Posted by: newair
In reply to: VABlue76 who wrote msg# 19639 Date:8/31/2005 4:53:07 PM
Post #of 24161
VABLUE, Like most if not all of us here, have not been through this exact same situation. But playing devils advocate for a moment, just how would increasing the outstanding contribute to a solution? Seems to me it would just further complicate an already existing problem.
Are you suggesting that the company would, could or should just increase the outstanding by enough to cover all of the fraudulent shares? What about equitable distribution.
If this stock was worth somewhere between .001 and .08 in the past, based on the exixting share structure, what would they be worth after such massive dillution? Not much.
To do so would put the holders of the original "legitimate" shares in a rather awkward position, why should they sacrafice such value, because of such a fraud be perpetrated upon them?
No I don't think we would ever see that happen.
No question there are a number of people scrambling at the moment. This is a problem which could very easily cost $25,000,000 or more to correct. And that is only based on a share price of .05. Far more than conservitive. The number could also easily exceed $100,000,000.00. We best all believe that every one of these folk behind closed doors is looking for a soulution, and for someone else to blame. No one wants to be exposed to that kind of a hit.
Now follow this all the way back to the source Carter care/ pinio. Even if he were held accountable and found to be financialy responsible, does any of us think that he could cover that kind of a loss? No, I don't think so. So next step, DTC. In their infinite wisdon and competence alowed this mess to come about. No they did not set out to defraud anyone. They did not conspire with the parties who did. But what they did do was to sign off on something that it would seem they "assumed" was ok. No DD on their part. Thats where some of their responsibility will come in. Lets see here, millions and millions of dollars of liability, versus a few million for attornies to drag it out and spread responsibility. Next comes the MM's who have sold countless millions of something they did not have to sell to begin with.
Poor smucks, did they get caught in the middle? Sure, but their greed kept them there. Thus it would seem that they have bitten into the liability pie. Last but not least we have the brokerages. Really no different than the MM's. They too have taken a big bite out of the responsibility pie.
Next problem, we know that as of Aug 1st Pr's had been released advising that a problem existed. that was the time for the red flags to go up. If some of these brokers were ever going to stop trading in this stock for a few days that would have been the time. But they did not. Instead they chose to continue to generate commisions.
It is no secret that the otc bb and pinks have been run by their own rules for a long time. Have bent the rules to suite themselves. and have on a number of occasions broken the back of a company to aviod having to cover a short position. They always seem to slip through the cracks. Look when the FBI and the SEC and the DTC were all made aware of what was going on. Took 30 days to respond?
WHY? No secert, I have never been a proponent of running to the SEC everytime I don't like the way a stock is trading or how a broker reacts. However I will say that this is one time when I really do believe that the respose from the SEC and suspension of trading today was as a direct result of numerous complaints from investors.
No excuse to slip this under the rug, they had to address it in an open format.
We can only hope that the SEC does envoke an open market buy in. That would lead to a swift and fair solution. However if that does not happen, and happen soon, I do see where this could be drug out for sometime. When this does resume, it will do so in all likelyhood do so on the GREYS. Not a good thing. This in my opinion has to be one of the biggest messes to come along in a long time. The really sad part is that people in general have no clue as to this rampant fraud in this arena. By the time they are done, this could or should be right up there with Worldcom or Enron.
What an ugly mess.
Good luck to all.
Have Fun,
AI
