The Jailhouse

[Ignutz]

EVER WONDER WHAT'S GOING ON?

A lot of my Christian Traders friends have been asking me what I think is happening with CMKX. Here is what I believe is going on right now. It is only that, my opinion. It is not meant as fact, insider knowledge, or anything other than that.

I think CMKX has been naked shorted into the trillions. "Shorty" (be it market maker, hedge fund or offshore interests, or a combination) thought that he could drive CMKX out of business and never have to settle their short position as they forced CMKX into bankruptcy. It didn't happen because we have the goods; and we have an unrelenting shareholder base, who believes in the company and investigates every avenue involved.

That whole story has been speculated, investigated, and theorized ad infinitum, so I won't detail it here. But we have finally arrived at an impasse that needs to be broken. The "breaking" began when CMKX forced a reluctant SEC to act with the Form 15a. Why was the SEC reluctant to deal with the CMKX mess? Because they knew it was naked shorted beyond imagination and that settlement was going to be, at best, crippling to the market. And they knew that there was going to be egg on their face, as well as on the DTCC and the "system" as a whole. How do we know that the SEC was aware of the naked short and the impact? Because they have just told us that they knew, in announcing that they were in possession of information and data that is part of an ongoing "law enfocement", active investigation. And information they are withholding is apparently too sensitive for shareholders or their attorney to view. That alone tell us that the "known" is far more sensitive than a "failure to file". So, how do we know that the information isn't about an ongoing criminal investigation of Urban and the company? Because the investigative agency wouldn't have permitted the SEC to open a "can of worms" with the hearing. The investigation would have gone on quietly until presented to a Federal Grand Jury, to consider indictments. IMO the "law enforcement" is the culmination of the Department of Justice "sting" investigation that has been "rumored" for months to have been going after the naked shorting culprits with CMKX as the vehicle of the "sting".

I believe that now the DOJ is "on their own" to pursue the criminal aspects of this investigation, and we are on our own to pursue the civil remedies for what was done to the company. This is the reason that we have seen Maheu on the outside of this company since at least 2003 when his right hand man, Kevin T Ryan bought Crystalix and began working with Woodward and Dhonau. Crystalix is the company that Urban has been loaing money to. Now Maheu has been brought in officially to handle the "dirty work" of getting this mess settled. And he is "hot" after them.

The officials at the SEC and the DTCC have been aware of the problems for some time, but have failed month after month to take any action. That is why the Form 15 was filed, to force the SEC to finally act.

Now with the SEC actively involved and being forced to take additional action, the DTCC and the Market Makers have finally come to the bargaining table, and I believe, that a settlement agreement has already been reached, or is very near completion. They have to, or face the wrath of the public and the enforcement actions of the SEC, when Bill Frizzell files our responses and proofs on the NS next week. It would be better to "buy us off" than to have to go through that. It would be an embarassment to the Administration, the SEC, the DTCC and hopefully more than an embarassment to the perpetrators.

If we accept a settlement that "makes CMKX go away", is that the end? No the criminal prosections are still coming.

How much will we get and when? Both unknowns and I won't even speculate. But it would sure make sense to get things done before either Frizzell proves the NS, or the company reports share structure and valuation. Those are the two big things that could be killers to "shorty" and the MM's / DTCC and bring this thing to a glaring public light. They don't want that. But won't the criminal prosecutions shine the light on this thing? Yes, some light, but criminal prosecutions can be "directed", whereas media publicity tends to be exteme and not as "contorollable" as a criminal prosecution. When the media works properly, the sky is the limit on questions of fault. Criminal investigations can be "surgical" in scope and zero in on one or two particularly "dirty" perps.

As far as an amount of settlement, I think it would have to be "punitive". Shareholders who have been in this thing for awhile, and know the huge potential of CMKX, will not settle for the simple return of their investment and commission fees, as compensation. Nor should they.

Why are the brokerages getting so "testy" with shareholders. I think they are complicit, and know the end is near and time to "ante" up.. "Markers" didn't get into our accounts without the knowledge of the brokers. They knew there was a naked short, by at least the time the divies were divided up and there weren't enough to go around. They have been making up stories and excuses ever since, misleading their shareholders, and even recently eliminating the "free trading" of the stock. However, brokers who have heavily invested in the Market Makers, (like Ameritrade and Knight) have other reasons to be complicit, at least in the "cover up". They are going to lose money and lose "big time".

What about pulling certs? That is the big question on all of the boards right now. I personally took over half of my CMKX in certs and left the other half in electronic, in order to have security and peace of mind that whichever way this thing goes, I will be ready. And for the same reason, I have also taken all of my restricted divies in cert form. Many have posted their reasons for why it makes sense to pull certs or not. I think the most comprehensive posting on this matter was put out by Dr D this weekend, and we can all learn a great deal from his investing wisdom.

What does concern me, is that some are using the divy issue to divide us, just like they did the Owners' Group issue. There is no need for division, it is as simple as each person weighing the good and the bad, the possible and the probable, and making your own decision on what makes sense to you.

In summary, I think the company has reached a settlement agreement with at least the majority of the MM's and the DTCC, if not all. I think we are seeing the results of this in the confusion within the brokerages. I believe we will we be seeing more "results" of this as we near the deadlines for filing our responses with the hearing judge. So to my friends, I say, "Think this thing through before you act." Understand what is happening when it does happen. Don't make rash decisions. Pray. Seek counsel from those you have come to trust over the months or years. Know your "stewardship" responsibilities. "Now is the time" How do I know? My wife was asking that this morning and I explained: When you are standing on the edge of a lake, and see ripples coming ashore. You may have not seen the source, but you know for a fact that something has applied pressure to the surface.

God Bless

Jim

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