for those who want a thanksgiving laugh.. here's some old LB stuff..
POWER TECH INC (U-PWTC) - Street Wire
Eron's Slobogian pops up in bulletin board promotion
1999-05-21 21:41 ET - Street Wire
See B.C. Securities Commission (BCSEC) Street Wire
SLOBOGIAN AND BALAK MOVE FROM PALMERSTON PROMOTERS' ROW TO BULLETIN
BOARD
by Brent Mudry
Howe Street has a long tradition of looking after its own, and loyal
friendships often count more than concerns over regulatory baggage.
Fugitive financier Brian Slobogian is a good case in point. After
British Columbia regulators shut down Eron Mortgage in October 1997
in a $200-million scandal, the Eron founder and head did not have to
venture far to get in business again, albeit at a much more modest
level. Within months, Mr. Slobogian was hired by Howe St. stock
promoter Lee Balak, a former West Vancouver neighbour and long-time
friend from Winnipeg, with a regulatory history.
Soon after Eron was shut down, Mr. Slobogian left Vancouver and
relocated in Los Angeles, where he set up a consulting company,
Concept Consulting. His first main contract was with Power
Technology, a bulletin board promotion launched by Mr. Balak a year
ago. Although Mr. Balak, Power Technology's president, remains in
Vancouver, Mr. Slobogian moved to Las Vegas, where Power is based.
Power Technology, an automotive battery developer, began trading at
50 U.S. cents in March 1998 and peaked at $5.25 (U.S.) within a
month. The stock slid to a low of 25 U.S. cents this March, and
rebounded to its current $2 (U.S.) trading range.
Mr. Balak notes Concept Consulting one-year contract with Power
Technology began in February or March of last year and expired at the
beginning of this year. Mr. Slobogian and Mr. Balak were both paid
the same salary of $5,000 (U.S.) per month, according to filings with
the United States Securities and Exchange Commission, plus options
and bonuses. The West Vancouver promoter says he hired Mr. Slobogian
to help Power Technology set up its Web site, although regulatory
filings suggest the former Eron head served as a key finder of Power
contacts. When asked what Mr. Slobogian's current role is with Power
Technology, Mr. Balak says "he does not have one."
"I've known Brian since our Winnipeg days, and I helped him out
before with his troubles in Winnipeg," Mr. Balak told Stockwatch. "He
was involved in a tax shelter that went awry," the promoter
explained. Mr. Balak cannot recall any specific details of the
troubled tax shelter, as he was not involved himself. Mr. Slobogian
was in the insurance industry at the time in Winnipeg, and he moved
to Vancouver for brighter prospects in the early 1990s.
Mr. Slobogian was a director of Antigua Enterprises, a VSE promotion
specializing in golf apparel, but he was forced to resign by the B.C.
Securities Commission in the aftermath of Eron's collapse. His wife
Onalee told a British Columbia Securities Commission hearing this
week that her husband was introduced to the concept of the mortgage
brokerage concept by Vancouver mortgage financier Brian Larsen of
Barclay Capital. "They met here in Vancouver, possibly through some
mutual business person. . . then Brian decided to take the course. .
. and passed it and entered the business," Ms. Slobogian testified.
The Slobogian's launched Eron Mortgage in 1993 and Mr. Slobogian ran
the operation until its demise in October 1997, assisted by Frank
Biller, who recruited, trained and motivated the commission salesmen.
Mr. Slobogian's hometown friend, Mr. Balak, moved to Vancouver eight
or nine years earlier, in 1983, after his own regulatory troubles in
Winnipeg. Mr. Balak served a five-year stint as a broker in Winnipeg
with Peter Brown's Canarim Investment, now known as Canaccord
Capital, which also happens to be one of Mr. Slobogian's brokerage
firms. Mr. Balak's regulatory troubles began in 1982, five years
after joining Canarim in 1977. An unhappy client complained that the
promoter made a false representation that a stock would be listed on
the VSE in 1981, and the errant broker signed a settlement agreement
with the VSE in August 1982. Mr. Balak admitted to violating the
Manitoba Securities Act and exchange bylaws, and agreed to pay a
modest fine of $500 plus costs of $250.
Canarim terminated the broker for cause just before Christmas that
year, for unauthorized trading and failing to comply with securities
industry rules and regulations. Six days later, on Dec. 22, 1982, Mr.
Balak's registration was suspended by the Manitoba Securities
Commission, at least until he transferred to another brokerage. Mr.
Balak moved to Vancouver soon after and built a career as a Howe St.
stock promoter. He also apparently had a hard time remembering his
past transgressions. The broker-turned-promoter filed false Form 4's
twice in three years with the BCSC.
Three months later, a BCSC staff member called Mr. Balak and asked
him to reconsider his false filing. After a two year regulatory lag,
Mr. Balak signed a settlement offer on May 15, 1986, admitting he had
been fired by Canarim for unauthorized trading in a client's account.
He agreed once again to pay a $500 fine and costs of $250. Just over
a year later, on May 29, 1987, Mr. Balak made the same mistakes,
falsely denying his prior troubles. "Balak ought to have known that
these statements were, at the time and in light of the circumstances
under which they were made, misrepresentations within the meaning of
the Securities Act," stated BCSC Superintendent of Brokers Wade
Nesmith in a 1990 citation.
The BCSC also cited Mr. Balak for insider filing breaches relating to
five companies which he served as a director over a three and a half
year period. Mr. Balak failed to file insider reports for 33 trades
totalling 114,000 shares of H.Q. Mineral in March and April 1988, and
12 trades totalling 62,500 shares of Vanwin Resources in the same
period. The promoter also forgot to disclose 56 trades totalling
about 340,000 shares of Newgate Resources from February to August
1989, and 42 trades totalling 183,000 shares of West Pride Industries
in the same period. The persnickety BCSC also cited the
broker-turned-promoter for a paltry seven forgotten trades totalling
20,000 shares of Oil City Lubricants. In an agreed statement of facts
and undertaking on Nov. 14, 1990, Mr. Balak agreed to a three year
ban on trading and serving as a director or officer of a company, and
to pay $2,000 of investigative costs.
Mr. Balak filed for personal bankruptcy eight months later, in July
1991. His major creditor was Revenue Canada, which claimed $177,000
for contested reassessments for the years 1986 to 1989. Bankruptcy
court filings also note a $10,000 amount with the Greater Vancouver
Community Credit Union for "Acct 191-7 Slobog guar," presumably
involving a guarantee with Mr. Slobogian. The trustee noted that Mr.
Balak blamed his bankruptcy status on the BCSC's three-year bans,
which curtailed his ability to generate income.
The promoter did get a helping hand from several Howe St. associates,
however. In a court-filed affidavit in March 1992, Mr. Balak noted he
was then self-employed as a financial consultant to public companies,
with a gross income of $4,100 the previous month. In an attached note
on the letterhead of Human Animal Coal Technology Systems, with a
Coquitlam address, president Rene Branconnier confirmed he was paying
Mr. Balak $4,100 per month under a consulting agreement. Mr.
Branconnier later went on to promote Thermo-Tech Technologies, better
known for its well-exposed controversies and legal tangles than its
commercial success.
After selling his $600,000 West Vancouver house in May 1990, netting
$50,000 in equity which he paid to a 100 Mile House couple, Mr. Balak
and his family were helped out by a Howe Street fixture. The Balaks
moved in to a North Vancouver house owned by A.E. Turton Investments
with no formal lease, but an agreement to "landscape and improve the
property" and pay the utility bills. The bankruptcy trustee estimated
in June 1992 that "their expenditures will equate to $1,250 per
month" and confirmed that the Balaks had done landscaping on the
yard. A month later, in July 1992, Mr. Balak, who was married to A.E.
(Ted) Turton's daughter was discharged from bankruptcy.
The promoter later moved back to West Vancouver, where Mr. Balak and
Mr. Slobogian were close neighbours, at least until Eron collapsed
and Mr. Slobogian headed to Howe St. South in Phoenix and Las Vegas.
Mr. Slobogian lived at 2253 Palmerston in West Vancouver in a
$1.2-million house he purchased with his wife Onalee in spring 1996
just as Eron was taking off. While the fugitive financier now lives
in Las Vegas, Mr. Balak remains based close to Howe St., operating
out of his home at 2450 Palmerston and a Vancouver office. This same
block of Promoters' Row on Palmerston also housed a more famous VSE
promoter, Frank Evanshen, the well-known babysitter sex assaulter.
After 15 years working on VSE deals, Mr. Balak launched Power
Technology in spring 1998. One of the company's first contracts was
with Concept Consulting, which supplied Mr. Slobogian's services. Mr.
Balak notes that after Mr. Slobogian's mortgage brokerage career
stalled, his Web site expertise was attractive. "We needed a Web
site. . . and we needed to make sure it was working. . . and we
needed to have someone do some research," Mr. Balak explained.
Power Technology's regulatory filings offer a slightly different
perspective. The Las Vegas company stated that with Mr. Balak based
in West Vancouver, it needed a U.S. consultant to introduce it to
U.S. licensed brokers, to help promote its revolutionary battery
technology. "CCC offers the ability to script announcements, and
deliver organized material to interested parties," stated Power
Technology.
Mr. Slobogian's Eron experience may actually have been an asset as
well. "CCC and its principal, through its experience as a financial
programmer, the former president of a mortgage company, and its
association with contacts from around the world, as well as their
extensive connections in the United States currently, all contribute
to making CCC the candidate of choice for PWTC," stated Mr. Balak in
a filing with the SEC last year. The promoter also noted that the
contract was "contingent on the services of Brian Slobogian being
provided." Under the one-year consulting contract, Mr. Slobogian's
Concept Consulting also agreed to maintain an office on behalf of
Power Technology as a corporate contact for the distribution of
information related to corporate operations in the U.S. and promoting
the company.
Mr. Slobogian's wife Onalee told a BCSC hearing on May 17 that he is
not involved in the mortgage or securities markets. "I do know what
he is doing," she testified. "He is working in public relations,"
added Ms. Slobogian. "Does that work have anything to do with the
securities business?," asked prosecutor Sacha Angus. "Absolutely
not," replied Ms. Slobogian.
With Mr. Slobogian's Power Technology work now done, Mr. Balak is
enthusiastic about his company's prospects. Power Technology shares
rose 12 U.S. cents to $1.78 (U.S.) on Thursday on volume of 332,000
shares, on news of a deal to sell its supposedly advanced new
batteries in China, targeting the automotive and electric bicycle
markets. Power president Mr. Balak is quite excited about Chinese
electric bicycles now, after years of flogging diverse promotions on
Howe St. "Since we have resolved the inefficiencies of current
battery technologies, the electric bicycle stands to gain rapid
acceptance as a real alternative to standard bicycles, motorcycles
and automobiles," states Mr. Balak in Power's May 20 release.
Philip Liu, the president of Aniche, Power's Phoenix-based
manufacturing and distribution partner, is even more upbeat. "China
has 1.2 billion people and an economy that been growing at almost 10
per cent a year over the past 18 years. . . as such, a mere 10
million units over three years, priced at an affordable US$500 each,
represents, US$5 billion in revenue," states Mr. Liu in the joint
release.
Power, a technology development company, has several other gadgets in
its bag, including electronic sensors and pipeline connection
technology. The Las Vegas company also claimed on Thursday that it
has "entered into formal discussion with a major North American
utility company for the development and commercialization of its
Alloy Sensor Technology, a proprietary patented metal alloy which
acts as continuous self-generating power sources when introduced to
any acqueous medium."
Reflecting on his recently departed colleague, Mr. Balak said, "I
don't need to have his kind of press on this company."
