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Pretty painful isn't it? Voting my shares will get me absolutely no where in this mess!
Perhaps you purposely forgot to mention exactly who it was that voted to approve all these measures? After the reverse split and the awards of the free shares they granted themselves, these guys were all very well aware that all the former owners of the Company (pre 2018 shareholders) would no longer command the same voting rights as before the actions you listed - the rightful owners of the Company were effectively neutered so they could not challenge them in a proxy vote. Unfortunately, former shareholders now hold only minuscule percentages compared to before these guys granted themselves complete voting control of the Company.
:(
You remember your oil industry history very well Sneak. The types of considerations you hint at have indeed been in play in other hook ups. Here is an example:
"Not about profit
Could it be that geopolitical and intelligence-gathering considerations overrode economic calculations in the CNOOC boardroom? That might explain why, after initially passing on Unocal’s invitation to bid, the Chinese firm reversed course and made a last-minute offer after Unocal’s board had already agreed to submit a $16.6 billion deal with Chevron Corp. to a shareholder vote.
Otherwise, why would a deal that made little economic sense two months earlier suddenly become so desirable that it’s worth paying not only top dollar to Unocal but an additional $500 million in breakup fees to Chevron?
Small wonder that Chevron Vice Chairman Peter Robertson complains, “Clearly, this is not a commercial competition. We are competing with the Chinese government.”
Members of Congress have asked the Bush administration to have the Committee on Foreign Investment in the United States investigate CNOOC’s bid and assess how the deal would affect national security. It seems the Treasury-chaired, interagency CFIUS would have ample cause to deny a foreign power’s bid to acquire any major oil company with offshore assets adjacent to strategic U.S. military facilities.
That may not sit well with free-trade purists or some free-trade pragmatists. But this may well be a case where vital security concerns outweigh economic ideology."
https://www.goupstate.com/news/20050703/chinas-bid-for-unocal-not-just-business
Interests of shareholders are clearly not aligned with those of management.
What about -
"The beginning of the end?"
There's your buyout right there! Just thinking about what is involved in taking the Company private, I imagine it could just about be done now with that small group of investors indicating they hold those large stakes already.
I don't think anyone wants to upset this apple cart. ;)
The answer is obvious of course. Wonder if that message will sink in for those clowns? And if so whether it influences them to undo the damage they have done before it goes before the courts and their ill gotten gains are clawed back from their greedy little fingers.
If you go to Trading View and click the chart to capture "all" data you will find that the price back in 1995 is $13,102. Of course the stock never traded at that price but the graphing software takes all the reverse splits into account and calculates an effective equivalent price. The point here is original investors have been hosed pretty badly by management over the years as they squandered investors capital. Further to this point is that if you are one of the original investors in this since day one, you are not exactly going to be doing cartwheels if the stock price magically lifts off to reach 8 bucks a share. On the other hand though, it might be another story though if you had been averaging down with dilution insurance following the lead of those in so called circle of trust. ;) But then again, the stock price actually needs to lift off to make that crowd smile.
https://www.tradingview.com/chart/?symbol=OTC:ERHE
"May the miracle of Easter and the lessons it offers find their way into the erhc dialog."
One that is obvious here is that "he is risen" and so too can ERHE if/when they get up to date on their filings. Right now you are not seeing any volume because the stock has the stop sign (because they are not filing) and the average retail investor on platforms like Fidelity can sell, but unfortunately they cannot buy. Under such conditions I wonder if it is telling enough that those that can sell choose not to?
This sort of stuff seems to go on out in plain sight for the world to see. Not that it makes it right by any stretch of the imagination. Greed and scheming goes on in a lot of places - and unfortunately this behavior is not limited to just microcap companies like SGSI. Take a read through an analysis of how Sears insiders went about their asset stripping and how this is now coming to light. This article (https://wolfstreet.com/2019/04/18/culpable-insiders-eddie-lampert-mnuchin-et-al-get-sued-over-sears-holdings-fraudulent-transactions/) shows how "Culpable Insiders began a scheme to strip Sears of assets,” plaintiffs claim, which led to these five “Fraudulent Transfers”:"
The circumstances with Sears might just end up in a high profile trial at some point given the players involved and the highly recognizable company name at the heart of the matter. We might not see the same high profile legal fireworks and media circus in this name but as the other post citing examples of case law show, justice will catch up with devious clowns that think they can step in and act with impunity to do deals that benefit themselves at the expense of minority shareholders. Sadly though, the only ones who really win in the end are the lawyers who rack up lots and lots of billable hours taking the bad guys to task for trying to screw the little guy. Far better to do things the right way from the start and not go down the path to the dark side.
There are many court cases that set precedents addressing the issue of fiduciary duties owed to the minority shareholders. Some of the case law can be complex and others may be simple and straightforward. The cases listed below actually describe situations where the minority shareholders were underpaid for their shares (but of course this says nothing about the notion of officers/directors granting themselves free shares to become majority shareholders in a way that usurps complete voting control and actually takes majority ownership of a company from the other shareholders).
"Majority shareholders and corporate insiders commit fraud by deception when they purchase minority shares in violation of duties of full disclosure and fairness. "
Some interesting reading[just my opinion] if you have time:
http://www.shareholderoppression.com/fraud-by-deception
Directors' and Officers' Fraud by Deception
In Westwood v. Continental Can Co., the Fifth Circuit decided a case involving a shareholder and managing director of a Texas corporation who negotiated a deal sell the stock of his corporation, and then negotiated option agreements with all the stockholders that would permit him to buy their stock and resell it at a premium. Ultimately, the buyer refused to consummate the transaction, and the shareholder sued for breach of contract. The buyer successfully defended the action on the grounds that the contract was unenforceable because it constituted a breach of the shareholder’s fiduciary duties to the corporation and its shareholders.
The Fifth Circuit held that the contract was unenforceable because “when directors or other officers step aside from the duty of managing the corporate business under the charter for the benefit of stockholders, and enter upon schemes among themselves or with others to dispose of the corporate business and to reap a personal profit at the expense of the stockholders by buying up their shares without full disclosure and at an inadequate price, there is a breach of duty.” “If a favorable opportunity arises to sell out, the stockholders and not the managing officers are entitled to have the benefit of it. If an agreement cannot be reached by the stockholders, no doubt one faction may buy out the other.” Any shareholder, even though an officer and director, could legally buy up the stock of the other shareholders with the purpose of reselling at a profit, but only on full disclosure. The shareholder had disclosed to the other shareholders in a letter “the state of the business, the want of harmony among the stockholders, and the wisdom of acting promptly to save the investment.”
In making his offer for the stock, he stated that he proposed to resell it as an entirety, and if unable to do so, to dissolve the corporation and dispose of the assets, hoping to make a profit as the reward of his risk and efforts.” He had even disclosed that he was in the process of carrying on negotiations for a possible sale. However, in the lawsuit, the shareholder contended that he in fact had a contract with the buyer; and the court held that, if so, “the plan as a whole was thus one for the managing officer to deceive the stockholders and acquire the corporate assets for his own and another's profit.”
Both Miller and Westwood involved shareholders who were also officers and directors, and both opinions emphasize their duties as officer and directors. Neither case was a derivative action—in Miller, the plaintiff was suing individually, and in Westwood the corporation was not involved in the transaction. The duties of disclosure in these cases are best understood as flowing from the corporation’s duties to its shareholders, with the courts imposing those same duties on the defendants because of their control of the corporation. If a corporation could not enter into a transaction or purchase shares from a shareholder because the corporation was in possession of undisclosed, material information, then a shareholder, officer or director who is in the same position of advantage over the shareholder as a result of his control over a corporation is subjected to the same duties of disclosure.
Majority Shareholder Fraud by Deception
Allen v. Devon Energy Holdings, L.L.C. concerned the redemption of Allen’s minority interest in an LLC involved in natural gas exploration and development. The LLC redeemed Allen’s interest in 2004 based on a 2003 $138.5 million appraisal of the LLC. In 2004, however, the LLC sold for $2.6 billion—almost twenty times the value used to calculate the redemption price. Allen sued, claiming that the majority shareholder and the LLC made misrepresentations, failed to disclose facts regarding the LLC’s future prospects, and that Allen would not have sold his interest in 2004 if he had known these material facts. For instance, the majority shareholder withheld information concerning the LLC’s technological advances in horizontal drilling and significant lease acquisitions in an existing natural gas field, both of which occurred after the redemption offer but before the redemption.
Although the transaction was a redemption in which the company was the purchaser, the court of appeals treated the transaction as though it were a purchase by the majority shareholder. “We note that the duty we recognize is owed by Rees-Jones, a majority owner and manager with virtually unmitigated control over an LLC, not [the LLC] itself—whether [the company] owed Allen any fiduciary duties is not before this Court.” The appellate court determined that a majority shareholder owed a fiduciary duty to a minority shareholder in the context of a redemption agreement. The court based its decision on majority shareholder’s operating control over the affairs of the company and intimate knowledge of the company’s daily affairs and future plans. Further, the purchase of a minority owner’s interest benefitted the majority owner.
Ritchie v. Rupe’s treatment of this line of authority is significant. The majority opinion cited Allen as authority for the ability of individual shareholders to sue directors and majority shareholders for “fraudulently [] manipulat[ing] the shares’ value” under existing causes of action. In re Fawcett, Miller, and Allen all clearly recognize that corporations—and by extension officers, directors, and controlling shareholders—owe fiduciary duties to minority shareholders at least in the context of a transaction to purchase the minority’s shares when there is knowledge of material facts within the corporation not disclosed to the shareholder. These duties are completely consistent with the legal relationship and duties described in Yeaman v. Galveston City Co.; they are completely inconsistent with notion that no common-law duties are owed directly to minority shareholders. However, Ritchie’s citation of Allen as “addressing fraud claims relating to closely held company’s purchase of minority shareholder interests” —a fraud by deception claim that existed only because of the fiduciary duty to make full disclosure—is at least an implicit acknowledgment of the existence of some duties owed to minority shareholders.
Chevron to buy Anadarko in $33 billion energy megadeal!
https://www.reuters.com/article/us-anadarko-petrol-m-a-chevron/chevron-to-buy-anadarko-petroleum-for-33-billion-idUSKCN1RO143?il=0
This is correct, but the $99 price handle described is still very low and understates the problem - the fall from the high is even greater than you said. Take a look at this chart on Tradingview.com and under the chart click "all" to include all price data from way, way back. It becomes very clear that the effective price after considering all the RS is even higher.
If you go to the very left side of the chart you can see that on July 3, 1989 the chart indicates price on that day was $6635.95. Did it ever sell for that price on the market? No, but that is the effective price after the Reverse splits.
https://www.tradingview.com/symbols/OTC-ERHE/
Very unfortunate loss of capital for all the long term holders who have been in this Company since the very beginning.
You are correct that it might not seem like a big payday and that the risk/reward might be unattractive to most traders. But doesn't your statement here also presume that the shorting simply began only at the 0.0002 level? It also presumes that someone might look at it and believe in their hearts that the company is going to be bankrupt soon and the risk is worth it because they will never have to return the money. But of course should the company survive in spite of their dire prognostications it could also come back and bite them in the rear end should that not turn out to be the case. The problem with predicting the future, is that no one knows for certain precisely how things will turn out.
The analogy used earlier of a bank robbery in plain view is not too far off then is it?
Why bother messing around with the formalities of using the shares of stock as a pretext for this transfer of wealth - why didn't they just come demand all the cash from shareholders wallets at gun point instead. In the final analysis it has the same effect. Is there somehow the misconception that if capital is taken in this manner while sporting the fancy suits and white collars that it is somehow even remotely acceptable? While an armed robbery is a bit more direct and to the point, at least the victim knows immediately that they have been violated.
Mantra shareholders were majority shareholders - NOT minority owners - before this crew were gifted the majority of the shares and took control of the company. As mentioned previously, even if that transfer was somehow accepted by the majority shareholders, then the now minority shareholders still have rights and the officers and directors have a fiduciary responsibility to minority shareholders as well. Somehow I sort of get the sense that this was either lost on them or they simply don't give a sh*t.
I hope the company does really well in the future because the following class action suits will really be something to watch.
Of course this is just one person's opinion. Perhaps others share it as well?
Re: Your comment -
"Former MVTG shareholder will now be diluted 60,000 to 1, now I cal that building shareholder equity."
With that in mind - would you describe them as "great capital stewards? (I suspect probably NOT...)
Yes - you are correct, we do have that right, but as I mentioned earlier, with a Company that is not exactly brimming with cash, and by that I mean lucrative enough that a hungry trial attorney might think the investment of his time and expenses is worth the effort and be willing to tackle such a case for shareholders in a class action lawsuit, even that "right" doesn't necessarily help us that much. We can be technically and legally correct in making the arguments but still end up losing out. And those things can drag out for years if you find yourself involved in a class action lawsuit and the entire time your investment in the stock will simply be in the dumps pending the potential for a victory in court. Its all very frustrating.
And please remind me again? What's in it for the SGSI shareholders?
Wonder if we have any attorneys on the board that might be able to tell us if there is a legal basis to have their shares removed from them or somehow nullify that transaction because of the timing? Very interesting indeed.
Yes, and there should be a lesson in there somewhere?
How about this as an analogy:
But to borrow another often repeated phrase - "they can't have their cake and eat it too!"
Here's another one that might be of interest for extra reading:
https://apps.americanbar.org/abastore/products/books/abstracts/5310344_chap1_abs.pdf
But isn't that still a great big "if"?
Do you get the feeling they have not been held to a "higher standard" as regards their representation of minority shareholders (and by the way the collective conversion of the now former majority shareholders to the now lowly position of minority shareholders [after they gifted themselves shares to effectively become the new majority shareholders was never approved by the subject class was it?)?
https://www.bendlawoffice.com/2018/01/17/can-shareholders-waive-directors-fiduciary-duties/
Background on Fiduciary Duties
Fiduciary duties imposed on directors and officers of corporations generally fall into one of two categories: duty of loyalty and duty of care. The duty of loyalty requires directors and officers to always act in the corporation’s best interest and forbids them from engaging in “self dealing,” or taking advantage of their position in the corporation to benefit their own interests. The duty of care obligates directors and officers to carry out their duties as a normal prudent person would do under the circumstances, including making sure that they are completely informed before making decisions.
If a director or officer makes decisions for the shareholders or the corporation in a manner that does not meet these obligations, then the shareholders can bring a lawsuit against the director or officer for breach of a fiduciary duty. Additionally, in small, non-public corporations, majority shareholders can generally control the corporation by electing themselves as directors and officers, thereby “freezing out” minority shareholders. Therefore, directors and officers of small or close corporations are generally held to a higher standard for fiduciary duties.
There are all sorts of websites (constructed by law firms and associations) that address this subject. Except for the fact that this is a microcap company and as such there is not really a large pot of gold for them to recover if they were to take on such a case in the courts to right such wrongs you describe, I am inclined to believe a class action suit involving wronged shareholders might actually win.
https://www.bendlawoffice.com/2018/01/17/can-shareholders-waive-directors-fiduciary-duties/
Interested Director Transactions
Transactions between a director and his corporation, or between corporations with common directors, often raise the question of whether the interested director has complied with his fiduciary obligation to place the interests of the corporation ahead of his own. Early common law rules governing this relationship have been supplemented with statutory directives.
Traditional case law held that contracts between a corporation and its officers or directors were not void, but were voidable for unfairness or fraud. The burden was on the fiduciary to prove fairness, and transactions in which a corporate fiduciary derived a personal profit were subject to intense scrutiny. The duties of the officers and directors were not viewed as identical to those of other fiduciaries; rather, they were defined on a case by case basis in Texas courts. In the past this duty has been described as one which holds the fiduciary to an "extreme measure of candor, unselfishness, and good faith." The director of a corporation must act fairly and honestly and make full disclosure of all pertinent information in relation to subject matter of any contract he would negotiate with the corporation in which he has a personal interest.
The Code provides a safe harbor for interested director transactions. Section 21.418 provides that a contract or transaction involving an interested director or officer shall not be void or voidable solely for that reason, nor because the interested director or officer was present at the meeting in which the transaction was authorized or his vote was counted in authorizing the transaction, if, after full disclosure, the transaction was (1) authorized by a majority of the disinterested directors (even if they constitute less than a quorum); or (2) approved by the shareholders; or (3) fair to the corporation. The provision codifies the rule of fairness traditionally applied by Texas courts, but additionally insulates transactions that have been properly authorized after full disclosure of the director's interest without further inquiry by the courts into the substantive fairness of the transaction.
Section 21.418 does recognize that an officer or director will be guilty of self-dealing if the plaintiff demonstrates (1) unfairness of the transaction to the corporation, including giving reasons it was unfair, (2) the board of directors did not authorize the transaction by an affirmative vote of the majority of disinterested directors after disclosure of material facts; and (3) the shareholders did not approve of the transaction by a vote after a disclosure of the material facts.
Self-dealing is only deemed to have occurred if the director is "interested." A director is considered to be "interested" if he or she (1) makes a personal profit from a transaction by dealing with a corporation; (2) usurps a corporate opportunity; (3) buys or sells assets of the corporation; or (4) transacts business in his or her capacity as a director, either with a second corporation of which he or she is also a director or is significantly financially associated, or with a family member. The burden of proving that the transaction was fair to the corporation falls upon the defendant. The plaintiff does not have to prove that the corporation would in fact have taken advantage of the opportunity allegedly usurped by the defendant.
Multiple Fiduciary Duties
A special problem is presented when a director sits on multiple boards and the corporations do business with
one another. Since each common director has a duty of loyalty to both corporations, the courts are suspicious of any dealing that might favor one corporation over the other. The burden of proof is on the party wishing to validate the transaction to show that each corporation was dealt with fairly in all respects. At the time of merger of one corporation with another, the director stands in a fiduciary relationship to both corporations. Therefore, he must ensure that any actions he takes are fair to both corporations.
My mistake. I missed one of the candles on the left edge screen when asking it to display all data. It was actually higher than I mentioned. The high was $10,816.43 back at the beginning of July 2000.
I think you can get to that image by loading the ticker in this tradingview site:
https://www.tradingview.com/chart/?symbol=NASDAQ:prpo
Just load all data and use the cursor to find the very left of the screen showing the prices original investors paid to get in. Of course this would be price adjusted for reverse splits but it clearly shows how badly they were hurt on the ride down.
I am not a lawyer yet, but very familiar with how things work. Given the fact they were in Federal Court earlier, you may wish to consider the implications of this as well:
https://fas.org/sgp/crs/misc/R41223.pdf
Not sure how fast the FBI would move but if those investigating were alerted to the fact this is simply the next phase of the scam they might take it seriously and move quickly. Might help to contact the Attorney General's office as well and have a conversation with them too.
Starting to look that way isn't it. And the real crime in this is that SGSI shareholders had absolutely no say in how these guys have taken control of the company and diminished the value of current holders in order to enrich them. Frustrating.
And look how well PRPO did after all of their efforts in coordinating that! While PRPO shows on the long term chart a stock price on September 29, 2000 of $8,198.19, today after all that effort by BV to bring this deal to market the stock sits at a dismal price today of $0.1762 per share. Anyone eager for some more of that kind of action? No not really very interesting it is?
No discussion of getting approval from shareholders for any of this prior to putting the plans in motion whereby they shifted the majority ownership from the existing shareholders to themselves? OK - after that power grab it would not make a difference as they held the majority stake and all voting rights - but that was the part the constituted robbery wasn't it? They have a fiduciary duty to minority shareholders which has been blatantly ignored to the detriment of everyone but themselves.
There are some important concepts established in business relating to the concept of "related party transactions" and working "at an arm's length." And any financial auditor or securities lawyer can tell you these are very important concepts as relates to potential conflicts of interest and fiduciary responsibilities owed to shareholders.
https://www.investopedia.com/terms/r/related-partytransaction.asp
https://www.investopedia.com/terms/a/arms-length-market.asp
Perhaps if you used a slightly different way to describe it rather than "short sellers" some might understand or otherwise accept what you are driving at.
Are you familiar with the concept involving what is called Continuous Net Settlement (CNS)? It is said to hide billions of counterfeit shares that never make it to the Reg. SHO radar screen, as the shares “borrowed” from the DTC are treated as a legitimate borrowed shares.
Not saying I have any information to prove anything like this is going on here, but simply echoing and expanding upon your thought process of thinking that 5 investors with 20% holdings might go a long way in establishing that there is more here than meets the eye (ref: short selling; "yes there is," "no there isn't" debates). Here is something that might be of interest to read for a little more background on CNS:
http://counterfeitingstock.com/CounterfeitingStock.html
That's for sure! Because it sure is not happening at Fidelity. Nice to get the feedback from others to hear how their brokers are handling it though.
Perhaps the company who now sees what they described as "a new world-class gas and oil play" off the southern tip of South Africa. Total's chief executive Patrick Pouyanné said it could hold "around 1bn barrels of global resources, gas and condensate light oil". Seems they have developed an appetite for offshore Africa plays.
Interesting short article entitled "South Africa's offshore sector finally makes some waves" can be found at link below:
https://www.petroleum-economist.com/articles/politics-economics/africa/2019/south-africas-offshore-sector-finally-makes-some-waves
Hate to waste time in disagreement, but every time I try to open a trade with Fidelity for ERHE I get "Trade Error" message that says "(TC9052) Opening transactions for Pink Sheets (without information) are not permitted because of the risks associated with these securities and all Microcap securities." And I can assure you this has nothing to do with the assets on account with the firm...
Once that warning box message comes up and my attempt is thwarted, I then have to click the "OK" button to get the warning off the screen at which point I have to do something different. The point is that I simply cannot enter an opening ERHE trade with them any longer. I am certain they would probably allow a closing trade but that is what happens when an order is attempted with Fidelity these days.
And just so you know, I copied what was in the warning box verbatim and did this by (again) attempting to open the order in real time simply for the convenience of being able to share that tidbit of info with you right here and now. Just think if they would have allowed it I would have bought a bunch of shares for the sake of demonstrating and driving home the point here. Wish it were different, but that is how they roll these days on their electronic platforms.
Figured if I have trouble being able to order so would all the other retail investors out there and thus the point of the post.
Outfits like Fidelity would not let you establish a position in ERHE at this point in time as it is a pink sheet stock that is not reporting. I imagine that sort of minor technical detail is keeping a lot of folks who might otherwise be inclined to take such a gamble from doing so at this point in time.
Maybe they have and we just are not aware of it yet?
What is with the pattern of filling the first open order with 1 share and then moving on to fill other orders with many more shares at the same price? We noted this occurred on Friday and now we see the same pattern here today? What is the significance of the one share? Is it an attempt to put a single share to someone with an open order so they get burned with the broker's commission for the day's partial fill? Is this a market maker's order desk tactic to discourage those sitting on the sidelines with unfilled open orders? Seems sort of pointless, but still very strange. Gives the impression of not keeping an orderly market as the regs require.
"Fat lady hasn’t sung yet." Thank goodness! Even though a lot of folks are not so keen on the lack of transparency these days, the fact that the game continues without seeing the doors closed completely does give many some glimmer of hope that a positive outcome is still (even remotely) possible.
I'm certain that those of us who remain as steadfast longs will continue to hold out hope for such an outcome, yet the math involved in this would suggest that even in your most wildly optimistic scenario, the long term investor in this company still would come up short. For example, suppose for a second that a miracle occurs and the PPS rises the 5-10K times you project, do you think that would be good for everyone or just a select few that were able to scoop up a few shares during the most recent slide following the reverse split? OK, so perhaps a number of those folks might be served by such an outcome (depending on their entry cost) but how about one of the original long term investors from 1995? Say for the sake of example this fellow was unfortunate enough to buy in at the high PPS of 1257 (price adjusted for numerous reverse splits) and he/she had the misfortune to ride it down to the present price of 0.003. That poor soul needs a rise in PPS of something considerably higher than that which even you have projected here.
1257/0.0003 = 4,190,000