By: gusjarvis
16 Feb 2010, 01:23 AM EST
Rating: Rate this post: Msg. 912489 of 912490
Jump to msg. #
showme's letter, great stuff, and letters like this
can be added as evidence, so it would be great if anyone who has evidence to put it in a letter if you want to be apart of this. Some of these questions will be added to a demand letter to kotz coming out very soon. It will be our next direction and will try and force many to answer our question. If this wasn't a sting then we want action immediately on those that are not named:
cmkxdiamonds
DIAMOND JEDI WARLORD
UNBELIEVABLE PRESSURE & STATE COORDINATOR CALLOUT
« Thread Started Yesterday at 11:12am »
--------------------------------------------------------------------------------
guys/girls we are applying so much pressure right now but i believe we can hurt them really hard with one little move right now..a few of us have been using that congress.org website and its helping get our story out but yesterday i found out how we truely are being sensored and they are letting out only what they approve...the reason i say this is because Showme wrote an awesome letter and i got it up on the site only for it to be taken off within the hour..touched a nerve i guess right...so i tried again..got the letter up and within a half an hour the link to the letter was broken...pretty strange??Showme's letter definately touched a nerve...so here we are today i think we should send out a ton of Showme's letter to everyone possible...you can send it to your senators you can also all bombard the same letter right back onto congress.org website...i think the letter is really hurting most...so i ask of everyone who has 10 minutes of computer time to help get this letter everywhere...its very well written and tells nothing but the truth...lets help Gus and Al apply this pressure to force this war to an end....
here's Showme's letter..
My sincere hope is that the SEC’s Complaint and DOJ’s indictment will eventually include the broker/ dealers who helped the Defendant’s sell their shares. I’m obviously not a securities lawyer; but, here is my reasoning:
Referencing the SEC's original Complaint (Case 2:08-cv-00437, dated 04/07/2008) and the DOJ's recent indictment (Case 2:09-cr-00132-RJJ):
• The SEC and DOJ claim John Edwards and the other Defendants sold 425.29 Billion unregistered shares.
• The DOJ's indictment claims that John Edwards sold his shares at an average price per share of $.00021. (Document 7, Page 23, DOJ Indictment)
• But, the DOJ's indictment, document 7, page 7 & 25, also claims the "average" share price to the final investor was $.00071.
• This means that someone else was pocketing the share price difference of $.00071 - $.00021 = $0.0005, as their profit, on average, for every share the Defendant's sold.
• 425.29 Billion Shares, at an average sales price of .00071 per share, means the expected total shareholder losses should have been $301,955,900 ($301 million), not the $60 million as noted in the SEC's Complaint and the DOJ's indictment.
• $0.0005 times 425 billion shares means someone else, not John Edwards and the Defendants, pocketed the $212,500,000 ($212.5 Million) difference.
• Neither the SEC nor the DOJ talk about how the Defendants' CMKX shares made it into the OTCBB/ NSCC's electronic trading systems, let alone be available for the participating brokerage firms, such as Ameritrade and eTrade, to facilitate the selling of the 425 Billion unregistered CKMX Securities.
• According to the Stockpatrol.com article, dated June 25, 2004, no brokerage firm had ever filed a Form 211, registering as a Market Maker for CMKM Diamonds. http://www.stockpatrol.com/article/key/cmkm
• In accordance with the OTCBB own rules: “Only Market Makers can apply to quote securities on the OTCBB”. http://www.otcbb.com/issuerinformation/issuerinfo.stm The same is true for quoting on the Pink Sheets. http://www.pinksheets.com/pink/otcguide/issuers_getquoted.jsp
• In order for CMKM Diamonds to legitimately issue and sell their shares via the OTCBB or Pink Sheets, one or more Brokers should have filed as the company's official Market Maker(s)... if for no other reason than to sell the company's own initial offerings.
• Moreover, without a registered Market Maker, there should be no way for an issuing company (in this case, CMKM Diamonds) to get their shares into the OTCBB or Pink Sheets Electronic OTC Markets in the first place.
In other words, with no Market Maker filing a Form 211, there never should have been any CMKM Diamonds (CMKX) shares trading via the OTCBB or Pink Sheets, ever!
That in itself should have been a huge Red Flag to the SEC... back when Billions of CMKX Shares were trading on a daily basis, if not before!
• Under Rule 15c2-11 -- Initiation or Resumption of Quotations without Specified Information, General Rules and Regulations, promulgated under the Securities Exchange Act of 1934, it is illegal for a broker/ dealer to issue a quote without first researching the company and obtaining certain information, in order to prevent “fraudulent, deceptive or manipulative practices”. http://www.law.uc.edu/CCL/34ActRls/rule15c2-11.html http://www.gopublicusa.com/whatis15c211.html The beginning of the rules reads as follows:
o “As a means reasonably designed to prevent fraudulent, deceptive, or manipulative acts or practices, it shall be unlawful for a broker or dealer to publish any quotation for a security or, directly or indirectly, to submit any such quotation for publication, in any quotation medium (as defined in this section) unless such broker or dealer has in its records the documents and information required by this paragraph”… “and, based upon a review of the paragraph (a) information together with any other documents and information required by paragraph (b) of this section, has a reasonable basis under the circumstances for believing that the paragraph (a) information is accurate in all material respects, and that the sources of the paragraph (a) information are reliable.”
o In accordance with the above paragraph, the information the Broker/ Dealers are expected to obtain from the Securities Issuer/ Company includes:
A Prospectus specified by Section 10(a) of the Securities Act of 1933
A copy of the offering circular provided for under Regulation A under the Securities Act of 1933
A copy of the Company’s (issuer's) most recent annual report filed pursuant to Section 13 or 15(d) of the Act
Company information that, since the beginning of its last fiscal year, the issuer has published pursuant to Rule 240.12g3-2(b)
16 additional items of information that further describe the nature of the issuer’s business, types of securities, business location and state of incorporation, their transfer agent, the name of the chief executive officer and members of the board of directors, and the relationship of the broker/ dealer to individuals affiliated with the company.
• As the SEC and DOJ have clearly stated, no such documentation from CMKM Diamonds existed! There was no way a market maker could have obtained this information.
• In my opinion, by not filing a Form 211, and registering as a market maker for CMKM Diamonds, brokers were trying to remove themselves from their fiduciary obligations under Rule15c2-11. (see explanation of rules: http://www.pinksheets.com/pink/otcguide/brokers_211.jsp)
• It's very apparent to me that the 74 (plus?) brokers who made commissions selling CMKX securities (and outright profits from the price they paid the Defendants verses the price they sold to their clients?), did so by invoking the 211 Exceptions for facilitating Unsolicited Quotes.
• From a legal standpoint, the Brokers could claim this exemption only if they were fulfilling a specific client request. E.g. At least 425.29 Billion shares worth of individual client requests…
• Here copied below is an explanation of the Unsolicited Quotes Exemption from the Pink Sheets web site. http://www.pinksheets.com/pink/otcguide/brokers_index.jsp
Unsolicited Quotes
SEC Rule 15c2-11 provides an exemption to filing a Form 211 with FINRA for brokers that wish to publish an unsolicited quote. An unsolicited quote represents a customer order and not a market maker's own position and must be removed from the system once the customer order is executed. Compliance with this rule is monitored by FINRA.
Federal securities laws require an issuer making a public offering of securities to file a registration statement with the Securities and Exchange Commission containing certain disclosures regarding the issuer and its securities. Pink OTC Markets has become increasingly concerned that the unsolicited quote exception in Exchange Act Rule 15c2-11 is being abused by unscrupulous individuals to engage in questionable and possibly fraudulent activities in violation of the federal securities laws. Pink OTC Markets, as a matter of policy, does not believe that the Unsolicited Quote Exemption should be used to circumvent FINRA's 211 process. As a result, effective February 6, 2006, Pink OTC Markets is limiting the publication of unsolicited quotes to securities of seasoned issuers only. A seasoned security is generally defined as a security for which there has previously been a public market or a security of an issuer that has other seasoned securities.
Who, after reading this Pink Sheets comment, and considering the time line, doesn't think CMKX played a significant role in this rule change? And yet, we didn’t see a complaint from the SEC until April of 2007, nor the indictment from the DOJ until just a few months ago.
Clearly, there were many opportunities – with at least 60 separate issuances, and plenty of evidence, for the Brokers and the SEC to put a stop to this nonsense, well before the end of 2005. Instead, they all chose to ignore the obvious. Without the Brokers’ help, John Edwards could not have gotten his shares into the OTC’s electronic trading systems... and there was too much of a financial upside for the Brokers to quit facilitating the sale of the obviously fraudulent shares.
With that in mind, I hope the reason this is considered a “Complex Case”, that will not go to court for another year - apparently, is that this case has to include the Brokers who were using fraudulent, deceptive and manipulative practices to deceive their clients on the true nature of CMKM Diamonds and the source of their CMKX securities!
So, in summary, I’ll say it again, I don’t think this case is so much about John Edwards and his Pump and Dump Scam, as it is about his enabling the Brokers to sell and make a much larger profit on selling unregistered securities on a massive scale… and then probably Naked Shorting on top of all that. So long as the SEC turned a blind eye, there was no down side for them.
As Deep Throat is alleged to have told Bob Woodward..."Follow the money". In our case… which Brokers financially benefited from selling John Edwards' shares??? Well, below is a list of brokers, dealers, and market makers that are known to have sold CMKX shares to their clients.
ADP, COSI, BROWN BROS, CITIGROUP, GMP SECS**, JAMESBLACK, MARSCO INV, NBC SEC., RAYMOND**, STERNE AG, ALPINE SEC, BROWN COLLC, CREST INTL, GOLDMAN, JEFFERIES, MERRIL, NFS LLC, RBC/DOMN**, SWISS AME, AMERITRADE, BUTLERWICK, DAVENPORT, GOLDMAN LP, JMS LLC, MERRIMACK, NRTHRN TR, RELIANCE, TD WATER**, ASSENT LLC, CAN DEP**, E*TRADE, GS I'NATL, JPMCBNA, ML SFKPG, PENSON FIN, RESEARCH**, UBS FINAN, BANC OF AM, CANACORD**, EDWARDS AG, H&R BLOCK, LAURENTI**, MLPCC/PAX1, PENSON**, SEI PRIVAT, UBS SECLLC, BANK OF NY, CIBCWRLD**, 0371 ELARKIN CO, HG WELLGTN, LEGENT LLC, MORGAN STN, PERSHING, SSB&T CO, US BANCORP, BEAR STERN, CITI/LMWW1, FIMAT PREF, HSBCSECS**, LPL CORP., MSDW INC., PIPER JAFF, SSB/FRANK, WACHTEL&CO, BNP PARIB, CITIBANK, FRST CLEAR, IBT/IN CUS, MAN SEC, N AMER COR, PRIMEVEST, STEPHENS WELLS LLC, WM FRANKEL, ZIV INVSMT.
The whole point of Rule 15c2-11, and the 1934 Securities and Exchange Act in general, was to provide transparency to prevent this type of fraud… yet, these brokers, dealers, and market makers, knowingly or unknowingly, played a major role, and managed to help facilitate the CMKX fraud on the grandest of scales! They did so by not performing their due diligence under Rule 15c2-11, and instead falsely applying the Unsolicited Quotes Exemption… knowing full well that they could not have legally sold CMKX securities by following the requirements of Rule 15c2-11.
This case should not be treated trivially… Is there any other documented case of a company having sold 425.29 Billion unregistered shares into the securities market, through at least 60 separate illegal issuances, without the assistance of a registered Market Maker, and still manage to sell the shares via a legitimate US Based electronic securities trading exchange????
Now, let’s talk about Naked Short Selling for a moment. I’ve mentioned in virtually every email I have sent that the current CMKM Diamond’s Management Team has commented, on more than one occasion, and as recently as this year, that CMKX Securities were also Naked Short Sold (NSS) at significant levels. They have also asked the SEC to force the broker/ dealers to open their books so that can be confirmed. To the best of our knowledge, that has never happened. Let me try to make the case why the SEC and DOJ should force the above brokers to open their books.
Starting in 2003, the management team of CMKM Diamonds tried to make a case that CMKX Securities were being Naked Short Sold. The SEC argues that this was a strategy by Urban Casavant and John Edwards to keep the heat off of their own Pump and Dump activities. Perhaps that is true. But, that doesn’t also mean Naked Short Selling didn’t occur. In fact, once the brokers, dealers, hedge funds and others realized this was a company that was set up to fail, those with less than stellar character would have also realized that there was little to no down side in naked short selling. E.g. selling additional CMKX Securities without first locating and either borrowing or buying CMKX Securities before selling them to their clients or buyers. Once the company was delisted or bankrupt, they would no longer be on the hook to cover.
Is there evidence to support this claim? I think there is.
First, CMKX Shareholders organized and formed a Task Force to oversee a Cert Pull, so that we could verify the legitimacy of the CMKX shares we were all holding. As the SEC very well knows, the DTCC ran out of certificates, and many brokers refused to deliver the paper securities. Some brokers even tried to eliminate their clients’ CMKX shares from out of their accounts. Moreover, most of the CMKX shares sold overseas were never counted. Still, the shareholder count managed to get to 622 Billion shares, before it was stopped. The SEC and DOJ have only accounted for 425.29 Billion unregistered shares. Without a registered market maker to sell the company’s legally issued shares, where did these other 197 Billion shares come from? (e.g. 622 Billion discovered via the Cert Pull minus 425 Billion illegally issued by the Defendants)
In addition, during the SEC’s hearings that resulted in the company being delisted, CMKM Diamonds’ current attorney, Bill Frizzell's, had publicly stated that he thought 1.2 Trillion shares were illegally introduced into the market. In part, we were told the estimate was based on the short fall of CMKX Certs for investors during the cert pull, and the number of shareholders who did not participate in the cert pull. In addition, other CMKX Shareholders have noted that the Dividends originally given out for the CIM Stock, suggests the NSS number might be as high as 1.47 trillion CMKM Shares.
But, even without Frizzell’s or the CIM Dividend numbers, we still have the additional 197 Billion shares left unaccounted for. Perhaps that is the actual NSS number – or at least those that can be documented.
In that case, 622 Billion shares times an average pps of $.00071, means total shareholder losses would be $441,620,000 ($441 million)... of which $139,870,000 (~$140 Million) would be due to illegal Naked Short Selling (NSS), and the remaining $301,750,000 ($301 Million) from the sale of the Defendant's unregistered shares.
Of course, we know the naked short number is higher than this, because not all CMKX Shareholders participated in the Cert Pull or were able to get their Certs from their brokers… especially overseas buyers.
That’s all I have for now. Once again, I sincerely hope the SEC and the DOJ will address these concerns in their upcoming complaints, indictments and court cases, and bring a case against the brokers who made a market in CMKX Securities, and illegally profited at shareholder expense, in violation of the real intent of Rule 15c2-11, or any other relevant securities violations.
News 
Market Data 
Discover 
AI
