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I was wrong. The letter that you provided is clearly a Wells Notice. Thank you.
I would've thought that the letter would be sent directly to the alleged offender. Apparently this letter was actually a follow-up to a Wells call, also made to the attorney. However, the following appears as an exhibit to a Track Data 8-K and the introduction makes it very clear:
CEO OF TRACK DATA RECEIVES WELLS NOTICE
Brooklyn, New York – April 23, 2004 – Track Data Corporation (Nasdaq: TRAC) – Barry Hertz, Track Data’s Chairman and CEO, has received the Wells notice that is set out below from the staff of the Securities and Exchange Commission. The Wells notice relates to alleged insider trading by Mr. Hertz in Track Data shares and is not directed to Track Data or any other member of its management.
Leslie Lupert and Robert Plotz of the firm of Orans, Elsen & Lupert LLP in New York, counsel to Mr. Hertz, said "We do not believe that Mr. Hertz violated any insider trading rules. The interpretation of those rules by the staff of the SEC in this matter has no basis under existing laws or under any reasonable extension of those laws. We believe that if the SEC decides to bring charges against Mr. Hertz, the Court will agree that Mr. Hertz did not violate any law. Mr. Hertz voluntarily cooperated with the SEC staff’s investigation, and testified that he had no beneficial interest in the shares in issue."
***
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
NORTHEAST REGIONAL OFFICE
233 BROADWAY
NEW YORK, N.Y. 10279
PLEASE REPLY TO
AUDRY WEINTROB
(646) 428-1937
April 21, 2004
BY E-MAIL AND FIRST-CLASS MAIL
Robert Plotz, Esq.
Orans, Elsen, & Lupert, LLP
One Rockefeller Plaza – 33 rd Floor
New York, NY 10020
Re: Track Data Corp. (NY-7227)
Dear Mr. Plotz:
This letter, etc........
http://www.secinfo.com/dS55k.15.c.htm#1stPage
"I will read it when I get time."
There's nothing else to read. The subject was the same......Does a Wells Notice contain details supporting the alleged violations? The poster said they had seen several and that they were "very detailed".
I'm done with this. Unless of course someone is able to produce an actual Wells Notice (good try, pup).
Understanding the issue definitely seems to be a semantics problem. But the issue actually centers on a perfectly understandable question, as yet unanswered. What does a Wells Notice look like? The 8-K filing is not a Wells Notice, but merely the reporting of ones (3's) receipt and the violations alleged. I know that YOU know that.
Risicare may have addressed it as logically as it can be addressed without us seeing an actual reproduction (this post you might want to read when you have more time):
"I think it is quite clear they put the premise for the charges in the notice. It would be impossible to respond to anything with no idea what the charges are based on. I think what you have bolded is quite clear that they provide a basic outline of why they are recommending the charges.
Something like we have examined these brokerage records and have found wash trading which contravenes Section blah, blahh....
opposed to specifics like
On July 12th brokerage account #foo sold 150000
shares while the same beneficial owner of account #bar purchased 150000 shares contravening Section Blah, Blah....."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46202574
I need a much bigger bucket. Maybe a drum.
ps. Yes, I can do this between snaps.
Underdog,
The short version:
Patch said that the Wells Notice was unusually long.
OT and I, having never seen an actual Wells Notice, asked if he had seen the actual Wells Notice.
You and puppy "were smart enough to realize that what was said wasn't what was meant" in the sense that he was talking about the length of the charges, not the length of the notice.
He finally admitted that was what he meant. (Actually, he said that was what he said.....but it wasn't)
OK?
We were merely trying to find out if he had, and could provide, a copy of the Wells Notice....which I would really like to see. Wouldn't you?
"If SPNG were out of cash they could, and would, have registered shares and sold them to Pike instead of Pike buying shares on the open market."
Interesting comment. Doesn't it assume that they feel that it is their interest for Pike to have the shares? Is that a safe assumption? Maybe they didn't issue him the shares because they didn't want to encourage his influence/control. Maybe he didn't want to be constrained by restricted shares, which I presume they would be.
"This is false, accusatory, unsubstantiated, and off topic."
accusatory.......definitely
off topic...........definitely not
false......
unsubstantiated......
Pick one. You can't have both.
If it's unsubstantiated you can't be sure that it's false.
OT,
I guess we can put that one to bed. Apparently puppy and underdog were smart enough to realize that what was said wasn't what was meant. Although there also seems to be a difference between what was said and what was said:
1."The other REALITY is that teh SEC found enough concern and possible wrongdoing that they suspended trading in this market and eventually filed a VERY LENGTHY Wells Notice..."
2."What I stated is that the charges in this wells notice was long (proof is the 8K) as compared to other wells identified (proof would be the 8K of others who received)."
So much for that.
FWIW, this is from a poster whose accounting-related posts have been valuable in the past:
"Handled several Wells in regard to GAAP and internal control issues. Very detailed."
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=46202747
Which suggests that the 8-K may have been a selective summary.
Looks like seeing a Wells Notice, any Wells Notice, is going in my bucket list. Seems a waste of good bucket list space, though.
patchman,
Surely you don't misunderstand OT's question.
You said that the SEC had "filed a VERY LENGTHY Wells Notice...".
He felt, reasonably enough, that based on that statement one could only conclude that you had seen the actual Wells Notice itself. And was asking if that was correct.
Have you seen the Wells Notice? Or did you mean to say something else?
music,
The purpose of my post was not sabre rattling, but rather just supporting the fact that allegation and accusation can be used interchangeably.
A hangin' may be acomin', but I ain't necessarily hankerin' fer it. We aren't all the same, you know.
Actually I think the previous controversy involved evidence and proof vs. allegation and proof. And hash used to be one of my favorite words.....ever wonder how something can be rehashed without being hashed in the first placed? Anyway, allegation and proof have yet to be hashed.
"The Wells notices advised that the Commission Staff intends to recommend that the Commission bring civil injunctive actions against them alleging violations of the federal securities laws contained in Sections 5(a), etc."
Per my thesaurus:
allege
verb
claim, assert, charge, accuse, declare, state, contend, argue, affirm, maintain, attest, testify, swear; formal aver.
"Call the store if you don't believe me."
Why wouldn't I believe you? I just got finished saying what a good idea I thought it would be :o) Right, Luppy?
How were they priced? I see that you posted their appearance on Monday. Was there any way to tell which location seemed to be more effective based on what was there then and what's there now?
"nothing worse than running around a store trying to find a kitchen sponge when its displayed in frozen foods."
Couldn't agree more. And we're talking about a bath sponge. A kids bath sponge. So your logic suggests the Bath department?
But is it the kind of product that one goes to the department store with the intention of buying?
How many would be sold to moms that go to the bath department for a sponge for the kid? Or for something else?
More or less than would be sold to moms (or dads) taking a stroll through kids/toys to see what catches their eye?
Is the answer weighted in favor of the department with the most traffic given its impulsive nature.
Is the kid the customer (buy me this!) or the adult?
Just collecting opinions as a diversion.
I'm about as far from a marketer as one can get, but given its multiple attractions I know what I would do.....test them all for a month.
Have you been in retail marketing?
I think that's probably the right answer, BUT......
It's a great question. If one were to pretend that the accounting and legal issues were somehow resolved, what department would a sponge with soap inside and a cartoon character on its face be best placed in? "As Seen On TV" isn't a category....at least not a permanent one....and multiple categories are rare for even the most successful products. More characters are theoretically in the pipeline...at least licensed. Bath or toys? At kids eye level or moms?
Any marketing people here?
How about CFO's, radio station operators or pizza moguls?
My vote for best prospective customer: Bed, Bath and Beyond.
"Correct me if I am wrong, but I think I read that RME is a private corporation not a partnership."
Per the last 10K:
Corporate Background
We are a Delaware corporation which, under the name Nexgen Acquisitions VIII, Inc., on July 15, 2002, entered into a stock purchase agreement with RSI Enterprises, Inc., a New York corporation, and its sole stockholder, RM Enterprises International, Inc..
My guess wasn't enough for ya?
Because it seems to me, in the absence of an actual indication on the form by the filer, the rules aren't going to help. We're left with nothing to do but guess.
Mike,
I'm sure that you've read part (iv) of Section 5. Holdings To Be Reported of the instructions, wherein it indicates that the filer can report either their own proportionate share or the entities total share, without requiring them to indicate which option that they are selecting (Brilliant!). The instructions also suggest looking at certain sections of Rule 16, which I've reproduced at the end of this post (hint: useless).
I can't help offering an opinion:
If they're reporting their proportionate share that would indicate that 1)they have equal ownership positions in RME and 2)no one else and no other entity has an ownership position in RME.
Just based on that I think that they are each reporting the total RME position. I'm pretty sure that the 3 people involved have never reported equal ownership of anything else and there's a history of lots of peripheral parties........especially going back to the days prior to SPNG.
Just going with the odds.
Useless:
http://www.law.uc.edu/CCL/34ActRls/rule16a-1.html
B. A general partner's proportionate interest in the portfolio securities held by a general or limited partnership. The general partner's proportionate interest, as evidenced by the partnership agreement in effect at the time of the transaction and the partnership's most recent financial statements, shall be the greater of:
The general partner's share of the partnership's profits, including profits attributed to any limited partnership interests held by the general partner and any other interests in profits that arise from the purchase and sale of the partnership's portfolio securities; or
The general partner's share of the partnership capital account, including the share attributable to any limited partnership interest held by the general partner.
XXXXXXXXXXXXXXXX
(iii) A shareholder shall not be deemed to have a pecuniary interest in the portfolio securities held by a corporation or similar entity in which the person owns securities if the shareholder is not a controlling shareholder of the entity and does not have or share investment control over the entity's portfolio.
You have to admit that it's kind of odd that the SpongeTech® Stain Remover Pen referred to here:
SARANAC, Mich., Aug. 5 /PRNewswire-FirstCall/ -- NXGen Holdings, Inc. (OTC: NXGH - News) is pleased to announce that the Company's wholly owned subsidiary, Green Bridge Industries, Inc., has entered into a licensing agreement with SpongeTech® Delivery Systems, Inc. (OTC Bulletin Board: SPNG - News), in which Green Bridge Industries has the exclusive nationwide rights to produce, market, and distribute the SpongeTech® Stain Remover Pens.
is referred to differently here:
SARANAC, Mich., Dec 18, 2009 /PRNewswire-FirstCall via COMTEX/ -- Green Bridge Industries, Inc. (Other OTC: GRBG) is pleased to announce that the Company is in negotiations to expand its purchase order for the ZAP(TM) Stain Remover product line with The Pencil Grip, Inc. of Los Angeles, CA . The Company has not yet received payment or delivered any product towards this purchase order, but hopes to start deliveries during the early part of 2010. The original purchase order was a direct result of the Company's attendance at the ECRM show in Dallas, Texas.
and here:
RIDGEWOOD, N.J., Feb 04, 2010 /PRNewswire via COMTEX/ -- Green Bridge Industries, Inc. (Pink Sheets: GRBG) is pleased to announce that the Company's ZAP(TM) Stain Remover Pen and Zapspray On-The-Go Sanitizing Spray Pen will be included as feature products in the VIP bags for the 10th annual Player Networking Event(TM) (PNE), a sanctioned NFL Super Bowl event, hosted by Troupe 21 & Associates.
Maybe I'm missing something.
Maybe it's just a name change and the licensing agreement is still intact? With somebody?
"Isn't there a date coming up where SPNG has to buy all the shares back from RME at cost ? "
z,
From the last published 10Q :
http://www.sec.gov/Archives/edgar/data/1201251/000114420409021409/v146656_10q.htm
NOTES TO FINANCIAL STATEMENTS
February 28, 2009
NOTE C – RELATED PARTY TRANSACTIONS
"In July 2008, RM Enterprises International, Inc., a company that is our majority stockholder and which is controlled by our officers and directors, agreed to grant the Company the right, exercisable by the Company at any time on or prior to February 28, 2010, to repurchase all or any portion of the 267,154,132 shares issued that RM Enterprises International, Inc. had purchased from the Company since January 1, 2008 at the original price paid by RM Enterprises International, Inc. to the Company for such shares, or an aggregate of $4,918,432.46 for all of such shares. Such shares were issued in tranches at the time of each of the advances of funds to the Company at a 40% discount from the market price on the date of each such advance. The average per share issuance price for the shares was $0.0184."
The same document also says:
PART II OTHER INFORMATION
ITEM 2. UNREGISTERD SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
urchases of Equity Securities by the Issuer and Affiliated Purchasers
"On January 13, 2009, RM agreed to return an aggregate of 133,577,066 to the Company out of the 267,154,132 shares which were originally issued to them in consideration of the conversion of an aggregate of $4,918,432.46 of debt between January 1, 2008 and June 30, 2008. The Company intends to return such shares to treasury and subsequently cancel such shares. The parties have further agreed that the Company will still have the right to repurchase the remaining 133,577,066 shares held by RM that were issued to them in consideration of the conversion of an aggregate of $4,918,432.46 of debt between January 1, 2008 and June 30, 2008 for the aggregate purchase price of $4,918,432.46."
it also says:
ITEM 5. OTHER INFORMATION
"On April 16, 2009, RM Enterprises cancelled 526,585,544 common shares to reduce the common shares issued and outstanding from 1,249,451,605 to 722,866,061 common shares. These common shares were put back into the treasury".
This single document does a lovely job of highlighting my ignorance.
1. In order of appearance, the bold phrases indicate that the same 267,000,000 shares were "purchased" by RME and issued in consideration of a "conversion" of debt. The former implies a sale of shares, the latter implying an issuance as collateral for a debt that was not recorded as debt. I always thought that collateral was pledged to a lender, not turned over for safekeeping or sale.
2. It says that on 1/13 RME indicated its INTENTION to return half of the shares in "consideration" of "conversion" and that the company will still have the right to "repurchase" the other half. I don't know if either half was executed. I also don't know if any of the shares are included in the 526million shares mistakenly reported as having been canceled by RME.
3. Theoretically, as I understand it, if the shares were indeed "purchased" by RME, they could have legally sold the shares after a 6 month holding period (please do not rely on this). Let's pretend that they did for the purposes of the question. From the perspective of the SPNG shareholder, assuming it had the funds, it would be in their interest to repurchase at the original prices any shares not previously repurchased from RME prior to the deadline......they are a RELATIVE bargain. If RME has sold the original shares, this would require RME to buy shares at today's prices to replace them. If this relationship were truly an arms length relationship that is what would be required. However, since the controlling shareholders of SPNG also own RME, it seems hardly likely that they would impose this instantaneous cash loss on themselves. Where certain allegiances lie and the current definition of fiduciary responsibility might be revealed in this.
It's all just a merry mix-up to me.
"It's beyond me why he even bothers filing those Form 4's for internal transfers."
Isn't it reasonable to expect that the SEC would question a subsequent filing if one of the funds had a buy or sell which, when added to or subtracted from the previous ownership number, didn't equal the new ownership number?
Maybe he's just avoiding that question with these filings.
Do you have any idea what purpose drives the re-balancing itself?
The transactions reported carry the transaction codes P and S.
From the instructions:
General Transaction Codes
P - Open market or private purchase of non-derivative or derivative security.
S - Open market or private sale of non-derivative or derivative security.
If the transactions were entered into as a private purchase and sale and hence not reflected in published volume data, would they not then avoid violating the following criteria of the cited rule?:
"For the purpose of creating a false or misleading appearance of active trading in any security registered on a national securities exchange, or a false or misleading appearance with respect to the market for any such security."
Again Pike is doing his re-balancing act. And again, a similar transaction in his PARL account at the same time.
any truth to this??
You decide. The exact wording of the stipulation is:
"Docket Text: STIPULATION: Plaintiff shall have sixty (60) days from the appointment by the Court of lead plaintiff pursuant to 15 U.S.C. § 78u-4(8)(3)(B)(i) to represent the class. and Court approval of lead plaintiff's selection of lead counsel pursuant to 15 U.S.C. § 78u-4(a)(3)(B)(v), to file and serve an Amended Complaint on Defendants. Defendants do not have to respond to the Complaint filed by Plaintiff on 10/9/09. Defendants shall have sixty (60) days from the service of an Amended Complaint to answer, move or otherwise respond to the Amended Complaint. ENDORSEMENT: No motion to dismiss is to be filed without a prior conference with the Court. (Signed by Judge John G. Koeltl on 11/4/09) (tro)"
Seems to me the Yahoo poster interpreted the stipulation incorrectly and drew improper conclusions as a result.
I believe that it says:
1. SPNG does not have to respond to the initial complaint filed on 10/9 because
2. the plaintiff will be filing an amended complaint
3. within 60 days of the Courts approval of the (as yet unnamed) lead plaintiff's selection of a lead counsel.
4. SPNG will have 60 days to respond to the amended complaint once it is filed.
5. The judge doesn't want to waste time with a motion to dismiss without a meeting first to preliminarily determine its viability.
It's a common misunderstanding....I had it myself once upon a time.
The rule I posted has cumbersome legalese in it, so if you would like me to highlight the salient phrases let me know. But rest assured, your understanding isn't correct.
Mr. dotcom must be busy.
If I may: http://www.law.uc.edu/CCL/34Act/sec13.html
Securities Exchange Act of 1934
Section 13 -- Periodical and Other Reports
Reports by issuer of security; contents
A. Every issuer of a security registered pursuant to section 12 shall file with the Commission, in accordance with such rules and regulations as the Commission may prescribe as necessary or appropriate for the proper protection of investors and to insure fair dealing in the security--
1. such information and documents (and such copies thereof) as the Commission shall require to keep reasonably current the information and documents required to be included in or filed with an application or registration statement filed pursuant to section 12, except that the Commission may not require the filing of any material contract wholly executed before July 1, 1962.
2. such annual reports (and such copies thereof), certified if required by the rules and regulations of the Commission by independent public accountants, and such quarterly reports (and such copies thereof), as the Commission may prescribe.
If the company gives up its registration, which can only be done if it falls below certain size parameters, or if the Commission itself yanks it, it no longer has to file. Right now it is still required to file, but the SEC is pretty much down to its last bullet, that being the yanking.
I don't disagree at all.
Still, I find the question an interesting one. And that's without even going into the issue of whether the shares held by the parties are legitimately held voting shares, properly acquired.
Nothing like a good quandary.
"if it's revealed that by their actions
mgmt needs to be replaced .. so be it"
Just how would that happen?
Management serves at the pleasure of the Board. Management, in this case, IS the board.
A new Board could be elected by the shareholders. The old Board holds the majority of the votes.
If this sounds like a philosophical question, it isn't. Should the SEC feel that SM and MM are no longer fit to act in their current positions in a public company, the question suddenly becomes a practical one.
"so be it" is a good bit trickier than it sounds.
rjs,
Very informative post.
The original poster and photographer of the Walmart sighting and purchase indicated, and the photo shows, that the sponge was found in the "AS SEEN ON TV" section of the store. I have to admit that I've never been in a Walmart so I don't know what one of those sections looks like, but it appears to be a collection of unrelated inexpensive items that have only one thing in common......they carry the little red nameplate that says AS SEEN ON TV. I found no evidence that the use of the nameplate requires a license. There is an Asseenontv.com website (in which I could not find any SPNG products) that offers many products and it appears that any product that carries the nameplate can call itself an AS SEEN ON TV product.
Here's what I'm wondering:
I know that Walmart has several different types of stores and I don't know if similar sections appear in all stores. Does it represent a Walmart department that has a unique buyer who seeks out, or is sought out, and walks individual manufacturers through the torturous process that you've posted......wherein the manufacturer seeks a "permanent" position in all the Walmarts that include such a section? Or is there a distributor of AS SEEN ON TV products who must go through the vetting process and who has the responsibility of providing various manufacturers (who avoid the process) products on an ongoing basis, rotating them by popularity, availability, close-out status, etc. ?
An understanding of Spongetechs basis of doing business with Walmart in terms of the above distinctions would be interesting and perhaps indicative of the potential of the future relationship.
"they contain evidence along with the allegations."
Risi,
Your logic is perfect regarding what an attorney WOULD advise. But......
The SEC manual relies on Rule 202.5(c) of Title 17 for its authority to issue the notice and it says:
"Upon request, the staff, in its discretion, may advise such persons of the general nature of the investigation, including the indicated violations as they pertain to them, and the amount of time that may be available for preparing and submitting a statement prior to the presentation of a staff recommendation to the Commission for the commencement of an administrative or injunction proceeding."
Do you believe that the SEC used the phrase "the general nature of the investigation" to indicate that it should "contain evidence"?
Before you decide, this is from some law firms presentation on "KEY ISSUES CONFRONTED DURING THE REPRESENTATION OF DIRECTORS AND OFFICERS FACING SEC ENFORCEMENT ACTIONS". It doesn't differ from another advisory on the subject that I've come across:
"Considerations for Wells Submissions.
1. “Defense counsel . . . often request a ‘Wells meeting,’ at which the staff presents a more detailed account of its case: their view of the relevant facts, the applicable law, and their theory of any violations. The Wells meeting is less a forum for defense counsel to obtain discovery of the Commission’s case than it is a dialogue in which defense counsel can appreciate whether there are any issues – factual, legal, or otherwise – that may affect the Commission’s deliberative process.”
It just seems to me that, should the Wells notice "contain evidence" in the sense that we're discussing, then there would not be a need (maybe not even a desire) for a meeting "at which the staff presents a more detailed account of its case".
Obviously, I appreciate your opinion on this. I guess that it's also obvious that I'm having trouble accepting that, given that 1)these notices have been issued for over 30 years, 2)the vast majority have been resolved one way or another and are meaningless today and 3)I can't think of an example of any other document that can't be found online, including some stuff that NOBODY needs to see, yet I can't find a sample Wells notice that "contains evidence" to prove or disprove this point.
Where's a securities lawyer when you need one? Half the time you can't swing a dead cat, etc.......
"It usually has evidence of the wrongdoing"
That's PRECISELY what I'm trying to find out. I don't REALLY need to see one if that's true and I'm starting to think you're right even in the absence of evidence.
Seems like it would be easier to find a Sasquatch.
:o)
Have you ever seen one?
A Wells notice, that is.
I understand.
But I find it unusual that while there is no requirement to make the receipt of a Wells notice public, many companies do.....due to the potential of a Regulation FD violation. I'm sure that, if companies felt that they could actually keep the notice a secret, they would. They know that they can't so they don't in order to avoid the compliance issue.
But since many companies DO make the receipt public, I find it unusual that that no company appears to make the verbatim contents of the notice itself public.
I've referred to the SEC Enforcement Manual a number of times and am aware of it's section on the Wells process, thanks.
Unfortunately it does not answer my questions directly:
1. Can we assume that the three notices vary in terms of the allegations and citings?
2. Does a typical Wells notice merely outline the alleged rules violations and not provide the actual acts that comprise the violation?
3. If the actual acts are not provided to the respondents in the notices and given that they haven't been made available to the public, would it be correct to assume that your connections of acts to violations are assumptions on your part, reasonability notwithstanding?
The third question can only be answered by patchman himself. But if you run across an ACTUAL Wells notice it might help with the second one and I would very much like to see it.
h,
Check out the bottom right corner of the Hope to the Hopeless billboard--zoom if you can. Somebody out there has a sense of humor.
patchman,
Given your posting limitation, please respond to my questions as a piggyback to another post. They are yes or no (or I don't know) questions.
It seems to me that what has been referred to as the "Wells Notice" is not actually a Wells notice, but an 8-k reporting the receipt by three different parties of three Wells notices and the citation of the various rule and law violations alleged.
I have been unable to find a sample of an ACTUAL Wells notice anywhere online.
1. Can we assume that the three notices vary in terms of the allegations and citings?
2. Does a typical Wells notice merely outline the alleged rules violations and not provide the actual acts that comprise the violation?
3. If the actual acts are not provided to the respondents in the notices and given that they haven't been made available to the public, would it be correct to assume that your connections of acts to violations are assumptions on your part, reasonability notwithstanding?
Thanks in advance.
Thank you.
I try to stick with the think, then type, approach but it doesn't always work out.
I was only posing the possibility that Pike could have simply felt that at some point SPNG shares represented a value that conformed to his investment philosophy. Maybe I'm inclined to give that explanation more weight based on my woefully inadequate understanding of things phantom, naked and offshore.
It doesn't conform to my own idea of value by a long shot....at no point would it have. But that's what makes a market. You pays your money and you takes your choice.
"one cannot simply assume that Pike is buying shares because he thinks this is a good investment."
Why not? Does the Occam's razor principle, relied on regularly around here, only apply when it fits ones own desired outcome?
There are some pretty fanciful explanations being floated regarding Pikes purchases, when the only things that we are absolutely certain of are that his funds owned 100,000,000 shares on 9/28/09 at an avg. pps of $.138 and that an additional 60,000,000 shares have been purchased since. Period.
Any shares, registered or unregistered that were purchased prior to 9/28/09 would have had to be included in that 100,000,000 unless they were sold prior to 9/28/09.
Any shares that were bought and sold (or shorted and covered) prior to 9/28/09 can't possibly matter any more. Can they?
Any shares owned by the Pike Capital Offshore Fund that were still held at the time of Daniel Pikes Form 3 filing would have had to have been reflected in that filing to reflect his beneficial ownership.
Any sales by any Pike Fund to any other Pike fund requires a filing until Pike Capital's ownership level drops below 10% of the last reported o/s level and all transactions between now and then require a filing.
If Pike has entered into a non-disclosure agreement with SPNG he will not be buying or selling shares in the open market until the agreement is terminated AND all the nonpublic information that he has acquired during the term of the agreement is in the public domain.....unless he's willing to break the law.
XXXXXXXXXXXXXXX
Since others have felt comfortable repeating their theories on this issue multiple times, I'll copy and paste mine:
An alternative theory....just for fun and 100% speculation:
Somebody got his ear....or he gave his ear to somebody. His portfolio includes companies with troubled histories and he has made money chasing high risks before. He established a position of 100,000,000 shares by 9/28/09, with the average share math suggesting that a portion of those shares were purchased before 9/14 and at an average pps of $.138:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45348177
So at least some of those shares were bought before the Post articles, the formal investigation commencement, the failure to file the 10K by the extension date, and obviously before the suspension and the letter threatening otcbb delisting. FWIW, the company announced the "appointment" of Deloitte & Touche LLP on 8/24.
I wouldn't have bought 'em, but.....
So at that point he had made a commitment. His history does not show him to be a trader. He apparently felt that he had uncovered a unique situation, because as you and I know the long term recovery rate from a 10 day suspension is abysmal....it rarely happens. Yet, not "soon after" as you indicate, but the very day that trading resumes he proceeds to go on a buying spree that lasts through the trading week, increasing his position by some 40%. At prices ranging from $.031-.063.
http://sec.gov/Archives/edgar/data/1201251/000101359409001621/xslF345X03/spongetechfm4-102909_ex.xml
He has averaged down before. I sure wouldn't, but....
Apart from another small buy he filled out to his current position on 1/6 and 1/7 at $.037-.04.
http://sec.gov/Archives/edgar/data/1201251/000101359410000014/xslF345X03/spongetechfm4-010810_ex.xml
Here's where my speculation may go over the top some:
On 1/14 the Post reported a suit by the NY Mets "that alleges the company stiffed the ballpark out of $300,000 owed for stadium-related advertising by sending them a bum check and then promising a wire transfer that never came."
I believe that a poster may have reported that suit a day earlier, but in any event it was around this time that the first public sign that the company's problems might extend beyond the regulatory and into the realm of operational cash appeared. The RME support structure ("investment arm") chipping in a stop payment notice.
If Pike was operating as my speculation suggests, this may have taken his risk/return ratio to a new level...it would have mine, for sure. One can play word games with a lot of stuff, but not cash position. He hasn't bought since....and I wouldn't be surprised if he doesn't buy again.
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Bottom line, I am not at all convinced that "one cannot simply assume that Pike is buying shares because he thinks this is a good investment."
Or at least THOUGHT that it was a good investment.
"Am I wrong?"
Damned if I now. I'm too confused to tell. Let's see if I've got this right:
Pike got $16million offshore somewhere, starting to accumulate same in 2007 per the filing, saved it up and spent it all on SPNG shares on someone else's behalf after reading your post in September.
How'm I doing so far?
Then, for some reason you reproduce a PR reporting the open market purchases of 18.2 million shares by the "Chief Executive Officer, Chief Operating Officer and Board Members", while the subsequent Form 3 filings of the 3 principals seem to indicate that 16million of those shares were purchased in the name of Mrs. Lazauskas. (I know....irrelevant.)
Then you proceed to summarize the 3 insiders holdings as of July 2008 when their holdings as of October 2009 are readily available:
7/08..10/09
MM 6..6
SM 8..11
FL 11..27
You tell me.....are you wrong?
About what?
dog.....Even smart guys make mistakes.
But first: I could watch those penguins all day.....and some days I'd be better off if I did. Thanks.
I don't like the guessing game much, but with Pike that's all we have and all we may ever have. You've mentioned that the issuance of a 10K might provide an answer but I fail to see how. Please explain if you get the chance.
An alternative theory....just for fun and 100% speculation:
Somebody got his ear....or he gave his ear to somebody. His portfolio includes companies with troubled histories and he has made money chasing high risks before. He established a position of 100,000,000 shares by 9/28/09, with the average share math suggesting that a portion of those shares were purchased before 9/14 and at an average pps of $.138:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45348177
So at least some of those shares were bought before the Post articles, the formal investigation commencement, the failure to file the 10K by the extension date, and obviously before the suspension and the letter threatening otcbb delisting. FWIW, the company announced the "appointment" of Deloitte & Touche LLP on 8/24.
I wouldn't have bought 'em, but.....
So at that point he had made a commitment. His history does not show him to be a trader. He apparently felt that he had uncovered a unique situation, because as you and I know the long term recovery rate from a 10 day suspension is abysmal....it rarely happens. Yet, not "soon after" as you indicate, but the very day that trading resumes he proceeds to go on a buying spree that lasts through the trading week, increasing his position by some 40%. At prices ranging from $.031-.063.
http://sec.gov/Archives/edgar/data/1201251/000101359409001621/xslF345X03/spongetechfm4-102909_ex.xml
He has averaged down before. I sure wouldn't, but....
Apart from another small buy he filled out to his current position on 1/6 and 1/7 at $.037-.04.
http://sec.gov/Archives/edgar/data/1201251/000101359410000014/xslF345X03/spongetechfm4-010810_ex.xml
Here's where my speculation may go over the top some:
On 1/14 the Post reported a suit by the NY Mets "that alleges the company stiffed the ballpark out of $300,000 owed for stadium-related advertising by sending them a bum check and then promising a wire transfer that never came."
I believe that a poster may have reported that suit a day earlier, but in any event it was around this time that the first public sign that the company's problems might extend beyond the regulatory and into the realm of operational cash appeared. The RME support structure ("investment arm") chipping in a stop payment notice.
If Pike was operating as my speculation suggests, this may have taken his risk/return ratio to a new level...it would have mine, for sure. One can play word games with a lot of stuff, but not cash position. He hasn't bought since....and I wouldn't be surprised if he doesn't buy again.
Don't lose those penguins.
ps. Just for the record:
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=45823856
Not exactly :o)
Your use of the term deadlines was correct, it's just that the Wells notice deadlines referred to are NASD Wells notice deadlines and not SEC Wells notice deadlines.
Those aren't deadlines for SEC Wells notices. As previously mentioned the SEC has no fixed deadline for a submission in their rules.
pj,
Facts presented. Authorities apprised. KooKooKachoo.
"Bill Young having made the situation entirely clear. The necessary documentation having been filed with the SEC back in August '09 at the very latest. The fact of the existence of the phantom float. The full extent of the abuse.
Just and exactly what, if any, regulatory involvement on the subject comes into measurable play remains to be seen. A controlled buy-in as an example?"
No E for effort even?
:o)
"The company evidently willing to announce the initiation of a Wells Notice, but not willing to elaborate about any possible conclusion to that process."
Just an opinion (links follow for reference):
The company filed the 8-K reporting 3 Wells notices under Item 8.01 Other Events, which is standard for such a communication.
Item 8.01 Other Events.
The registrant may, at its option, disclose under this Item 8.01 any events, with respect to which information is not otherwise called for by this form, that the registrant deems of importance to security holders. The registrant may, at its option, file a report under this Item 8.01 disclosing the nonpublic information required to be disclosed by Regulation FD (17 CFR 243.100 through 243.103).
I believe that the pertinent Regulation FD terms are :
a. Whenever an issuer, or any person acting on its behalf, discloses any material nonpublic information regarding that issuer or its securities to any person described in paragraph (b)(1) of this section, the issuer shall make public disclosure of that information as provided in Rule 101(e):
1. Simultaneously, in the case of an intentional disclosure; and.............
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b. Except as provided in paragraph (b)(2) of this section, paragraph (a) of this section shall apply to a disclosure made to any person outside the issuer:
iv. Who is a holder of the issuer's securities, under circumstances in which it is reasonably foreseeable that the person will purchase or sell the issuer's securities on the basis of the information.
Clearly, to me:
1. The Wells notice qualifies as "material nonpublic information".
2. RME is a "holder of the issuer's securities", etc.
3. An awareness on the part of the Officers of Spongetech effectively acts as a de facto disclosure to the officers of RME.
So, what you refer to as being "willing to announce" was actually an obligation to announce the Wells notice under Regulation FD.
More importantly at this point, the company would have the same obligation to report a settlement, should one occur.
People may differ with my opinion on this. If they do I would hope that they might use the links provided and cite the appropriate rules.
As far as "Or even to advise us about the status of the process" is concerned, that's an unrealistic expectation. Disclosure rules and message board rules are different that way.
Finally, and I mean no offense, your sentence structure in this post slipped into Stoxian at points.....if you want to be clearly understood please go back to good old Jayspeak.
http://www.sec.gov/Archives/edgar/data/1201251/000114420409067083/v170343_8k.htm
http://sec.gov/about/forms/form8-k.pdf
http://www.law.uc.edu/CCL/regFD/FD100.html
ps. It was my understanding that this Siegel guy was retained in connection with the class action issue, specifically concerning Rosen. If he is also representing any of the Wells parties please provide a link because I missed it.