Calissio Resources Group Inc (CRGP)

[janice shell]

So COR puts DTCC 'on notice', 'warns' DTCC, calls their actions 'unjust' and 'erroneous', yet refuses to take a single legal step against DTCC in more than nine months.

Exactly. I hadn't read that letter in a long while; I'd forgotten how strongly worded it was. Why didn't COR take the course laid out in it? Why didn't they simply sue DTCC, whose actions were, after all, the immediate cause of their problem?

The letter to DTCC was written on August 24th. We know DTCC debited the funds later that day; we don't know if they replied to Mark Bell's email. Two days later, COR sued Calissiio, Carter, and Signature. Perhaps they made a miscalculation, thinking they were easier targets, and not imagining Calissio and Carter would default and disappear, respectively. But the list of defendants wasn't set in stone; COR could have amended its complaint to include DTCC.

Did Mark Bell, in house legal counsel, advise an action against DTCC, and was he overruled? He doesn't play an important role in the story thereafter. His name appears only one more time that I'm aware of. According to the affidavit filed by Carlos Salas in connection with the motion to appoint a limited purpose receiver, on 24 September representatives of COR and DTCC participated in a conference call:

5. On September 24, 2015, I took part in a conference call with Mark Bell, counsel for COR Clearing; David Aronoff, Saul Rostamian, and Andrew Smith of Winston & Strawn LLP, outside counsel for COR Clearing; Isaac Montal, Aimee Bandler, and Ann Shuman, counsel for DTCC; and Gregg Mashberg of Proskauer Rose LLP, outside counsel for DTCC, regarding the best method for COR Clearing to obtain restitution of the money taken from COR Clearing as a result of Calissio’s fraud.

6. During this call, the representatives of DTCC explained that DTCC would not reverse the transfers of funds at COR Clearing’s request, but would do so if Calissio made this request to DTCC, and with it all debits and credits. Under DTCC’s rules, DTCC will correct errors within 90 days from the transactions, so COR estimates that the request must be made no later than November 13, 2015.

https://www.scribd.com/doc/283949532/COR-Clearing-LLC-v-Calissio-Resources-Group-Inc-Et-Al-Doc-22-11-Filed-05-Oct-15

Why did they wait a month? Or was it simply that DTCC decided not to make time for them until then? After all, DTCC refused even to give Alpine a hearing on the matter, though it apparently gave them the same advice it gave COR: get a receiver appointed to act for Calissio, and we'll reverse the divvy.

Given all that happened - I can make the logical assumption that DTCC actually WANTED this scenario to play out.

But why would it it want that? I can only think of one reason: it didn't want to admit it was in the wrong, and that the problem had arisen out of its own carelessness. DTCC doesn't like to explain, ever. Back in 2011, the SEC held a roundtable discussion about microcaps. The recording of it is archived, and it's quite interesting. All kinds of speakers were invited: people from the SEC, FINRA, a transfer agent, and a woman from DTCC. At one point the DTCC rep was asked why, when microcap companies were denied DTCC eligibility, DTCC refused to explain why, or tell them what they needed to do in order to improve their situation.

She replied, "We don't want to give them that information, because then they'll just find another way to get around the rules". While I agree that penny stock companies do dedicate a great deal of effort to circumventing rules, there's no point in having those rules unless they're clear and comprehensible. DTCC, however, begs to differ. More recently--a couple of years ago--the SEC pressured DTCC to make its policies regarding chills and global locks clearer. DTCC came up with a reasonable proposal. The proposal went though two rounds of comment at the SEC website. And then one day DTCC withdrew it, without explanation.

So that's DTCC. It's unpredictable and unwilling to engage in discussion. It's also powerful, has a first-rate legal team, and has tons of money. Of course that last wouldn't be a bad thing for COR: DTCC would hardly notice the loss of a few million.

I still believe that suing DTCC would have made the most sense for COR, and I'd like to know why they didn't take that route. Such an action would have made for a simple case. Instead of claiming a difficult-to-prove conspiracy involving Calissio, Carter and Signature, COR could simply have sought to show that DTCC had been negligent in not ensuring the dividend was paid only on stock issued and outstanding as of the record date.

Instead, COR embarked on a series of different strategies, each of them, at least in my view, less likely to obtain the desired result. Go figure.