Spongetech Delivery Systems, Inc. (fka SPNGQ)

[panglozz]

Metter to roll over on Pike?

The financial crime in SPNG was the collusion of hedge funds with the FME principals to kickback a 40% vig on the discounted money-laundered shares that were sold to the overseas affiliates of the hedge funds.

The SEC (through the as-yet-unreleased testimony of the cooperating Frank Lazaukas) has a clear picture of how deeply involved in the deceit the hedge funds were.

The subsequent actions of Pike illustrate a lawyer-driven strategy of creating a cover story and plausible deniability. The initial "purchases" by Pike were simultaneous with the defection of Lazaukas, and obviously these were motivated by fear of prosecution and not financial acumumen. The SEC is likely considering how it can break down the cover story and reveal the conspiracy. It cannot do this with Lazaukas alone, as he could be impeached for self-interest.

Metter's hope for leniency is to roll over on the hedgies and coroborate the Lazaukas testimony. He will testify that the hedgies knew the issue was fraudulent and dealt in shares anyway. It won't be pleasant for Pike, but really, cry me a river.