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Shares are tied up until ownership is determined. That could take a while and a lot of discovery would take place. Only clean hands need play the game further.
TA has the restricted cert and no free trading shares are able to leave by order of the TRO.
Clearing firm anxious for shares... Where will they come from? Why do they need them so badly?
We will see how this plays out, but I don't think you see the full picture.
1.The shares are tied up now in court.
2. We have a clearing firm demanding free trading shares. why?
3. We likely have a 600 to 800,000 share short on a stock that averages 20,000 shares a day. Thats 30-40 days to cover!
4. Any short has to be covered immediately and was illegal in the first place.
5. It may be hard to move forward and sew a party for property if you already illegally sold it.
6. By the time the legal issue is figured out the short will have to be covered or the clearing firm is toast.
BTW...
Deposit the Restricted Cert at your buddy's clearing firm. Instruct them to deposit free trading shares into multiple broker accounts, borrowed against the restricted shares. Sell them today and replace them with the free trading shares when the restriction is lifted. Broker reports don't show a short on record and after 1 year there is no trace of the transaction.
TRO and Complaint
Click on the link then each page is viewable as JPEG files. The complaint has the TRO included as an exhibit.
Complaint: http://convert.neevia.com/completed.asp?cid=ed4834e4-5262-49ce-bf88-cda0bbdcd8fa
I'm happy to send the PDF version to your email if you can get me your address.
Copies of the TRO and the complaint in hand. Anyone know how to post PDF's?
Rule 144: Selling Restricted and Control Securities
http://www.sec.gov/investor/pubs/rule144.htm
Can the Securities Be Sold Publicly If the Conditions of Rule 144 Have Been Met?
Even if you have met the conditions of Rule 144, you can't sell your restricted securities to the public until you've gotten the legend removed from the certificate. Only a transfer agent can remove a restrictive legend. But the transfer agent won't remove the legend unless you've obtained the consent of the issuer—usually in the form of an opinion letter from the issuer's counsel—that the restricted legend can be removed. Unless this happens, the transfer agent doesn't have the authority to remove the legend and execute the trade in the marketplace.
To begin the process, an investor should contact the company that issued the securities, or the transfer agent of the company's securities, to ask about the procedures for removing a legend. Since removing the legend can be a complicated process, if you're considering buying or selling a restricted security, it would be wise for you to consult an attorney who specializes in securities law.
What If a Dispute Arises Over Whether I Can Remove the Legend?
If a dispute arises about whether a restricted legend can be removed, the SEC will not intervene. The removal of a legend is a matter solely in the discretion of the issuer of the securities. State law, not federal law, covers disputes about the removal of legends. Thus, the SEC will not take action in any decision or dispute about removing a restrictive legend.
.<font color=red>The next few months may be very interesting. We seem to have a situation on our hands that just might result in a rather nasty short squeeze.
The following statements contain much of my own personal opinions and I have no proof that anything illegal has taken place.
1. On May 9, 2007, we entered into a contract with Var Growth Corporation (D.B.A. Ice Cold Stocks) and issued 875,000 shares of restricted common stock at $.15 in exchange for consulting services to be performed over a 12 month period from the date of the contract.
These shares cannot be sold until the restrictions have been lifted by the company. The $.15 was the value declared at the time of the deal but does not represent money paid for the shares.
2. Over the last six months many of the shareholder have been trying to piece together a puzzle. There has been a constant selling pressure on Fuego's stock at prices that are well below even the lowest averages and nobody knew where the stock was coming from. The answer would have to be someone who's cost basis was below these levels or a desperate shareholder. Only one name ever came up but he did not have free trading shares yet. So it would seem... Sure there have been sellers including one of our hedge funds, but we now have word that that hedge fund is a buyer at this low level and has been sucking up these shares for 2 weeks.
3. Yesterday it seems the company filed a restraining order in Miami's Dade County court today against Var Growth (IceCold Stocks) to prevent them from having the free trading stocks on the grounds that services were not provided as promised. A second lawsuit claims damages. This all takes place only days after yet another massive dump of shares on the last 2 Mondays.
Dade County documents:
http://investorshub.advfn.com/boards/read_msg.asp?message_id=28327482
rule 144 states.
What If a Dispute Arises Over Whether I Can Remove the Legend?
If a dispute arises about whether a restricted legend can be removed, the SEC will not intervene. The removal of a legend is a matter solely in the discretion of the issuer of the securities. State law, not federal law, covers disputes about the removal of legends. Thus, the SEC will not take action in any decision or dispute about removing a restrictive legend.
http://www.sec.gov/investor/pubs/rule144.htm
4. Here is a link to a similar situation where restricted shares were sold into the market and the bad results for the sellers: http://www.finra.org/PressRoom/NewsReleases/2006NewsReleases/P017730
5. What we may have here is the perfect storm... illegal shares possibly sold into the market, rumors of the clearing house requesting the shares, legitimate grounds to deny the shares with legal claims and damages against the seller. Best of all is the seller will not want to go through legal discovery process and reveal that they illegally sold restricted shares through a shorting scheme. If these phantom shares cant be covered with the free trading shares, then where will the clearing firm find them to satisfy the DTCC and Reg SHO?
Can you say.... "Forced Cover?" its either cover or go to court to try and get them while having to admit you already illegally sold them! All speculation on my part...
Again, the next few of months may be very interesting indeed.
I think we are all on the same page... Hugo is not one to be bullied around.
Looks like Barry is at it again...
YES... I sold it already!
Latest on Beatles Tapes:
Much more accurate account of what is going down.
**************************************************
MIAMI — A judge signed a temporary injunction Friday, preventing a Miami Lakes company from using the Beatles' recordings or trademark in any way until a lawsuit over the historic recordings is resolved, lawyers said.
U.S. District Judge William Hoeveler approved an agreement between Apple Corps Ltd. and Fuego Entertainment, Inc. which requires Fuego to stop plans to release eight song recordings featuring Ringo Starr on drums as a Beatle for the first time.
Apple Corps, the London-based group formed by the Beatles that helps guard their legacy, claims the songs were taped without the consent of the band and that Fuego and sister companies Echo-Fuego Music Group LLC and Echo-Vista Inc. have no right to distribute them.
But Fuego Entertainment says the recordings were legally made.
Fuego's lawyer Michael Joblove said the agreement was voluntary and that his clients claim they acquired the legal right to market the recordings.
"This is an injunction that was agreed to by our clients with no admission of liability to give the court time to consider the parties' claims regarding the ownership interests in these recordings," Joblove said.
New York-based lawyer Paul LiCalsi, who represents Apple Corps, said the agreement "clearly reflects that there is no basis for Fuego's claims that they have a right to exploit the tapes."
http://canadianpress.google.com/article/ALeqM5i2u0K4et3OhdyjSsrmEhkoLgsZFQ
MSPD very nice close!
They have to be careful since its a legal matter, but Hugo said they will be addressing it as soon as he is back from a business trip.
Here is a possible bottom play
MSPD
MSPD
In the Investor's Presentation they mention that they have a lot of relevant developments to disclose that they feel will mitigate any share price slippage after a possible reverse split.
Investor Presentation April 3, 2008
http://investors.mindspeed.com/eventdetail.cfm?EventID=52847
Nice Chart
Apple Corp really wants these Beatles Tapes!
They have gone to the point of putting out a press release with false information and Hugo is not very impressed to say the least.
There was not court ruling at all and a formal agreement was struck between Fuego and Apple before appearing in court to wait on the release until courts ruled on ownership. Apple paints a very different picture indeed.
Please call Dan York for any further details if this is reason for concern in any way!
I will try and get a copy of the formal agreement....
Dan York
phone (214) 675-2531
Link Below:
http://www.bradenton.com/695/story/507679.html
You know he is lurking on this board.
Interesting document I found about Barry:
http://www.citronresearch.com/wp-content/uploads/2007/04/barry-davis.pdf
Page 1 © 2007 Factiva, Inc. All rights reserved.
Penny Stocks, Big-Bucks Fraud --- Aided by a Tipster, Feds Bring a Vast Scheme to Light
By Eric J. Savitz
2,455 words
6 December 1993
Barron's
PAGE 19
English
(Copyright (c) 1993, Dow Jones & Co., Inc.)
WHEN last we left him, in a Barron's story on March 25, 1991, the admitted pennystock flim-flam artist Barry K.
Davis was dividing his days between two pursuits. Some of the time he was providing hot tips to investors, via a
900-number telephone service called Wall Street Watch. The rest of the time he was providing hot tips to the
government, finking on his friends and trying to keep himself out of jail.
Sometimes, hot tips pay off big time.
In mid-November, the U.S. Attorney's office in Newark, N.J., announced the indictment of five men tied to Davis,
accusing them of wire fraud, securities fraud and criminal conspiracy in the manipulation of several over-thecounter
stocks in 1988. The stocks included Vista Capital Corp., Castleton Investors Corp. and Bellatrix Corp.
That trading in those issues wasn't entirely kosher is no revelation: In February 1991, Davis pleaded guilty to three
counts of wire fraud and one count each of securities fraud and conspiracy for his part in the manipulation of at least
five stocks -- including Vista, Castleton and Bellatrix.
The defendants in the case face a maximum penalty of five years in prison and a $250,000 fine for each count.
Under the complex federal sentencing guidelines, Davis faces the prospect of 37 to 46 months in the pokey,
although the judge will take into account his cooperation with the prosecution. And the government apparently has
kept him busy. More than two years after entering his guilty plea, Davis has yet to be sentenced -- and no date will
be set until the completion of his cooperation.
Which is not to say Davis won't soon be spending some time in court. When the five go to trial, likely some time
next year, Davis will undoubtedly be the prosecution's star witness, and his command performance will make a lot
of people nervous.
"Who do you think in the penny-stock market didn't do something wrong?" thundered the always-loquacious Davis
in an interview with Barron's in 1991. "My answer to you is that every single person I know did something wrong. If
you called me on the phone, you did something wrong. . . . Major cases are going to get popped. And major people."
Indeed. The information supplied to the government by Davis and the other admitted conspirators, in combination
with wiretapped conversations and other evidence, has helped unveil a complex ring of stock fraud reaching into the
ugliest corners of the securities business. By the government's count, the scheme involved more than 100 people at
brokerage firms across the country. A brief look at the cast of characters and how they do business should make
anyone think twice about investing in penny stocks and blind pools.
The five men recently indicted raises the number of accused or admitted participants in the scheme to 11. Including
Davis, six have pleaded guilty and agreed to cooperate with the government.
The first four pleas came in April 1990, all from persons associated with Sheffield Securities, a defunct Fort
Lauderdale, Fla., brokerage that underwrote initial public offerings for Vista, Castleton and Bellatrix.
Page 2 © 2007 Factiva, Inc. All rights reserved.
John LaSala, who owned one-third of Sheffield, pleaded guilty to conspiracy and wire fraud. Allen Weinstein, a
one-third owner who professed to own two-thirds of the firm, pleaded guilty to conspiracy, as did Sheffield trader
Ronald Spencer. Ronald Martini, who secretly owned one-third of Sheffield, pleaded guilty to conspiracy, wire
fraud and securities fraud. Martini, LaSala and Spencer all admitted to aiding Barry Davis and his associate Eric
Wynn in manipulating trading in Castleton, Bellatrix and Vista shares; Weinstein's charge related to helping Martini
conceal his ownership position in Sheffield.
(An obvious reason for keeping Martini's involvement with Sheffield a secret was the problem of registering an
admitted felon as a securities industry principal. In 1979, Martini and two other men, Frank Coppa and Francis
Orofino, pleaded guilty to fraud charges stemming from trading in Tucker Drilling Co. In an unrelated case the same
year, Martini pleaded guilty to one count of passing a forged instrument.)
The other admitted conspirator is Douglas Selander, a former broker at L'Argent Securities in Minneapolis. In
December 1990, he pleaded guilty to one count of conspiracy for his part in manipulating six stocks, including
Castleton, Vista and Bellatrix.
Among the newest group of defendants -- all of whom last week pleaded not guilty -- the biggest fish is clearly Eric
Wynn. The government contends Davis and Wynn were the masterminds behind the stock manipulation scheme on
which all the charges are based.
In entering his guilty plea, Davis asserted that Wynn was responsible for choosing stocks to be manipulated and for
planning overall strategy. Davis said his own role involved directing the day-to-day trading activities in those stocks
conducted by brokers and promoters around the country, including the other defendants. Wynn, 34, of West Milford,
N.J., faces 13 counts of fraud and conspiracy.
According to the indictment, the principals of Sheffield Securities allowed Wynn and Davis to control the
distribution of shares in the Vista and Bellatrix IPOs, allowing the two to gain direct or indirect ownership of almost
all the stock of the two blind pools. The indictment says that Davis and Wynn helped arrange merger partners for
Vista and Bellatrix, and then advised certain of their co-conspirators of their plans before making required public
disclosures. Similarly, the government contends Sheffield assisted Davis and Wynn in gaining control of a majority
of the free-trading shares of Castleton, a company that went public in 1986.
Once the three companies were under their control, the government asserts, Davis and Wynn artificially inflated
their share prices, thanks in part to the cooperation of brokers and traders who bought and sold securities as Davis
and Wynn directed. As payback, the government says, the cooperating brokers received all sorts of goodies: free
securities, securities below the manipulated market price, guaranteed profits, cash, promised participation in future
offerings of manipulated securities and assistance in their own stock manipulations.
This is not Wynn's first brush with the legal system. In 1991, while Davis was entering his guilty plea, Wynn was
serving a three-year sentence in Federal prison in connection with a 1989 guilty plea to two felony counts in an
unrelated stock fraud. In that case, Wynn was charged with siphoning off $640,000 from stockholders of a defunct
jewelry company called Renaissance Enterprises.
Related charges against Wynn's wife, Annabelle Salaverria Wynn, were dropped, but a third defendant, Francis
LaMagra, was convicted on four felony counts and sentenced to three years. In 1988, in a separate case, LaMagra
received a one-year prison term for conspiring to prepare false tax returns for Louis "Louie Ha-Ha" Attanasio, a
capo in the Bonnano crime family. According to the government's indictment in that case, Attanasio "received
substantial income from loansharking and conducting an illegal gambling business."
Renaissance had been underwritten by Monarch Funding, a defunct New York brokerage firm that sits at the center
of yet another complex stock fraud. The Monarch case, which centered on trading in Liquidation Control Inc. and
Toxic Waste Containment Inc., led to the 1989 indictment of Monarch founder Leo Eisenberg, former Wood Gundy
research analyst Richard Cannistraro and the stock promoter Richard Bertoli. Both Eisenberg and Cannistraro
pleaded guilty to charges connected with the case. Bertoli, who was tried and convicted, is scheduled for sentencing
later this month.
Page 3 © 2007 Factiva, Inc. All rights reserved.
The Monarch case has several ties to the Davis case. That's clear from Eisenberg's testimony at Bertoli's trial.
Eisenberg said the stock promoters who participated in the Monarch scheme included both Frank Coppa, Ronald
Martini's co-defendant in the Tucker Drilling case, and Eric Wynn. Neither Coppa nor Wynn were indicted for their
role in the Monarch Funding case, although both once worked at Monarch.
Among the other newly indicted co-defendants, the most prominent name is Anthony Nadino. (According to
records of the National Association of Securities Dealers, Nadino's original surname was Nadratowski.) Nadino, 49,
of Colts Neck, N.J., heads the trading desk at Hibbard Brown & Co., a brokerage firm currently fighting civil fraud
charges in an unrelated case filed by the Securities and Exchange Commission in federal court in Manhattan. A
longtime associate of penny-stock king Robert Brennan, Nadino was once head trader at First Jersey Securities,
where he worked for more than 12 years. (The two men also have a family link: Brennan's wife and Nadino's wife
are sisters.)
Besides the indictment, under which he's charged with four felony counts, Nadino faces two pending complaints
from the NASD. In a case filed in July, the NASD alleges that Nadino and Hibbard Brown charged excessive
markups in about 6,200 transactions in 1991. A year earlier, the NASD charged that Nadino and his firm "engaged
in a manipulative, fraudulent and deceptive scheme" by acquiring all of the outstanding warrants of a company and
then "engaging in a massive sales effort" to customers without disclosing that it controlled the stock.
In 1986, Nadino had been suspended from association with any NASD member firm for 10 days and fined $25,000
in partial settlement of NASD allegations that in 1983 First Jersey had charged customers unfair and excessive
markups. In the same case, in which the defendants agreed to the penalties without admitting guilt, First Jersey paid
a $300,000 fine and Brennan coughed up $25,000.
Another defendant in the case who has long haunted the penny-stock world is Perry "Pericles" Constantinou, 60, a
Manhattan-based promoter indicted on four felony counts in the Davis case. Constantinou has been battling
securities regulators for decades. In his most recent previous brush with the law, Constantinou in 1990 pleaded
guilty to five felonies in connection with the role played by his firm, World Wide Capital Corp., in the manipulation
of the IPO and after-market trading of Memory Protection Devices and Memory Metals. (Barron's ran stories
detailing the Memory Metals saga in 1986 and 1987.) Constantinou was placed on probation and ordered to pay
restitution of $327,909.
The SEC had barred Constantinou from the investment business in 1975 for the part played by Provident Securities,
a brokerage firm he controlled, in the manipulation of a company called Fantastic Fudge. (Among Provident's
officers was Sheffield's secret co-owner, Ronald Martini.) Also in 1975, a federal court found that Constantinou
assisted a group led by fugitive financier Robert Vesco in a complex stock manipulation involving a company called
International Health Sciences.
Also indicted on four counts is Irwin Frankel, a 31-year-old resident of Hialeah, Fla., who at the time of the alleged
conspiracy was a registered representative for both Corporate Securities Group, of North Miami Beach, Fla., and a
defunct New City, N.Y., firm called Allegiance Securities.
While not as infamous as some of his alleged co-conspirators, Frankel is not exactly an altar boy. In 1989,
Allegiance signed a consent agreement with New York State Attorney General Robert Abrams to terminate an initial
public offering for a Denver company called Superconductive Technologies Inc. Abrams alleged that the company's
promoters "tried to get rich quick by cashing in on the public's interest in high-technology superconductors."
According to Abrams, Superconductive and Allegiance failed to disclose that one of the company's promoters,
Joseph Pignatiello, another well-traveled denizen of the penny-stock world, was associated with Power Securities, a
defunct brokerage that earlier this year was ordered by a federal judge to pay $25.6 million in profits and interest for
allegedly fraudulent stock sales.
As part of the consent agreement, Allegiance and its principals -- Irwin Frankel and Frank Grillo -- were barred
from underwriting securities for three years. The NASD revoked Frankel's registration as a broker in August 1990.
Page 4 © 2007 Factiva, Inc. All rights reserved.
Brad Haddy, a 42-year-old broker indicted on four counts, formerly worked at L'Argent Securities, alongside
admitted conspirator Douglas Selander. Now a registered representative at Kennedy Mathews Landis Healy &
Pecora, a Minneapolis brokerage firm, Haddy doesn't have a clean record, either. In 1986, the NASD suspended him
from associating with any member firm for 60 days, following allegations that he wrote four checks drawn on his
employer's bank account without authorization and retained the proceeds.
Completing this rogues' gallery, of course, is Barry Davis, ne Barry Sutz. The SEC threw him out of the securities
business in 1971, citing his violation of capital requirements and other regulations as president of Sutz & Ross, a
Valley Stream, N.Y., brokerage firm. In 1975, the New York State Department of Insurance revoked the license of
his insurance agency, Sutz & Sutz, citing hundreds of customer complaints. Later on, Davis went into the publicrelations
business. The activities described in the indictment took place while he was running a PR firm called
Princeton Financial.
In September 1989, Davis agreed to pay the state of New Jersey a civil penalty of $50,000 to settle allegations that
he'd provided investment advice without registering in the state; he agreed to be permanently barred from the
securities business in the Garden State. At the time, Davis was tied to a Fort Lee, N.J., telephone hotline service
called Traders & Investors Alert. The firm offered recorded stock advice, and for an extra fee, personal consultations
with Davis.
It didn't take Davis long to violate the ban -- two months later he was heard on the same hotline, reportedly calling
in his tips from a Chinese restaurant in New York City to circumvent the New Jersey-imposed ban. The state then
sued Davis to recover the $50,000 fine -- the check he wrote to cover the first installment of the penalty bounced.
(He later paid in full.) Davis later found his way back into the telephone hotline business in Piermont, N.Y., with
Wall Street Watch.
All five of the recently indicted defendants contend they did nothing wrong. Wynn, Nadino and Constantinou
declined to discuss any details of the case. Frankel's attorney says he and his client have no comment, either. Haddy
admits that he had discussions with Davis and Wynn both in person and on the phone, but says "it's something I feel
innocent about." Nadino's lawyer, Michael Critchley, admits that his client "knows Eric Wynn, in a business sense,"
but contends he did nothing improper.
And Barry Davis?
For once in his life, he's got nothing to say.
Document b000000020011031dpc6001h5
This could get very interesting...
Excellent, as usual
Maybe this is something to look into. These shares will come off restriction any day now and I've been waiting to see how these hit the market...
This is from the Jan 22nd, 2008, 10QSB
On May 9, 2007, we entered into a contract with Var Growth Corporation (D.B.A. Ice Cold Stocks) and issued 875,000 shares of restricted common stock at $.15 in exchange for consulting services to be performed over a 12 month period from the date of the contract. For the six months ended November 30, 2007, $100,625 of this cost was expensed. The remaining balance is treated as a deferred charge, a contra equity account, as all of the shares were issued for services but not yet fully rendered.
Everyone is stumped... Maybe a large shareholder has a big tax payment due in April and is selling stock. Who knows?
AES Capitol and The Herzfeld Caribbean Basin Fund are long time supporters of the company.
Thanks for the report.
Please explain what sounds so crazy?
Makes perfect sense to me...
The Hedge Fund obviously recognizes how cheap these shares are and must be confident enough to reload at this price...
Remember they were selling on the way down to around .20. Now they can buy at .10!
Always follow smart money!
BTW, to Mr. Seller... Thanks for the cheapies!
Obviously, someone dumped a position...
Earnings are tied up with Auditor and back logged due to tax season. Auditors tend to have a "GOD Complex" and companies have to just grin and bear it...
Just checked in with company... Hedge fund says it has now turned to a buyer at these prices and has been buying all day at the bid.
wild action for sure...
Someone got shaken, bad!
I love this spread and someone is getting a great deal at .16!
NICE SPREAD... congrats to who ever is getting these cheapies!
Retail seller at .17... who is gonna grab them?
Ha!... what does he know?