Letter by Phxgold to Judge Murray. It's posted on proboards.
Letter to the judge forwarded to stoeklein and frizzell
The Honorable Brenda P. Murray
Chief Administrative Law Judge
450 5th Street, N.W. Mail Stop 1106
Washington, D.C. 20549-1106
Your Honor:
This letter is written in the hopes that the information I provide will help in your decision regarding CMKM Diamonds. I have been a shareholder in this company for over 18 months only after doing extensive due dilligence. My partners and I have gone to great lengths spending hundreds of dollars and manhours in order to follow the paper trails associated with the claims held by CMKX. I have researched miles of paper in documents, laws, contracts, deeds and have come to one conclusion, CMKX is a viable company.
I have watched CMKX trade shares in the billions on a daily basis. I have seen the company raise their authorized shares to a staggering 800 billion shares. I have watched the company state that the outstanding shares is 703,518,875,000. Many things on the surface seemed out of the ordinary until further researched. The definitive 14c filed by CMKX in Feb 2003 states some interesting things. I hope you have reviewed it for what it truly is, a contract. In that contract there are a group of people listed as "the sellers". These people hold not more than 4.9% of CMKX individually and a total of 85.8% of CMKX collectively. What I find interesting is that these shares are deemed "unaccessable" according to the contract until registered with the SEC. That means to me that 85.8% or 603,619,194,750 of this companies 703,518,875,000 shares cannot even trade, that leaves 99,899,680,250. I'm sure it has struck you as strange that the DTCC claims to have 404 billion shares under CEDE and Co. control. Another thing I find a little strange, which has probably piqued your interest as well, is that under contract, Mr. Casavant cannot divulge this information unless he is court ordered to do so. I'm sure you figured that out when he pleaded the fifth amendment in your court.
I also find it interesting that Ameritrade has halted the ability for its clients to buy CMKX as a corporate decision due to this investigation. Were you aware that 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. Thats a whole lot more than 4.2%. Wouldn't you agree?
CMKX is now in court facing the SEC who is adamant about deregistration of its securities; and in their first response after the hearing, the SEC has called the form 15 filed by CMKX fraudulant. I'm sure you are thinking "why would the SEC wait 2 years to enforce this?" Well, me too. According to Reg 12g, if a company has less than 300 shareholders of record or more than 300 but less than 500 shareholders of record and less that 10 million dollars in assetts on the last day of the 3 most recent fiscal years, the company then may file for deregistration under the rule by filing a form 15. OK, in court it was stated that 360 people became shareholders of record in Feb of 2003, and it was also stated that there were 692 shareholders of record in July 2003. How many were there on Dec 31, 2002, 2001, and 2000 respectively. Those numbers and those dates are the ones that matter according to the SEC regulation 12g. I also ask, if CMKX was wrong in filing their form 15, are they not also covered under the exemption 13a-13 which states, and I quote:
" Part I of the quarterly reports on Form 10-Q or Form 10-QSB need not be filed by:
1. Mutual life insurance companies; or
2. Mining companies not in the production stage but engaged primarily in the exploration for the development of mineral deposits other than oil, gas or coal, if all the following conditions are met:
1. The registrant has not been in production during the current fiscal year or the two years immediately prior thereto; except that being in production for an aggregate period of not more than eight months over the three-year period shall not be a violation of this condition.
2. Receipts from the sale of mineral products or from the operations of mineral producing properties by the registrant and its subsidiaries combined have not exceeded $500,000 in any of the most recent six years and have not aggregated more than $1,500,000 in the most recent six fiscal years."
We know that part one of a 10q or 10qsb is all financials and management discussions about the standing of the company. Anything further in a 10q is considered "other information" such as legal proceedings and sales of unregistered securities. Is cmkx exempt from filing quarterly reports under rule 12g or rule 13a-13 as the rules that govern the 10q also state that all statements not covered by section 1 of a 10q may be filed in 8k and not refrenced in a 10q?
I have a problem with this situation as we have multiple regulations written by the SEC that have been violated by the SEC, AS FOLLOWS:
1. Under Reg 12g the company filed a form 15 (which must be reviewed and signed off by the SEC for accuarcy to deregister)
2. The SEC has not addressed the shareholders of record or the assets in question according to Reg 12g (the last day of the 3 most recent fiscal years)
3. When CMKX filed a 15/a in order to regain reporting status, the SEC reacted with legal proceedings 31 days prematurely. According to rule 12g the company was to recieve 60 days to catch up on past filings. Instead the company had to prepare for legal proceedings in your court.
4. The SEC is basing their case around CMKX and its financials being presented, or lack there of, but according to their own Regulation 13a-13 since CMKX is a mining company in "exploration stages" the companies financials are not even required to be filed.
All of this leads me to believe that someone does not want this company to continue and its not because of the filings or any attempt to "defraud" investors. The very same SEC that is bringing these charges wrote the regulations. How can the SEC offer Revocation as the only remedy in this situation when they themselves were recently 6 months late in their own filings? Filings which were rejected by the GAO due to internal accounting practices that were not SOX compliant.
I ask you, who has the most to gain or lose by your decision? Common shareholders that bought a piece of CMKX because they did research on the claims this company holds and the Laws and regulations that govern its trading, or the SEC who is supposed to police the markets and has allowed billions if not trillions of unaccessable and counterfeit shares to trade unchecked on the market for over 2 years possibly allowing the funneling of billions of dollars out of the United States?
I feel I would be remiss if I didn't ask you to review the regulations that the SEC has ignored in bringing this action against CMKX.
Thank you for your time, Your Honor, I'm sure that this information will find the truth with you and the others it is sent to.
Sincerely,
AI
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