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Shares Undervalued -- Share Re-purchase
And the hits just keep on coming.
Continue to watch with Interest
Looks like we are in the final blow-off top innings for precious metals too. Not sure how long that will last.
Lumber (as a commodity) looks very interesting from Abitibi's bid for Fibrek. I guess tonight's the dealine, unless it is extended.
Maybe Abitibi, Fibrek, West Fraser and Tembec should just merge and get it all over with. Flaherty said the industry was to be re-structured -- of course these guys justify it as in the "public interest" to use illegal naked shorting and Credit Default Swaps to get their own way.
Also, watching the Dynegy situation too.
Out for now - best wishes for 2012 to all fellow posters.
2231264067500001225
Abitibi to Buy Fibrek (lovely)
In the event board is kaput -- will post under Dynegy. We have a lot in common with Dynegy Bondholder Legal Interests.
In light of Tembec sale today -- it looks like WFT will pick them up in due course. But would not rule out Abitib just yet -- cause sale was in BC. And Tembec appears to be going to the secondary market for financing on their 190 million cogen-project.
Resolute Forest Products plans take-over bid for Fibrek
November 28th, 2011 | Posted in Mill Sales/Transfers | No comments »
Resolute Forest Products (previously known as AbitibiBowater) intends to make a formal take-over bid to acquire all of the issued and outstanding common shares of Fibrek Inc.
“The acquisition of Fibrek is consistent with our strategy,” stated Richard Garneau, President and Chief Executive Officer. “As we continue to focus on building a sustainable and profitable Company, growth in expanding global pulp markets is the right move, at the right time, for Resolute Forest Products. The range of optimization opportunities that we expect from this acquisition will, over time, deliver increased value to our shareholders.”
The offer would contemplate that holders of Fibrek shares could elect to receive, for each Fibrek share:
Cash and Share Option: C$0.55 in cash and 0.0284 of a Resolute share
Cash Only Option: C$1.00 in cash (subject to proration, as described below)
Shares Only Option: 0.0632 of a Resolute share (subject to proration, as described below)
The maximum amount of cash available will be approximately C$71.5 million and the maximum number of Resolute shares to be issued will be approximately 3.7 million shares. For purposes of calculating the applicable proration, the maximum cash available and the maximum shares available will first be reduced by the amounts necessary to fully satisfy the Cash and Share Option. The Cash Only Option and the Shares Only Option will each be subject to proration in the event aggregate elections exceed the remaining cash or the remaining shares, respectively. If proration applies, the remaining consideration will be delivered in Resolute shares if the Cash Only Option is prorated, or in cash if the Shares Only Option is prorated.
The offer will contain customary conditions for transactions of similar nature, including, among others, a 66?% minimum tender condition, waiver or termination of all rights under any shareholder rights plan(s), receipt of all regulatory, governmental and third-party approvals, consents and waivers, Fibrek not having implemented or approved any issuance of shares or other securities or any other transaction, acquisition, disposition, capital expenditure or distribution to its shareholders outside the ordinary course of business, and the absence of occurrence or existence of any material adverse effect or material adverse change.
Resolute has entered into lock-up agreements with three significant shareholders of Fibrek, including Fairfax Financial Holdings Limited and Pabrai Investment Funds, holding, directly or indirectly, an aggregate of 59,502,822 Fibrek shares (representing approximately 46% of Fibrek’s issued and outstanding Common Shares). Under the Lock-up Agreements, each of the locked-up shareholders has agreed to tender, or cause to be tendered, all of its Fibrek Common Shares to Resolute’s offer, subject to certain conditions. The Lock-up Agreements provide, among other provisions, that Resolute commence a formal take-over bid on or before December 30, 2011, provided certain conditions are satisfied, including there not having occurred any material adverse change with respect to either Resolute or Fibrek. Under the Lock-up Agreements, which are being filed with the U.S. Securities and Exchange Commission (the “SEC”), also available on the Canadian SEDAR filing system, the Locked-up Shareholders have no ability to withdraw any Fibrek Common Shares to tender to or facilitate any competing transaction.
The offer represents a premium of approximately 39% over the closing price of Fibrek’s shares on November 28, 2011, and a premium of approximately 31% over the volume-weighted average trading price of the shares on the TSX for the 20 trading days ending on that date.
Full details of the offer will be included in the formal offer and the take-over bid circular to be filed with the securities regulatory authorities and mailed to Fibrek shareholders.
Based on Fibrek’s public disclosure, it has 130,075,556 issued and outstanding Common Shares (on a non-diluted basis), valuing the offer at approximately C$130 million, or approximately US$126 million. Resolute currently owns no Fibrek Common Shares.
BMO Capital Markets is acting as financial advisor to Resolute, while UBS is acting as financial advisor to a special independent committee of the Board of Resolute.
Source: Resolute Forest Products
About Fibrek
Fibrek is a leading producer and marketer of high-quality virgin and recycled kraft pulp. The company operates three mills located in Saint-Félicien, Québec, Fairmont, West Virginia, and in Menominee, Michigan with a combined annual production capacity of 760,000 tonnes. Fibrek has approximately 500 employees. The Saint-Félicien mill provides northern bleached softwood kraft pulp (product known as NBSK pulp) to various sectors of the paper industry mainly in Canada, the United States and Europe, for use in the production of specialized products. The Fairmont and Menominee mills manufacture air-dried recycled bleached kraft pulp (product known as RBK pulp) and primarily supply manufacturers of fine uncoated paper, tissue paper for commercial and industrial uses, and coated paper in the United States
Let more Ch. 11 Games begin
Look at document # 92. from Dynegy Case
http://dm.epiq11.com/DHL/docket/Default....
Just simply cannot see that Judge Morris would dismiss the ch11 filing due to the alleged FC. Judge Morris would really need to get the FC issue settled one way or the other.
Frankly, this looks like a really bold move on PSEG's part.
Here is the introduction from the 40-page filing.
>> INTRODUCTION
This Court should dismiss the Debtors’ bankruptcy cases because the Debtors have
fraudulently and without good faith manufactured an artificial insolvency in an effort to impose
the limitations of section 502(b)(6) of the Bankruptcy Code upon a handful of the Debtors’
creditors. In In re Integrated Telecom Express Inc., 384 F.3d 108, 115 (3rd Cir. 2004), the Third
Circuit ordered the dismissal of a bankruptcy petition in strikingly similar circumstances. The
Third Circuit’s reasoning is directly applicable to these cases, and this Court should follow
Integrated Telecom and dismiss the Debtors’ bankruptcy cases.
The Debtors’ commencement of these chapter 11 cases is the most recent step in a
scheme orchestrated by non-debtor Dynegy Inc. and its other non-debtor affiliates (collectively
with the Debtors, “Dynegy”), along with certain members of the “Control Group.”2 Dynegy Inc.
and certain members of the Control Group have fraudulently stripped value from the Debtors,
and in particular Dynegy Holdings, for the benefit of Dynegy Inc. and its equity holders—and
thereby created an artificial insolvency. They seek to exploit that artificial insolvency to take
unfair advantage of section 502(b)(6)’s cap on certain lease rejection damages. Dynegy Inc.’s
scheme, if successful, would turn the Bankruptcy Code on its head by allowing Dynegy Inc. to
extract and retain much of the value of the Debtors and reap the benefits of the prepetition fraudulent transfers that rendered the Debtors artificially insolvent and caused them to file for
bankruptcy relief in the first instance.
Dynegy Inc. caused the Debtors to file these bankruptcy cases in the wake of three state
court lawsuits, including one filed on November 4, 2011, by the PSEG Entities, all of which
allege that Dynegy and certain members of the Control Group engaged in actual or constructive
fraud when they rendered Dynegy Holdings artificially insolvent by engaging in a restructuring scheme designed solely to benefit Dynegy Inc. and its shareholders, including Icahn Capital and Seneca, at the expense of Dynegy Holdings and its creditors.3 <<
Lumber Up Now -- PPT having 1a tough time
The Entire System Has Been Utterly Destroyed By The MF Global Collapse" - Presenting The First MF Global Casualty
Submitted by Tyler Durden on 11/17/2011 14:19 -0500
• Barack Obama
• Bond
• Cronyism
• MF Global
• Reality
Presented without comment, merely to confirm that the market as we know it, no longer exists.
BCM Has Ceased Operations (source)
Posted by Ann Barnhardt - November 17, AD 2011 10:27 AM MST
Dear Clients, Industry Colleagues and Friends of Barnhardt Capital Management,
It is with regret and unflinching moral certainty that I announce that Barnhardt Capital Management has ceased operations. After six years of operating as an independent introducing brokerage, and eight years of employment as a broker before that, I found myself, this morning, for the first time since I was 20 years old, watching the futures and options markets open not as a participant, but as a mere spectator.
The reason for my decision to pull the plug was excruciatingly simple: I could no longer tell my clients that their monies and positions were safe in the futures and options markets – because they are not. And this goes not just for my clients, but for every futures and options account in the United States. The entire system has been utterly destroyed by the MF Global collapse. Given this sad reality, I could not in good conscience take one more step as a commodity broker, soliciting trades that I knew were unsafe or holding funds that I knew to be in jeopardy.
The futures markets are very highly-leveraged and thus require an exceptionally firm base upon which to function. That base was the sacrosanct segregation of customer funds from clearing firm capital, with additional emergency financial backing provided by the exchanges themselves. Up until a few weeks ago, that base existed, and had worked flawlessly. Firms came and went, with some imploding in spectacular fashion. Whenever a firm failure happened, the customer funds were intact and the exchanges would step in to backstop everything and keep customers 100% liquid – even as their clearing firm collapsed and was quickly replaced by another firm within the system.
Everything changed just a few short weeks ago. A firm, led by a crony of the Obama regime, stole all of the non-margined cash held by customers of his firm. Let’s not sugar-coat this or make this crime seem “complex” and “abstract” by drowning ourselves in six-dollar words and uber-technical jargon. Jon Corzine STOLE the customer cash at MF Global. Knowing Jon Corzine, and knowing the abject lawlessness and contempt for humanity of the Marxist Obama regime and its cronies, this is not really a surprise. What was a surprise was the reaction of the exchanges and regulators. Their reaction has been to take a bad situation and make it orders of magnitude worse. Specifically, they froze customers out of their accounts WHILE THE MARKETS CONTINUED TO TRADE, refusing to even allow them to liquidate. This is unfathomable. The risk exposure precedent that has been set is completely intolerable and has destroyed the entire industry paradigm. No informed person can continue to engage these markets, and no moral person can continue to broker or facilitate customer engagement in what is now a massive game of Russian Roulette.
I have learned over the last week that MF Global is almost certainly the mere tip of the iceberg. There is massive industry-wide exposure to European sovereign junk debt. While other firms may not be as heavily leveraged as Corzine had MFG leveraged, and it is now thought that MFG’s leverage may have been in excess of 100:1, they are still suicidally leveraged and will likely stand massive, unmeetable collateral calls in the coming days and weeks as Europe inevitably collapses. I now suspect that the reason the Chicago Mercantile Exchange did not immediately step in to backstop the MFG implosion was because they knew and know that if they backstopped MFG, they would then be expected to backstop all of the other firms in the system when the failures began to cascade – and there simply isn’t that much money in the entire system. In short, the problem is a SYSTEMIC problem, not merely isolated to one firm.
Perhaps the most ominous dynamic that I have yet heard of in regards to this mess is that of the risk of potential CLAWBACK actions. For those who do not know, “clawback” is the process by which a bankruptcy trustee is legally permitted to re-seize assets that left a bankrupt entity in the time period immediately preceding the entity’s collapse. So, using the MF Global customers as an example, any funds that were withdrawn from MFG accounts in the run-up to the collapse, either because of suspicions the customer may have had about MFG from, say, watching the company’s bond yields rise sharply, or from purely organic day-to-day withdrawls, the bankruptcy trustee COULD initiate action to “clawback” those funds. As a hedge broker, this makes my blood run cold. Generally, as the markets move in favor of a hedge position and equity builds in a client’s account, that excess equity is sent back to the customer who then uses that equity to offset cash market transactions OR to pay down a revolving line of credit. Even the possibility that a customer could be penalized and additionally raped AGAIN via a clawback action after already having their customer funds stolen is simply villainous. While there has been no open indication of clawback actions being initiated by the MF Global trustee, I have been told that it is a possibility.
And so, to the very unpleasant crux of the matter. The futures and options markets are no longer viable. It is my recommendation that ALL customers withdraw from all of the markets as soon as possible so that they have the best chance of protecting themselves and their equity. The system is no longer functioning with integrity and is suicidally risk-laden. The rule of law is non-existent, instead replaced with godless, criminal political cronyism.
Remember, derivatives contracts are NOT NECESSARY in the commodities markets. The cash commodity itself is the underlying reality and is not dependent on the futures or options markets. Many people seem to have gotten that backwards over the past decades. From Abel the animal husbandman up until the year 1964, there were no cattle futures contracts at all, and no options contracts until 1984, and yet the cash cattle markets got along just fine.
Finally, I will not, under any circumstance, consider reforming and re-opening Barnhardt Capital Management, or any other iteration of a brokerage business, until Barack Obama has been removed from office AND the government of the United States has been sufficiently reformed and repopulated so as to engender my total and complete confidence in the government, its adherence to and enforcement of the rule of law, and in its competent and just regulatory oversight of any commodities markets that may reform. So long as the government remains criminal, it would serve no purpose whatsoever to attempt to rebuild the futures industry or my firm, because in a lawless environment, the same thievery and fraud would simply happen again, and the criminals would go unpunished, sheltered by the criminal oligarchy.
To my clients, who literally TO THE MAN agreed with my assessment of the situation, and were relieved to be exiting the markets, and many whom I now suspect stayed in the markets as long as they did only out of personal loyalty to me, I can only say thank you for the honor and pleasure of serving you over these last years, with some of my clients having been with me for over twelve years. I will continue to blog at Barnhardt.biz, which will be subtly re-skinned soon, and will continue my cattle marketing consultation business. I will still be here in the office, answering my phones, with the same phone numbers. Alas, my retirement came a few years earlier than I had anticipated, but there was no possible way to continue given the inevitability of the collapse of the global financial markets, the overthrow of our government, and the resulting collapse in the rule of law.
As for me, I can only echo the words of David:
“This is the Lord’s doing; and it is wonderful in our eyes.”
With Best Regards-
Ann Barnhardt
Thanks for the comment (attached)
I noticed a couple of links on the subject (below). Had trouble with the forest talk link -- so the information is below.
AbitibiBowater’s compensation package for their new Chief Financial Officer
November 16th, 2011 | Posted in Misc. | 1 comment »
Jo-Ann Longworth took over the position of Senior Vice President and Chief Financial Officer of AbitibiBowater (now Resolute Forest Products) when William G. Harvey stepped down from the position on August 31, 2011.
In AbitibiBowater’s recent quarterly statement, Longworth’s salary and Harvey’s compensation were made public.
William G. Harvey’s Severance
William G. Harvey resigned from his position of Chief Financial Officer as of August 31, 2011.
Terms of departure include:
Severance Pay = $1,303,681.44
Retroactive Pay = $42,000
+ Vacation Pay (for all accrued but unused vacation time + 12% of base salary earned in 2011)
+ Short Term Incentive Plan Bonus pro-rated for 2011
+ Long Term Incentive Plan Bonus
As a condition of receiving the severance pay, Harvey agreed to waive all claims against the company, except the following amounts:
$252,268 for regular and synergy bonuses pursuant to the 2008 Annual Incentive Plan
$133,279 related to the Executive’s relocation process following the Abitibi/Bowater Merger (without any admission from the Company that the Executive did relocate to Canada)
$135,000 for education allowance
$10,208.19 for reimbursement of tax penalty
Each of these will be settled, if and when allowed, to the extent provided in accordance with applicable bankruptcy rules and procedures.
William G. Harvey’s Consulting Agreement
For 7 months after his termination day, Harvey will provide consulting services to the new Senior Vice President and Chief Financial Officer.
Details:
less than 20% of his previous worked hours
Consulting fees: $40,000 / month
Professional fees: not to exceed $10,000
will provide all consulting services from the USA
Jo-Ann Longworth’s Salary and Compensation Package
Annual Base Salary: $350,000 (Canadian funds)
Short Term Incentive Plan: targeted at 100% of base salary for 2011, with opportunity to earn 150%. (overall maximum incentive payout cannot exceed 7% of company’s free cash flow in 2011)
Long Term Incentive Plan: Likely 125% of base salary for 2011 – to be determined by Board of Directors
Pension Plan – Employee contributes 5% of eligible earnings (to a limit of $245,000), Company contributes 20.5% of eligible earnings)
Vacation – 5 weeks a year
Allowance – up to $12,000/yr to cover items such as club membership, fiscal and financial advice, and tax preparation
Annual Medical Examination provided by the company for Longworth and her spouse (up to $1,500 per person)
Parking
Source: AbitibiBowater’s quarterly report for the period ending September 30, 2011
------------------
Old Press releases
December 17th, 2010 | Posted in Financial News | 12 comments »
AbitibiBowater recently announced that David J. Paterson will be resigning from his position as President and Chief Executive Officer of the company, as well as the Board of Directors, effective January 1, 2011.
Richard Garneau, currently a member of the board of directors, will success Paterson.
Now I bet you are wondering what Garneau might earn in his new role? And I bet you would also like to know how sweet Paterson’s exit package was??
Well, here are the numbers:
RICHARD GARNEAU’s numbers:
Annual Base Salary: $765,000
Incentives: Eligible for discretionary incentive award of 50% – 150% of his annual base salary based on performance targets established by the board of directors (expected to be 100% for Garneau)
Pension: Company will contribute 22% of his annual base pay & incentive awards, Garneau will contribute 5%. In 2011, it is expected that Mr. Garneau will be awarded an initial grant equivalent to 225% of his annual base salary.
Severance: If Garneau is involuntarily terminated, he will receive a lump sum payment equal to 6 weeks of his pay (sum of annual base salary and the average of the two last incentive awards paid under an annual incentive plan) for each year he was with the company. If Garneau leaves involuntarily within 2 years, he will receive 3 times his eligible pay (sum of annual base salary and the average of the two last incentive awards paid under an annual incentive plan).
Perquisite Allowance: $16,000 per year
Vacation Time: 5 weeks a year
Club Membership: Yes
Expenses: Reimbursed by the company.
DAVID PATERSON’s Severence
Severance Pay: $1,338,000 (equal to 100% of his base salary, and the average of his last two bonuses)
Restructuring Recognition Award: $765,000
Incentive Award: $430,000 (on July 31, 2011)
Legal Fee and Expenses Reimbursement: max $35,000
Consulting Fees: For the first six months of 2011, Paterson will serve as a consultant to the company, and will be paid consulting fees of $150,000 per month.
Source: AbitibiBowater
Again Thank you.
Thank you for the recent update on Nov. 2nd. All is well (or at least better). Though still very bitter at the overall fraud in the equities and bond markets.
Watching MF Global situation with keen interest, as I believe that there will be many more individuals and firms hurt over this. Not sure where it all stops.
Also watching the Dynegy situation closely. Many similarities with the Abitibi case.
Just wanted to respond before the board disappears (probably around the 7th).
What part of BK do you not understand?
Bon1dholders will want premiums for early settlement. Lawsuits will eat everything away.
If you are in it for a trade -- that's one thing. But1 if you are giving trading advice, then be very careful -- because every board is being monitored now.
It is my understanding that the FBI have already seized documents. And the1re was some reports of people trying to shred documents.
Not saying that if all is good mm's won't run this thing higher, but the BK process will take a long time.
Thanks for the update.
Everything reads with great interest these days. Wondering how Peter's lawsuit is going. Maybe he joined in with the Alabama Group. I had not seen anything in a long while on it.
Right now, enjoying the MF Global and Dynegy stories.
Notice main algorithm programs are holding Abitibi, West Fraser Timer and Tembec pretty much constant.
Unless the PPT (Plunge Protection Team) starts shaking things up, more and more people will come out and say it is all rigged.
Even CNBC is not afraid to have guests on any more saying it is rigged.
Possible fraud on the MF Global situation = co-mingling of dollars and settle at the end of the day. Wonder how their clients feel right now?
All is well now
Fed leant the money to the broker-dealers. Broker-dealers now say thay have MF Client money -- this is after four independendent sources (all of whom have been paid to look at MF's books) have claimed that MF Global used client money.
Notwithstanding a statement from MF Global directly to the CME that clients's money was used for Corporate purposes.
I was WROMG -- a massive cover-up is underway.
Fed cannot not have these knind of allegations floating around.
Diagree -- if JP Morgan
If JP Morgan has a lein and rights to set-off, likely common and most bondholders are royally screwed. Probab1ly was not enough time to acquire CDS for most bh -- so there will likely be a class-action.
FBI is apparently seizing everything. I believe that someone will go to jail over this.
Suicide watch for whoever stole the money from the cookie-jar.
Pitt77 -- If this makes things easier
You should see the naked shorts on MF Global. All the best.
SHAREHOLDER LAWSUIT -- if you still believe that it will do some good -- give these guys a call.
For those who are institutions or invidividuals with losses in excess of $100,000
TRIPP LEVY PLLC Announces Investigation of MF GLobal
NEW YORK--Tripp Levy PLLC is investigating the Board of Directors of MF Global Holdings Ltd. for possible breaches of fiduciary duty and other violations of federal and state law in connection with the bankruptcy and sale of the Company.
The investigation concerns whether the MF Global Board of Directors breached their fiduciary duties to stockholders and violated federal securities laws by engaging in a pattern of behavior and omitting material information concerning the company's true financial condition and hedging bets.
If you own common stock in MF Global and suffered a loss in excess of $100,000 and wish to obtain additional information, please contact us at 877-772-3975 or contact@tripplevy.com
Agree, time is short
Cdn dollar dropping now. November 7th -- New Name. Steelhead IndsiderPurchase? Huh?
WFT and Tembec and Abitibi big lumber names.
All in the name of union busting. Flarhety said publicly that the industry was going to be restructured. Green Transformation Credits are from the Billion that the US Gov't stole from Cdn prodcuers.
If you have lost money, then file a class action. 1It will be the only way to get your money back.
Yesterday on CNBC, Michael Moore was talking about the Wall Street rigged Casino. Things must be really bad in terms of dishonesty -- M.Moore was not even allowed in or around NYSE.
End.
1003113500000410
Agree -- File a Class Action
You are going to be absolutely s1ick to see how high Abitibi (Resolute) goes over the next 8 months, as the derivative unwind gets going.
It's a fraud. It's all a fraud.
See link from CNBC "occupy Wall Street" today.
http://video.cnbc.com/gallery/?video=3000051727
Secrets Of The
Plunge Protection Team
The Four Derivative US Dictators
By Michael Edward
5-13-4
There are just four people who control all of the U.S. markets through their use of dangerous and explosive DERIVATIVES. They are risking the assets and retirement funds of all Americans. Because of their manipulations, especially since 2001, U.S. financial markets are now based on the gambling whims of a special fraternity of Federal Government DERIVATIVE dealers.
This group is known among Wall Street as the Plunge Protection Team (PPT). Their "official" role was to prevent another 1987 "Black Monday". They have the entire U.S. Treasury at their disposal to manipulate the markets through DERIVATIVES (futures options). In other words, they are using the assets behind the U.S. Treasury to rig the prices of commodites (gold, currencies, etc.) and stocks.
This fraternity comprises of Fed Chairman Alan Greenspan, the Secretary of the Treasury, and the heads of the SEC and the Commodity Futures Trading Association. It works closely with all the U.S. exchanges and Wall Street banks, including the largest DERIVATIVE risk holders Citibank and JP Morgan Chase.
Few people are aware of Executive Order 12631 signed by Ronald Reagan on March 18, 1988. In a nut shell, this is the "authority" behind the four dictators and the [sic] "laws" and "regulations" that have backed their casino-style DERIVATIVE gambling spree since 2001. Here are some highlights of this Executive Order to ponder:
Executive Order 12631 - Working Group on Financial Markets - Mar. 18, 1988; 53 FR 9421, 3 CFR, 1988 Comp., p. 559.
"By virtue of the authority vested in me as President by the Constitution and laws of the United States of America, and in order to establish a Working Group on Financial Markets, it is hereby ordered as follows:
Section 1. Establishment. (a) There is hereby established a Working Group on Financial Markets (Working Group). The Working Group shall be composed of:
(1) the Secretary of the Treasury, or his designee; (2) the Chairman of the Board of Governors of the Federal Reserve System, or his designee; (3) the Chairman of the Securities and Exchange Commission, or his designee; and (4) the Chairman of the Commodity Futures Trading Commission, or her designee.
Section 2. Purposes and Functions. (a) Recognizing the goals of enhancing the integrity, efficiency, orderliness, and competitiveness of our Nation's financial markets and maintaining investor confidence, the Working Group shall identify and consider:
(2) the actions, including governmental actions under existing laws and regulations (such as policy coordination and contingency planning), that are appropriate to carry out these recommendations.
(b) The Working Group shall consult, as appropriate, with representatives of the various exchanges, clearinghouses, self-regulatory bodies, and with major market participants to determine private sector solutions wherever possible.
Section 3. Administration. (c) To the extent permitted by law and subject to the availability of funds therefore, the Department of the Treasury shall provide the Working Group with such administrative and support services as may be necessary for the performance of its functions."
Get out of the markets before the inflated DERIVATIVE bubble bursts.
....... Excerpt from the Secrets of the PPT
End
Disagree -- Great Name
Check out the meaning!! Nailied it (imo)
Resolute Employment may put up a fuss, but it should stick.
Wonder how Peter's Lawsuit is coming along.
Former shareholders missed the boat by not filing a class action. After November 7th -- any action will be buried. Too late.
Tembec already telling everyone lumber is going up. Unwind of PPT derivatives is around the corner.
MM's can barely keep lid on Abitibi shares. By mid-Feb -- I think you will see a business combination. Prem said buyout recently,, but I think that is just to play with everyone -- same with the talk about the Catylst merger.
Abo Merger with Catylst Paper?
Wonder who paid for thi1s article to be written on Forest Talk?
Maybe the same guys who are trying to diffuse the conversation about a possible Merger with Tembec?
Irene looks like it will side-swipe US eastern seaboard? Maybe some ST lumber demand.
-----------------------
Could Catalyst Paper merge with AbitibiBowater?
August 23rd, 2011 | Posted in Misc. 1| 3 comments »
Catalyst Paper is seeking to merge with another company, and AbitibiBowater may be the most likely possibility.
That is the topic of Gordon Hamilton‘s analysis of Catalyst Paper in The Vancouver Sun yesterday.
Richard Garneau is an obvious connection between the two companies. Now the president of AbitibiBowater, Garneau is the former president of Catalyst Paper. He was worked at forest company Donohue before Abitibi bought it in 2000.
When Kevin Clarke took over as the CEO of Catalyst Paper last year, he said in an interview that positioning the company for a 1friendly takeover was one of his key objectives.
Catalyst Paper has a excellent fibre sources in British Columbia and is geographically positioned as the largest newsprint producer in western North America, but it has struggled with its debt load that now outweighs the estimated $40 million value of the company’s equity.
Read about Catalyst Paper’s options 72111510275000
End.
-----------------
Here is part of the DTC Info
Any class action lawyer will tell you since they are going back to 2009, then -- the DTC is now in clear admission of illegal activity.
--------------
Non-Confidential
DTCC is now offering enhanced access to all important notices via a new, Web-based subscription service. The new notification system
leverages RSS Newsfeeds, providing significant benefits including real-time updates and customizable delivery. To learn more and to set up
your own DTCC RSS alerts, visit http://www.dtcc.com/subscription_form.php.
To remove your name from the former system of email notifications, send a message to unsubscribe@dtcc.com. 1
#: B0846-11
Date: August 5, 2011
To: All Participants
Category: Settlement
From: Settlement Department
Attention: Settlement Manager/Managing Director/Cashier
Subject: Clean up of Aged Fails in Select Globally Locked CUSIPs
DTC will support a program to facilitate the industry's clean up of aged fails in select globally
locked securities. This notice details the information necessary for firms to participate in this
program, which is scheduled to occur during the period August 15, 2011 through August 19,
2011.
Background
DTC may impose certain restrictions on a security in situations where DTC may become aware of
certain potentially illegal or otherwise questionable features of a security, its issuer or other principal
parties. In addition, DTC may place restrictions when it has been informed by the issuer or its agent,
regulators or law enforcement, or has other compliance concerns that its Cede & Co certificate
inventory has been compromised due to unauthorized, altered, fraudulent or counterfeit share issuance.
If DTC reasonably suspects that all or a portion of its street name holdings of a security, may not be
fungible and freely transferable as required for DTC services, it may decide, with respect to that
security, to chill one or more of its services or place a global lock on all services, as it deems
appropriate.
Impact of a Global Lock and Trade Fails
A global lock on a security prevents the security from being transferred on the books of DTC and
otherwise restricts any DTC activity with respect to the security. For so long as the global lock is in
effect, Participants are unable to settle any further trades in that security, as their inventory is frozen
and settlement of pending trades will fail. If counterparties nevertheless continue to trade in a security
which is globally locked and those trades are submitted to DTC for settlement, those trades will also
fail and be rejected in DTC’s system.
In connection with certain designated CUSIPs (see Exhibit A attached), although DTC issued an
Important Notice to its Participants to advise that the global lock was implemented, many Participants
Non-Confidential 2
did not immediately stop trading in these securities and additional trades occurred, so that firms
experienced a growing number of trade fails.
DTC has been working proactively with the industry to increase awareness of our global lock process,
to eliminate these difficulties in future. DTC also enhanced its procedures to expedite the release of
any Important Notice reflecting a global lock, so firms can promptly halt trading in affected securities.
Additionally, DTC implemented on June 10, 2011 a global lock reason [code] on its security master
file and related outputs (ELIS and DWIZ files - see important notice B-0811-11 dated May 24, 2011 -
http://www.dtcc.com/downloads/legal/imp_notices/2011/dtc/ope/0811-11.pdf) to allow Participants to receive
an automated notification in the event a global lock occurs. This enhancement provides Participants
the ability to update their systems to automatically block future trading of affected securities, as well as
alerting Compliance areas of the Participants so that they may investigate activity related to these
securities.
Despite these improvements, Participants and DTC have a legacy issue of accumulated trade fails that
occurred prior to these enhancements.
Proposed Solution
Working with the Participants, DTC identified a number of options and determined that the preferred
solution is to lift the global lock on designated CUSIPs for a limited period of time, to allow
Participants to take appropriate steps (including any appropriate segregation updates) to make
deliveries that will resolve outstanding fails in the designated CUSIPs. DTC will report all such deliver
orders during the specified period to the Securities and Exchange Commission.
DTC cautions participants that, if a participant were to make or receive deliveries to or from a
party other than the original counterparty or the NSCC assigned counterparty, which resulted in
the fails in the designated CUSIP, change of such counterparty to the transaction likely would be
deemed to be effecting a new transaction.
Securities subject to a trading halt by the Commission will be excluded from this program. The
attached list will be re-verified during the Amnesty period and if any securities are subsequently found
to be subject to a trading halt, they will be excluded at that time and Participants will be informed via a
subsequent important notice.
As to these designated CUSIPs, however, DTC will not lift the related deposit chill. If there are failed
deliveries in these CUSIPs that are dependent upon physical securities held outside of DTC, settlement
of those trades must be effected by physical delivery outside of DTC.
As outlined below, DTC will offer Participants the opportunity to make the necessary updates and
deliveries to complete their failed transactions during a specified limited time period, as follows:
DTC will lift the global lock and the SEG chill on Friday night, August 12, 2011 until
approximately 5:00 PM Friday night August 19, 2011. DTC will maintain chills on other
services including deposits and withdrawals to prevent any unintended transactions from
occurring. This update will permit participants the ability to send in their memo seg
instructions and permit them to segregate or release positions in these securities for several days
in advance of the delivery time period outlined below,
Non-Confidential 3
The Eligible Securities (ELIS) files will systematically reflect the global lock and SEG chill
removals and are typically available to participants between 7:30 PM and 8:00 PM EST each
day.
The Data Delivery Service (DWIZ) change files will also reflect the global lock and SEG chill
removals and are typically available to participants between 9:00 PM and 10:00 PM EST each
day.
In addition, on the evening of August 17, 2011, DTC will also remove the DO chill on all
CUSIPs identified below. This change will also be reflected in the ELIS and DWIZ files
created on the night of August 17, 2011. This will allow all participants to submit deliver
orders to DTC for processing on the next 2 business days, August 18 and August 19, 2011.
Obligation Warehouse (OW) users should include the OW control number on all DOs to ensure
that the settlement status associated with these obligations is updated in the OW.
These CUSIPs will maintain this “unlocked” status until the night of August 19. This will
permit participants to have two business days to process instructions against an ELIS and
DWIZ files that contains the changes to the affected CUSIPs.
DTC will continue to accept MSEG, SEG and Deliver Order and reclaim instructions for all
CUSIPs identified below until the applicable valued cutoffs occur or approximately 5:00 PM on
August 19, 2011.
Prior to the night cycle beginning on August 19, 2011, DTC will restore all CUSIPs to their
original status by reinstating the SEG and DO chills as well as the applicable global locks. Any
future dated transactions or additional input after the status is reinstated, e.g., memo seg, Night
Deliver Orders will reject.
If you have any questions regarding this notice, please contact your Relationship Manager.
Non-Confidential 4
# CUSIP Security Description Symbol Date of Action
1 913513107 UNIVERSAL FOOD & BEVERAGE INC N/A 04/28/11
2 48254P106 KMA HOLDINGS MCDA 04/25/11
3 57059N109 MARKETING CONCEPTS INTERNATIONAL MCCI 04/15/11
4 572356202 MARSHALL HOLDINGS INTERNATIONAL MHLI 04/15/11
5 69372L850 PACEL CORP PCLO 04/15/11
6 81213Y108 SEALIFE CORP SLIF 04/15/11
7 933706103 WANNIGAN CAPITAL CORP N/A 04/15/11
8 936902501 WASATCH PARM INC WSHP 04/15/11
9 08520E103 BERMAN CENTER INC BRMC 03/31/11
10 47188V205 JAVA DETOUR INC JVDT 03/31/11
11 54141Y102 LOGISTICAL SUPPORT INC LGSL 03/31/11
12 74266D303 PROELITE INC PELE 03/31/11
13 98953T107 ZICIX CORP ZICX 03/28/11
14 169382108 CHINA DIGITAL MEDIA CORPORATION N/A 03/18/11
15 37990T100
CHINA MOBILITY SOLUTIONS INC
(NOW KNOWN AS GLOBAL PEOPLELINE)
GPPL 03/18/11
16 554042101 M-WISE INC MWIS 03/18/11
17 71943E100 PHYSICAL PROPERTY HOLDINGS INC PPYH 03/18/11
18 74161T106 PRIMEGEN ENERGY CORP PGNE 03/18/11
19 80917T308 SCORE ONE INC SREA 03/18/11
20 81941R102
PINGCHUAN PHARMACEUTICALS INC
(NOW KNOWN AS SHANDONG ZHOUYAN SEED &
NURSERY)
SZSN 03/18/11
21 98159A100 WORLDWIDE BIOTECH AND PHARMACEUTICALS WWBP 03/18/11
22 003865102 ABSOLUTEFUTURE.COM AFTI 03/03/11
23 12619H100 CO2 TECH LTD CTTD 03/03/11
24 727563108 PLASTICON INTERNATIONAL INC PLNIQ 03/03/11
25 847248200 SPATIALIGHT INC SPLT 03/03/11
26 92922N101 WAMEX HOLDINGS INC WAMX 03/03/11
27 137693107 CANNON EXPLORATION CNEX 02/17/11
28 456635101 IFINITY MEDICAL GROUP IMGR 02/17/11
29 83420E107 SOLEI SYSTEMS, INC. SOLI 02/17/11
30 189098106 CLOUD CENTRIC SYSTEMS INC CLDR 02/03/11
31 86273M100 STRATEGIC MANAGEMENT INC SMPP 02/03/11
32 01551R101 ALGAE FARM USA INC COM ALGF 01/27/11
33 054617105 AXIS TECHNOLOGIES AXTG 01/21/11
34 37950D103
ZCOM NETWORKS INC (N/C TO GLOBAL GATEWAY
MEDIA & COMM)
GGMC 01/21/11
35 422463109 HEATHROW NATURAL FOOD AND BEV HRNF 01/21/11
36 554187104 MACADA INC MCDA 01/21/11
37 670762202
PERIHELION GLOBAL INC N/CTO NY MET
HOLDINGS
NYMH 01/21/11
38 682347208 141 CAPITAL INC ONCP 01/21/11
39 749283206 RBID.COM INC NEW RBID 01/21/11
40 749318101 RCC HOLDINGS INC RCCH 01/21/11
41 78249M603 RUSSELL INDUSTRIES, INC RUSL 01/21/11
42 886352202 TIDALWAVE HOLDINGS INC TWVH 01/21/11
43 71643L107 PETRO AMERICAN CORP PTRZ 11/26/10
44 922576202 VELTREX CORP VLXC 11/15/10
45 05546H102 BIH CORPORATION BIHC 10/01/10
46 749126207 QURI RESOURCES INC QURS 10/01/10
Non-Confidential 5
# CUSIP Security Description Symbol Date of Action
47 076012202 BEDERRA CORP BEDA 09/16/10
48 37364Q104 GEOTEC INC GETC 08/17/10
49 346196108 FOREST RESOURCES MNGMT FTRM 06/11/10
50 849109103 SPONGE TECH DELIVERY SYSTEM SPNG 06/02/10
51 638691105 NATIVE AMERICAN ENERGY NAGP 05/27/10
52 00725F308 ADRENALINE NATION ENTERTAINMENT NA 05/14/10
53 00764K101 AEGIS ASSESMENTS, INC AGSI 05/14/10
54 12507U106 CDI DEVELOPMENTS, INC NA 05/14/10
55 16938L106 CHINA GOLD CORP CGDC 05/14/10
56 29445M103 EQUIPMENT AND SYSTEMS EQSE 05/14/10
57 380795104 GOLDEN APPLE OIL AND GAS GAPJ 05/14/10
58 38144Y102 GOLDMARK INDUSTRIES INC GDKI 05/14/10
59 39573M106 GREENSTAR LIGHTING GRLH 05/14/10
60 46262T102 IPACKETS INTERNATIONAL IPKL 05/14/10
61 54147U104 LOM LOGISTICS INC LOMJ 05/14/10
62 63008E109 NANO FORCE INC NNFC 05/14/10
63 92855W102 VIYYA TECHNOLOGIES INC VYON 05/14/10
64 53219E808 LIFELINE BIOTECHNOLOGIES, INC LLBO 05/03/10
65 84915Q100 SPOOZ, INC. SPZI 05/03/10
66 G4411NAA5 HERITAGE INV CAP LTD, Ltd 9% 8/31/2010 N/A 04/21/10
67 607587409 MODERN ENERGY CL B MDRG 03/25/10
68 607587201 MODERN ENERGY N/A 03/15/10
69 39573P208 GREENSTONE HOLDINGS INC GSHN 02/23/10
70 272023102 EAST DELTA RESOURCES CORP N/A 02/05/10
71 01374L109 ALCHEMY CREATIVE INC ALMY 01/26/10
72 08782W106 BEVERAGE CREATIONS INC BVRG 01/26/10
73 62847C100 MY VINTAGE BABY MVCY 01/26/10
74 61944V102 MOSAIC NUTRICEUTICALS N/A 01/12/10
75 256647108 DOLL TECH GRP INC DTGP 10/13/09
76 169364106 CHINA ADNET ENTERPRISES CAEJ 10/13/09
77 50115V108 KSW INDUSTRIES INC* KSW 10/13/09
78 45775F104 INNOLIFE PHARMA INC INNF 10/13/09
79 53184V108 LIFE EXCHANGE INC LFXG 10/13/09
80 527299101 LEVEL VISION ELECTRO LVLV 10/13/09
81 54569N109 LOTTA COAL INC LCOL 10/13/09
82 559071204 MAGELLAN ENERGY LTD MGLG 10/13/09
83 568093108 MARINAS INTERNATIONAL INC MNSI 10/13/09
84 73035T102 POCKETOP CORPORATION* PKTO 10/13/09
85 902658103 UDS GROUP INC. COM UDSG 10/13/09
86 91021P207 UTD ENVIRO ENERGY CORP UTEM 10/13/09
87 91688L200 UPTREND CORPORATION UPCP 10/13/09
88 92909T204 VSHIELD SOFTWARE CORPORATION VSHE 10/13/09
89 98148A203 WORLD HOCKEY ASSOCIATION WHKA 10/13/09
90 929367100 WW ENERGY INC WWNG 10/13/09
91 294113105 ENZYME ENVIRONMENTAL EESO 09/30/09
92 761379106 REVENGE DESIGNS RVGD 09/30/09
93 22743P100 CROSS ATLANTIC COMMODITIES CXAC 09/30/09
94 46018A100 INT'L POWER GROUP IPWG 09/30/09
95 27031F102 EARTH BIOFUELS EBOF 06/17/09
Naked Shorts (DTC) Forced to Cover?
New Legislation? Not sure if this is a hoax, but in case anyone is interested. See link below.
What ever happened to John Haack's hearing. Checked last week and saw that no Class Action was1 filed -- maybe still in the works.
Recently saw a lot of discussion (in advance of presumably higher rates) to buy agriculture and timber assets.
DTC is forcing bankers to cover their counterfeit shares.....
http://www.dtcc.com/downloads/legal/imp_...
Looks like we are setting up
Wall Street hedges were all offsetting housing (lumber etc.). You will see it all go kaboom very soon.
Credit Default Swaps Casino
Look like it's going to come to a head real soon -- with Tricet offically saying no to Moody's and other rating agencies concerning Greece and Portugal Bonds.
You wonder if these swaps will ever be traded in the same way ever again.
You are now getting an anti1-American spin on the CDS products / rating agencies -- which may very well help in any class-action negotiations down the road.
Merger Agreement Document? (2007 and disclosure and accounting firms related directly to CDS and naked shorts). And proof that the BOD and senior management and PremW / Steelhead were aware of their use for forcing default.
Pretty easy to BK anyone these days.
For clarification purposes
unpublished = privately paid for.
This is likely it guys,
Notice lumber futures -- notice gold, silver and crude. You want to own agriculture land and forests among other things.
USDX an1d the market (POMO and the FED). Cdn Dollar relationship to hedges going back to 2003.
Crude at $110 was Goldman's bogey for getting out of trapped hedges from the crash of 2008.
Notice the buy on Tembec by Wayzata (an insider).
Notice Fed has limited succes with 2 and 5 year bond auctions -- over the next six months ST rates will likely rise -- even if QE3 keeps LT rates down (Operation Twist).
Notice Haack's resistance.
I have so much unpublished info from Deloitte that will nail these guys to the wall. Their own phone messages and emails will paint a unique picture, as well of the fraud BK.
If you guys can -- just launch the Class Action and I will assist in the efforts. Otherwsie forever hold your peace.
Again, I was hedged in this venture. Good luck.
Nothing like kicking the can
down the road. Estate Taxes. And VAT (Value-Added Taxes in the U.S. similar to the GST). Pay for use everywhere. What a future?
And the politicians that created this mess have a happy retirement and die.
The market may yet fix things
for you guys to go class action. Looks to be setting up for a significant change in the direction of 2003. ie fundamentals are about to change.
Thanks for the news clippings.
Note: Canada is in worse shape than the US right now. It is 2 times BK compared to one times in the US. Canadians can not afford to pay out 60 cents out of every dollar paid in tax revenues to fund gov't officials pensions.
Pension reform has to come (imo). Otherwse many jurisdictions, states, provinces and countries will be foreced to go BK in order to avoid their obligations.
imo, the only reason that the internet flurished was because of the weaker US dollar It was a game and now hedges are going to be unwound.
Original Merger Document?
I would think this has something to do with the original Merger document between Abitibi and Bowater and the Exchangable shares.
It seems to me that one party (Old Widows) might be contesting some issues. I have not kept up with filings.
To me, once they change their Legal Company name in the fall -- that's it.
I do not think that anything will come from the appeal documents. Your best bet is a class action. Get together with the Sino-Forest and RIMM guys and maybe Dynegy (if they file BK) before August 31st.
SINOFF was also naked shorted (same with RIMM and NOK -- big time).
I expect more consolidation in the industry
Recapitalized Bonds -- got to lov'em
Have you noticed what they are trading at -- no surprise to me?
------------------
The buy lumber call came out last week. Next few months should be interesting. Last night -- guy from ABC said gov'ts could not quantify the damage in Joplin (13 miles east -- west).
Just noticed the filing -- great.
If someone would just take the lead -- now really is the time for a class action suit. Lokk someone is going after RIMM now (Class Action).
And wrt ABH, there was a recent filing -- that referred to the Merger document -- Some Group. I did not review it -- I just do not have the time, these days.
Someone came out yesterday and said that they expect lumber prices to rise sharply over the next several months (maybe alog with Nat. Gas).
But you might just win a token (over time) if you can just sue everyone for fraud -- when I say everyone -- I mean everyone.
Get a contingency lawyer.
Watching what happens with Dynegy right nw -- don't own it -- just watching, becuase of the CDS and illegal naked shorts. Funds buying up common to hedge against their bonds.
We all knew that it was coming.
Good article. Class action is the only way now.
I still wonder how emailjanum and Pitt77 are faring behind the scenes with the negotiations. These numbers do give us some good amo. for future events.
My sources still tell me that Abo will merge with or buyout another Canadian company this year, but they are waiting for the six months to pass. Note that there is another angle on this should it occur.
Best wishes to everyone that still check in from time to time.
Hello,
Not sure how the appeal is coming along -- or if it has been dropped. I have not read anything on the docket -- so I assume it is being handled behind the scenes.
That said -- perhaps th IRS extension can give you some ideas on the appeals process -- the Naked Short article was excellent, though dated.
I am pretty sure sure that the IRS, as part of their overall analysis would be very interested.
I am looking for an eventual market downturn -- Fed cannot keep it up forever -- the more they do -- the more it is talked about on TV as a 'manipulated market' or 'directed market'.
Emailjanum -- good article from today
Wall Street Shouldn't Confuse Bull Market For Brilliance While They Count Their Bonuses
Posted Jan 25, 2011 12:30pm EST by Peter Gorenstein in Investing, Banking
Related: SKF, XLF, ^DJI, ^GSPC, GS, JPM, C
Email
Print
Nearly 3 years since Bear Stearns collapsed into the arms of JP Morgan Chase, setting off the financial crisis that climaxed with the bankruptcy of Lehman Brothers, we may finally see perp walks for those responsible of wrongdoing.
The Financial Crisis Inquiry Commission has concluded that "several financial industry figures appear to have broken the law and has referred multiple cases to state or federal authorities for potential prosecution," the Huffington Post reports, citing two unnamed sources "directly involved."
This is the only first step in what will likely be a long and protracted legal battle but, to many, that step is one in the right direction. Reckless management of risk on Wall Street combined with little, if any, standards (or worse, fraud) by mortgage lenders cost Americans millions of jobs and sunk the economy into the Great Recession.
"There's been no sort of consequence," says David Gaffen, Reuters markets editor and author of "Never Buy Another Stock Again", who is in favor of prosecutions. "People keep asserting this notion that somehow taking on the banks in some form of regulation or legal authority, some sort of investigative powers is hurting the markets ...when that's not the case at all."
Specific names or companies may come as soon as Thursday when the commission is expected to release its report.
Meanwhile, Wall Street keeps operating much as they had before 2008. A survey conducted by eFinancial Careers shows outsized bonuses are still the norm. According to the poll, 56% of those surveyed reported receiving a higher year-end pay-out, although the average bonus fell 5 per cent to $72,000.
"Bonuses continue to rise when a lot of what they (bankers) did this past year was based on free money from the government in one way or another," not "some sort of brilliance on their part," says Gaffen.
Though, the poll hints at a changing trend in the bonus battle. 37% of respondents in the U.S. said they expect their firms to change pay out this year, in the form of more deferred stock and more clawback rights.
While bankers complain, outsiders may applaud these rational changes
Emailjanum -- when is the appeal?
Maybe you and Pitt77 can join forces. I do recommend a really good legal firm though. Contingency? Naked short data as at December 31st at the end of the article (looks like over 44 million terminal shorts -- it is illegal, though according to my council).
---------------------------
No Audit At All: Deloitte and Bear Stearns
Jan. 25 2011 - 3:33 pm | 0 views | 0 recommendations | 0 comments
By FRANCINE MCKENNA
Deloitte’s audits “were so deficient that the audit amounted to no audit at all,” the [Bear Stearns investors] plaintiffs argued in court papers.
That’s Reuters describing the rationale behind the decision of US District Judge Robert Sweet on January 23, 2011 to allow a case against fallen investment bank Bear Stearns and its outside auditor, Deloitte, to go forward.
The decision for a group of plaintiffs, including the State of Michigan Retirement system, and their attorneys is indeed sweet. Subprime suits have been hampered by the argument they are trying to punish the case of “classic fraud by hindsight”. Bankers did a great job during and after the crisis of describing the events that occurred as “black swan” events, forces of nature that could not have been identified in advance.
That rhetoric is slowly being disproved.
This decision is even more significant because it provides a successful template for including claims against the auditors for financial crisis failures when warranted. In Ernst & Ernst v. Hochfelder, the Supreme Court held that actions under Section 10(b) of the Exchange Act and Rule 10b-5 require an allegation of “`scienter’—intent to deceive, manipulate, or defraud.” The “scienter” requirement, necessary to sustain allegations against the auditors in a securities claim under Section 10(b), is notoriously difficult to meet.
If there’s anything of substance in a claim against auditors the case usually settles before the facts are made public. New Century Trustee v. KPMG is an early crisis mortgage originator case, cited several times in this decision. However, those facts will never be heard in open court. In spite of – or perhaps because of – very particular examples of reckless behavior by the auditor documented by the bankruptcy examiner, the case was settled.
The Ernst & Ernst v. Hochfelder decision left open the question of “whether, in some circumstances, reckless behavior is sufficient for civil liability under § 10(b) and Rule 10b-5.” However, since Ernst, most courts have concluded that recklessness can satisfy the requirement of “scienter” in a securities fraud action against an accountant.
“Recklessness” in a securities fraud action against an accountant is defined as, “highly unreasonable [conduct], involving not merely simple, or even inexcusable negligence, but an extreme departure from the standards of ordinary care, and which presents a danger of misleading buyers or sellers that is either known to the defendant or is so obvious that the actor must have been aware of it.”
That standard requires more than a misapplication of accounting principles. Plaintiffs must prove that the accounting practices were so deficient that the audit amounted to no audit at all, or “an egregious refusal to see the obvious, or to investigate the doubtful,” or that the accounting judgments which were made were such that no reasonable accountant would have made the same decisions if confronted with the same facts.
The summary of this concept with all the citations is found in SEC v Price Waterhouse, 1992.
The plaintiffs In Re: Bear Stearns Companies, Inc. Securities Litigation successfully plead recklessness equivalent to scienter and more.
First they knock the requirements for recklessness to prove “scienter” out of the park:
The Securities Complaint adequately alleges Deloitte’s recklessness, if not actual knowledge, based on its awareness of red flags and its duty to investigate. McCurdy v. SEC, 396 F.3d 1258, 1261 (D.C. Cir. 2005) (“[P]rofessional auditing standards have come to recognize, through decades of experience, particular factors that arouse suspicion and call for focused investigation. These factors are the so called `red flags’ for which all auditors are trained to remain alert.”).
The Securities Complaint identified as a red flag the fact that Deloitte knew or should have known, absent recklessness, the risk factors inherent in the industry, such as declining housing prices, relaxation of credit standards, excessive concentration of lending, and increasing default rates.
The Securities Complaint has alleged that JPMorgan discovered in the course of one weekend the overvaluation of assets and underestimation of risk exposure in Bear Stearns’ financial statements. JC Flowers & Co., a leverage-buyout company, had also reviewed Bear Stearns’ books the same weekend and made an unsuccessful proposal to buy 90% of the Company at a similar price between $2 and $2.60 per share. These allegations support an inference of Deloitte’s scienter.
The key distinction between cases relating to hindsight and the allegations here is that multiple GAAP and GAAS violations have been described and red flags alleged.
Then they’re specific enough about who, what, why, and when to nail “particularity”:
The misstatements with respect to valuation and risk have been adequately particularized and alleged, as established as material.
Then they show how Deloitte, like the Bear Stearns executives, caused losses:
The Securities Complaint has alleged that the March 14 and 17, 2008 disclosures revealed to the market the falsity of, inter alia, the 2006 and 2007 Form 10-Ks audited by Deloitte and thereby established the connection between those false statements and Lead Plaintiff’s losses. The Securities Complaint also identified the risks that were concealed by Deloitte’s false audit opinions and the losses suffered when the risks materialized.
Proving, with little doubt, the claim of “no audit at all” is one way to overcome the standard excuse auditors have been using lately in cases of fraud, especially when the allegations of fraud against corporate executives are strong or have already been judged true. When company executives are guilty of fraud, it’s common for the auditors to claim they have been “duped.” Who wouldn’t agree that unscrupulous, criminal executives could and would seek to “hoodwink” or “fool” trusting auditors, if possible, to further their scheme?
It seems, given how frequently it occurs, it’s quite an easy thing to do.
Proving “no audit at all” equals acknowledgement that the auditors can be bad guys too – negligent to the point of constructively participating in the fraud. Plaintiffs can, therefore, overcome the frequent bias of judges who’ve had a hard time believing that auditors, as licensed professionals, would risk their reputations for the sake of a few dollars in fees.
The fee dollars from clients like Bear Stearns, AIG, Lehman, Washington Mutual, Merrill Lynch, Citigroup and Bank of America add up to billions. Who can claim, with a straight face, that auditors are worried about their reputation when their instant defense is they were too blind to see, and too stupid to know, what their crooked clients were up to?
-----------------------
20101201 003687100 ABWTQ 15622849 ABITIBIBOWATER, INC. 0.06
20101202 003687100 ABWTQ 14115168 ABITIBIBOWATER, INC. 0.05
20101203 003687100 ABWTQ 15649940 ABITIBIBOWATER, INC. 0.04
20101206 003687100 ABWTQ 15979985 ABITIBIBOWATER, INC. 0.04
20101207 003687100 ABWTQ 17845198 ABITIBIBOWATER, INC. 0.04
20101208 003687100 ABWTQ 16983538 ABITIBIBOWATER, INC. 0.03
20101209 003687100 ABWTQ 18084687 ABITIBIBOWATER, INC. 0.03
20101210 003687100 ABWTQ 21839536 ABITIBIBOWATER, INC. 1
20101213 003687100 ABWTQ 24055704 ABITIBIBOWATER, INC. 1
20101214 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
20101215 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
20101216 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
20101217 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
20101220 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
20101221 003687100 ABWTQ 44702955 ABITIBIBOWATER, INC. 1
Emailjanum
You may find of use an interesting article posted on Forest Talk -- about the impact of China to Canadian Lumber markets (in 2010 and moving forward). Re: Valuation of Timber Assets.
I respect your past efforts very much.
Happy New Year to all.
Since the new year, I have spoken to many in the know on this one. Right from the start, it would appear that the judge had no interest in doing the right thing. Lots of GM type back-room negotiations going on -- hence the indemnification for Fairfax.
Also, I hear that the Canadian Gov't wanted to screw S/H in return for the Pension Reform and concessions.
That said, over time I think that Peter may be rewarded in terms of some sort of settlement. Maybe a return of of his legal fees, or something nominal, etc.
---------------------------
For me -- I have just wrtiten everything off. I have sold out of my hedge position on Tembec to be in a B/E scenerio of the two stocks (and now hold only TMB warrants -- if they come in prior to expiry -- next Feb. -- then the overall venture would be profitable).
---------------
FYI -- there are many traders that are suggesting the TMB and Abitibi will eventualy merge -- and that may have been the plan from the start.
Best wishes for a safe 2011.
Emailjanum - Fairfax Filing (yesterday)
Attached.
http://whalewisdom.com/schedule13d/view/28238
----------------
Back in tomorrow for only part of the day. Then gone till next Monday.
Emailjanum -- any signif. to us at this pt.
The Order Unsealing the Report of the Special Advisor to Bowater Finance Corporation. Docket keeps referencing it.
January 11th date for claims. Any chance you can make an argument that our claims are really against BWFC (not in terms of equity -- but a claim in itself). See the bottom of Avenue Mgmt Filing (dated December 20th).
Note that for some reason, there are two parties that I am aware of that are afraid that they might get sued (until sometime in January), having to do with the official zeroing out of the shares.
Full filing is attached in this link.
http://whalewisdom.com/schedule13d/view/28107
CUSIP No. 003687209
1 NAMES OF REPORTING PERSONS
Avenue Investments, L.P.
2
CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
(See Instructions) (a) r (b) r
3
SEC USE ONLY
4
SOURCE OF FUNDS (See Instructions)
OO
5
CHECK IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEM 2(d) or 2(e) r
6
CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF
SHARES BENEFICIALLY OWNED BY
EACH
REPORTING
PERSON
WITH 7
SOLE VOTING POWER
99,661
8
SHARED VOTING POWER
0
9
SOLE DISPOSITIVE POWER
99,661
10
SHARED DISPOSITIVE POWER
0
11
AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
99,661*
12
CHECK IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES r
(see Instructions)
13
PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
0.1%
14
TYPE OF REPORTING PERSON (see Instructions)
PN
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*Excludes shares of common stock that may be received in connection with the resolution of certain disputed claims in respect of which share reserves have been created, including among others a disputed claim by Bowater Canada Finance Corporation against Bowater Inc. The amount of additional common stock, if any, that could be received from such reserves in connection with the resolution of such claims, and the timing of any such distributions, is uncertain.
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Emailjanum
Not sure if you hired a lawyer to represent you on the appeal or if you are going to let it die, knowing the judge's mind is already made up -- but I thought you should be aware that Canaccord has upped its Target for Tembec to $5.35 on a valuation basis.
Out until the 29th. I may or may not post on the ABH board.
Merry Christmas to everyone who has posted.
Interesting filing from the docket. Appeal -- not sure if this will be postponed until the new year. Another hearing for January 11th -- I think. Not sure what to make of this.
Also -- I truly do not understand how they can even Issue the new shares to the unsecured or creditors, until the appeals are heard.
---------------------
In any case, I am out until the 29th -- and I am sure that by that time this board will no longer exist.
So again, let me thank everyone for their support and for their efforts.
Over and Out.
Lumber Futures Up Yet Again,
We knew that this was to be the case -- very well telegraphed by the market.
In terms of "futures valuation", you are getting pretty close to the Cdn dollar equivalent when "export taxes" will be reduced significantly resulting in big profits.
Month
Click for chart Session Pr.Day Options
Open High Low Last Time Sett Chg Vol Sett OpInt
Jan 11 285.90 298.50 284.60 298.40 Dec 17, 16:01 298.50 10.00 382 288.50 1937 n/a
Mar 11 299.80 312.80 298.10 311.00 Dec 17, 16:01 311.40 8.40 670 303.00 5274 n/a
May 11 310.00 321.00 308.60 318.50 Dec 17, 16:01 320.10 8.30 204 311.80 1602 n/a
Jul 11 315.00 324.90 315.00 324.00 Dec 17, 16:01 326.50 8.60 87 317.90 523 n/a
Sep 11 309.80 317.90 309.80 317.40 Dec 17, 16:01 315.00 7.00 12 308.00 126 n/a
Nov 11 - - - - Dec 17, 16:01 310.00 10.00 - 300.00 - n/a
Click here to refresh data
Times indicate exchange local time.
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Re: Insider Buys again on Tembec.
First the CFO bought, now the CEO bought -- on the market
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 1,900 $3.510
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 1,200 $3.520
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 3,500 $3.530
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 2,500 $3.540
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 3,700 $3.550
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 2,700 $3.590
Dec 16/10 Dec 15/10 Lopez, Jim Direct Ownership Common Shares 10 - Acquisition in the public market 14,500 $3.600
One more thing that might help you.
Key is still valuation and bond data (imo).
WOOD PRODUCTS INDUSTRY TURNS THE CORNER THIS YEAR
OTTAWA, Dec. 14 /CNW/ - A mini-boom in the Canadian housing market, a slight improvement in American demand, and growing exports to China will bring Canada's wood products industry back to profitability this year, according to The Conference Board of Canada's Autumn 2010 outlook for the industry.
"After three years of losses, a surge in prices and demand lined up favourably early this year for the industry," said Jacqueline Palladini, Economist. "The industry's rebound will continue in 2011, but the pace of growth will slow. The uncertain short-term outlook for the U.S. housing market remains a key concern for the Canadian industry."
To meet rising demand, Canadian production is expected to accelerate by 10.6 per cent this year. Years of hard work to diversify away from the volatile U.S. market and break into China appear to be paying off for the industry. Between 2000 and 2010, Canadian exports to China have increased by 3,300 per cent. In fact, Canada surpassed Russia this year as the biggest exporter of softwood lumber to China.
In the U.S., the housing market improved slightly in 2010, but demand remains in flux due to a weak economic recovery. Adding to the uncertainty, the sale of existing homes is being held back by revelations of questionable practices for processing foreclosures - which could delay demand for new homes. In all, Canada's wood products exports, which are forecast to grow by 2.4 per cent in 2010, will not begin to accelerate until the second half of 2011 and into 2012.
Demand could also be affected by a correction in the Canadian housing market in 2011, following a mini-boom through late 2009 and early 2010. Canadian housing starts will decline by 8.2 per cent in 2011 compared to this year. Despite concerns about housing markets in North America, overall wood products production is expected to increase by 3.7 per cent in 2011."
Industry revenues are increasing this year for the first time since 2004, and although costs are on the rise too, the wood products industry is expected to post a profit of $476 million in 2010.
Profits are expected to increase again in 2011, and continue to rise as the U.S. housing demand rallies. There are also promising signs on the employment front next year, as an additional 9,700 jobs are forecast to be created in 2011.
For further information:
Brent Dowdall, Media Relations, Tel.: 613- 526-3090 ext. 448
E-mail: corpcomm@conferenceboard.ca