subcontracting Concepts, a company it purchased in January, back to its former owners because of "concern and apprehension" voiced by Subcontracting's insurers, financial institutions and clients over the SEC's complaint.
The quarterly report details Universal's $14.7 million in assets, including $7.9 million in goodwill -- an accounting definition for intangible, hard-to-measure assets that can end up worthless -- as well as a $906,000 advance to Altomare's wife and a $793,831 balance on a company loan to Altomare.
Meanwhile, Universal's multiplying shares -- the company disclosed it issued 189.8 million more shares in the nine months ended March 31 -- trade for a fraction north of a penny. Whether naked short sellers, a SEC conspiracy or chronic losses and a debilitated balance sheet are to blame for Universal's depressed stock is a matter for the judiciary to resolve. By the time they sort through the mess, judges may need a psychologist of their own.
Len Boselovic can be reached at lboselovic@post-gazette.com or 412- 263-1941.
.
Faulk indeed did call Roger Glenn a "Crook". Also named FBI and IRS agents handling the CMKX investigation
Listen: http://www.toginet.net/upload/PODCAST_MASTER/the%20faulking%20truth/FaulkingTruthLIVE_2007-10-26-09-58.mp3
Urban Casavant nothing more that a low life Embezzler
=====================================================
SEC Dismisses Penalties Against Jail-Bound Embezzlers By Aaron Seward
October 25, 2007
The SEC dismissed its claim for penalties against three Florida residents who admitted to stealing $35 million from their employee-owned company.
The embezzlement scheme caused the company, PBSJ, a national engineering, design, and construction firm, to file false quarterly reports with the Commission for approximately 13 consecutive years.
William DeLoach, Maria Garcia, and Rosario Licata consented to permanent injunctions from violating securities laws for their parts in the scheme. DeLoach, who was PBSJ’s CFO, also agreed to a permanent bar from acting as the officer or director of a publicly traded company, according to the SEC’s September 2006 lawsuit.
At that time, the court decided to determine at a later date whether it would allow the SEC to impose disgorgement and civil penalties on the embezzlers. Now the regulator has dismissed those claims because DeLoach, Garcia and Licata each face prison sentences and restitution payments ordered in a related criminal trial that the U.S. Department of Justice filed.
In September 2006, concurrent with the Commission’s settled action, the three plead guilty in Florida federal court to criminal charges of conspiracy to commit mail fraud, which arose from the embezzlement scheme. A guilty verdict for such a charge carries a statutory maximum of 20 years’ imprisonment, a fine, and mandatory restitution.
In June, the court sentenced DeLoach, Garcia and Licata to prison terms of 97 months, 63 months and 63 months respectively. The court imposed restitution payments on the three of approximately $19 million, $10 million and $7 million respectively. The restitution payments go to PBSJ and its insurance provider Chubb Group of Insurance Companies.
DeLoach, Garcia and Licata perpetrated the embezzlement scheme from 1992 to 2005. Their method was simple. They wrote checks to themselves directly from the PBSJ’s master cash disbursement account and diverted funds from the company’s medical benefit account to two secret accounts that DeLoach controlled, according to court documents.
The SEC said that DeLoach, Garcia and Licata concealed the theft by excluding the fraudulent checks from the company’s accounting journals, preparing phony bank reconciliations and recording false and unsupported journal entries on PBSJ's books and records.
The trio’s positions in PBSJ’s financing and accounting departments gave them ready access to the company’s money. Deloach started with the firm in 1992 as comptroller. He later became the company’s CFO. Garcia and Licata had even longer histories with PBSJ. Garcia started working at PBSJ in 1978 and held various positions in the company’s finance department. Licata also started in 1978 in the accounts payable department, where she later became a supervisor and manager.
The DOJ said that the trio used the millions in embezzled cash to fund their lavish lifestyles. Deloach, said the prosecutor, owned several valuable properties, including a multi-million dollar home, multi-million dollar real estate in the Florida Keys, luxury sports cars, and a yacht.
Garcia used the stolen money to buy several luxury sports cars, expensive jewelry, Rolex watches, and an ownership interest in a local restaurant. Licata used her share of the pilfered funds to purchase real estate in Florida and Nicaragua, and to support a high-rolling gambling habit.
When PBSJ discovered the massive embezzlement scheme DeLoach, Garcia and Licata resigned their positions and confessed to the theft.
In addition to the embezzlement scheme, DeLoach also plead guilty in criminal court to charges of unlawfully reimbursing federal campaign contributions. The DOJ said that in 2004 Deloach learned that PBSJ supported the U.S. Senate campaign of Mel Martinez. Deloach wrote a personal contribution check to the Martinez campaign and asked four other PBSJ employees to do the same. Along with two of their spouses, the four employees made contributions totaling $11,000, for which the firm unlawfully reimbursed each.
For the campaign finance charge the court sentenced De Loach to an additional 24 months in prison, to run concurrently with the time he’ll serve for the embezzlement.
Have a comment? Let us know what you think of this or another CCH Wall Street story by clicking here.
"The event was chaired by Brian Wilkie, former Chairman of the BBG and Managing Director of Universal Express, who led a host of expert panelists dedicated to the issue. "
.................................................
The Corporate Conundrum
British Business Group (BBG) Hosts CEO Discussion Forum On Attracting And Retaining Senior Management Talent
http://www.middleeastevents.com/site/pres_dtls.asp?pid=2143
Advertising Info
Dubai, UAE - October 24, 2007: A group of leading CEOs in Dubai and the Northern Emirates attended an open forum last night to discuss the revolving door syndrome: the problem of attracting and retaining senior management and reducing high employee turnover.
The event, which was hosted by the British Business Group (BBG), was organised as a direct result of discussions in July this year, where leaders of Dubai companies unanimously decreed that the biggest problem facing employers in the UAE is finding and retaining good senior managers.
The event was chaired by Brian Wilkie, former Chairman of the BBG and Managing Director of Universal Express, who led a host of expert panelists dedicated to the issue. Panelist and BBG committee member, Ian Giulianotti, Associate Director – HRM Consulting for Nadia Recruitment, agreed that staff retention needed to be addressed.
“In the global market place retention of staff is a key strategic issue for senior management,” said Giulianotti. “The current situation within the Middle East market place where companies face challenges in attracting talent combined with the increasing economic pressures makes staff retention a priority for any successful business. At this forum we shared best global practice and provided senior managers the opportunity to discuss and give insights to situations which may be unique to the local market.”
The event, which took place at the World Trade Centre, allowed Dubai’s business leaders an open forum in which they could freely discuss these sensitive issues with peers. Brian Wilkie provided his own perspective when he commented that CEOs could “consider paying slightly more than the market price in order to incentivize potential employees to not only apply for positions, but grow with the company too”.
The BBG hosts a number of Special Interest Group (SIG) events throughout the year to provide a platform for people working in the same industry, or for those working at the same level within their business, to come together and discuss relevant issues.
“This event provided the opportunity for CEOs to candidly discuss the implications and problems of staff retention,” said Elizabeth Sellwood, BBG Director for Special Interest Groups. “Sharing best practice and knowledge leadership is vital for the ongoing development and growth of Dubai and the Northern Emirates.”
“The BBG has identified 12 categories of interest for members, which include banking, education, energy, real estate and young professionals, and each category is chaired by an expert business person from that industry,” she added.
Celebrating its 20th Anniversary year, the BBG has undergone huge growth in recent years and now has almost 1,000 members. The Group, which is widely recognized as one of the largest and most active business groups in the Gulf, holds around 80 networking events, forums and seminars each year.
Kevin West had his hand up when it came to free shares. Who where these "individuals"?
Maybe he could post that on the CMKM web site because America needs to know
"We here at "Foundation of the Heart" have a few million donated shares of CMKM Diamonds (from individuals and not from CMKM Diamonds, Inc.)"
From Kevins charity website
--------------------------------------------------------------------------------
Foundation of the Heart
Please Help by giving "A Hand Up" today
Do a Kind Deed for Someone Today and help "MAKE THE WORLD A BETTER PLACE"
CMKM Diamonds, Inc.
Most people don't realize the financial condition of our stock markets. If they did, and if they took action, we would not allow our president to go forward with his Social Security plans of moving a percentage of our retirement money into the stock market. Although the plan may have merit, the markets must be cleaned up first!
The SEC has recently put a new regulation into effect to help combat this problem (naked short shares and/or counterfeit shares... see links at bottom of page to explain) called Regulation SHO and we now are waiting, as the people of the United States of America, to see if our governmental agencies will enforce the new rules and force a cleanup in the market place. If they don't, then we cannot support moving our Social Security monies into a corrupt market!!!
We here at "Foundation of the Heart" have a few million donated shares of CMKM Diamonds (from individuals and not from CMKM Diamonds, Inc.), a mining company from Las Vegas that has over 1.4 million acres of possibly the "richest land in the world" that surrounds diamond bearing land in Canada. This investment is what we have chosen to be the key to funding our goals. CMKM Diamonds, Inc., that goes by the stock symbol of CMKX, is presently trying to fight the corruption that has been placed on them by various companies and agencies in the stock market that have been responsible for destroying as many as 7,500 companies since 2000 through illegal activities that have gone un-contested by the governing agencies like the Securities Exchange Commission.
CMKX has quite possibly been the target of the largest fraudulent attempt to bankrupt and destroy a company in the history of the markets. But, CMKX is fighting back and have hired one of the top legal guns, Roger Glenn of Edwards and Angell law firm, (we like to say our investment is protected by an Angel) in our country along with hiring the former managing director for Howard Hughes, Robert Maheu as co-chairman. Although anyone can purchase 1 million shares of CMKX today (2-06-05) for $200, it is only that low (in our opinion) because of the extreme illegal manipulation that is taking place in our American markets. CMKX is fighting this problem and have dedicated themselves to correcting the injustice that has been done to them and all of their shareholders. CMKX could have well over 50,000 investors today and they have more investors than any other Pink Sheet trading company in the history of our market place. Because they have this huge investor base (VOICE) and because they have the goods (diamonds, gold and silver and possibly several other minerals), they also have been able to get the financial backing to continue their business plans and combat the illegal activities that have been waged against them in the market place. We believe, (do not take our opinion as investment advice. You must do your own investigation into the facts to make your investment decisions) that this company is worth in excess of $1 per share and will soon be able to move to that price once the corruption against it has been managed.
Some recent articles and news stories about the "Market Place Corruption" that may enlighten you to what is happening in our American markets
http://web.archive.org/web/200502082...m_diamonds.htm
"$50,000 in cash to Mr. Brown, delivered in a paper bag, prosecutors said."
Contact: Andrew Brown
ROI Group Associates, Inc.
Tel: 212-495-0202
Email: abrown@roiny.com
===================================================
Government Accuses 6 Men of $55 Million Offshore Fraud
http://www.nytimes.com/2007/10/20/business/20trader.html?ref=business
By MICHAEL J. de la MERCED
Published: October 20, 2007
Federal prosecutors charged six men yesterday, including a New York corporate lawyer, three former executives and two Israeli investors, with making $55 million in fraudulent profits via private stock sales.
In Federal District Court in Brooklyn, prosecutors said that Edward and Steven Newman, Martin E. Weisberg, Andrew Brown, Zev Saltsman and Menachem Eitan ran a four-year scheme that revolved around Xybernaut and Ramp, two companies now in bankruptcy.
The Securities and Exchange Commission filed a civil lawsuit against them yesterday as well.
At the crux of the case is a security known as a private investment in public equity, or PIPE, in which a company sells shares to an accredited investor, usually at a discount. Because of the tendency of these kind of investments to depress a stock — they dilute existing shareholder stakes — they can prove lucrative to those with advance knowledge of them.
According to the indictment, Mr. Saltsman, 45, and Mr. Eitan, 51, two investors based in Israel, arranged to buy hundreds of thousands of shares in Xybernaut, a Fairfax, Va., maker of portable computer hardware, and Ramp, a New York producer of software for health care providers, from 2001 to 2004.
The two men used 37 offshore shell companies to buy the shares at a sometimes considerable discount. Prosecutors said they had arranged the sales with the cooperation of Edward Newman, 64, and Steven Newman, 61, brothers who worked as the chief executive and president, respectively, of Xybernaut until 2005; Mr. Weisberg, 57, a New York partner at Baker & McKenzie and a former Xybernaut director; and Andrew Brown, 38, the former president of Ramp.
Mr. Saltsman and Mr. Eitan sold both companies short, and then repaid the shares using their discounted stock. Altogether, prosecutors say, the two men made $16 million in profit from their Ramp sales and $39 million from their Xybernaut transactions.
To hide the transactions, which gave Mr. Saltsman and Mr. Eitan up to a 37 percent stake in Ramp and an 18 percent stake in Xybernaut, both companies illegally failed to disclose the PIPEs in regulatory filings. Prosecutors also say that Mr. Weisberg lied to regulators and Ramp’s auditors about two investments Mr. Saltsman and Mr. Eitan made in the company.
In return, Mr. Saltsman and Mr. Eitan are said to have paid more than $4 million in kickbacks to the other co-defendants. Among those payments were $1 million to Steven Newman through Mr. Saltsman’s Swiss bank account and $50,000 in cash to Mr. Brown, delivered in a paper bag, prosecutors said.
Mr. Brown was arraigned in Federal District Court in Brooklyn and posted a $1.5 million bond. Steven Newman was arraigned in federal district court in Virginia and posted a $1 million bond.
Mr. Saltsman was arrested in London on Thursday, and prosecutors are seeking his extradition, a spokesman for the United States attorney’s office said.
Arrest warrants were issued for Edward Newman and Mr. Weisberg. Lawyers for both men said their clients intended to turn themselves in on Monday.
Elkan Abramowitz, a lawyer for Mr. Weisberg, said: “My belief is that this indictment mischaracterizes Mr. Weisberg’s conduct in this matter. He acted at all times as an attorney and the payments described in the indictment will ultimately be shown to have been all legitimate.”
A spokeswoman for Baker & McKenzie, Mr. Weisberg’s law firm, said it believed that the events began before he started at the firm, and that he was on leave until the matter was resolved.
John M. Tran, a lawyer for Edward Newman, said: “We are doing everything we can to get him before the court,” and declined to comment further.
Alexander H. Gardner, a lawyer for Mr. Brown, declined to comment. No information on lawyers for Mr. Saltsman and Mr. Eitan was available. Prosecutors intend to seek the extradition of Mr. Eitan from Israel. He is not in custody.
Crowne Ventures was a stock promoted by The Future Superstock. Bruss too was trying to make a million millionaires. lol http://siliconinvestor.advfn.com/subject.aspx?subjectid=8563
=======================================================
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 15958 / October 27, 1998
S.E.C. v. The Future Superstock, Inc. and Jeffrey C. Bruss,
Docket No. 98C6772 (U.S.D.C., N.D.Ill.)
The Securities and Exchange Commission announced the
filing of a Complaint in the United States District Court
for the Northern District of Illinois, on October 27, 1998,
seeking a permanent injunction, disgorgement, civil
penalties and other relief against The Future Superstock,
Inc. ("FSS") and Jeffrey C. Bruss.
The Complaint alleges that since the spring of 1996, an
Internet newsletter called The Future Superstock, which is
published by FSS and researched and written by Bruss, has
recommended to the newsletter's more than 100,000
subscribers and to visitors to the newsletter's web site
(www.futuresuperstock..com) the purchase of approximately 25
microcap stocks which were predicted to double or triple in
the next three to twelve months. In most instances, the
prices of recommended securities increased for a short
period of time after a recommendation was made in The Future
Superstock, after which the prices of those stocks dropped
substantially. It is alleged that in making these
recommendations FSS and Bruss have violated the federal
securities laws by failing to provide adequate disclosure in
a number of significant areas: (1) for over two years
neither the newsletter nor the web site disclosed that Bruss
or FSS received compensation, in cash and stock, from nearly
every issuer profiled; (2) FSS and Bruss have failed to
disclose that in many instances they have sold stock in the
issuer shortly after the dissemination of a recommendation
in The Future Superstock caused its price to rise; (3) FSS
and Bruss have represented in the profiles that they
performed independent research and analysis in evaluating
the issuers profiled by the newsletter when, in fact,
little, if any, research was conducted in preparing the
profiles; and (4) the statements made in the profiles
regarding the success of past stock picks made in The Future
Superstock have been false and misleading.
It is alleged that by engaging in such conduct FSS and
Bruss have violated Sections 17(a) and 17(b) of the
Securities Act of 1933 and Section 10(b) of the Securities
Act of 1934 and Rule 10b-5 thereunder.