You have to be kidding me. You actually read the SEC info and conclude that Gene did not sell the stock to Gendarme? It says right in the info that is what happened.
FROM the SEC
1...Gendarme acquired the stock from small public companies at 30-50% discounts to the market price
...2. Gendarme typically bought shares from companies
How did Gendarme get the stock
...Gendarme Generated Income by Purchasing Billions of Shares of Pink Sheets Stocks
from the Issuers
24. From early 2008 to at least May 2010, Gendarme bought stock from at least 12
different issuing companies and distributed more than 15 billion shares in the public markets.
None of the transactions was registered with the Commission. The transactions are summarized
below.
Bought used above and acquire use below. Both mean the same though.
Specific to RCCH -- RCC Holdings, Inc. (“RCCH”): From September 2008 through January 2009,
Gendarme acquired RCCH shares from the issuer. From September 2008 to June
2009, Gendarme sold more than 2.1 billion of these RCCH shares for more than
$210,000.
...29. At the time she drafted and issued the opinion letters, Armento understood that a
purchaser who bought shares from an issuer intending to distribute them to the public was an
underwriter. In preparing and issuing the opinion letters, Armento did not ask Gendarme, or
otherwise make any effort to determine, what it intended to do with the shares it was acquiring.
Armento had no reasonable basis for opining that Gendarme was not an underwriter. Armento
knew that, as a result of her opinion letters, Gendarme was obtaining shares without a restrictive
legend, and thus would have the ability to quickly sell the shares to the public, even if doing so
violated Section 5 of the Securities Act.
...From at least early 2008 to at least mid-
2010, Armento drafted approximately 35 or more warrant agreements for Gendarme, which
gave Gendarme the right to purchase an issuing company’s shares. The warrant agreements
typically gave Gendarme the right to purchase up to a specified amount of an issuing
company’s stock at a 30% or 50% discount to the market price for the company’s stock. The
warrant agreements represented to issuers, among other things, that Gendarme was purchasing
shares for investment purposes only – a term commonly understood to mean not for the purpose
of resale. Armento expected Gendarme to exercise the warrants and purchase the shares, but
drafted the warrant agreements without determining what Gendarme intended to do with the
shares it would purchase
They bought shares and sold shares. As we know they bought shares from companies’ stock transfer agents, (thus from Gene). 2.1 billion at 30-50% discount.
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