Modern Energy Corp (fka MDRG)

[Southern Gal]

Non-Confidential

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#: B6309-10
Date: March 12, 2010
To: All Participants, Depository Facilities and Pledgee Banks
Category: Operations
From: Operations Regulatory Compliance
Attention: Managing Partners, Officers and Cashiers
Subject: Suspension of DTC Services: Modern Energy Corporation


DTC has suspended all services, except Custody Services, for the below referenced issue. The
suspension is effective March 15, 2010.


CUSIP SECURITY NAME

607587409 Modern Energy Corporation


Questions regarding DTC’s Important Notice should be directed to the Operations Regulatory
Compliance Hotline [phone].


The following is a copy of the United States District Court ruling.
UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF MISSOURI
EASTERN DIVISION
Scottrade, Inc., )
)
Plaintiff, )
)
V. )
)
Modern Energy Corporation; )
First Public Securities Transfer )
Corporation; )
)
Defendants; )
)
Merrill Lynch, Pierce Fenner & )
Smith, Inc.; Ridge Clearing & Outsourcing )
Solutions, Inc.; Penson Financial Services, Inc., )
E*Trade Financial Corporation; TD Ameritrade,)
Clearing Services, Inc.; )
)
Relief Defendants. )
5080656.5
Case No. 4:07-cv-01982 HEA
A TRITF COPY OF THF ORIGINAL
JAvtS (. WCDL'W.U, CLERI..
JN1TLDSLPlk )IT TCOURT
EASTERN DISTRiCT CF IS SOURI
BY:
DEPUTY CLERK
JUDGMENT BY DEFAULT AGAINST DEFENDANTSMODERN ENERGY
CORPORATION1 INCLUDING A PERMANENT INJUNCTION
Default having been properly entered by the Clerk against Defendant ModernEnergy
Corporation, and First Public Securities Transfer Corporation having beenserved with process in
this matter and having failed to appear herein, and more than sevendays notice having been
given to Modern Energy Corporation and First Public SecuritiesTransfer Corporation of Plaintiff
Scottrade, Inc.'s application for entry of judgment by default, it ishereby adjudged and decreed:
(a) Modern Energy and its transfer agent, First Public SecuritiesTransfer Corporation,
have not complied with and have violated the spirit and the letter of this Court's prior
judgments in this matter by, among other things, failing to return tothe Depository Trust
Company ("DTC") or its nominee, CEDE & Company, certificatesrepresenting the
Modem Energy common shares delivered by to Modem Energy'stransfer agent, First
Public, pursuant to what Modem Energy described as a "mandatoryexchange" which this
Court subsequently determined to be a reverse stock split effected inviolation of
Wyoming law and the anti-fraud provisions of the Securities ExchangeAct of 1934, 15
U.S.C. §78j(b), and thus null and void;
Based on this Court's prior judgments rendered in this matter, Scottrade's DTC
account should now reflect that it continues to own29,797,165 of the 30,797,165 issued
and outstanding Modem Energy common shares Scottrade heldthrough its DTC account
for the accounts of Scottrade customers on October 19, 2007, and the actions and
inactions of Modem Energy and First Public and those persons acting in active concert or
participation with them (including, but not limited to, David Kormana/k/a David Korem
a/k/a/ Mark Pedley and Michael S. Ioane) have preventedDTC from causing Scottrade's
DTC account to reflect such holdings and rendered it impossible for Scottrade to deliver
any of said 29,797,165 Modem EnergyCommon shares to Scottrade's customers for
whose accounts Scottrade holds such shares;
Modem Energy has violated and continues to violate thereporting requirements
imposed on it by the federal securities laws, specifically 15 U.S.C. §78l and 78m;
Modem Energy does not now have, and since December 21, 2007 has not had a
.properly constituted board of directors, properly appointedofficers or employees, and no
action purportedly taken by Modem Energy at any timesince December 21, 2007 was a
properly authorized action by Modem Energy, every suchaction having been taken,
instigated or directed by persons (including, but not limited to, anindividual using the
name David Korman, and also known as David Korem and Mark Pedley, and another
5080656.5 2
individual named Michael S. Ioane) acting in Modem Energy's name but without any
authority to so act;
(e) Modem Energy has no substantial assets or legitimate business purpose, its shares are
valueless, and its purported existence as a corporate entity is being continuedsolely to
further the fraud launched with the announcement of the purported, but void, reverse
stock split.
Further, the Court finds that:
The actions (and inactions) and the threatened actions and inactionsof Defendants
Modem Energy Corporation and First Public Securities Transfer Corporation, theiractual (or
supposed) officers, agents, servants, employees and attorneys, and those personswho are in
active concert or participation with them or with their purportedofficers, agents, servants,
employees and attorneys, including David Korman a/k/a David Korema/k/a Mark Pedley and
Michael S. Ioane, individually and as a representative of Western InvestmentProperties, Inc.,
pose a continuing threat and risk ofirreparable harm to Plaintiff Scottrade, Inc., for which
Scottrade, Inc. has no adequate remedy at law. The harm threatenedby the Defendants' actions
and those of their actual or supposed officers, agents, servants, employees and attorneys, and
those persons (including Messrs. Korman and Michael S. Ioane) who are inactive concert or participation
with them, includes, but is not limited to, the damage to Scottradewhich would result if
Scottrade were directly or indirectly compelled by the fraudulent schemes being pursued by
Defendants Modern Energy Corporation and First Public SecuritiesTransfer Corporation, their
actual (or supposed) officers, agents, servants, employees and attorneys, and those persons who
are in active concert or participation withthem (including Messrs. Korman and Michael S. Ioane and the
corporation known as Western Investment Properties, Inc. controlledby bane) to purchase
5080656.5 3
and/or deliver intrinsically valueless shares of Modern Energy common stock (and/or other
stocks purportedly distributed by Modern Energy and First Public to Modern Energy
shareholders as in-kind dividends) at artificially inflated prices, whether pursuant to demand by
any Scottrade customer for delivery of the Modern Energyshares shown in Scottrade's records,
or pursuant to any order, by arbitrators or other authorities,entered at the behest of any such
Scottrade customer.
Accordingly, Defendants Modern Energy Corporation, First Public Securities Transfer
Corporation, their respective actual or purported officers, agents, servants, employees and
attorneys, and pursuant to Rule 65(d), Fed.R.Civ.P. all other personswho are in active concert or
participation with any of them (including, but not limited to, David Korman,a/k/a David
Korem, a/k/a Mark Pedley, and Michael S. Ioane and Western InvestmentProperties, Inc.), are
hereby permanently enjoined from:
issuing any additional securities purporting to be issued byModern Energy without
the express, prior approval of this Court;
transferring or purporting to transfer, of record, ownershipof any securities
heretofore issued or purportedly issued by Modern Energy without the express, prior approval of
this Court;
issuing any further announcements, press releases, orother form of communication
with actual or purported shareholders of Modern Energy or theinvesting public and purporting to
be from or concerning Modern Energy without the prior expressapproval of this Court;
making any further postings to the websitewww.rnodern.energycorporation.com or to
any other website purporting to be awebsite of Modern Energy Corporation without theprior
express approval of this Court;
5080656.5 -.4
making any further filings with the Wyoming Secretary of State's office in the nanie
of Modem Energy Corporation without the prior express approval of this Court; or
taking any actions directly or indirectly intended to perpetuate the manipulative
scheme described in the Court's Summary Judgment and earlier Permanent Injunction issued in
this matter, true and correct copies of which are attached hereto and incorporated by reference,
including, but not limited to, prosecuting any arbitration or other proceeding against Scottrade
designed to compel Scottrade to deliver Modem Energy shares or to pay any damages for failing
to deliver such shares or taking any other actions which would directly or indirectly cause,force,
or result in Scottrade having to purchase or pay for any sharesof Modern Energy or any other
issuer, shares of which were purportedly distributed to Modem Energy shareholders asdividends
on Modem Energy shares.
Dated thi,ay of March, 2010
5080656.5 5