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CR lost that one - court has ordered CR et al to produce an extensive swag of docs and emails on the funds, NIR, service providers and issuers.
Hopefully he gets toasted, but I won't be surprised if the sentence is disappointing. The other Xybernaut perps got probation and deferred prosecution agts. And Marty's other case doesn't look like the kind of thing which gets you thrown in the slammer for years (not that it's relevant, but the victims in that one were shady REFCO/Bawag types, quite possibly laundering money etc - Thomas Hackl!).
Finally, the prosecution's sentencing memo wasn't fantastic - IMO they spoiled it by throwing in a bunch of unsupported accusations from a guy who has commercial grievances over a completely unrelated matter, in an attempt to show Marty's lack of contrition etc - evidentiary value zero.
Anyway, fingers crossed.
It's pathetic. You do get the sense that the bureaucratic hurdles they have to jump to bring any kind of action are just way too high.
Given that three convictions from indictments delivered in 2010 and a 2010-vintage SEC action were based to a large extent on Paradigm's status as a scam from the outset, you have to wonder why it took so long to have the thing deregistered.
Marty Weisberg on 8 August, I believe, unless it gets put off again. Dunno why it keeps getting delayed - originally supposed to be a year ago.
Be interesting to know who "Paradigm Associates A,B,C" are in the complaint & why they haven't been charged with anything.
I think this was after O'Riordan, Latorella and Fields had finished with it as part of the Locateplus scams (they set up Paradigm as a means to cover up for fake Locateplus revenue). But were they still involved in some fashion?
Not that it's particularly relevant, but the DoJ investigation of Locateplus, which included the Paradigm scam, stemmed originally from an investigation into Geoff Eiten. The DoJ decided that LP & its people were a richer target, and so dropped the Eiten investigation, but the SEC pinged him on other grounds and recently won a default judgement against his vehicle, NFC.
A connected little world of douchebags ...
CR et al continue to struggle against PwC's demands for discovery in the bankruptcy case. Amongst other things, CR's lawyers claim that he is "insolvent" and unable to bear the costs of document production.
PwC says that's tosh - if he's broke, who's been paying the lawyers in this 4 month struggle?
It's good, but it took so long, and so far the sanction is only against NFC (by default, for not having an attorney), not against poor ole Geoff himself.
Not a really big scary deterrent for the young playa looking at a penny-stock-spiv career option.
$3.6 billion, not trillion. Their investment income for the year (appreciation + dividends) was $334M, so a bit less than 10%, which isn't so bad.
Just an idea - maybe they were invested in a fund which played in the pennies, and maybe that fund went belly-up and as part of the liquidation distributed its holdings to its investors.
I do note that Russell Trust Company is one of their managers. This is part of the old Frank Russell, which allocated to Laurus before it liquidated. See eg http://investorshub.advfn.com/boards/read_msg.aspx?message_id=41234605
mainly real-estate development guys
Except of course that the TynanGroup company handling VG, Medbridge http://www.medbridge.md/ is in the business of advising & providing services to various kinds of physician practices.
VG is now located at their Santa Barbara office and a bunch of their people have various roles with VG.
They seem like nice folks with a nice office, committed to the environment and their community, presumably good at what they do biz-wise & possessing no apparent biotech credentials whatsoever.
What are they smoking??? - asks Mr Cynical. Actually, my guess is that Tynan and Odell woke up from a (Monica Ord induced?) warm fuzzy dream of saving-the-planet and curing-every-disease & noticed that their investments had been diluted to nothing in the course of VG achieving hardly anything; and now they're using Medbridge in the hope of recovering something of the dream and investments.
In which case - good luck to them! But I think it may be a tough job to de-Haig-ify the dream & deal successfully with $4M+ of liabilities on the investment side.
Detroit and focus on pension fund math ...
http://dealbook.nytimes.com/2013/07/19/detroit-gap-reveals-industry-dispute-on-pension-math/?hp
Maybe this trainwreck will have some tangential benefits by getting people to delve into the extent to which pension funds may be complicit in financial fraud, intentionally or cluelessly.
As the article says, an input into the way pension funds calculate how much they need to invest to meet future payment obligations is an assumption about how much return they'll get on the investment. The higher this assumption, the less cash the fund needs to find now, all else being equal.
Generally they are obliged to invest most of their money in relatively un-risky things - investment grade bonds; diversified blue-chip equity portfolios; etc. Of course, lower risk = lower returns.
On the one hand, the standard 7-8% annual return assumption is probably too high over the long term, for this kind of risk level.
And on the other hand, the clear temptation if somebody fronts up with a supposedly investment grade opportunity offering returns way above investment grade average returns. Like eg a pile of CDO poo in a nice shiny Moody/S&P investment-grade wrapper.
My hypothesis: Some large proportion of major financial fraud is concocted between pension funds looking to plug funding deficits & willing to accept lies about risk to achieve this; and people willing to tell the lies.
As part of this, a whole industry has been created to legitimize the notion of magic sustainable "alpha" - above average returns for a given risk level.
Management changes: http://www.vglifesciences.com/dev/wp-content/uploads/2013/06/Investor-Letter-July-2013-VGLS.pdf
John Tynan takes interim CEO role; Haig remains as chair and VP IP etc. The board is Haig, his brother Arthur, Tynan and a TynanGroup senior exec, David Odell.
From previous filings, I think the idea is that Tynan and Odell have one board vote between them, in which case Haig still controls the board, I guess. Nothing to indicate any changes to the preferred share structure, so presumably Haig also still controls the shareholder vote, as much as he ever did.
Nevertheless it does look as if Tynan is progressively taking over VG. Interesting! I don't see anything to indicate that Tynan isn't a real guy. Why does he care?
I also don't see anything to indicate they know much about biotech - mainly real-estate development guys.
Management changes: http://www.vglifesciences.com/dev/wp-content/uploads/2013/06/Investor-Letter-July-2013-VGLS.pdf
John Tynan takes interim CEO role; Haig remains as chair and VP IP etc. The board is Haig, his brother Arthur, Tynan and a TynanGroup senior exec, David Odell.
From previous filings, I think the idea is that Tynan and Odell have one board vote between them, in which case Haig still controls the board, I guess. Nothing to indicate any changes to the preferred share structure, so presumably Haig also still controls the shareholder vote, as much as he ever did.
Nevertheless it does look as if Tynan is progressively taking over VG. Interesting! I don't see anything to indicate that Tynan isn't a real guy. Why does he care?
I also don't see anything to indicate they know much about biotech - mainly real-estate development guys.
SEC is asking for entry of defaults against Dynkowski, Bailey and Meagher.
Meagher was served on June 6; response was due June 26; hasn't responded.
Yup ... but 10 years or whatever to get a judgement. How many pennyscammers have that kind of horizon? I'd say most of them don't think much further ahead than immediate satiation of whatever substance/gambling/shopping addiction is dominant in their ratty little lives at the time.
Reading about that old LOM etc stuff makes me feel kind of youthful, bringing back the days when the world of pennyscams was fresh, new & astonishing :)
Just a tid-bit in a big array of funny, but "rouge TA" is good.
The SEC case is at the summary judgement motion phase.
At this point, it's mainly about whether Hicks improperly used one of his funds to pay legal expenses of another (in which he had a bigger personal interest).
You don't see this one every day: defendants in an SEC case asking the court to impose injunctions & bars on themselves.
It's the Newman brothers, defendants in the old Xybernaut/Ramp criminal and SEC cases. They have deferred prosecution agreements with the DoJ, conditional on them either reaching a settlement with the SEC including injunctions and bars, or being subjected to a judgement in the SEC case including those sanctions, by July 12th this year.
But before it will settle with them, the SEC is insisting they disclose the assets of a particular offshore trust of which they are beneficiaries. The SEC wants a disgorgement etc order as well as the injunctions and bars, and for the disgorgement it wants to know what all of their assets are.
The Newmans are saying that they can't compel the trust to open up; the SEC calls bullshit on that.
Pressure on the Newmans! If they're not enjoined & barred by July 12th, maybe the DoJ re-starts the criminal prosecution. On the other hand, the SEC isn't going to settle except as part of a package including disgorgement & one suspects that there might be some tasty rainy-day assets sitting in that trust ...
So the Newmans file motions in the SEC case asking the court to impose the injunctions and bars against themselves even though the SEC isn't ready to settle. Never seen that one before ...
The SEC objected - without the criminal case hanging over them, maybe the Newmans will never reveal their assets.
The court denied the motions, refusing to get involved with the SEC settlement process.
Anyway, kudos to the SEC for playing hardball & delivering an entertaining spectacle of pennyscammers squirming between a rock and a hard place.
The SEC is trying to get the Newmans to open their kimonos.
Kind of amusing. The Newmans have deferred prosecution agreements with the DoJ conditional on them either reaching a settlement with the SEC in the civil case including injunctions and lifetime public company bars, or being subjected to a judgement including those sanctions, by July 12th.
Before it will settle with them, the SEC is insisting that they disclose the assets of a particular offshore trust of which they are beneficiaries. The SEC wants a disgorgement etc order as well as the injunctions and bars, and for the disgorgement it wants to know what all of their assets are.
The Newmans are saying that they can't compel the trust to open up; the SEC calls bullshit on that.
So the Newmans are at risk of having their criminal cases re-opened, unless the SEC agrees to a settlement by 12th July.
To get around that, they filed motions in the SEC case asking for the appropriate injunctions and bars against themselves- which would satisfy the conditions of the DoJ deferred prosecution agreement. Don't see that one every day!
The court denied the motions, refusing to get involved with the SEC settlement process. So lots of pressure on the Newmans, it seems.
Anyway, kudos to the SEC for playing hardball with them. Dunno whether any disgorgement in this case would feed into the remissions, but maybe the SEC stance will uncover a pot of gold.
Meanwhile, Marty Weisberg was supposed to be sentenced last Friday in his criminal cases, but nothing on the court docket as yet.
The stay in the SEC case against unsettled defendants in the Lambo However-Many case has been lifted.
I think the remaining defendants are Meagher, Mangiapane, Canceli and Ternes.
05/03/2013 35 MOTION to Lift Stay - filed by United States of America. (Hanson, Shannon) (Entered: 05/03/2013)
05/03/2013 36 NOTICE of Service by United States of America re 35 MOTION to Lift Stay (Hanson, Shannon) (Entered: 05/03/2013)
05/20/2013 37 ORDER GRANTING 35 Intervenor Plaintiff United States' MOTION to Lift Stay filed by United States of America. Signed by Chief Judge Gregory M. Sleet on 5/20/13. (mmm) (Entered: 05/20/2013)
05/20/2013 38 PRAECIPE filed by Stephan J. Schlegelmilch on behalf of Securities and Exchange Commission requesting Clerk to issue summonses for defendants Florian R. Ternes and James Meagher (rbe) (Entered: 05/20/2013)
05/20/2013 Summons Issued with Magistrate Consent Notice attached as to James Meagher on 5/20/2013; Florian R. Ternes on 5/20/2013. Summonses mailed to requestor - Stephan J. Schlegelmilch, Assistant Chief Litigation Counsel, U.S. Securities and Exchange Commission, Washington DC; to effect service pursuant to FRCP 4. (rbe) (Entered: 05/20/2013)
06/04/2013 39 STIPULATION TO EXTEND TIME to Answer or Otherwise Respond to Plaintiff's Second Amended Complaint to July 31, 2013 - filed by Joseph Mangiapane Jr. (Spence, Stephen) (Entered: 06/04/2013)
06/05/2013 SO ORDERED, re 39 STIPULATION TO EXTEND TIME to Answer or Otherwise Respond to Plaintiff's Second Amended Complaint to July 31, 2013 filed by Joseph Mangiapane Jr, Set/Reset Answer Deadlines: Joseph Mangiapane Jr answer due 7/31/2013. Ordered by Chief Judge Gregory M. Sleet on 6/5/2013. (asw) (Entered: 06/05/2013)
06/11/2013 40 AFFIDAVIT of Service for Summons and Second Amended Complaint served on James Meagher on June 6, 2013, filed by Securities and Exchange Commission. (Schlegelmilch, Stephan) (Entered: 06/11/2013)
06/12/2013 41 PRAECIPE filed by Stephan J. Schlegelmilch on behalf of Securities and Exchange Commission requesting Clerk to issue summons for defendant Jacob Canceli. (cla, ) (Entered: 06/12/2013)
06/12/2013 Summons Reissued with Magistrate Consent Notice attached as to Jacob Canceli. Summons mailed to requestor - Stephan J. Schlegelmilch, Assistant Chief Litigation Counsel, U.S. Securities and Exchange Commission, Washington DC; to effect service pursuant to FRCP 4. (cla, ) (Entered: 06/12/2013)
06/20/2013 42 AFFIDAVIT of Service for Summons and Second Amended Complaint served on Florian R. Ternes on June 17, 2013, filed by Securities and Exchange Commission. (Schlegelmilch, Stephan) (Entered: 06/20/2013)
Full transcript of JF sentencing now available, including his statement to the court:
THE DEFENDANT: Today I stand before you, your Honor,
in a situation in which there is no way to express in my words
the regret at how sorry I am and how -- and that I have hurt so
many people. Before all this happened I never could have
imagined I would do the things that I have done, and it's been
a sobering realization coming to terms with the failings in my
own character, the failings that allowed me to do the wrong
that I've done.
Nothing I say today is an excuse for what I did. To
the investors who lost money, I am truly sorry and I hope that
I am able to right my wrongs in some way. I have violated a
trust bestowed upon me. For other victims that were hurt, I am
also sorry. For these things I am prepared to pay my debt.
To those who love me and cared about me, I'm sorry I
let you down, disappointed you and especially any hurt I have
caused.
And to my parents, particularly, not a day goes by I
don't wish there was something I could do to make you suffer
less will all of this. You've always been there, and I'm sorry
not only to let you down but cause so much pain.
This is not the person I set out to be in life. From
as early as I can remember, my parents always taught me right
from wrong and that there were consequences for doing wrong. I
learned to do the right thing, and I was surrounded by people
that supported making the right choices.
From an early age I was very involved with my church.
In fact, along with another family and our church the family
ran a halfway house helping people put their lives together. I
tried to help and set up to lead a good life. Up until I
joined Locateplus I had a spotless record. I think, at most, I
had maybe one speeding ticket maybe at one time in my life, and
despite having been offered and pressured by peers while
growing up, I refused to try any drugs. In fact, I never
touched any alcohol until I was of a legal age and drank
infrequently until this time in my life.
I had planned and set out on a path to be successful
in a law-abiding way. I saw how my parents had struggled
financially while growing up and it motivated me to want to do
well enough so that some day I would be able to help them out.
I put myself through college taking full-time course load while
working 50 hours a week.
It was at this time I married a woman that I met in my
teens. We met working at a fast food restaurant. After
graduation we both started out on our career paths. This
eventually led us to Boston, where we both earned graduate
degrees and both had progressively increased roles of
responsibility. For all intents and purposes, we were living
out the path of a good life.
I took my first job after graduate school, and after
about a year and a half I found myself unemployed when the
company was sold. This is when, much to my regret today, I was
introduced to Locateplus. For all its initial appearances, it
looked like a great opportunity. It had an exciting
Internet-based product, an impressive customer base with law
enforcement and what seemed like experienced management, but as
it turns out, I entered what became my perfect storm. I found
myself surrounded by individuals that didn't support making the
right choices. In fact, I was surrounded by people who
encouraged making bad decisions in many aspects of my life, and
I went along with it. I compare it much to a frat house
environment among many of the people there. To call what
happened here the biggest and worst ordeal in my life would be
such an understatement.
My marriage of 11 years came to an end shortly after
joining, drinking began to take over, and I lost a sense of who
I was. The only sense of praise or approval that seemed to
reach me was the feedback that I could be effective at helping
the business. I found myself justifying a small compromise
that led to justifying a bigger compromise that led to another
and another until I was buried in my bad decisions. It makes
me sick to think of how I gained comfort and a sense of
fulfillment at that time from things like driving a Hummer or
calling myself an executive.
As time went on and I got deeper and deeper in, I felt
the only way out was to ride out the storm and hope that
somehow in the future I could fix it. When I was in the
situation I couldn't see the forest for the trees, but when it
was laid out in display in this case for the world to see it
was clear there was never any justification. It makes me sick
to look back and think about how warped my perceptions were of
myself, others, my choices and conduct. This is not an excuse
for my behavior, because there is no excuse. It was
inexcusable. I only tell this to explain the insight I have
gained on my personal journey to understand how I came to fail.
I lost sight of what it really meant to lead a good life,
something I seemed to know naturally early in life, which I've
worked to regain the past years. I'm not at all implying that
I have ever lived the perfect life, but before joining
Locateplus I would have never even imagined contemplating and
engaging in the events that happened here, and I know I will
never let anything like this happen again.
When I became aware of the investigation, I chose to
meet the Government agents in mid-2007. I met with them on
five different days over a few months' time. It wasn't easy,
but as it went on it was somewhat of a relief to start getting
things off my chest, but by then the bad choices and conduct
had led to other bad choices and conduct. Talking about it
started making me feel a little like my old self, however, a
lot of time kept passing without any resolution or conclusion,
and I just couldn't understand why. My life seemed to be
largely on hold.
As the cloud of this impending prosecution loomed, I
went through some very dark times personally, experienced bouts
of depression, thoughts of suicide. It was only when I let
control over my situation go that I was able to work to
understand and try to move on. It was at this time in 2010
that I was introduced to someone who became my sponsor and gave
me an opportunity for work. I started a low-level position
handling phone calls and doing some clerical work. I also
entered therapy, where I started to understand more about the
values at the times I felt better about myself and the
circumstances that led to my choices. I'm once again
surrounding myself with good people who support making good
choices, and I am so far from the person I was when I worked at
Locateplus. Not a day goes by that I don't wish I could go
back and change what I did. I know now that if I am ever faced
with another situation like Locateplus I will not continue to
associate with or be influenced into making bad decisions.
At trial, the picture drawn of me, which
understandably colors the views of me, was constructed from a
set of events representing the most horrible decisions I've
ever made in my life, but those events don't capture all or
even most of who I am. Unfortunately, but understandably, this
is the only view prosecutors had of me. The prosecutors at
trial never had a chance to meet me or get to know me other
than in the courtroom, and for me when it came to any plea
negotiations it was overwhelming to have to contemplate the
loss of my liberty in terms of what seemed like one-dimensional
negotiations of numbers without any consideration of so many
other things about me, especially in light of so much
excruciating personal darkness I had gone through waiting for a
resolution.
When I was presented with the potential package deal
last spring, I chose not to accept being sentenced with my
co-defendant as a unit. I chose not to accept what seemed to
be a sentence predetermined by prosecutors who never really met
me. The main reason I couldn't accept the package deal is I
wanted to be considered fully as an individual with all
relevant factors and have the Court determine the most
important resolution of events in my life. I do admit, once I
made the decision to go to trial, I had hoped I would be
acquitted of some or all of the charges, and for that I
apologize for putting any burden on the Court.
While I have come to terms in so many ways with what
has led me here, not a single day in the nearly six years since
2007 have I been free of the realization that consequences are
still waiting. I can assure your Honor that I will never make
choices or engage in conduct contrary to my good values again.
I have prepared myself for the punishment the Court
deems appropriate. In fact, I am more concerned about the
effect on those who care about me than I am about myself. I
have caused my family and others so much pain I cannot describe
how committed I am to making something good come from all of
this. I am truly sorry. I promise your Honor that any mercy
will be returned with only good going forward.
What a toad he is.
Sometimes I get a bunch of Foprtune 100 CEO's together to workshop ideas for what kind of car I should buy or whther it's time to try a different aftershave. It's amazing what you can get done in a couple of hours with that kind of concetrated brain-power.
First I've heard of that one ....
Here's the OTCBB link showing the SFOR deletion: http://otcbb.com/asp/dailylist_search.asp?DirectSymbol=SFOR&OTCBB=OTCBB . It's completely different to the OTCBQ tier of OTC Markets & I think the deletion from OTCBB isn't very meaningful, given how unimportant that place is now.
EDIT: See eg http://investorshub.advfn.com/boards/read_msg.aspx?message_id=88716210
FWIW, the lawyer Marty Weisberg's sentencing in the Xybernaut/Ramp case (and another) is now set for June 28th; don't know whether any restitution amount will be ordered at that hearing. But if the distributions are waiting on the resolution of that matter, I guess an end may be in sight.
FWIW, hardly anything trades on the FINRA OTCBB anymore - they priced themselves out of the market, effectively replaced by OTC Markets "OTCQB" tier, which is where SFOR sits.
Dunno why SFOR would have been dropped from OTCBB but I would guess it's because nobody's making a market for SFOR there any more, as with many other stocks.
Anyway, it doesn't mean anything much by itself. Quoted on OTCBB or the OTCQB tier, SFOR remains a piece of penny-trash regardless.
Partial transcript of JF's sentencing hearing released. The judge believed that JL's plea deal was too generous; he would have given JL something harsher if his hands hadn't been tied.
On the other hand, JF's blizzard of support letters convinced the judge that JF had confronted his sinful past & was determined to reform etc etc. JF was in the position of an easily-led youth finding himself in a toxic frat house - and so on. This despite the judge's belief that JF and JL were equally responsible for the crimes at the time they were committed.
These factors outweighed the considerations arising from JL's guilty plea vs JF's robust defence, and the 28 or whatever counts versus one count aspect.
So not appropriate to use JL's 5 years as any kind of benchmark to be added to for JF's lack of admission of guilt etc etc. The 5 years for JF is just right, in the judge's view, and the 5 years for JL was too light, in the larger scheme of things.
The judge makes IMO valid points about threading what he sees as the common Scylla & Charybdis of judges empathizing too much with white-collar defendants with similar socio-economic backgrounds to themselves versus "hitting for the bleachers" in sentencing to show how tough they are.
It's all thoughtful & intelligent but the gaping hole for me is the judge's ready reliance on all of those support letters JF got people to write.
Without them, it's pretty clear the judge would have hit JF with a double-digit sentence. It's seems like a very fragile basis for such a differential in sentencing. Would kind of diligence did the court do on the quality of those letters - anything? I'm following another case where the defendant has produced a similar blizzard letters - some of them from people who are obviously complicit with the defendant in other shady stuff, to anybody who digs into things.
Not that it really matters, but I have to chuckle seeing Fidelity First on that list. This was a shell whose only purpose was to be part of the Lancer scam & it featured in the SEC's original complaint against Lancer & Michael Lauer ... 10 years ago. http://www.sec.gov/litigation/complaints/comp18226.htm
Taking 10 years to suspend it doesn't seem very impressive.
Marty Weisberg update ...
I don't know why the sentencing process has been so drawn-out, but anyway the DoJ filed its sentencing memo yesterday.
The interesting thing for VG purposes is that it mentions "DMBM".
The memo goes into circumstantial detail explaining why it thinks Marty is lying about his holding in United Stations Radio Network, the established radio content/distribution outfit co-founded by Marty's old buddy Dick Clark & which Marty served as attorney and company sec for years, even after his guilty plea.
As part of this:
However, the defendant [Marty] remains active in the business of United Stations and has not ceased billing it for what he terms “consulting” services; the defendant is believed to have a retainer in excess of $200,000. The defendant is also believed to receive funds from United Stations via an entity not bearing his name, preliminarily identified as “DMBM.”
I wonder if the sleuths at the DoJ will actually now investigate DMBM and the association of low-lives feeding from it?
They seem to be doing stuff. Hearing today in the US bankruptcy action which approved their motion "(I) Directing Issuers to Produce Documents and Witnesses and (II) Authorizing the Issuance of Subpoenas".
Of course it's all very slow.
The PwC site for this: http://ajw-group-liquidation.com/index.html
Not what you're looking for, I expect, but I guess you could try the contact details listed there.
The "Chapter 15 Docs" section contains filings from the NY bankruptcy action but doesn't seem completely up to date.
It is a good article. But they take a position that "death spiral financing has disappeared from American Securities markets" and so the big problem with PIPEs no longer exists. Perhaps true of the exchanges, but what about the OTC markets?
From latest filing by the PwC guys in the US bankruptcy action:
20. The Offshore Funds’ investments in the Issuers were its most substantial assets, albeit assets that appear to have been manipulated and overvalued. The Offshore Funds purchased notes from the Issuers and received convertible debentures, which allowed the Offshore Funds to convert their debt to stock at predetermined discounts to the market price.
However, when many of the Issuers struggled and defaulted, Ribotsky rolled the outstanding principal, interest, and default penalties into new debentures.
21. As set forth above, the Ribotsky Discovery Parties have already provided incomplete and suspicious documents concerning Issuer transactions. The nearly 140 boxes of documents they produced do not include correspondence with the Issuers, draft documents, due diligence concerning the Issuers, or information about the negotiation of transactions with the Issuers, including the restructuring of the outstanding debt.
22. Furthermore, based on review by our counsel of some of these Issuer transactional files, I understand that many millions of dollars of notes are missing. Suspiciously, loan documents are more likely to be absent for the larger loans. Complete documentation is necessary to evaluate potential claims against Issuers. Furthermore, because the Offshore Funds typically obtained security interests in substantially all the assets of the Issuers, financial discovery about the Issuers is necessary to assess whether there are valuable tangible or intangible collateral that could be the subject of foreclosure or other default remedies.
23. Many of the Issuers are defunct companies. While some of them may have been failed legitimate businesses, other Issuers appear to have been run by unscrupulous management. Potential claims may exist against their current or former management, including improper conveyances. Finally, the Foreign Representatives need information that will allow it to assess the likelihood of recovery of lawsuits against Issuers.
Great stuff!
Hopefully they've learned a lesson.
But most of them didn't seem like the types who would learn the right lesson: ie "I suck at investing and shouldn't do it anymore or at least not until I've learned how to read & understand a financial statement."
Most likely they're huffing & puffing about a "class action suit" or something.
Financials for 2012 posted at OTC Markets.
Plenty of chuckles but a couple of stand-outs:
1. In their report for Q2 2012 they said they had given notice to T&T that they were going to pay the $450K settlement tranche due to in Nov 2012 by issuing them shares at around $0.0045. That was way above market price at the time.
It surprised me, because I was fairly sure that Haig would cunningly assign the underlying debentures to DMBM, as he was permitted to do. DMBM would pay off T&T, and then Haig and DMBM would agree to reset the debenture conversion price, allowing DMBM to dump at a large profit. The shareholders would pay off the T&T debt for Haig, and DMBM would reap a super profit.
This would fit nicely with VG's apparent reason for existence - ie to serve as a cash machine for Hugh Austin et al.
According to the annual just filed, it seems I was right and the Q2 report was wrong.
On February 15, 2013, DMBM, Inc. and T&T entered into an agreement whereby DMBM purchases that portion of the original debenture representing the $450,000 payment originally scheduled for payment on November 1,2012. ... Pursuant to
an Agreement and Amendment to Convertible Debenture between DMBM and the Company, the Company is obligated to a series of 12 payments commencing in March 2013 for $37,500 each. Each payment is to be satisfied in post-split common shares of the Company determined by a conversion price which is the lower of (i)
$0.10 per share (post-split) or (ii) a discount of 30% from the average of the closing price of the Company’s common stock on the principal exchange or securities market on which the Company’s common stock trades for the 14 trading days prior to DMBM’s submission of a conversion notice under the Debenture.
So another lovely little death-spiral cooked up between Haig and DMBM.
2. VG ended up owing Martin Weisberg *** $440,000+ *** for "legal and consulting" work. Geebus! That's more than the current market cap, isn't it? What could he possibly have done which was worth that much?
Of this amount 5,266,745 shares related to $84,795 in consulting services were accounted for as deferred costs since the shares were issued in advance of receiving the related services.
Say what??? They issued shares to him before he did the work? Wow. If you had a nasty suspicious mind you might even think that Marty was paid not to sing.
It'd almost be better if this was massive corruption rather than extraordinary stupidity.
Also, describing Iceland's economy as "stable" is a stretch ...
I'm just one data point, but a data point dubious about Australia placing 7th.
NYC: Zero personal suffering of any criminal activity except having pocket picked once while young & drunk.
Medium-sized Australian city: Car stolen 3 times; house burgled 3 times; one home invasion by drug-crazed lunatic with a machete resulting in regrettably hard-to-see scar on left hand; multiple observations of stupid drunken street violence.