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Sterling, the SEC isn't involved in this lawsuit. It's between the company and listed defendants w/ a county district judge presiding. Megas went after the culprits who created the mess back in 2005. As part of the settlement, he supposedly issued a bunch of stock in Jan 2006. The recipients were going to deposit it w/ the DTC to cover FTDs. I don't know what happened next. Perhaps someone else does. Seems like some, if not all, should have received real stock to replace their fake from that settlement. Apparently, it didn't happen.
A judge cannot order someone to buy fake stock from the open market. Without a valid cert, it would cause an FTD. More importantly, it's against the law to buy/sell fake stock.
Come on Art, you know when brokers restrict trading investors get angry and whine. Since orders were settling, each probably assumed their own customers were fine until the FTDs started and kept growing. Many posters assumed the same.
It took awhile for their Reps to even comprehend what was occurring let alone the magnitude of it. They gave different answers when asked the same question. If brokers were really out to protect customers, they wouldn't allow us to buy/sell any pennystocks. Some like TDA aggressively restrict trading now. When they do it, investors get angry and whine.
Great! Wonder if he plans to stop delidog's illegal stock selling activity.
What "legal instrument" did your broker supposedly receive that said all their customers' shares were fake yet continued to trade them? Do you use the same broker as Pino did? If not, I don't see how they would know. They don't trade paper certs back and forth. AFAIK, the TA and company didn't initially report the cert numbers of the counterfeit securities because they weren't known until the certs were sent in for re-registration. If trades were settling, your broker would assume everything was fine.
When the DTC sent out a warning notice, they quoted the BCIT PR as its source. Yeah, the very same document you claim is not a legal instrument and not a formal notification for a little retail investor. When told the certs were not valid, the DTC demanded replacement ones. Pino's broker tried purchasing stock in the open market but didn't receive any because it was flooded w/ fake shares. They couldn't find available valid ones to purchase. Shortly later, the SEC suspension followed.
You don't seem to understand with the fed buyin suspension in place your broker doesn't need to do jack. Those who want reimbursement should stand up for themselves. Otherwise, you can spend another 25+ years waiting around for nothing to happen. Sure, this lawsuit gives you personalized notification (of something you should have known 2.5 years ago) while at the same time accuses everyone listed of securities fraud.
That's understandable since there's so many shady OTC companies. It's ashame the honest ones are penalized too.
Brokers can wait you out because they have the fed's buyin suspension. During this long period when the stock hasn't traded, no one changed your fake shares into real ones right? Same thing will happen after this action except you won't even have fake stock anymore. To influence the outcome requires you to stand up for yourself.
FYI, counterfeit stock periodically enters the market. There's even a system in place for companies and TAs to report such activity. Brokers force buyins when discovered. Market hasn't fallen into chaos over it yet. The uniqueness here though is the amount of fake stock in the float greatly exceeds the real. Practically everyone knew BCIT was being flooded w/ fake stock and jumped in anyway hoping to ride a MOASS. By doing so, you helped the culprits distribute it.
No. However, you could probably use Megas' legal action to countersue your broker or take the issue to arbitration. With this lawsuit now, why not ask for more than just your investment back like covering your legal bills and any negative judgment.
It's not the judge's and plaintiff's responsibility though to present and argue the defendants' side of the case. The fed's buyin suspension took the brokers off the hook. They may not have to show the suspension because the petition asks for the stock to be canceled. I don't see why a broker would object. They were paid a commission for the trade.
Whether or not one replies has no bearing on the legitimacy of his holdings. The company claims all listed defendants have fake stock and wants it canceled. Responding back won't change its status to real.
There's a securities regulation, but the feds suspended that requirement. There isn't enough real stock in the market to do a buyin to cover all the fake. Megas apparently just wants to cancel all the fake as the solution.
Megas submitted a fix. If you don't like it, well you have to stand up for yourself.
Good idea! /eom/
I didn't file the case. BCIT did. The company is the one saying it doesn't recognize the listed defendants as legitimate shareholders. Frankly, Megas has been pretty consistent w/ this view from the start.
Pino and gang fed certs into the system. During the run up, trades were settling due to this. AFAIK, the FTDs didn't occur until the DTCC/brokers started sending these certs to the TA to be exchanged.
IMO there won't be a MOASS. The feds suspended the buyin requirement here. In the petition, they didn't request a buyin. They want the fake stock canceled and to impose a $40K+ penalty against everyone listed.
If you all want to see a different outcome, the defendants have to make their own legal argument for it.
Street name stock is backed by certs. They're normally retained by CEDE. He wants to cancel certs backing all the fake stock held by defendants.
I recommend you speak to an attorney before sending a response. The couple hundred spent upfront might save you a $40K+ judgment later on. In my state if a person uses the bar's attorney referral service, he only pays $25 for an initial consultation. The money goes into some sort of legal fund. Your state may have something similar. You could also check local law schools and see whether they run a legal clinic or a professor there would be willing to speak w/ you.
The suit was filed in a County District Court not a federal one. Unless you live or have a presence in Oklahoma County, I don't think the court there has jurisdiction over you. The petition argues that some stock was sold to OC locals so they do, but individual investors don't know the buyers or sellers of their stock. Once you send a response in, I think you willingly accept the court there has jurisdiction. It could turn into a pain fighting this long distance. Seriously, it's not a good thing to wing something like this.
Hey congratulations. Kinda slick how they did it huh?
BTW, did you notice how rapidly the o/s has grown? Went from ~15M (post-split) to 108.2M (621% increase) in less than one month. Went from ~15M to ~2.15B (14,200% increase) in less than four months.
O/S: 2,145,357,320 (5 Apr 07)
Rolled-back stock will be no greater than 25,000. Only the o/s is reverse split not the a/s.
Only insiders can answer that question. Per the 8K, the BoD decided not to cancel post-split stock "in order to keep an orderly market." I already told you my guess, but I'll give you another one -- GREED!
When a company cancels stock, the market needs to place a value on the newly issued. Financials show before BK, they had ~$2.5M in assets and ~$1.8M in annual revenues. The o/s was ~12.1M, and the stock traded below .05. Today, it has -0- assets and -0- revenues. The o/s has more than doubled. So, the new stock would probably have been priced at least initially below pre-BK level.
However, you guys came along and ran up the price. Now, put yourself in their shoes. Would you want the market price to reset at sub-.05 or at a much higher level? By not canceling the old after the r/s (and assuming the price doesn't totally collapse prior), they'll accomplish the latter. The BK-issued stock, which would probably have been valued at less than $2M total on a reset, will be worth over $300M** post-split initially.
** using yesterday's close; the price can change prior to the 1-500 r/s
BioTransplant Inc (BTRNQ): filed Chap 11 in Feb 2003; canceled all common in Apr 2004; ticker still active: http://pinksheets.com/quote/quote.jsp?symbol=BTRNQ
CinemaStar Luxury Theaters (LUXYQ): filed Chap 11 in Jan 2001; canceled all common in Nov 2001; ticker still active: http://pinksheets.com/quote/quote.jsp?symbol=LUXYQ
Liteglow Industries (LTGLQ): filed Chap 11 in Oct 2003; canceled all stock in Aug 2004; ticker is still active: http://pinksheets.com/quote/quote.jsp?symbol=LTGLQ
There's other examples. Of the ones I've watched, usually the company takes steps to cancel the stock whenever the oversight is brought to their attention either thru heavy trading or contacting them.
The o/s hasn't changed in over a year. Prior to this, they issued stock but not insane amounts. They could have issued another ~77M more before the o/s (~123M) hit the a/s (200M). At the rate they were previously diluting, it would probably take three or more years. Also, the stock hasn't done any r/s since at least 1998.
Here's a shell which has no business and hasn't been diluting the public to death. All of a sudden, they decide to do a large r/s. Based on all of this, I think they plan to drop something in it.
That one is a shell. They're probably going to drop something into it soon.
Market cap is much higher. Need to add all the stock issued under the BK reorg plan.
Investors (Rosetta Granite): 25,000,000 restricted
DIP loan: 6,000,000 common and 3,000,000 warrants w/ $1.00 exercise price
Class 3 General Unsecured Claim Holders: 25,000 each (total unknown)
Allowed Class 3 General Unsecured Creditor: 100 each (total unknown)
Share Transfer Transaction Persons: 25,000 (this might be the 25K they plan to cancel)
Current Outside Shareholders: 25,000 or less
A company must follow established procedures to request a "Q" be removed from its ticker. The 8K is not the proper method for notifying market participants. The symbol will probably not change until the r/s occurs.
Sure, the 8K says they plan to cancel 25K of newly issued shares, but it also says they plan to r/s the o/s. The 8K corrects previously reported information in the Qs/Ks.
When the company stopped reporting in 2004, the o/s was ~12M. Everyone has been trading whatever the float of that amount is. Your holdings will indeed be r/s whenever they get their act together.
One thing you might want to check out for future reference is whether your broker charges a fee on a r/s. Some brokers do; some don't.
Per the 8K, everyone has been trading pre-split stock. It was never r/s or canceled. The company claimed it set an effective date for the r/s but not a record date. In other words, the company screwed up here -- not the DTCC, brokers, or MMs.
To fix the problem, they plan to do a 1-500 r/s in the "immediate future." The BoD decided not to cancel the post-split stock as previously planned "in order to keep an orderly market." My guess is it's because outside investors who recently bought thought that's what they were buying or maybe to avoid some sort of legal liability.
They don't have to buyback any stock. Per the 8K (and contrary to the financials), it wasn't previously r/s or canceled.
The current TA thought the old CUSIP was the new one right? IMO that alone shows the screw up was on the TA's end IF the company had tasked them to cancel all stock. It's not the DTCC's responsibility to apply and pay the fees for a new CUSIP.
Why did Fearnow file paperwork w/ the DTCC? Seems like he should have contacted NASD who in turn notifies the system. The TA should coordinate to have all certs returned for cancellation.
IMO ultimately blame lies w/ the company. It's their responsibility to oversee the process is completed correctly. Sadly, Fearnow and gang do this for a living.
Re PM: tavy, IMO that company runs a pyramid marketing scheme. Pyramids can operate for many years until they run out of suckers or the government decides to shut them down.
Financials show annual revenues last year were mostly derived from current and new members (~$42.7M not including franchise fees) rather than from selling travel services (~$7.4M). As typical w/ all MLM’s, they sell a dream leading folks to believe they can make a meaningful income. Reality is only a tiny percentage ever do. In this case, most of their referring travel agents (RTAs) are probably losing money.
According to the 10K, company paid out $4.89M in travel commissions and $29.9M in marketing commissions. On average, each RTA is generating ~$123/year selling travel services and receiving $82/year in travel commissions plus $500/year from marketing commissions (% of monthly fees paid by those lower down in his section of the pyramid). Not including the initial license fee of $449.95, most RTAs pay a recurring $49.95/month. So, one pays $599/year ($49.95 x 12) for the opportunity to earn on average $582/year (net loss: $17). This doesn’t include expenses incurred from training, meetings, conferences, etc.
Earnings are never this evenly distributed. The majority are probably losing $500+ per year while a tiny minority at/near the pyramid’s top are making out like bandits. That's normally how it works.
252368105? This stock has had that particular CUSIP since 2000. Check out the number listed on this old 13G or even more current filings.
http://sec.gov/Archives/edgar/data/860131/0000919567-00-000095.txt
The issuer info statement on pinksheets shows the o/s at 655 billion as of 30 Sep 06. http://www.nqb.com/quote/finance.jsp?symbol=VPSI
Looks like that one was a Sandy Winick Adatom.com spin-off. It has no business. Balance sheet shows $10K investment and $32K convertible note.
Someone posted info from DE's corp database the other day. It showed an entry where they filed an amendment for a split in Sep 06.
I suspect Fearnow's explanation is correct. Wouldn't be the first time a stock traded long after it was canceled because a company forgot to notify NASD. That's probably the #1 logical reason for what's occurring here w/ BK stockholders selling as #2.
Okay, let's say your interpretation is correct. I bet any positive bottom line 4Q will be due to one-time gain(s) and not continuing ops.
The PR says "fourth quarter profits" which may mean gross profit. It doesn't specifically say the $300K represents net income.
I doubt the common o/s is still ~15M. At any rate when calculating fully diluted market cap, you should include all the outstanding preferred.
Oh, he spoke w/ Rosetta Granite? Did he ask where they were incorporated?
I don't know what the BK order says. Perhaps JJSeabrook can access a copy.
If the court placed a holding period on the stock, it's still exempt from registration. Once the holding period (if any) is over, they can start selling into the float w/o informing the public ahead of time if they want.
Right, the float might be much larger than what many expect because of the exemption. Filings show they want to do a merger. Usually when a r/m occurs, the new entity is given a huge chunk of stock. Depending on what they drop into the shell, it could run the price up further.
Recommend doing a search on Heskett to see how other r/m deals he's done turned out. I've never run across him before so I don't know.
When a company issues stock, the recipient is restricted from reselling it unless:
-- he's held the stock for a certain period of time (normally one year or more); OR
-- a registration statement is filed and deemed effective; OR
-- the issuance falls under an exemption to registration
Stock issued as part of a bankruptcy reorganization plan happens to fall under category #3. In other words, the stock can be immediately free-trading and sold into the float if they so desire. Since the filings say they want to do a merger, they'll probably retain enough to keep control. It's possible the BK order may restrict how much they can sell prior to the merger occurring.
Oh okay. Hopefully, you see some more price ripples here. GLTY