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I SURE HOPE SO, and Thursday Aug 15 if not tomorrow.
Disgorgement by the SEC
How can investors (POTN?) get money back in a fraud case involving a violation of the federal securities laws?
There are a number of ways that investors who have been defrauded may recover some of their financial losses caused by the fraud, depending on the circumstances.
The Securities and Exchange Commission is authorized by Congress to seek a number of remedies, including civil money penalties and disgorgement, from those who commit fraud. (While the Securities and Exchange Commission is a law enforcement agency, only the Department of Justice has authority to seek criminal sanctions, such as imprisonment.) The cases the Commission brings against individuals and companies are all civil or administrative matters – that is, the SEC sues alleged wrongdoers for violations of securities law in federal court or in front of a federal administrative law judge and seeks to obtain remedies, including civil money penalties, disgorgement of ill-gotten gains, injunctions prohibiting future violations of the law, and officer and director bars.
Below is a description of mechanisms injured investors may be able to use in recovering funds, including Receiverships, Fair Funds and Disgorgement Funds, Brokerage Account Customer Protections, Corporate Bankruptcy Proceedings, and Private Class Action Lawsuits. Please note that, in many cases, victims of fraud may recover only a fraction of what was stolen, or, in some cases, may recover nothing at all. Also, the mechanisms described below take some time to develop after the initial fraud is discovered. Make sure you check the SEC’s website for updates in the matter you are concerned about.
Receiverships
In matters where the Commission files a civil court action against an entity or individual, the Commission may ask the judge to appoint a receiver. The purpose of appointing a receiver is to recover and protect funds and other assets the defendants have obtained in connection with the fraud and distribute those assets to injured investors if a determination of liability is made. You can find a list of Commission actions with receivers, as well as disbursement agents and claims administrators (whose functions are, generally speaking, to facilitate the claims and distribution process), here.
Fair Funds and Disgorgement Funds
In civil court actions or in administrative hearings, the defendant (or respondent) can be ordered to pay disgorgement – a measure of the ill-gotten gains from the fraud. Where disgorgement is ordered, the judge or the Commission may also order that any money collected, including fines paid, be placed in a Fair Fund for distribution to investors who were the victims of the violation. Under this process, a plan for the administration and distribution of the funds will be developed. A claims administrator or disbursement agent often oversees the plan.
Commission rules on Fair Funds and Disgorgement Funds are available here. A list of administrative proceedings where the Commission has required a distribution is available here.
I am not an SEC attorney, but I would expect that any share holder using his shares to conduct criminal acts that have a negative effect on the company would be stopped by the law. Possibly the shares would be seized by the government, this can occur in a bankruptsy for example.
If Q2 earnings are not yet finalized, I would like to see an estimate given this week along with an earnings date and clarity on the Vaccaro situation.
I would hope that shares can be frozen in a case like POTN having criminal activity involved in shares acquired many years ago, and the CEO needs to give investors clarity as soon as it is possible. Resolution through the criminal justice system is very slow and cancellation of those shares could be years away. The immediate positive is that there are no longer large sells on a daily basis, allowing the share price to grow while waiting for news releases regarding upcoming catalysts.
I'm talking about the "hundreds of millions of shares" that you claim every day belong to Vaccaro. Between Vaccaro and Taieb, there may be enough to materially affect the float.
And I expect that the share count will go down by 200 million or more when the Vaccaro criminal group gets convicted, whenever that might occur.
This Q needs to be on time, I'm sure Hagen realizes that.
The CEO has set the expectations high for a big jump in sales. Hagen said that POTN would "handily" beat 2018. Since Q1 was slightly lower, we can expect Q2 to more than make up for Q1. The new salesforce will drive revs to 8-9 million IMO. This should be an interesting 2 weeks.
Keep in mind that the courts have been taking a serious look inside the whole Sign and Drive situation for the last several years during the court case, so the FBI knows all about Vaccaro's involvement in that. All told, this could result in forgiveness of most of POTNs debt and return of a significant percentage of shares in a best case scenario. I have no idea how long it takes or when shareholders will get some clarity, though.
I have never known of a situation such as this in which a large shareholder and former officer committed crimes related to his ownership and manipulation of shares. Any SEC expert attorneys on this board?
Let's hope we clarity next week with earnings, it is time for Hagen to enlighten shareholders.
When the dust settles, POTN will come out a much better company free of all of these criminals and grifters IMO, with high quality products and rapidly growing revenues. I also want to point out that the CEO Hagen, from the minute he took over a year ago, has fought to get shares registered with the SEC. It took a year of hard work until he succeeded, but POTN IS fully reporting now.
Here is a summary of Vaccaro's involvement by Cashcollections, and you can see that POTN REFUSED to pay him at the conversion rate he wanted.
Original promisory notes was dated June 2 2014 between Sunrise Auto Mall and David Grey
On July 1 2015 David Grey sold the prom note back to Charles Vacarro for $250k?
Same date the company (SND) assumed liability for the note...meaning CV not only the owner but now lender to Sign and Drive
July 18 2016 CV sold 25k of the debt to Southridge
July 25 2016 Southridge converted $3,300 dollars for 3,882,353 shares of common stock. Those were later sold in July 2017
Jan 30 2017 and again in April 2017 Southridge attempts to convert $4,161.64 of principal for 2,972,600 shares but were refused
Merger occurred on March 3, 2017 essentially isolating the 25k from the new companies share structure (POTN).
CV then retired the remaining debt in exchange for the right to receive over 577M shares of POTN.
The debt with Southridge isn't the problem, somehow CV is the controlling owner of the company, and he was the one that received the 25M share conversion early in 2018 in exchange for 300k off the debt.
The share retirement/conversion to preferred is to shift CV's common stock to preferred.
At this point the debt remains on the books since not all of those shares have been issued to CV. It appears that POTN is trying to pay him down so the liability goes away. For that to happen he has to agree to the conversion to preferred and also waive rights to convert back to common stock.
I would guess that the settlement conference was cancelled because Vaccaro is suing with the group that lost their bid for summary judgement, and the whole group is under investigation. This bodes well for POTN, IMO.
You need PACAR access, but here is the summary
POTN won the COURT CASE against Southridge: Summary Judgement denied for Southridge
Summary:
https://www.law.com/ctlawtribune/almID/1559881281CT317cv19/
"PotNetwork agreed to treat Southridge as a party to Note 2 with all the rights of, in place and stead, of SND."
"PotNetwork objected to use of the conversion formula contained in the STA rather than the conversion formula contained in Note 2."
"The April amendment calculated the conversion using the STA conversion formula and based the calculation on the January stock price. PotNetwork did not honor this April letter because it was an unreasonable and untimely “amendment” to the January Second Conversion Notice; it used the wrong stock prices for calculating the conversion; and it used the wrong formula for calculating the conversion."
Southridge lost the trial. They will get nothing. Show a link proving that pacer was wrong.
POTN is NOT under investigation, read the arrest warrant. Several large shareholders have been arrested, which will affect share structure most likely in a beneficial way for shareholders. The warrant made it clear that neither the CEO of the company is involved.
CBD is going to be the biggest moneymaker for Cronos over the next several years they say.
Cronos reported today- tripled Q2 2018. The cannabis sector is about to fly, tech is overbought. Let's see some great numbers from POTN and the sky is the limit.
Exactly what I would like to see- on time this of all quarters.
I hope that the Vaccaro gang scam brings attention to the crooked actions of MM's and the process gets more oversight going forward. This and legalization of bank money flowing into cannabis stocks will help legitimize the industry and the small company stocks.
In the case of POTN, this means automatic debt removal and share retirement, a wonderful thing.
I am hoping to see a PR- on time- with Q2 earnings combined with clarity on the shareholder fraud. The Q2 disclosure should have updated data on shareholders, revised numbers of shares, unknowns due to indictments of criminal shareholders etc..
Seriously? CVSI recently uplisted to OTCQB from OTCPINK after resolving their SEC problems and debt problems. POTN is following their trajectory IMO, having now SEC registered and resolved the Vaccaro debt problem. POTN is currently at about half their revenue level. Look at the CVSI chart over the last 1.5 years and see the POTN potential for multiplying valuation 5-10 fold.
Looking at the numbers of POTN in comparison to CVSI who reported earnings today- CVSI revs for Q2 were $16 million and their market cap is 450 million. POTN revs will be around 8 million and their market cap is 45 million. POTN should be at least 5X higher at .30 and growing. IMO we will see the rise starting soon with the Q2 earnings report. An announcement of a new national distribution chain will drive this to .60.
Vaccaro would have squealed on Hagan in a nanosec if there was anything to say, anyway, the speculators have it backwards.
Do your OWN DD people, don't believe me or anybody on this board- the filings are here.
https://www.otcmarkets.com/stock/POTN/disclosure
I have repeatedly provided that link over the last 2 days.
Don't tell me- now the FBI lies to the public to cover up Hagen's crimes, only so that Hagen can continue to scam shareholders. Unbelievable.
LITERALLY the arrest warrant says that the CEOs didn't know and the companies aren't involved.
PLEASE provide a link to these wild claims.
It is all public- everyone found out about Vaccaro weeks ago.
Have you ever dealt with the FBI? The LAST thing they are concerned about is saving the rep of a criminal, particularly one who has scammed millions of share holders. If they had evidence, Hagen would have been arrested.
People who have been arrested and indicted cop pleas in return for lighter sentences, not innocent people, give me a break!
There is no evidence that these shares are on the open market at this time, and ZERO evidence that Vaccaro or Taeib own (or owned) them.
$9 million if Hagen's claim that 2019 will "handily beat" 2018 revenues.
Your claims of Hagen handing over shares to Vacarro is speculation, actually untrue. See the link I just posted.
And this was GREAT news- the arrest of several large shareholding criminals that were selling into every rally. No more dilution. The current CEO is granting restricted shares to private equity firms at a value of 0.45 in exchange for loans. Onward and upward from here!
Get the facts here from OTC market most recent Q report disclosures:
https://backend.otcmarkets.com/otcapi/company/financial-report/220936/content
Go to Disclosures at this link and you can see the entire list of shares granted for the last few years. As I said yesterday, 21 million unrestricted were granted since Hagen took over, most to Private Equity firms. The rest were restricted. IMO Hagen has a plan to use the new unrestricted shares in an upcoming deal, we will see. Do your own DD rather than automatically believe FUD posted on this board.