Modern Energy Corp (fka MDRG)

[Southern Gal]

As a shareholder in MDNO, I view this news as an opportunity to buy additional shares at tomorrow morning's opening bell; or soon after. From my perspective, Scottrade's open admission of being short 1,000,000 shares is welcome news. I believe that they will be forced to cover and in so doing, the PPS will rise dramatically.

Scottrade's lawsuit can be seen at this link:

http://www.courthousenews.com/2007/11/30/ModernEnergy.pdf

I believe that Scottrade screwed up in the selling of 1,000,000 shares of MODR. They admit that there was a GTC sell order for 1,000,000 MODR shares at $0.01. AFTER MODR created a new ticker symbol/cusip # AND released PR's about the corp. restructuring that resulted in 1 share of MDNO for each 1000 shares of MODR, Scottrade asked the shareholder if he still wanted to sell the 1,000,000 shares for $.01. The seller replied with a "Yes". Scottrade should have adjusted the shareholder's account; converting the 1,000,000 MODR shares into 1,000 MDNO shares. Nevertheless, Scottrade then sold 1,000,000 shares. So, 1,000,000 shares Scottrade didn't have minus the 1,000 shares Scottrade did have has created a 990,000 share short position. I view this as great news for the PPS.

Also, in the lawsuit Scottrade wrote the following about the selling of the 1,000,000 shares:
"While the trades were executed one month ago at a price of $0.01 per share, MDNO is now selling at $0.89 or more per share without any corresponding business justification for the marked jump in price."

I view this position as laughable. On one hand, Scottrade fully admits that there was a conversion of 1000 MODR shares into 1 MDNO share. On the other hand, Scottrade claims that there is no "corresponding business justification for the marked jump in price". If MODR shares were trading as low as $0.001, the restructuring would easily support an MDNO share price of $0.89.

Scottrade has created an exciting investment opportunity. I believe that one way or another, they will be required to resolve the short position. Doing so can only be good news for the PPS.