Home Solutions Of America Inc fka HSOA

[rrufff]

Great response from Yahoo board from matpethybridge

Left's Related Party Transaction Fraud Exposed (11 Ratings) 25-Sep-07 07:21 pm

Everybody knows by now that in a desperate and failed attempt to salvage a short position opened at $3.00 and closed out today, Andrew Left posted a new rant against home solutions. I have spent some time scrutinizing his post, and I have learned that he has, once again, omitted materials facts that, if he had disclosed them, would have shown that there is no impropriety at all in Home Solutions' recent related party transactions.

To set the stage for Left's deception, let's examine some of the things he said.

First, his basis for attempting to claim that HSOA has acted improperly:

"Specifically, Home Solutions of America has never reported any related party transactions." This, of course, would be no big deal, but as Left points out, "all related party transactions must be reported as such in corporate filings according the Statement No. 57 according to SEC rule SK 404."

Thus, according to Left, if HSOA has entered into related party transactions, and has not disclosed them, they are in violation of SEC regulation 404.

At least, that is what you would think is his thesis. But if you read his post carefully, he NEVER ACTUALLY SAYS THAT HSOA HAS VIOLATED THE DISCLOSURE RULES. Now, there are two possible reasons for this: Either Left is just a sloppy writer who cannot adequately frame a thesis, or he knows that HSOA has not violated the related party transaction disclousre requirements, and his whole post is nothing but more smoke and mirrors.

In fact, Left knows that HSOA has not violated any disclosure requirements. Take a look at the transactions he cites as related party transactions--the Villa at Tampiana, Fireline Restoration's office and Marshall's home. (he mentions two others, including the Tampa project that he said last month didn't exist, but these three will suffice to prove the point).

I will concede that each of these projects is a related party transaction. Related party transactions are perfectly legal. There is nothing wrong with them. They simply need to be disclosed to the investing public.

The first relevant question then, is how one discloses a related party transaction to the SEC. The answer is that the regulated company that is a "participant," in a related party transaction can make its disclosure in an 8k or a 10KSB. To glean this information, you have to parse this http://www.sec.gov/rules/final/2006/33-8... 436 page document pretty damn carefully. But once you do (see, for instance, page 227, which discusses the paperwork reduction act impacts on such filings, you learn that these are the two reporting mechanisms.

A form 8k is a "current Report" that companies use to disclose major events. For a list of triggering events, review the SEC's discussion here: http://sec.gov/answers/form8k.htm When you do, you will see an important fact: ENTERING INTO A RELATED PARTY TRANSACTION DOES NOT TRIGGET THE REQUIREMENT TO FILE AN 8K. Thus, if you do not have to file an 8K fr a related party transaction, you simply disclose it in your 10KSB.

That, ladies and gentlemen, is the Annual Report, and it lies at the heart of Left's deception. You disclose your related party transactions in your 10K, and HSOA is not due to release that until 2008.

Meanwhile, the 3 related party transactions are all 2007 projects: Villas at Tampiana was filed on January 24, 2007, Fireline's office was filed March 26, 2007, and Marshall's home was filed on May 16, 2007. Thus, HSOA has no legal obligation to disclose these projects until it files its 2007 Annual Report in Q1 of 2008.

Left, you are a fraud. Moreover, your desperation is showing--it is getting increasingly easy to show how deceptively you write about HSOA.