OK, from various new reports, here is my summary of events:
1. CHWM was looking for a private placement to keep production going in China projects.
2. Steve Berman, CEO of CHWM, listens to an FBI undercover agent and agrees for a private placement of $5M, and will kickback some money to the agent himself (up to 1/2 of the placement, I think!).
3. Richard Kranitz, board member and attorney for CHWM, delivers fraudulent papers agreeing to the whole deal.
4. 8-K, Berman resigns for 'personal reasons.'
5. Eric Hager, VP, is now acting CEO
6. Announcement of arrest from FBI and halting of various securities.
My concerns:
1. It appears that CHWM never actually received these funds, so they were not halted.
2. I would assume they made business plans BASED ON receiving these funds, so their business plan could be seriously in jeapordy.
3. I am sure the company will not be able to make many comments on the total event due to 'ongoing investigations' other than some kind of statement.
4. Hopefully the agreements they have signed in China will not be affected by the purported illegal acts of the CEO.
5. Further investigation must be going on by the company examing all documents now.
6. The 10-Q (an audited form for SEC) may be even later than we expect due to this investigation.
What will happen?
Who knows, but if CHWM is not affected in the contracts, I am tempted to buy on the dip here in the next few days, since I am riding all free shares, anyway. We'll see, though.
All The Best
