Dear Kevin West, Mark Faulk, and Bill Frizzell:
From another borad
We are the CMKX Shareholders Coalition for Justice, a shareholders group that has filed a lawsuit against the Securities and Exchange Commission in the Supreme Court of British Columbia for aiding and abetting the counterfeiting of the stock market in general and CMKX stock in particular. Mark Faulk said, "it would be beyond detrimental to our investigation to release any detailed information to anyone not directly involved in either researching or investigating potential claims that CMKM might take against those who defrauded the company and its shareholders." Our Coalition is doing just that, we have already filed a lawsuit against the SEC and are about to file law suits against TD Waterhouse/Ameritrade, Etrade, RBC, and others who have proven to have naked shorted CMKX stock.
We understand that you were under strict confidentiality agreements while working with Don Stoecklein, Robert Maheu, and Urban Casavant, among others. In your capacity as the shareholders lawyer, Bill, you gathered evidence that proved CMKX was the largest naked shorted stock ever. That evidence was gathered after the Silver State bank information showing fraud was committed by John Edwards and Urban Casavant was well known to the SEC and to the task force from the FBI/IRS/DOJ that Mark was in contact with. That evidence was gathered after most shareholders and the Owners Group were well aware of the possible guilt of Urban Casavant and John Edwards, as it was on the boards everyday, all day, and John Martin read the boards every day. It was in news stories on the internet, particularly the Las Vegas Review-Journal, Feb. 2005, just before the Owners Group was established.
It was your fiduciary duty to make sure your clients were protected and to investigate this information before you worked with Urban Casavant, Don Stoecklein, Robert Maheu, among others. We assume you did just that and that all your comments made during work with the Owners Group and as the shareholders lawyer were accurate and backed by hard evidence, and that possibly contradictions later were due to the strict confidentiality agreements as negligence does not seem a reasonable explanation.
Kevin West identified three brokerages who had naked shorted CMKX stock in conference calls with shareholders, namely , TDWaterhouse, Ameritrade, and Etrade. These same perpetrators where identified in Owners Group Updates, in emails, and in private phone calls. Bill, you also confirmed the identification of the perpetrators when you mailed letters to TD Waterhouse, Etrade, Ameritrade, among others. Clearly, these companies sold several hundred billion shares of CMKX stock and stole almost two hundred million dollars from CMKM shareholders, but these companies are as yet, still not included in your law suits, they are not included in the SEC actions, and are not indicted along with the other perpetrators. We intend to address this issue directly.
These companies are all members of SIFMA, who colluded with the SEC to invoke the notorious Grandfather Clause, which gave them immunity from their crimes, and concealed their fraud. These companies illegally sold hundreds of billions of shares of CMKX stock that was grandfathered and stole almost two hundred million dollars from CMKM shareholders, but you know all that. The CMKX Shareholders Coalition for Justice is preparing to file a law suit against them, and name the SEC as their accomplices.
It appears on the surface as if the Owners Group is also colluding with the SEC and these perpetrators to conceal their crimes, and to make it look like the only perpetrators were insiders of CMKM (who you know phoned in each cert to the SEC before it was sold). WE assume there is a compelling reason for your apparent breach of your fiduciary duties, but we have run out of patience and are taking legal action on behalf of all shareholders which we feel should rightly have been done several years ago.
These are quotes from the Owners Group regarding what you have called the largest proven naked short ever:
1. I have presented a Motion to Judge Murray requesting her permission to allow us to file our evidence which proves significant naked shorting of our stock. (From: jmartin@cmkxownersgroup.com, Date: Tue, 28 Jun 2005).
2. There is evidence of billions of failed deliveries in this stock at the time the trading in this security was halted by the sec. (NASD complaint letter).
3. Due to the indisputable evidence of large numbers of failed deliveries in this stock, CMKM elected to distribute the 45,000,000 shares of Entourage stock to all bonafide shareholders in what was described at the time as a windup distribution. (NASD complaint letter).
4. The Task Force has now received certs in the name of certain brokerage companies. Our investigation reveals a potentially huge naked short position in at least two of the very companies that have sent us certs. The certs sent to the Task Force by the brokers represent billions of shares of CMKM stock. (NASD complaint letter).
5. It is clear from the Regulation SHO records in conjunction with other sources (ADP, the transfer agent and the DTCC) that huge fails to deliver in this stock currently exist. It would be a breach of the fiduciary duty of the company to distribute these assets to a broker in lieu of its true beneficial owner when there is evidence of known fails to deliver occurring at the same brokerage house. (NASD complaint letter).
6. It will be my recommendation to the Task Force that we use all means necessary to assist the shareholders in obtaining their certs. We are most concerned with the legions of Ameritrade, RBC, and TD Waterhouse customers (to name a few) who have been trying since November to obtain certs for their accounts. (May 15th 2006 Owner's Group Update)
7. Ameritrade holds 7.9 % of Knight Trading Group? If you knew that, I'm sure you knew that Knight Trading group stated in Feb 2004 they traded 3.6 billion CMKX shares a day, which accounted for 44% of their average trading volume. 19 trading days in Feb 2004 at 3.6 billion shares is a total of 68,480,000,000 shares. At that time the o/s was 100 billion. (Phxgold's letter to Judge Murray).
8. CMKM Diamonds, Inc. has received letters from a broker requesting that larger CMKX certificates (held in the same broker's name) be broken down into several smaller certs. The written request contained the notation FOR FAILS PHY. The broker confirmed that the request was to cover a fails to deliver in the stock. In a separate incident, one major brokerage firm requested the transfer of a bulk certificate from another major brokerage firm. (September 25th 2008 CMKM corporate update).
9. To The SEC Commission and Financial Industry at Large: Naked shorts in the United States = "counterfeit shares." The case of CMKX represents the greatest "counterfeit shares" fraud in the UNITED STATES. CMKM DIAMONDS, INC. suffered THE LARGEST NAKED SHORT IN HISTORY. (per Al Hodges comment letter to the SEC, March 27th 2008).
The Coalition is aware that every shareholder who is on the victims notification list sent in their total shares purchased and who sold those shares. This list, without names of shareholders, is necessary for the Coalition to go forward with our lawsuit against the perpetrators. We anticipate that you will be willing to supply The Coalition with the requested information in a package, sent to us by registered mail, to allow us to properly identify the perpetrators who harmed all CMKM shareholders and to seek damages in a court of law from those perpetrators. We followed along years ago , when you took the steps necessary to obtain these records and realize how difficult it was. Given the late date and the suffering the shareholders have endured , as well as our mutual interests, we are hopeful that we will not be forced to repeat those same steps or take further legal action, when all this information is at your fingertips.
We formally request these documents which you have obtained in your work as the shareholders lawyer and as a member of the CMKM Task Force:
1. Exact totals of shares sold by every institution from the victim notification list and the shareholders audit.
2. All nobo/obo lists.
3. All trading records provided by the SEC and DTCC.
4. The cert pull work product Kevin and Bill put into the interpleader, whether it was filed or not.
5. Any phone records from the SEC, in particular those mentioned in Mark's letter to President Obama.
Thank you for your prompt attention to this matter. As both our goals are to protect and look after the interests of the CMKX Shareholders, we are hoping that you will voluntarily assist us in providing this information needed for our lawsuit.
AI
