Replies to post #140402 on DD Support Board and Research Team

[janice shell]

It’s too bad the SEC complaint only focused in on 3 stocks because there are dozens of them that Honig and his gang did the exact same stuff with.

Yes, but if you make a case too complex, it becomes difficult to prosecute. Like you, though, I think we'll be hearing more about all this.

[integral]

Pappadufalus only got 14 days, what is that, time served.

https://www.washingtonexaminer.com/news/former-trump-adviser-george-papadopoulos-gets-14-days-in-jail


Maybe we should all be crims, apparently crime pays.

[Stocknut]

What a hell of a day to get back in and ride it up!!! 24 percent up in after hours already!! Watch for bitcoins huge come back!! BET

[samsamsamiam]

Is it me or you too - that when the frustration level reaches an all time high of the SEC ignoring cases sent to them on a freaking silver platter and they do nothing - that they suddenly do something like these cases - that they keep us hooked AGAIN!

Wasn't there something about Honig and Eric Van Nguyen/APS or some related association with this FROST guy that crossed our paths before? LIKE YEARS AGO!

[penknee]

I was hoping the SEC complaint would shed more light on Honig’s lawsuit against MGT. Suing them probably wasn’t the smartest idea, but it looked like McAfee and Ladd had found a loophole, and used it to screw Honig out of nearly 19 million shares of MGT. I somewhat enjoyed seeing a conman get conned. Hopefully the SEC goes after McAfee soon too, maybe not for MGT, but for his pumping of crypto coins. As soon as they said they hired McAfee I knew it would be a fraud, especially since Ladd ran the same p&d when MGT was known as VGGL.

Below is from Terri Buehl’s article April 5, 2017
http://www.teribuhl.com/2017/04/05/honig-and-friends-sue-john-mcafee-because-they-didnt-make-enough-money-in-mgt-capital-deal/

Honig and Friends Sue John McAfee because they didn’t make enough money in MGT Capital deal

Barry Honig and others he invested with have filed a mudslinging breach of contract suit against the security company John McAfee is working with called MGT Capital. The lawsuit, filed in New York federal court yesterday names personally MGT president Robert Ladd, John McAfee and three of the company board members. The investor group (aka Team Honig *) is upset that, as third-party investors, a bridge loan they made to companies MGT was trying to buy didn’t turn into millions of cheap MGT Capital stock.

It’s hard to tell what parts of the lawsuit are fact-based or fancifully interpretations of events by Team Honig because they lost out making big money on a risky bridge loan. What’s most interesting to me is we see Barry Honig totally reverse course from his stance that he is just a passive investor. The lawsuit against MGT details multiple instances where Barry Honig, along with John O’Rourke, and John Stetson, are negotiating with MGT’s Ladd and McAfee to invest more money into the company dependent on an asset purchase agreement (APA) being executed.

The asset purchase agreement said MGT would buy McAfee’s cyber-security company D-Vasive and another cyber-security startup called Demonsaw founded by famed hacker Eric Anderson (aka Elijah). The purchase would mean shareholders in Demonsaw and D-Vasive would get millions of cheap stock in MGT Capital. On May 5th, Team Honig gave McAfee’s D-Vasive a $100,000 as a convertible debt to equity bridge loan in return for shares in D-Vasive, according to the lawsuit. A few days later the investors did the same kind of loan to Demonsaw for $750,000 converting shares in Demonsaw. If both companies completed a deal to be acquired by MGT Capital the bridge loan investors would get 8.8 million of shares in MGT as a result of their D-Vasive shares merging with MGT. For Demonsaw, it would be 10 million shares of merged MGT stock. Now for the bridge note investors to get the MGT shares they depended on the people who controlled the three companies to complete a signed deal and for new shares to be issued. It’s a typical vulture-style quick money deal that nets sophisticated investors like Honig, O’Rouroke and Stetson cheap stock for little cash out but it’s also risky because these investors aren’t suppose to be in control of the companies making the deal that would net them easy profits via cheap free trading stock.

When I read the Team Honig lawsuit against MGT, Ladd, and McAfee I got the impression that Team Honig had some kind of deal terms and control of the companies that would definitely get them MGT stock for giving loans to another company that MGT didn’t legally own yet…and now we know never will.

The lawsuit says

As with MGT’s acquisition of D-Vasive, the sole reason that Plaintiffs agreed
with Ladd, McAfee, and MGT to provide bridge financing to facilitate the MGT/Demonsaw
acquisition was to ultimately receive additional equity in MGT.

In my opinion that’s active investing not a passive investment as Honig, and his bulldog attorney Charles Harder, have previously said he does.

MGT will likely argue in response to Team Honig’s lawsuit the asset purchase agreement had run out of time and the contract was dead. Or that since the NYSE desisted them after the company got an SEC enforcement subpoena and wouldn’t’ approve the new shares as part of the D-Vasive/Demonsaw deal that there were terms in the contract that allowed MGT to back out of the asset purchase. Meaning there was a legal way out of the contract and they took it.

At the time of the McAfee loves MGT deal announcement, on May 9th, MGT was trading for less than one dollar. After the announcement that this penny stock was going to own a company founded by famed John McAfee, tons of main street investors bought shares in MGT and the stock shot up over eight times its trading price. MGT’s stock price was $0.48 per share on May 9 and rose to $4.15 on May 17, 2016, before settling generally in the $3 to $4 per share range through out the summer of 2016.

If the MGT / D-Vasive / Demonsaw deal had actually been closed the bridge note investors would have turned $850,000 in loans into MGT stock that could have been sold for $56.4 million (assuming 18.8 million shares sold at $3 share price). That’s one heck of a return on investment in a relatively short amount of time. And because none of these investors in the bridge loan to a private company owned more than 5% of the investment they didn’t have to tell The Street they would have owned this convertible stock and made millions. Additionally with all the new MGT stock issued investors who bought MGT on the hype of John McAfee’s involvement would have had their shares diluted.

What I think really happened here is Honig got in bed with two men (Ladd and McAfee), as street smart about how the market and deal making works as he is, and had the tables turned on him. Let’s not forget he filed a 13-G saying he also owned and sold MGT stock during the time the stock was flying high. The bridge loan stock he could have gotten if the deal closed was just extra money he could have made.

What’s ironic about this whole lawsuit is that at the end of last year Honig filed an anti-slaap libel suit against this journalist for 1)reporting he was named in an SEC lawsuit and 2) it was my opinion that the SEC was looking into the investing activities of people he invested with for trading as an affiliate without disclosing it. On February 1st 2017, at a federal court hearing in the Southern District of New York in front of Judge Paul G. Gardephe, Honig’s attorney Charles Harder (you know the slimball LA attorney that represented Hulk Hogan and has waged a war on journalist for his clients) told the judge when he was questioned how he came up with the legal basis that sentences in my reporting were defamatory against Honig “Yes, your Honor. Mr. Honig is a passive investor in stocks”. Then Harder went on to say “and one of these stocks is MGT”. There was short discussion, by Attorney Harder, about Honig not getting involved in the companies he invest in. Yet yesterday we see Barry C. Honig suing MGT and detailing, in my opinion, how active an investor he is.

Honig, without warning to my counsel, dropped his defamation suit against me a few days after that hearing.

The Team Honig lawsuit also details who Honig works with when making investments; something we rarely see in a public document. Honig through his attorneys usually claims he invest and works alone. Two of the men described as working with Honig in the lawsuit, Stetson and O’Rourke, are also named along with Honig in the SEC subpoena sent to MGT capital last year. In fact we see a text sent by O’Rourke to John McAfee literally speaking for Honig and detailing that Honig will make more investments in MGT if XYZ happens.

O’Rourke wrote back to McAfee, asking for confirmation of McAfee’s offer:
My understanding is that MGT will delist onto the QX or bulletin board and close the deal as originally agreed upon and voted upon by shareholders. In exchange, Barry [Honig] will commit to funding the company at $1.50/share

O’Rourke, who is younger than Honig, is the managing member of an investment firm called ATG Capital and has his office in the same building and the same room as Barry Honig in South Florida. Through interviewing people who have done deals with Honig I am consistently told “O’Rourke is Honig’s boy and acts at his direction”. Yet a paper trail of deals that both men invest in usually shows two separate corporate entities investing in the same company. This is how they claim they don’t work together and why it is difficult for a regulator to prove Honig is investing and trading as an affiliate group without disclosing it.

Here is a link to the lawsuit. Keep in mind you can write anything in a lawsuit and the plaintiffs have conveniently left out a copy of their bridge note contract. I asked Team Honig’s counsel at Susman Godfrey to clarify, and back up with documents, some of the statement of facts listed in the lawsuit but they have not responded to an email as of press time. MGT will be represented by Kramer Levin.

* Editors Note: I am using Team Honig to describe the plaintiffs in the lawsuit against MGT. The plaintiffs are: ATG Capital LLC, Four Kids Investment Fund LLC, GRQ Consultants Inc. Roth 401k FBO Barry Honig, Barry Honig, Jonathan Honig, Melechdavid Inc., and Stetson Capital Management LLC. These are not all of the 16 investors in the bridgenotes just the ones who opened themselves up to exposing their private trading records through discovery in a lawsuit.

[samsamsamiam]

Unnamed Stocks in SEC fraud suit against Barry Honig Revealed
Teri Buhl
Smashmouth Investigative Journalism
http://www.teribuhl.com/2018/09/08/unnamed-stocks-in-sec-fraud-suit-against-barry-honig-revealed/


The Securities and Exchange Commission has finally filed an enforcement action against Barry Honig, Philip Frost, and Michael Brauser for trading as a group of affiliates without disclosing their true stock ownership. A group of ten men are named in the complaint as being part of the fraud with Honig listed as the ring leader. The regulator will be trying to ban the men from the industry and charge them millions in restitution and fines. I reported on September 5 the SEC could be bringing an enforcement action soon when I saw Honig’s attorney Harvey Kesner had been removed from the law firm the bore his name.

I was the first journalist who reported Honig and others were under SEC investigation for the actions detailed in their new complaint two years ago at www.growthcapitalist.com and here at this publication. Honig hired a bull dog attorney who makes his money attacking free speech named Charles Harder to sue me for reporting he was the target of an SEC investigation. I had the pro bono help of Eric David, a North Carolina attorney, to stand up to Honig’s lawsuit and we litigated until he dropped the suit against me. Honig’s goal was to get through discovery and force me to disclose the names of people I had interviewed that the regulator had spoken to about Honig and told them he was under investigation. I held my ground even when faced with the possibility of being held in contempt and never revealed my sources. I knew the story was true and it was important for the investing public to know how Honig illegally operates.

The SEC was very slow to sue Honig and the three stocks mentioned in the complaint are only the tip of the iceberg regarding pump and dump schemes Team Honig has done. Because I have interviewed multiple people who have worked with Honig or been company executives of small cap stocks that he has invested in I can report who are the unnamed companies in the SEC complaint.

Company A is Biozone. It was run my a Northern California man named Daniel Fisher. Then Honig came in with his crew and took it over. Eliot Maza and Brian Kelley were part of the Honig-Frost-Brauser ring in that company which later was renamed CoCrystal. Maza and Kelley are also charged for securities violations in the SEC’s Honig complaint.

Company B is MGT Capital. It is run by Rob Ladd and for some time John McAfee was an executive of the company. Honig made a bizarre move and sued Ladd and others in the company for basically stopping him from getting more cheap warrants and trying to take over the company so he could do probably do multiple pump and dumps with the stock. Honig won a partial motion to dismiss in his case against Ladd but also disclosed his behind the scenes strategy to give desperate small cap companies bridge loans that they can’t repay and then the debt gets turned in to discounted stock. Honig suddenly dropped the suit against Ladd in May on the same week another one of his investments filed an 8-K admitting the SEC was investigation preferred share investors for not disclosing they were trading as affiliates. That company is Company C in the complaint.

Company C is MabVax Therapeutics and it is odd that the company CEO’s were not charged with an enforcement action by the SEC when it is clear from the SEC complaint they allowed Honig to control decision making of the company and hide his involvement from investors.

The SEC said this case isn’t over in their press release yesterday and that the investigation is on going. I would bet the regulator’s goal is to flip a few of the men who work with Honig and are named in the complaint and then the DOJ could bring criminal charges against Honig and others. There could also be other companies added to the complaint like $COOL, $RIOT, $MARA. Each of these companies were subject of a recent Sharesleuth investigation and story.

Every time I print a story on Honig this publication is hit with a DDOS attack that tries to crash the site and drive up cost of hosting this news publication on the internet. My personal email has been hacked, I have had men show up at my NYC apartment building trying to speak to me about Honig, and teribuhl.com had a story removed by a hacker two years ago that involved Honig and his lawyer Harvey Kesner. Let’s just say reporting on this man is costly. That’s why reader donations are extremely important to keep the reporting up and free for the market to read. Please donate to support journalism that makes an impact. There is another story on Honig and other firms he works with and their illegal actions that are not described in the SEC complaint coming soon.