Section 3(a)(10) of the Securities Act is meant to allow companies in dire straits a way to make good on their outstanding claims by issuing shares in exchange for bona fide outstanding claims. The investors, 3(a)(10) financiers in this context, are protected by means of a judge or agency reviewing the terms and conditions of the exchange to make sure they are fair to the investors receiving the shares of a struggling company. 3(a)(10) financing, which is a practice where the investor actively looks for companies who would like to trade its debt for discounted shares, results in the possibility of a financier receiving an almost infinite number of shares if the stock price falls. This practice not only falls outside of the legislative intent of Section 3(a)(10), but also leads to violations of Sec- tions 5, 12, and 13 of the Securities Act of 1933. Rule makers must focus on this growing practice to blatantly skirt the traditional registration pro- cess of the Securities Act and amend Section 3(a)(10) to better protect current shareholders of the target comp any, the target company itself, and the marketplace from the harmful effects of 3(a)(10) financing. Look what the Boys and Girls have found. We believe Redhawk has used these highly Dilutive means to pay debts. Boys and Girls are peeling as Jelly is on the grill. Divest, Can you post the original EMI lawsuit ? Trying to find these 3A10 transactions in the company's filings. Again thanks for all of you are pointing us in the right direction.
