Replies to post #13425 on Electronic Game Card, Inc (fka EGMIQ)

[market-liquidity]

EGMI shareholder settlements would be very slim

if EGMI indeed proves to be a fraud, and this thing certainly stinks like one right now. I'd still guess just a very few cents on the dollar for shareholder losses. If not 1 or 2 cents per dollar, maybe 5 cents on the dollar. I obviously don't know for sure, and no one else does either, there are way too many unknown variables at this point. Like what in the world really happened to create this car crash, with EGMI on the greys at 19 cents. No one knows all the answers right now, plain and simple.

In terms of auditors, other posters on this board have pointed out that auditors are not private investigators. I spoke to a friend who is an FDIC auditor- he goes in with armed law enforcement and shuts down banks when needed, and takes control of their files and operations. He said there are several different levels of audits that auditors are retained for. The deeper the audit, the more the client pays for the audit. So, the client tells the auditor what to do, and to minimize the bill, that work requested will be minimal. Yes, auditors would have E&O insurance, but the question will be what degree of audit did they agree to perform, and how bad did they screw it up in light of that level. I don't know that answer, and I've not seen any posts on this board that indicate anyone else knows that answer yet either.

In terms of personal pockets of perp's, LS (rest in peace) estate has by far the only deep pockets in the crowd of those who were running the ship in past and present, and those LS estate pockets would only be exposed if LS were proven to be a perp. I'm doubting LS was a serious perp in this (why would a guy with that kind of clout and rep to protect and "royal easy street" assets already in hand, want or need to scam chump change relative to his overall net worth), but I have no clear idea. That's why the fed's and Scotland Yard will need to open a criminal case when and if the time is appropriate for such, and look for the dirty trail of stolen money and/or fraudulent lies about fabricated money.

Whatever the case, expect a year or longer before you'll see any settlement funds on your losses if that's the direction this goes, which I think it likely will.

[okvestor]

IFTC, I agree with your recovery thoughts. IF there is fraud, getting a court judgment is the easy part -- collecting it is uaually the challenge. In many cases like Enron, the loss in market value far exceeds the net worth of any individual or even groups of individuals involved. Unlike many such cases, I do believe with an EGMI market loss of $100 million +/- we have at least a couple of likely recovery sources that could exceed this amount, as you mentioned. May or not be enough to make a full recovery, but seems likely to be much more than just pennies on the dollar.

Also, while I know the historical revenues and profitability of EGMI are under investigation, I continue to believe there is some technology and on-going business value either as a stand-alone company or through an acquisition by others.

All things considered, I'm still in agreement that the long-term downside from $.17 is minimal compared to the upside potential.