SI
SI
discoversearch

   Biotech / MedicalGMXX - GENEMAX CORP


Previous 10 Next 10 
To: afrayem onigwecher who started this subject7/1/2004 12:43:40 PM
From: StockDung
   of 977
 
INVESTREND/DONALDSONGATE:"Dutton set out on when he founded Investrend, another pay-for-play research organization from which he parted to start the new company, taking many of the analysts with him."

J.M. Dutton & Associates
An Independent and Pure Research Shop
by Ben Mattlin

In April 2002, John M. Dutton, president and director of research at the El Dorado Hills, California-based J.M. Dutton & Associates, was wooing chief executive officers of American Stock Exchange-listed companies at their semi-annual convention. The CEOs weren't used to receiving attention from research directors. Wall Street, after all, tends to favor the larger and better known companies of the New York Stock Exchange and Nasdaq Market, which are seen as more likely to generate rapid sales commissions and lucrative investment-banking deals. But, Dutton told the assembled CEOs, all that was about to change. "They should get to know us, I said, because they might want to do business with us," he later recounts.

Dutton, who has worked on both the buy and sell sides on and off Wall Street since 1966, launched Dutton & Associates last September, before the terrorist attacks, to seek out under-covered stocks wherever they might be hiding. With 14 analysts spread across the country tracking 30 small- to micro-capitalization companies ranging from $10 million to $500 million, the firm has no investment-banking or securities-trading operations. It is a research shop, not a brokerage.

Headquartered a half-hour's drive east of Sacramento, Dutton & Assoc. stresses nothing but pure, old-fashioned independent research unadulterated by corporate-finance and trading pressures. "That's the way I was taught to do it," says the distinguished, thoughtful Dutton, a Brown University graduate with an M.B.A. from the University of Pennsylvania's Wharton School.

Indeed, in an era of increasing scrutiny over sell-side analysts for alleged conflicts of interest, Dutton's back-to-basics philosophy sounds refreshingly honorable and extraordinarily well timed. What's more, Dutton's team of seasoned analysts comes armed with decades of professional experience, chartered-financial-analyst certifications, and active memberships in the Association for Investment Management and Research, an independent organization dedicated to maintaining a high standard of business ethics. The firm may not be the only dedicated-research outfit, but it has the most mature analyst roster, with an average age that's roughly double that of many Wall Street hotshots today -- another point of pride. "There's real value in maturity," observes Dutton, 59. "Young people assume when the market's hot it's going to stay that way, but I've been around long enough to see every cycle come to an end." Specialty-foods and gaming analyst Gerald F. LaKarnafeaux, himself 65 years old, adds: "We've all been around the block a few times. We are not going to be misled very easily."

But the other point about maturity has to do with a sense of responsibility and ethics. When the Securities and Exchange Commission recently proposed new regulations for analyst conduct --such as barring them from owning shares of companies they cover -- Dutton's squad was already a step ahead. They've never been allowed to hold the stocks they follow.

Of course, whatever their degree of moral integrity, the firm's got to make money somehow. This is another way Dutton & Assoc. differentiates itself from its three or four pure-research competitors: its revenue model. "Our revenue model is the best for avoiding conflicts of interest," asserts Richard Hefter, Los Angeles-based vice president of sales and marketing.

Regional investment banks and brokers with insufficient or inadequate research capabilities outsource to Dutton & Assoc. But other, often-misunderstood revenue sources are under-followed companies willing to pay for coverage. Hefter and Dutton actively solicit such business, which is largely why Dutton attended that April AMEX company CEOs meeting. From the outset, it's made clear to corporate candidates that they are not buying recommendations; they're buying coverage. They pay for one year in advance, and let the chips fall where they may. Dutton compares it to credit ratings from Moody's Investors Service and the like, which are based on independent, objective research. "We're not an investor-relations firm," Hefter stresses. "Companies know that when they hire us, and they understand that our only value to them lies in our credibility."

Do all companies without coverage deserve coverage? Perhaps there's a good reason they've been overlooked. But Dutton & Assoc.'s Robert Davis, who studies coverage statistics, asserts that stock coverage is directly proportional to stock size. All other things being equal, the smaller the company the less likely it is to draw an analyst's attention. And the problem is growing worse. Today, only 41% of companies with market caps between $50 million and $75 million receive sell-side earnings forecasts, for instance, whereas last August more than half the companies in that bracket did.

Dutton estimates some 5,000 small-cap companies in the United States are going without adequate research coverage. "They trade more cheaply than their listed counterparts even when they have better margins, better growth rates, and better management," he observes. In truth, the drop in available research on small-cap stocks is even more surprising when you consider the relative performance of Standard & Poor's Small Cap 600 to its big-brother benchmark, the S&P 500. Last year, the smaller companies advanced 6.5% while the broad index plunged nearly 12%.

Yet Dutton's firm isn't open to providing research on all comers. They must be "well run and high quality" to pass his screens. Over-the-counter Bulletin Board stocks can and often do pass, but Dutton draws the line at penny stocks listed on the "pink sheets."

An accepted company is then assigned to an analyst, who earns a fee up front to track the stock for one year, in a kind of freelance arrangement. Strictly speaking, the analysts are independent contractors. Their compensation is based on the number of companies they follow (capped at eight per year, to avoid burnout), the number of update notes they write beyond the initial and quarterly reports and the accuracy of their forecasts. Because all fees are paid up front, analysts are free to conduct their research and formulate their opinions without concern about ruffling management's feathers. They're not even afraid to issue sell ratings when appropriate. "My opinions are based on my research, not on how we can get a buck out of trading the stock or doing a deal with the company," insists analyst Richard W. West, who monitors financing and technology companies from a base in New York. "We're not pushed to come out with a certain rating."

In another surprising aspect of the revenue model, research reports are distributed as widely as possible -- simultaneously to Multex.com, FirstCall.com, the company's own free website (www.jmdutton.com), and an ever-growing mailing list. "We don't charge for our research," says Hefter, who defines an important part of his job as "making sure the product has the widest possible readership."

That's true to the mission Dutton set out on when he founded Investrend, another pay-for-play research organization from which he parted to start the new company, taking many of the analysts with him. "The more sunlight that shines on every step of the process, the better for everybody," Dutton holds. An avid airplane pilot and sailor in his off-hours, he knows a lot about sunlight. And about independence.

If you can talk about loyalty in a company that's not even a year old, Dutton's analysts appear loyal to the man and the mission. Sherry Grisewood, an analyst based in New Jersey who covers "healthcare-enabling technologies" and doubles as assistant director of research, has worked with him at two different firms -- a distinction shared by many of her colleagues. She boasts 25 years on the sell side, monitoring a variety of special situations and small-cap stocks both independently and for such firms as E.F. Hutton Co. (now part of Lehman Brothers) and Donaldson, Lufkin & Jenrette Securities Corp. (now part of Credit Suisse First Boston). Grisewood is currently focusing on new technologies that enable less invasive therapeutic solutions.

Her Seattle-based colleague Les Childress leverages as many years' experience in energy and special-situations research. Turnaround opportunities and the misunderstood are among his favorite finds, but he also keeps sights on community banks and, increasingly, Canadian stocks. Famously skeptical of management, he puts more faith in strategic execution and a sound balance sheet.

Such no-nonsense values pervade the analysts' reports, which are surprisingly well written and to-the-point. Though largely aimed at individual investors, they are fashioned with an eye toward "institutional quality." Dutton himself wields an editor's red pencil over every word. "If you can't communicate your views clearly," he muses, "you might as well be a portfolio manager!"

The research director is actively recruiting to expand the department into new sectors, and he anticipates a coverage universe of 75 companies by year-end, triple the current size. A London office is also underway, followed shortly by one in Asia. The heady excitement is palpable. Observes vice president Hefter, "You can feel the analysts' delight at being able to do research without strings attached." *

(continue)

=====================================

."BusinessWeek magazine last year reported that the company paid a promoter for ostensibly independent stock research while Donaldson was on the board"
====================================================
Regulators Probe Firm Where SEC Chief Was Director

By Carrie Johnson
Washington Post Staff Writer
Thursday, July 1, 2004; Page E01

The Securities and Exchange Commission is probing the books of EasyLink Services Corp., a New Jersey firm where SEC Chairman William H. Donaldson served on the board until shortly before he became the agency's chairman, according to sources familiar with the investigation.

The status of the investigation, which involves how the company recorded its revenue, could not be determined yesterday.

Donaldson declined to comment yesterday, as did SEC spokesman Matthew C. Well.

Donaldson, 73, took the helm of the SEC last year after financial scandals and political missteps had damaged the agency's reputation. He has been trying in recent months to push through a slate of controversial proposals to clean up the mutual fund industry, regulate the risky investment pools known as hedge funds and give dissatisfied shareholders more power to nominate corporate board members.

The investigation into EasyLink, which was reported by Dow Jones yesterday, echoes a similar controversy in the SEC's recent history.

Donaldson's predecessor as SEC chairman, Harvey L. Pitt, resigned on election night in November 2002 in a firestorm over his choice of former CIA director William H. Webster to head the new accounting industry oversight board.

It was later disclosed that Webster had headed the audit committee at U.S. Technologies Inc., a D.C. company whose accounting practices were under SEC scrutiny and whose chief executive would later be convicted of fraud. Pitt allegedly failed to tell his fellow commissioners about Webster's role at U.S. Technologies before they voted to approve him to head the accounting oversight board.

Donaldson, who was on the EasyLink board from 1998 to late 2002 and served on the audit and compensation committees, has recused himself from voting on the EasyLink enforcement action, the sources said. One of the sources said board members, even those on audit committees, don't necessarily delve into methods of revenue recognition.

EasyLink converts paper documents into e-mail messages. The company, then known as Mail.com, went public during the height of the dot-com boom in 1999 and its shares rose to a high, adjusted for splits, of $271 that year. Its shares now trade for $1.63.

Its founder and chairman, Gerald Gorman, worked for a dozen years at the Wall Street investment bank Donaldson, Lufkin & Jenrette, which Donaldson co-founded. Gorman did not return phone calls yesterday.

While on the board, Donaldson voted to forgive a $200,000 loan to the company's chief executive at a time the company was struggling financially, an issue that critics raised before his 2003 confirmation hearings for the role of SEC chairman. BusinessWeek magazine last year reported that the company paid a promoter for ostensibly independent stock research while Donaldson was on the board.

SEC enforcement chief Stephen M. Cutler did not return calls yesterday evening.

© 2004 The Washington Post Company
=========================================

A Thorny Question for Donaldson
DECEMBER 31, 2002
NEWS ANALYSIS
Bush's SEC chief nominee was on EasyLink's board when the Internet outfit paid $25,000 for a report that called it a "speculative buy"

The brokerage firm that William H. Donaldson co-founded, Donaldson, Lufkin & Jenrette, was proud to call itself "The House That Research Built." But research may prove to be a thorny issue for Donaldson, who faces Senate confirmation hearings on whether he will succeed Harvey L. Pitt as chairman of the Securities & Exchange Commission. BusinessWeek has learned that an Internet company in which Donaldson was a director, EasyLink Services Corp. (EASY ), paid $25,000 to a California firm to produce ostensibly independent research that briefly boosted the high-tech company's share price.

And that poses a troubling question: Did Donaldson endorse the controversial practice, common among microcap companies, of paying for research? Donaldson's close ties to Wall Street and his controversial tenure as chairman of Aetna Inc. (AET ) have made him a subject of widespread criticism by investor advocates. Any connection between Donaldson and the decision by Edison (N.J.)-based EasyLink to commission the research -- which mimics Street research so closely that it appears to violate industry guidelines -- could fuel criticism that he is not sympathetic to investor concerns.

PROMOTION GIMMICK. Donaldson, who left the EasyLink board on Nov. 12, declined comment on whether he or the board had approved the hiring of J.M. Dutton & Associates to produce the reports. Through a staffer, he referred questions to Gerald Gorman, EasyLink's chairman and a former DLJ investment banker, who said he didn't recall discussing Dutton with Donaldson, or asking for board approval. He declined to say if the board ever discussed the general issue, saying, "Those are not matters we discuss publicly."

Paid research, though legal, is generally viewed by regulators and market pros as a stock promotion gimmick rather than genuine research. Says Joseph P. Borg, the Alabama Securities Commissioner and an authority on microcap issues: "When we look at these things, more than half are usually, you know, crap."

Louis M. Thompson Jr., president of the National Investor Relations Institute, says the group banned paid research entirely until January, 2002, because of the potential for abuse. NIRI then enacted stringent, though voluntary, guidelines requiring that reports not resemble ordinary analyst reports and mandating explicit payment disclosure.

"UNDERVALUED"? Market reaction to the first Internet-distributed Dutton report, on Sept. 3, was ecstatic. Share prices jumped 37%. Contrary to NIRI guidelines, the report gave EasyLink a "speculative buy rating." It noted Donaldson's presence on the "strong board of directors" and said the company "appears to be undervalued."

The report says "the cost of enrollment in the Dutton & Associates one-year continuing research program is US $25,000" -- but does not explicitly say that EasyLink paid Dutton. The firm's president, John M. Dutton, confirmed the payment and said there was no understanding that Dutton would provide favorable reports.

The SEC has set no rules specifically governing paid research and has announced no plans to look at the issue. But that could change if more distressed companies decide to resort to this controversial form of stock promotion. Gorman is right. What happened at EasyLink board meetings is a private issue. But the Senate may not take "no comment" for an answer.

By Gary Weiss in New York

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story.

To subscribe online to BusinessWeek magazine, please click here.

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/6/2004 5:01:22 PM
From: StockDung
   of 977
 
THE PLOT THICKINS LOL->Notice of Hearing LOM (Holdings) Limited, LOM Securities (Bahamas) Limited,
LOM Securities (Bermuda) Limited, LOM Securities (Cayman) Limited, Lines Overseas Management Limited, Donald P. Lines, Brian N. Lines,
Scott G. S. Lines, Malcolm Moseley, David McNay, and J. Scott Hill
Section 161 of the Securities Act, RSBC 1996, c. 418


==========================================
Policy Documents Decisions & Orders

Document Sub-category: Notices of Hearing
Document No.: 2004/05/20
Subject: LOM (Holdings) Limited, et al. [Notice of Hearing]
Amendments:
Published Date: 06/01/2004
Effective Date: 05/20/2004



______________________________



Click on the Adobe icon to launch the Acrobat Reader


2004 BCSECCOM 294



Notice of Hearing

LOM (Holdings) Limited, LOM Securities (Bahamas) Limited,
LOM Securities (Bermuda) Limited, LOM Securities (Cayman) Limited, Lines Overseas Management Limited, Donald P. Lines, Brian N. Lines,
Scott G. S. Lines, Malcolm Moseley, David McNay, and J. Scott Hill
Section 161 of the Securities Act, RSBC 1996, c. 418

¶ 1 A hearing will be held (the Hearing) to give LOM (Holdings) Limited, LOM Securities (Bahamas) Limited, LOM Securities (Bermuda) Limited, LOM Securities (Cayman) Limited, and Lines Overseas Management Limited, Donald P. Lines, Brian N. Lines, Scott G. S. Lines, Malcolm Moseley (Moseley), David McNay (McNay), and J. Scott Hill (Hill) (collectively, the Respondents) an opportunity to be heard before the British Columbia Securities Commission considers whether it is in the public interest to make the following orders:

1. under section 161(1)(a) of the Securities Act, RSBC 1996, c. 418, that the Respondents comply with or cease contravening the Act;

2. under section 161(1)(b) of the Act, that the Respondents cease trading in, and be prohibited from purchasing any securities or exchange contracts;

3. under section 161(1)(c) of the Act, that all of the exemptions described in sections 44 to 47, 74, 75, 98 and 99 of the Act do not apply to the Respondents;

4. under section 161(1)(d) of the Act, that Donald P. Lines, Brian N. Lines, Scott G. S. Lines, Moseley, McNay, and Hill resign any position they may each hold, and be prohibited from becoming or acting, as a director or officer of an issuer and be prohibited from engaging in investor relations activities;

5. under section 162 of the Act, that the Respondents each pay an administrative penalty;

6. under section 174 of the Act, that the Respondents each pay prescribed fees or charges for the costs of, or related to, the Hearing; and

7. to make any other orders that are appropriate in the circumstances.

¶ 2 The Commission will be asked to consider the following facts and allegations in making its determination:

Respondents
1. LOM (Holdings) Limited is company that was incorporated under the laws of Bermuda.

2. LOM Securities (Bahamas) Limited, LOM Securities (Bermuda) Limited, LOM Securities (Cayman) Limited, and Lines Overseas Management Limited are subsidiaries of LOM (Holdings) Limited.

3. LOM Securities (Bahamas) Limited provides investment and financial advice, brokerage services and discretionary investment services from the Commonwealth of The Bahamas.

4. LOM Securities (Bermuda) Limited provides investment and financial advice, brokerage services and discretionary investment services from Bermuda.

5. LOM Securities (Cayman) Limited provides investment and financial advice, brokerage services and discretionary investment services from the Cayman Islands.

6. Lines Overseas Management Limited provides custody, clearing, trading, and administrative services to LOM Securities (Bahamas) Limited, LOM Securities (Bermuda) Limited, and LOM Securities (Cayman) Limited.

7. Donald P. Lines is chairman and a director of Lines Overseas Management Limited and is a resident of Bermuda.

8. Brian N. Lines is president and a director of Lines Overseas Management Limited and is a resident of Bermuda.

9. Scott G. S. Lines is managing director of Lines Overseas Management Limited and is a resident of Bermuda.

10. Moseley is chief financial officer, executive vice president and a director of Lines Overseas Management Limited and is a resident of Bermuda.

11. McNay is the vice president, investment operations of Lines Overseas Management Limited and is a resident of Bermuda.

12. Hill is the compliance manager of Lines Overseas Management Limited and is a resident of Bermuda.

Purchase and Sale of Shares
13. Lines Overseas Management Limited has accounts at brokerage firms in Canada (the LOM Accounts) which it uses to conduct trades on behalf of its clients.

14. From September 1, 2002 to March 28, 2003 (the Relevant Period) some of the LOM Accounts bought and sold, among other things, the shares of a British Columbia reporting issuer (the Company).

15. During the Relevant Period the LOM Accounts:

(a) accounted for approximately 15.5% of the purchases and 35% of the sales of the shares of the Company on the TSX Venture Exchange;

(b) engaged in 11 trades in which one of the LOM Accounts was the buyer and another one the seller; and

(c) were responsible for 20% of all of the upticks (purchases that take place at a higher price than the last purchase) in the price of the shares of the Company.

16. On November 6, 2003, Commission staff sent a request to the Bermuda Monetary Authority (the BMA) requesting its assistance in obtaining information from Lines Overseas Management Limited relating to the identity of the person(s) trading in the shares of the Company through the LOM Accounts (the Requested Information).

17. The BMA asked Lines Overseas Management Limited to provide it with the Requested Information.

18. Lines Overseas Management Limited declined to provide the BMA with the Requested Information. Instead Lines Overseas Management Limited provided the BMA with a list of all of the transactions that it had conducted in the shares of the Company, from August 19, 2002 to July 29, 2003 (the Transaction Report).

19. The Transaction Report revealed that LOM Securities (Bahamas) Limited, LOM Securities (Bermuda) Limited, and LOM Securities (Cayman) Limited bought a total of 1.65 million shares of the Company and sold a total of 5.6 million shares of the Company on the TSX Venture Exchange and two other stock exchanges. The Transaction Report does not contain any information that would allow Commission staff to determine the identity of the actual person(s) who conducted the purchase and sales of the shares of the Company.
20. Lines Overseas Management Ltd. and LOM Securities (Bermuda) Ltd. have commenced a court action against the BMA in Bermuda to resist providing the Requested Information.

21. On March 4, 2004 Commission staff wrote to Lines Overseas Management Limited directly requesting that it provide the BMA with the Requested Information. Lines Overseas Management Limited has failed to comply with the request.

22. On April 30, 2004 Commission staff served Lines Overseas Management Ltd., LOM Securities (Bahamas) Limited, LOM Securities (Bermuda), and LOM Securities (Cayman) Limited with a Demand for Production under section 144 of the Act (the Demand). The Demand required these entities to, among other things, provide Commission staff with the Requested Information. Lines Overseas Management Ltd., LOM Securities (Bahamas) Limited, LOM Securities (Bermuda), and LOM Securities (Cayman) Limited have each failed to comply with Demand.

Breach of the Act
23. The Respondents failed to comply with the Demand, contrary to section 144(1) of the Act.

Acts Contrary to the Public Interest
24. The conduct of the Respondents as set out in this Notice of Hearing was contrary to the public interest.

¶ 3 The Respondents may be represented by counsel at the Hearing, and make representations and lead evidence. The Respondents are requested to advise the Commission of their intention to attend the Hearing by informing the Commission Secretary at PO Box 10142, Pacific Centre, 701 West Georgia Street, Vancouver, BC V7Y 1L2 phone: (604) 899-6500; email: commsec@bcsc.bc.ca.

¶ 4 The Respondents or their counsel are required to attend at the 12th Floor Hearing Room, 701 West Georgia Street, Vancouver, British Columbia, on Wednesday, June 2, 2004, at 9:00 am if they wish to be heard before the Commission sets a date for the Hearing.

¶ 5 Determinations may be made in this matter if the Respondents or their counsel, do not appear at the Hearing.

¶ 6 May 20, 2004




¶ 7 Stephen J. Wilson
Executive Director

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/7/2004 8:49:39 AM
From: StockDung
   of 977
 
ANOTHER TUSSLE WITH ONE OF THOSE HIGH QUALITY STOCKGATE STOCKS. MUST BE A CONSPIRACY. LOL

In the Matter of PINNACLE BUSINESS MANAGEMENT, INC.Respondent.


UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
SECURITIES EXCHANGE ACT OF 1934
Release No. 49971 / July 6, 2004
ADMINISTRATIVE PROCEEDING
File No. 3-11535

--------------------------------------------------------------------------------

In the Matter of

PINNACLE BUSINESS MANAGEMENT, INC.

Respondent.

--------------------------------------------------------------------------------
:
:
:
:
:
:
:
:
:
:
: ORDER INSTITUTING PUBLIC PROCEEDINGS, MAKING FINDINGS, AND REVOKING REGISTRATION OF SECURITIES PURSUANT TO SECTION 12(j) OF THE SECURITIES EXCHANGE ACT OF 1934

I.
The Securities and Exchange Commission ("Commission") deems it necessary and appropriate for the protection of investors that proceedings be, and hereby are, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Exchange Act"), against Pinnacle Business Management, Inc. ("Pinnacle" or "Respondent").

II.
In anticipation of the institution of these proceedings, Respondent has submitted an Offer of Settlement (the "Offer") which the Commission has determined to accept. Solely for the purpose of these proceedings and any other proceedings brought by or on behalf of the Commission, or to which the Commission is a party and without admitting or denying the findings herein, except as to the Commission's jurisdiction over it and the subject matter of these proceedings, Respondent consents to the entry of this Order Instituting Public Proceedings, Making Findings, and Revoking Registration of Securities Pursuant to Section 12(j) of the Securities Exchange Act of 1934 ("Order"), as set forth below.

III.
On the basis of this Order and Respondent's Offer, the Commission finds that:

A. Pinnacle (d/b/a "Serac Holdings") is a Carson City, Nevada holding company that was incorporated in 1997. Pinnacle acquired a public shell company in a reverse merger in March 2000, and traded on the OTC Bulletin Board until December 2000, when it was delisted. Since that time, it has been quoted on the "Pink Sheets" under the ticker symbol "PCBM." The common and preferred stock of Pinnacle have been registered under Section 12(g) of the Exchange Act.

B. Pinnacle has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder, while its common stock was registered with the Commission. Pinnacle has not filed an Annual Report on Form 10-K since April 17, 2001, when it filed its annual report for the year ended December 31, 2000. Pinnacle has not filed any quarterly reports on Form 10-Q for any fiscal period subsequent to its fiscal quarter ending June 30, 2001.

C. Pinnacle's last filing of record with the Commission is a Form 8-K dated August 4, 2003. In this Form 8-K, Pinnacle announced that two officers had resigned and that the company had one remaining officer and director. This Form 8-K also disclosed "the company has no assets, no operating business and no sources of revenue."

D. On May 8, 2002, the Commission filed a civil action in the United States District Court for the Middle District of Florida, Tampa Division, alleging that on April 2, 2002, Pinnacle issued a false and misleading press release regarding a proposed spin-off of a Pinnacle subsidiary known as All Pro. In the press release, Pinnacle stated that after the spin-off to Pinnacle shareholders, All Pro would seek a listing on the American Stock Exchange and that its initial trading price would be $4.00 per share. The Commission's complaint alleged that Pinnacle lacked a reasonable basis for these statements. On December 15, 2003, the Court for the Middle District of Florida entered an order permanently enjoining Pinnacle from violating the antifraud provisions of the federal securities laws. Pinnacle consented to the injunction without admitting or denying the allegations in the Commission's complaint. Consequently, Pinnacle failed to comply with Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Exchange Act and Rule 10b-5 thereunder.

IV.
Section 12(j) of the Exchange Act provides as follows:

The Commission is authorized, by order, as it deems necessary or appropriate for the protection of investors to deny, to suspend the effective date of, to suspend for a period not exceeding twelve months, or to revoke the registration of a security, if the Commission finds, on the record after notice and opportunity for hearing, that the issuer of such security has failed to comply with any provision of this title or the rules and regulations thereunder. No member of a national securities exchange, broker, or dealer shall make use of the mails or any means of instrumentality of interstate commerce to effect any transaction in, or to induce the purchase or sale of, any security the registration of which has been and is suspended or revoked pursuant to the preceding sentence.

In view of the foregoing, the Commission finds that it is necessary and appropriate for the protection of investors to impose the sanction specified in Respondent's Offer.

Accordingly, it is hereby ORDERED, pursuant to Section 12(j) of the Exchange Act, that registration of each class of Respondent's securities registered pursuant to Section 12 of the Exchange Act be, and hereby is, revoked.
By the Commission.

Jonathan G. Katz
Secretary

sec.gov

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/7/2004 3:39:06 PM
From: StockDung
   of 977
 
DJ IN THE MONEY: Tracking CMKM Diamonds' 400 Billion Shares


By Carol S. Remond
A Dow Jones Newswires Column

NEW YORK (Dow Jones)--There are still a lot of unknowns about CMKM
Diamonds Inc. (CMKX), but one fact was cleared up by the company's
former transfer agent last week: There are lots of CMKM shares
outstanding.
According to Pacific Stock Transfer, a firm which acted as transfer
agent for CMKM for a short period last month, there are about 400
billion CMKM shares outstanding.
CMKM's share count had been one big mystery for shareholders that
had been trying to figure out just how many shares of this tiny mining
company are out there.
CMKM stock trades on the unregulated Pink Sheets market, which means
that the company doesn't file any financial information with
regulators. As reported in a previous "In The Money" column, CMKM has
refused to tell Pink Sheets how many of its shares are currently
outstanding. 1st Global Stock Transfer, CMKM' s transfer agent before
Pacific Stock Transfer took over, had also refused to discuss this
normally very basic information.
CMKM in March filed an amendment with the state of Nevada, where
it's incorporated, to increase the amount of shares authorized by the
company to 500 billion from 200 billion.
It's not unusual for billions of shares of CMKM to trade daily. CMKM
shares were recently down $0.0001, or 25%, to $0.0003. So far
Wednesday, 360 million shares of CMKM have changed hands.
CMKM said in a press release on June 29 that Pacific Stock Transfer
had taken over as its transfer agent. But that was a short-lived
assignment because according to Pacific Stock Transfer, it stopped
acting as CMKM's agent during early afternoon on July 1. A transfer
agent generally keeps track of a company's shares and transfers
shares between owners as trades clear.
Urban Casavant, CMKM's president and large shareholder, declined to
comment about Pacific Stock Transfer's departure or the amount of CMKM
shares outstanding. Casavant said that "press releases will be
coming." Asked whether CMKM plans on becoming self-transfering,
Casavant said "I've got no opinion right now."
The Nevada State Corporate database shows that a firm called Desert
Stock Transfer Co. was incorporated on July 1, the same day that
Pacific Stock Transfer stopped acting as a transfer agent for CMKM.
Casavant is listed as president, secretary and treasurer for Desert
Stock Transfer.
Roger Glenn, a lawyer retained by CMKM last month, declined to
comment on the company's loss of its transfer agent. Glenn also
declined to comment on what he is doing for CMKM. The company said in
press release on June 16 that it hired Glenn "in connection with
securities and corporate issues faced by the company." In previous
press releases, CMKM had indicated that it hired the lawyer and his
law firm to "represent the company in its desire to become fully
reporting once again."
CMKM, once Casavant Mining Kimberlite International Inc., stopped
filing with the Securities and Exchange Commission last July.
Trading in this tiny stock has been extraordinary in recent months.
So much so that trading in CMKM shares accounted for 44%, or 3.36
billion shares, of Knight Trading Group Inc.'s (NITE) average daily
share volume in February.

(Carol S. Remond is one of four "In The Money" columnists who take a
sophisticated look at the value of companies and their securities and
explore unique trading strategies.)

-By Carol S. Remond; Dow Jones Newswires; 201 938 2074;
carol.remond@dowjones.com

(END) Dow Jones Newswires
07-07-04 1357ET
- - 01 57 PM EDT 07-07-04

Back to top

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/7/2004 4:51:32 PM
From: StockDung
   of 977
 
Citizens Against Stock Fraud, LLC Announces Lawsuit Regarding NASD Rules Affecting Short Sellers

PALM BEACH, Fla.--(BUSINESS WIRE)--July 7, 2004--Citizens Against Stock Fraud (CASF), a non-profit advocacy group seeking to provide fairness in the stock market and to combat stock fraud, announced today that it had filed suit against the National Association of Securities Dealers (NASD) in Federal Court in the Southern District of Florida, and is seeking to challenge the implementation of certain regulations including so-called Rule 3370, alleging these regulations unfairly restrict the ability of investors to effect short-sales in publicly traded stocks.


A short-sale is a completely legal and very common investment transaction in which the investor sells borrowed shares for cash, on the anticipation that the shares will be available for purchase later at a lower price. It is the same "buy low, sell high" transaction that most investors are familiar with, but with the order of events reversed - "sell high, buy low."

CASF believes that short-selling is one of the most effective checks and balances against fraud, hype and deception in publicly traded stocks. The existence of a vigorous short-selling constituency within our securities markets assures that, in the face of exaggerated industry claims and excessive hype, the intelligence of healthy skepticism has a voice. This voice can often serve to warn the public against investments that could suffer devastating declines in value.

CASF believes that NASD member firms, which have broad but not unlimited powers as a self-regulatory body overseeing stock market operations, have chosen self-interest rather than concern for the public good with regard to their position on short-selling. It seeks to "level the playing field" with regard to access to short-sale transactions.

Another benefit to short selling is the acceleration of price corrections in overvalued securities. Many people feel that short sales regulation delays the market reaching its natural level and that without short selling during the long bull market the current bear market would have been more severe. Others feel that the 'tick' rules or any attempt to put a brake on markets either detract from market efficiency or are of questionable effectiveness.

About Citizens Against Stock Fraud

Citizens Against Stock Fraud is an organization dedicated to the prevention of fraud in the securities marketplace and the preservation of the best safeguard against securities fraud - the public's ability to short sell securities free of unreasonable restraint.

Please direct all inquires to Troy Levy of Hewlett Investor Relations at 561-998-8845.

Contacts


For Citizens Against Stock Fraud, Palm Beach
Hewlett Investor Relations
Troy Levy, 561-998-8845

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/8/2004 8:49:23 PM
From: StockDung
   of 977
 
StockGate: Bank of America, SG Cowen Made 'Bets' Against Companies, Says WSJ






Jul 8, 2004 (financialwire.net via COMTEX) -- (FinancialWire) Bank of America's (BAC) Banc of America Securities LLC and Societe Generale's (SCGLF) SG Cowen Securities Corp. are being investigated for possible insider trading relative to PIPE transactions related to hedge funds, according to the Dow Jones' (DJ) Wall Street Journal.

"The U.S. Securities and Exchange Commission is looking at whether hedge funds, tipped off to Pipe deals by brokers, made bets against the companies' stocks before the deals were consumated and publicly announced," according to the WSJ.

Usually such "bets" are in the form of short sales, sometimes "naked short sales."

WSJ said BayStar Capital, a California hedge fund, is specifically being probed.

In a June 23 release, the SEC stated it has put into place Rule 202(T), which establishes procedures to allow the Commission to temporarily suspend the operation of the current "tick" test in Rule 10a-1, and any short sale price test of any exchange or national securities association, for specified securities.

Through a separate order, the Commission will suspend, on a pilot basis for a period of one-year, the tick test provision of paragraph (a) of Rule 10a-1, and any short sale price test of any exchange or national securities association, for approximately one-third of stocks in the Russell 3000 index.

The order also will suspend, on a pilot basis for a period of one year, the tick test provision of paragraph (a) of Rule 10a-1 for short sales executed in any security included in the Russell 1000 index after 4:15 p.m. Eastern, and all other securities after the close of the consolidated tape, and until the open of the consolidated tape the next day.

The pilot will commence on January 3, 2005 to permit broker-dealers and self-regulatory organizations to make the necessary programming adjustments.

The Commission deferred consideration of the proposal to replace the current "tick" test of Rule 10a-1 with a new uniform bid test. The Commission could reconsider any further action on these proposals after the completion of the pilot.

Rule 203, which will incorporate current Rule 10a-2 and will create a uniform Commission rule requiring broker-dealers, prior to effecting short sales in all equity securities, to "locate" securities available for borrowing.

There will be limited exceptions from the locate requirement, including for short sales by registered market makers in connection with bona-fide market making.

Rule 203 also imposes additional requirements on designated "threshold securities." Rule 203 defines a threshold security to mean an equity security for which there is an aggregate fail to deliver position for five consecutive settlement days at a registered clearing agency of 10,000 shares or more and that is equal to at least 0.5% of the issue's total shares outstanding.

Where a clearing agency participant has a fail to deliver position in threshold securities that persists for ten consecutive days after settlement, the participant must take action to close out the position. Until the position is closed out, the participant, and any broker-dealer for which it clears transactions, may not effect further short sales in the particular threshold security without borrowing or entering into a bona fide arrangement to borrow the security.

Rule 203 will become effective 30 days after publication with a compliance date of January 3, 2005, to permit firms to make programming and procedural adjustments.

Rule 200, which among other things, will redesignate current Rule 3b-3 with some modifications to define ownership and aggregation of securities positions, and include a requirement to mark all sell orders in all equity securities. Rule 200 will become effective 30 days after publication.

The Commission also adopted amendments to Rule 105 of Regulation M to remove the current shelf offering exception, and issued interpretive guidance addressing sham transactions designed to evade the rule.

The amendment applies to short sales effected within five days prior to the pricing of a shelf offering. Such short sales may not be covered with offering securities purchased from an underwriter or other broker-dealer participating in the offering.

The Rule 105 amendments will be effective 30 days after publication in the Federal Register, and the interpretive guidance will be effective upon such publication.

Opponents of naked short selling were, however, quick to denounce the provision that allows market makers an exemption, and many market observers said that the SEC should provide a public list of companies that fall into the "threshold security" category.

"The SEC claims that the number of companies involved in this 'threshold security' category is 4% of all publicly traded companies. If in fact it is that small the process is certainly manageable," said the website InvestigatetheSEC.com at investigatethesec.com . "It is also the right of every issuer, in protecting their business and their investors to know the status of their stock trading."

Some were discussing whether the SEC can keep such information private under the Freedom of Information Act.

Recently observers were surprised to find a comment letter submitted to the SEC by Mike Alexander, Senior VP of Charles Schwab, that admits outright that brokerages regularly ignore rules and regulations, saying it is not rules that need to be written; it is changes in behavior that is needed.

The comments were directed towards proposed changes in the U.S. settlement system, but could easily apply to other regulations as well.

"Improvements in the U.S. settlement system will only be truly achieved if and when regulations are rationalized to ensure that all market participants are held accountable for compliance. For example, the industry has struggled with the issue of institutional trade affirmation for quite some time now. While the benefits to the clearance and settlement system are self-evident, Buy-Side firms and Custodian banks have been resistant to make those changes that provide for same-day trade confirmation / affirmation and assurance of trade settlement," said Alexander.

"Schwab opposes the notion that securities intermediaries such as broker-dealers be required to police compliance," he stated. "The NYSE and other SROs have had trade affirmation rules on their books for some time. However, such rules have not been effective in changing the behavior

of Buy-Side firms or their custodians; nor do the rules provide assurance that the affirmed trade will settle.

"Recognition of this fact is evidence that changes to the settlement cycle not only require overhauling systems, but also changing behavior. We believe that only by holding all market

participants directly accountable for making required affirmations will the necessary changes to behavior," he stated at sec.gov .

The marketplace is already upset over promises by the Berlin Stock Exchange, since broken, that it would delist any company upon request.

"Please understand that cessation of trading in the shares of XRAYMEDIA Inc. (XRYM) is not possible," the exchange told one such requester.

It's not just U.S. companies such as Whistler Investments (WHIS), Sonoran Energy (SNRN), Celsion Corporation (CLN), and eLinear Inc. (ELU) or Israeli companies that have had serious concerns about their unannounced and unathrorized listings on the Berlin-Bremen Stock Exchange.

Apparently, some 150 British companies are protesting the same fate.

A number of UK-listed companies have demanded a London Stock Exchange investigation after they found that their shares are being traded.

Meanwhile, Whistler, Sonoran and eLinear have announced they have successfully secured their delistings, and the U.S. Securities and Exchange Commission has rescheduled its open hearing to consider the adoption of amendments to Regulation Sho to July 8 at 9:30 a.m. The announcement is at sec.gov .

According to the London Money Telegraph, "several companies believe the market for their shares has been distorted and that they have fallen in value after trading started on the Berlin-Bremen exchange.

"Some smaller companies, whose shares are lightly traded in London, fear the Berlin market has been used by speculators to short-sell their shares."

The Telegraph said the number of companies are thought to be as high as 150, including even "larger companies" such as Matalan (OTC: MATNF) and Halfords.

Mladen Ninkov, the chairman of Aim-listed Griffin Mining (OTC: GFNMF), was quoted as saying: "We were put on the Berlin market without our knowledge by a German broker and now we've got about 8m shares out in a short sale. It is horrifying - that is about 4 per cent of the company and it is forcing the price down."

A spokesman for the London Stock Exchange said: "If there is evidence of market abuse we would refer that on to the appropriate authorities."

Whistler said that according to its transfer agent records, "we have 5,504,680 shares held by DTC, but the ADP broker search indicates of 6,217,458 shares being reported by broker/dealers as being held on behalf of their customers, indicating a short position of more than 700,000 shares. A summary report can be viewed at whistlerinvestments.com .

"We have therefore commenced work with DTC for a formal review of the reported excessive broker/dealer holdings of our stock so that we can conduct our corporate affairs properly in view of our planned stockholders meeting and other upcoming corporate matters. We again advise our stockholders make sure that they receive delivery of any shares that they purchase, and also that their stock is not being borrowed without authorization.

Holly Roseberry, President of Whistler Investments, states "We intend to get to the bottom of the excessive short position and bring stability back into the trading of our stock. We're happy to say that we have 5,133 stockholders and we expect all our stockholders to benefit from the shorters having to cover their short positions."

FinancialWire has reported on the disclosure that "Dateline," the investigatory TV program aired by General Electric's (GE) NBC unit, has purportedly been preparing a blockbuster expose of "Stockgate" (see separate story at financialwire.net).

It is not known if "Dateline" has uncovered continuing underworld connections to the scandal, but FinancialWire reported that Dateline may be pointing a large finger of conflict at the U.S. Securities and Exchange Commission itself, which reportedly receives a slice of every transaction fee as part of its budget. According to court filings supported by the O'Quinn/Christian legal network, almost $1 billion annually is received by the Depository Trust and Clearing Corp. for its "Stock Borrow Program," which the lawsuits claim is just a fancy name for counterfeiting, as the DTCC purportedly lends out many multiples of the actual certificates in the float. Apparently the SEC receives a transaction fee for each transaction facilitated by these loans of non-existent certificates, which could knock a hole in its budget should the revenues from the practice be halted.

The North American Securities Administrators Association, comprised of state and Canadian regulators, has pointedly told the SEC that either it must rethink its cozy DTCC relationship, or it hints, some of its more aggressive state practitioners (think Eliot Spitzer) may do the rethinking for the SEC.

Naked short selling is worrisome for hundreds of small U.S. companies, including those recently asking to be delisted from the Berlin Stock Exchange, such as Golden Phoenix Minerals, Inc. (GPXM), Nannaco, Inc. (NNCO), 5G Wireless Communications, Inc. (FGWC), CyberAds, Inc. (CYAD), Provectus Pharmaceuticals, Inc. (PVCT), House of Brussels Chocolates (HBSL), InforMedix, Inc. (IFMX), Tissera, Inc. (TSSR), Americana Publishing, Inc. (APBH), Celsion Corporation (CLN), ChampionLyte Holdings, Inc. (CPLY), Pickups Plus, Inc. (PUPS), China Wireless Communications Inc. (CWLC), CareDecision Corp. (CDED), Titan General Holdings, Inc. (TTGH), IPVoice Communications, Inc. (IPVO), Whistler Investments (WHIS), WARP Technology Holdings, Inc. (WRPT), BGR Corp. (OTCBB: BGRR), ICOA, Inc., (ICOA), DICUT, INC. (OTCBB: DCUTE), NHC Communications Inc. (NHC), Stratus Services Group, Inc. (SERV), Golden Phoenix Minerals, Inc. (GPXM).

Berliner Freiverkehr (Aktien) AG has been singled out as the broker and market maker that has been "listing" the companies. It is suspected that one broker, RA Angsar Limprecht, is involved in all if not most of the listings.

Small public companies are squeezed not only by hedge funds, naked short sellers, overseas listers such as the Berlin Stock Exchange, and the out-of-control "Stock Borrow Program" run by the governance-conflict-laden Depository Trust and Clearing Corporation, but to the amazement of the industry, as often and not by their own regulators.

A new staff recommendation by Annette Nazareth, director of the division of market regulation at the U.S. Securities and Exchange Commission to "outlaw" ownership of paper certificates at the same time the Depository Trust and Clearing Corporation is under intense scrutiny for alleged electronic counterfeiting has begun hitting the small public company markets, company executives, shareholders and manipulative short-selling opponents like the proverbial ton of bricks.

A Dow Jones (DJ) article by Judith Burns sparked the uproar, as the inextricably intertwined web of connections between the SEC and the DTC, which is sagging from the weight of conflicted governance by representatives from a rollcall of industry heavyweights, including NASD, which owns NASDAQ (NDAQ), the New York Stock Exchange, Goldman Sachs (GS) and Lehman Brothers (LEH), to name only a few.

The rule proposal would bar stock transfer agents from handling shares that carry any limitations on transfer. Control over stock certificates is one of the ways that small companies have combated illegal naked short sellers. Burns quoted Nazareth as saying that these companies' "self-help" efforts "aren't helping U.S. markets overall." Nazareth was quoted as saying restrictions on stocks are "a significant step backwards" in the "move from paper stock certificates to automated computerized trading."

Nazareth said that abusive "naked" short selling has been a problem "in some cases," but that is "best dealt with by a pending SEC proposal," presumably Regulation SHO.

SEC Commissioner William Donaldson purportedly publicly refused to answer any questions from the NASD about the timing of the Commission's consideration of the Regulation at a conference where he was simultaneously proposing early reforms of the mutual fund scandals. The Dow Jones said, however, that Robert Colby, SEC deputy market regulation division director, predicted the SEC will take that to a vote in early June.

The Dow Jones report noted that "naked short-selling occurs when sellers don't buy shares to replace those they borrowed, a manipulative practice that can drive a company's stock price sharply lower.

The stock certiticate plan has been put to a 30-day comment periodl Then the SEC would have to vote to adopt it. If adopted, Colby was quoted as saying that regulators might "sue firms that seek to impose restrictions on stock transfers."

The recent lawsuit filed by Nanopierce Technologies (NPCT) alleges that the Depository Trust and Clearing Corp. has a lot of reasons, almost one billion of them a year, to keep illegal naked short selling in operation. It was the shot across the bow by the legendary Houston law firms of Christian, Smith, Wukoson and Jewell, and OQuinn, Laminack and Pirtle, whose notches already include environmental targets, the breast implant industry and the tobacco industry, all brought to their knees.

In comments to the U.S. Securities and Exchange Commission, C. Austin Burrell, who is providing litigation support and research for the law firms, said that StockGate is more massive than anyone may have imagined. "Illegal Naked Short Selling has stripped hundreds of billions, if not TRILLIONS, of dollars from American investors," and have resulted in over 7,000 public companies having been "shorted out of existence over the past six years." Burrell said some experts believe as much as $1 trillion to $3 trillion has been lost to this practice.

He stated that the restrictions on short selling were deliberately put into the Securities Acts of 1933 and 1934 because of the first-hand evidence then available that the "sheer scale of the crashes was a direct result of intentional manipulation of US markets through abusive short selling by a massive conspiracy."

Burrell noted that the 65-lawyer team presided over by lead lawyers Wes Christian and John O'Quinn has uncovered more than 1,200 hedge fund and offshore accounts working through more than 150 broker-dealers and market makers in a joint cooperative effort to strip small and medium size public companies of their value.

Recently the NASD and U.S. Securities and Exchange Commission approved an interim naked short-selling band-aid, requiring U.S. brokers to make an "affirmative determination" that short-sellers, even foreign short-sellers, mostly Canadian, can find certificates to cover before processing the order.

Last year, many besieged public companies sought refuge from the manipulation by seeking to exit the DTC, but on July 8, 2003, the SEC stated "the issues surrounding naked short selling are not germane to the manner in which DTC operates as a depository registered as a clearing agency. Decisions to engage in such transactions are made by parties other than DTC. DTC does not allow its participants to establish short positions resulting from their failure to deliver securities at settlement. While the Commission appreciates commenters' concerns about manipulative activity, those concerns must be addressed by other means."

The Nanopierce lawsuit, said to be the first of many out of the box, emphatically suggests otherwise. According to lawyer Christian, et.al., the DTC is at the very heart of the problem, and has almost a billion dollars a year at stake in keeping the problem.

The Depository Trust Company (DTC) is a member of the U.S. Federal Reserve System, a limited-purpose trust company under New York State banking law and a registered clearing agency with the SEC. The depository supposedly brings efficiency to the securities industry by retaining custody of some 2 million securities issues, effectively "dematerializing" most of them so that they exist only as electronic files rather than as countless pieces of paper. The depository also provides the services necessary for the maintenance of the securities it has in "custody."

According to the suit, the DTCC has an enormous pecuniary and conflicted interest in the entire short selling scandal through the huge income stream they were realizing from it every day. They have made literally billions of dollars lending individual real shares, in most cases over and over, getting a fee each time they made a journal entry in the "Stock Borrow Program."

The Stock Borrow Program was purportedly set up to facilitate expedited clearance of stock trades. Somewhere along the line, the DTCC became aware that if it could lend a single share an unlimited number of times, it could collect a fee each time, according to Burrell. "There are numerous cases of a single share being lent ten or many more times," giving rise to the complaint that the DTCC has been electronically counterfeiting just as was done via printed certificates before the Crash.

"Such re-hypothecation has in effect made the potential 'float' in a single company's shares virtually unlimited and the term 'float' meaningless. Shares could be electronically created/counterfeited/kited without a registration statement being filed, and without the underlying company having any knowledge such shares are being sold or even in existence." Burrell said the Christian/O'Quinn lawsuits will seek to show that the "counterfeiting/creation of unregistered shares is a specific violation of the Securities Act of 1933, barring the 'Sale of Unregistered Securities'."

While the Nanopierce lawsuit has been filed at the state level, another companion lawsuit just heading to the courts on behalf of Exotics.com (EXII) will be argued at the Federal level.

Nanopierce's suit in the 2nd Judicial District Court in Nevada, is Case No. CV04-01079, alleges that the DTC's "stock borrow program" was "purportedly created to address SHORT TERM delivery failures," but that the "end result of the program has been to create tens of millions of unissued and unregistered shares to be traded in the public market," and in some instances resulting in "two or more shareholders who purchase shares in separate transactions to own the same shares."

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/8/2004 8:49:47 PM
From: StockDung
   of 977
 
cont:The complaint alleges that the DTC has a colossal disincentive to stop the "stock borrow" program, booking revenues from services of $425,416,000 and similarly, the NSCC deriving revenues of $293,133,000.

Further, the suit alleges that "open positions" resulting from this activity at the close of business on December 31, 2003, "approximated $3,025,467,000" due to NSCC, and $2,303,717,000 due by NSCC, and unsettled positions of $721,750,000 for securities borrowed through the NSCC's "Stock Borrow Program."

Nanopierce claims that DTCC and NSCC have joined in a "scheme" to "manipulate downward the price of the affected securities, thereby reducing the market value of the open fail to deliver positions." The suit also claims that the defendants have permitted sellers to maintain open fail to deliver positions of tens of millions of shares for periods of a year and even longer.

It quotes the National Association of Security Dealers as admitting that "concerns have been raised by members, issuers, investors and other interested parties about potentially abusive short selling activities occurring in the marketplace. In particular, naked short selling, or selling short without borrowing securities to make delivery, can result in long term failures to deliver, including aggregate failures to deliver that exceed the total float of a security. NASD believes such extended failures to deliver can have a negative effect on the market. Among other things, by not having to deliver securities, naked short sellers can take on larger short positions than would otherwise be permissible, which can facilitate manipulative activity."

Nanopierce claims that it had "relied on material misrepresentations and omissions by DTC and NSCC in trading its shares in the stock market "without knowledge of Defendants' fraud-on-the market through statements they made about the clearing and settlement services they provided." Further, it claims that the Defendants acted with "scienter" since they had a major financial financial motivation to falsely represent their services, which Nanopierce claims are also anticompetitive.

The largely unregulated DTC has become something of a defacto Czar presiding over the entire U.S. markets system, wielding more day-to-day influence and control than the SEC, the NASD and NASDAQ combined. And, as the SEC's July 8 ruling indicates, its monopoly over the electronic trading system appears even to be protected.

The Depository Trust and Clearing Corp.'s two preferred shareholders are the New York Stock Exchange and the NASD, a regulatory agency that also owns the NASDAQ (NDAQ) and the embattled American Stock Exchange! Regulators, regulate thyself?

In an era when corporate governance is the primary interest for the SEC and state regulators, the DTCC is hardly a role model. Its 21 directors represent a virtual litany of conflict:

They include Bradley Abelow, Managing Director, Goldman Sachs (GS); Jonathan E. Beyman, Chief Information Officer, Lehman Brothers (LEH); Frank J. Bisignano, Chief Administrative Officer and Senior Executive Vice President, Citigroup / Solomon Smith Barney's Corporate Investment Bank (C); Michael C. Bodson, Managing Director, Morgan Stanley (MWD); Gary Bullock, Global Head of Logistics, Infrastructure, UBS Investment Bank (UBS); Stephen P. Casper, Managing Director and Chief Operating Officer, Fischer Francis Trees & Watts, Inc.; Jill M. Considine,Chairman, President & Chief Executive Officer, The Depository Trust & Clearing Corporation (DTCC);

Also, Paul F. Costello, President, Business Services Group, Wachovia Securities (WB); John W. Cummings, Senior Vice President & Head of Global Technology & Services, Merrill Lynch & Co. (MER); Donald F. Donahue, Chief Operating Officer, The Depository Trust & Clearing Corporation (DTCC); Norman Eaker, General Partner, Edward Jones; George Hrabovsky, President, Alliance Global Investors Service; Catherine R. Kinney, President and Co-Chief Operating Officer, New York Stock Exchange; Thomas J. McCrossan, Executive Vice President, State Street Corporation (STT); Eileen K. Murray, Managing Director, Credit Suisse First Boston (CSR); James P. Palermo, Vice Chairman, Mellon Financial Corporation (MEL); Thomas J. Perna, Senior Executive Vice President, Financial Companies Services Sector of The Bank of New York (BNY); Ronald Purpora, Chief Executive Officer, Garban LLC; Douglas Shulman, President, Regulatory Services and Operations, NASD; and Thompson M. Swayne, Executive Vice President, JPMorgan Chase (JPM).

In their comments to the SEC regarding Regulation SHO in January, the 50 state regulators, through their association, the North American Association of Securities Administrators (NASAA) issued what many consider to be a strong warning that if the DTC is not dealt with in the final regulations, state regulators such as New York State Attorney General Eliot Spitzer may step to the plate.

In what many considered to have been explosive comments, Ralph Lambiase, NASAA president and Director of the Connecticut Division of Securities, warned "NASAA urges the Commission to reconsider its stance regarding the role of the Depository Trust and Clearing Corporation (the DTC). As a threshold matter, NASAA believes that the Commission should explicitly prohibit the DTC from lending more shares of a security than it actually holds. The ability of the overall proposed rule would be severely impared unless the Commission undertakes to implement such a prohibition."

As the Nanopierce lawsuit reveals, those were indeed strong words, meddling as it did, in a substantial revenues base for the DTCC.

Recently, leading market makers and brokers named in various lawsuits and other actions, including FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (GS), H. Myerson & Co., Inc. (NASDAQ: MHMY), Olde / H&R Block (HRB), Charles Schwab (SCH), Toronto-Dominion's (TD), TD Waterhouse Group and vFinance, Inc. (VFIN). A.G. Edwards, Inc. (AGE), Ameritrade Holding Corp. (AMTD), Deutsche Bank AG (DB), and ETrade Group, Inc. (ET), were forced to comply with new short-selling market regulations imposed by the NASD after the SEC had "sat on" the NASD request to plug material loopholes for almost 2-1/2 years.

"The new rules expand the scope of the affirmative determination requirements to include orders received from broker/dealers that are not members of NASD ("non-member broker/dealers").

The new rule is on the web at nasdr.com

The rule itself, while welcomed by small companies and their shareholders in the U.S., nevertheless raised an outcry because the NASD's request to put it into effect had set on a shelf at the SEC since 2001.

The scandal has embroiled hundreds of companies and dozens of brokers and marketmakers, in a web of internaitional intrigue, manipulative short-selling and cross-border acctions and denials.

Comments on Regulation SHO ended January 5, and may be viewed at sec.gov .

Some 122 companies, including 13 brokers, such as FleetBoston (NYSE: FBF), Goldman, Sachs & Co. (GS), H. Myerson & Co., Inc. (NASDAQ: MHMY), Olde / H&R Block (HRB), Charles Schwab (SCH), Toronto-Dominion's (TD), TD Waterhouse Group and vFinance, Inc. (VFIN). A.G. Edwards, Inc. (AGE), Ameritrade Holding Corp. (AMTD), Deutsche Bank AG (DB), and ETrade Group, Inc. (ET), have been embroiled for over a year in a raging controversy

The remaining 109 companies among the 122 named to date have issued press releases or been named in the media as having been victimized, or as taking various actions, either alone or in concert with other companies, to oppose manipulative trading in the form of illegal naked short selling. The actions have ranged from lawsuits to withdrawals and threatened withdrawals from the electronic trading system managed by the Depository Trust & Clearing Corp., to withdrawals from toxic financings, to the issuance of dividends or name changes designed to squeeze manipulators, to joining associations or networks or to contacting regulatory authorities to provide documentation of abuses or otherwise complain.

The complete list of those 108 companies include Advanced Viral Research Corp. (ADVR), AdZone Research, Inc. (ADZR), Amazon Natural Treasures (OTC: ANTD), America's Senior Financial Services (OTCBB: AMSE), American Ammunition, Inc. (AAMI), AngelCiti Entertainment (OTCBB: AGLC), ATSI Communications, Inc. (ATSC), Federal Agricultural Mortgage / Farmer Mac (AGM) Allied Capital (ALD), American Motorcycle (OTC: AMCYV), American International Industries (AMIN), Ameri-Dream (OTC: AMDR), Adirondack Pure Springs Mt. Water Co. (OTCBB: APSW), ATSI Communications,Inc. (ATSC) Bluebook International (BBIC), Blue Industries (OTCBB: BLIIV), Bentley Communications (OTCBB: BTLY), BIFS Technologies Corporation (BIFT), Biocurex (BOCX). Broadleaf Capital Partners, Inc. (BDLF), Chattem, Inc. (CHTT), Critical Home Care (CCLH), Composite Holdings (COHIA), CyberDigital, Inc. (CYBD). Diamond International Group (OTCBB: DMND), Dobson Communications Corp. (DCEL), Eagle Tech Communications (EATC), Edgetech Services (EDGH);

Also, Endovasc Ltd. (EVSC), Enviro-Energy Corporation (ENGY), Environmental Products & Technologies (OTC: EPTC), Environmental Solutions Worldwide, Inc. (ESWW), EPIXTAR Corp. (EPXR), eResearchTechnologies, Inc. (ERES), Flight Safety Technologies (OTCBB: FLST), Freddie Mac (FRE), FreeStar Technologies (OTCBB: FSRCE), Front Porch Digital,

Inc. (FPDI), Geotec Thermal Generators, Inc. (GETC), Genesis Intermedia (GENI), GeneMax Corp. (GMXX), Global Explorations Inc (GXXL), Global Path (OTCBB: GBPI), GloTech Industries, Inc. (OTCBB: GTHI), Green Dolphin Systems (OTCBB: GLDS), Group Management (OTCBB: GPMT), Hop-On (HPON), H-Quotient, Inc., (HQNT), Hyperdynamics Corp. (HYPD), International Biochem (IBCL), Intergold Corp. (OTCBB: IGCO), International Broadcasting Corporation (IBCS), InternetStudios, Inc. (ISTO), ITIS Holdings (ITHH), Investco Corp. (IVCO), Lair Holdings (LAIR), Lifeline BioTechnologies Inc. (LBTT), Life Energy & Technology (LETH), MBIA (MBI);

Also, MegaMania Interactive (MNIA), MetaSource Group, Inc. (MTSR),Midastrade.com (MIDS), Make Your Move (OTCBB: MKMV), Medinah Minerals (MDMN), MSM Jewelry Corp. (OTC: MSMC), Nanopierce Technologies, Inc. (NPCT), Nutra Pharmaceutical (NPHC), Nutek (OTCBB: NUTK), Navigator Ventures (NVGV), Orbit E-Commerce, Inc. (OECI), Pitts & Spitts (OTC: PSPP), Sales OnLine Direct (OTCBB: PAID), Pacel Corp. (OTCBB: PACC), PayStar Corporation (PYST),Petrogen Corp. (PTGC), Pinnacle Business Management (OTC: PCBM), Premier Development & Investment, Inc. (PDVN), PrimeHoldings.com, Inc. (PRIM), Phlo Corporation (PHLC), Resourcing Solutions (RESG), Reed Holdings (OTC: RDHC), Rocky Mountain Energy Corp. (OTCBB: RMECE), RTIN Holdings (OTCBB: RTNHE), Saflink Corp. (SFLK), Safe Travel Care (OTCBB: SFTVV), Sedona Corp. (SDNA);

Also, Sionix Corp. (SINX), Sonoran Energy (SNRN), Starmax Technologies (SMXIF), Storage Suites America (SSUA), Suncomm Technologies (OTC: STEH), Sports Resorts International (SPRI), Technology Logistics (TLOS), Swiss Medica, Inc. (SWME), Ten Stix, Inc. (TNTI), Tidelands Oil (TIDE), Titan Construction (TTCS), Trezac Corp. (OTCBB: TRZAV), Universal Express, Inc. (USXP), Valesc Holdings, Inc. (OTCBB: VLSHV), Vega Atlantic (OTCBB: VGAC), Viragen (VRA), Viragen International (VGNI), Vista Continental Corporation, (VICC), Viva International (VIVI), Vtex Energy (OTCBB: VXENE) and Wizzard Software (WIZD), WorldTradeShow.com (WTSW) and Y3K Secure Enterprise Software, Inc. (OTCBB: YTHK).

Earlier in 2003, the SEC fined Rhino Advisors, Inc., $1 million for its representation of Amro International in the financing and manipulation of Sedona Corp. Amro, also known as AMRO, was registered in Panama, a secretive offshore haven, but was not named in the SEC settlement. Another 60 public companies may have been manipulated by the fined Rhino Advisors and its indicted principals, or its funding apparatus, Amro.

These include:

All American Food Group Inc (AAFGQ), Amanda Co Inc (AMNA), Antra Holdings (RECD), Aquis Communications Group Inc (OTCBB: AQUIS), Avanir Pharmaceuticals (AVN), Bionutrics Inc (BNRX), Brilliant Digital Entertainment Inc (AMEX: BDE), Bravo! Foods International Corp. (OTCBB: BRVOE), Butler National Corp (BUTL),Calypte Biomedical Corp (CYPT), Chemtrak Inc/DE (CMTR), Clicknsettle Com Inc (CLIK), Corporate Vision Inc (OTC: CVIA), Crown Laboratories Inc/DE (CLWB), Dental Medical Diagnostic Systems Inc (DMDS), Detour Media Group Inc (DTRM),

Also, Digital Privacy Inc/DE (OTC: DGPV), Senior Services Inc (DISS), International Inc (DYNX), Endovasc Ltd Inc (EVSC), Esynch Corp/CA (OTCBB: ESYN), Focus Enhancements Inc (NASDAQ: FSCE), Frederick Brewing Co (FRBW), Greystone Digital Technology Inc (GSTN), Havana Republic Inc/FL (HVNR), Henley Healthcare Inc (HENL), Hollywood Media Corp (HOLL), Ibiz Technology Corp (IBZT), Diagnostic Systems Inc/FL (IMDS), Imaging Technologies (OTCBB: IMTO), Integrated Surgical Systems Inc (RDOC),

Also, Interferon Sciences Inc (IFSC), Interiors Inc (OTC: ITRNA), Laminaire Corp (THMZ), Medisys Technologies Inc (SCEP), Milestone Scientific Inc/NJ (MS), Nevada Manhattan Group Inc (NVMH), Innovations Inc (OTCBB: NTGE),Systems Group (OSYM), Pacific Systems Control Technology Inc (PFSY), Professional Transportation Group Ltd Inc (TRUC), Rnethealth Inc (RNTT),

Also, Sand Technology Inc (SNDT), Sedona Corp (SDNA), Silverado Foods Inc (SVFO), Stockgroup Information Systems (SWEB) Surgilight Inc (SRGL), Tasty Fries Inc (TFRY), Tech Laboratories Inc (TCHL), Teltran International Group Ltd (TLTG), Titan Motorcycle Co of America Inc (TMOTQ), Trans Energy Inc (TSRG), Motorcycle Co (UMCC), Universal Communication Systems Inc (UCSY), Medical Systems Inc (UMSI), Vianet Technologies Inc (VNTK),Viragen Inc (VRA), Webcatalyst Inc (WBCL), Worldwide Wireless Networks Inc (WWWNQ), and ZAP (ZAPZ).

Universal Express terminated its coverage in Investrend Research's unique and pioneering professional analyst program, which facilitates independent analysts to provide financial coverage for shareholders and investors in companies that otherwise would have little or no analyst following. Just prior to the termination, Investrend Research analyst Jeff Howlett had issued a "Speculative" rating on the company, a downgrade from the previous "Speculative Buy."

The Investrend Research program is the largest in the world and includes a number of safeguards to reduce or eliminate conflict. These systems, including media coverage and endorsements, may be accessed at investrendresearch.com

Investrend Research subscribes to the "Standards for Independent Research Providers" at firstresearchconsortium.com, and adheres to the Guidelines for independent providers jointly endorsed by the National Investor Relations Institute (http://www.niri.org) and the Association for Investment Management and Research (http://www.aimr.org).

The Dow Jones Newswires has stated that independent research has been growing in credibility over the past 18 months, specifically citing Investrend Research, and the New York Times has reported a survey by Charles Schwab & Co. reveals an astonishing 78 percent of active stockholders now "value research from independent firms over analysis by Wall Street firms with financial ties to the companies they are rating." A survey at Investopedia reveals that 74.7% of investors say that "legitimate fee-based research is objective and useful," and 70.9% say that a company that enrolls for "legitimate fee-based research is making a positive statement about its investment potential."

Enrollment fees for Institutional coverage were $23,400 per annum, and the fees were paid by the company for two years. There are never any fees associated with FinancialWire, which independently covers a wide range of corporate news, including but not limited to those that are or have been enrolled in Investrend's platforms.

Complete information about any company enrolled in an Investrend shareholder empowerment platform, including those of its affiliates and independent analysts and webcasters, including disclosures and disclaimers, is available at the company's InvestorPower page at investrend.com , and on each report and press release, and investors are advised to read those disclosures carefully before trading in the equities of any enrolled company.

For up-to-the-minute news, features and links click on financialwire.net

FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on investrend.com

The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: investrend.com



financialwire.net


(C) 2004 financialwire.net, Inc. All rights reserved.



© 1997-2004 MarketWatch.com, Inc.

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/9/2004 1:29:49 PM
From: StockDung
   of 977
 
NASD BARS SCOTT W. RYAN, EXPELS RYAN & COMPANY FOR FAILURE TO COOPERATE IN SHORT SALE PROBE


FOR RELEASE:
CONTACTS: Thursday, July 8, 2004
Nancy Condon 202-728-8304
Herb Perone 202-728-8464


NASD BARS SCOTT W. RYAN, EXPELS RYAN & COMPANY FOR FAILURE TO COOPERATE IN SHORT SALE PROBE

NASD Investigation into Short Selling Activity for Hedge Funds Continues

Washington, D.C.—An NASD Hearing Panel has barred Scott W. Ryan of Bryn Mawr, PA, and has expelled Ryan & Company, LP (RYCO) of West Conshohoken, PA, for failure to cooperate in an ongoing investigation into whether Ryan and the firm engaged in a widespread scheme of impermissible short selling activity on behalf of three hedge fund clients.

As part of the investigation, NASD requested that Ryan and RYCO produce certain documents and information pertaining to short-selling and options transactions under review. NASD also requested copies of Ryan's and RYCO's tax returns and RYCO's certified financial statements for fiscal years 1999 through 2003. Ryan and RYCO refused to provide all but a small portion of the requested documents and information, claiming NASD's requests were burdensome and irrelevant.

The Hearing Panel found that Ryan's and RYCO's objections were without merit and were not raised "in a good faith attempt to resolve their concerns in a timely and complete manner."

Instead, the Hearing Panel said, Ryan and RYCO "made no effort to comply with portions of the document requests… assumed a hostile stand, challenging the (NASD) staff's motives… (and) obdurately stalled the staff's efforts to complete the investigation by repeatedly raising meritless objections."

The Hearing Panel's decision will become final on Aug. 4, 2004, unless it is appealed to NASD's National Adjudicatory Council (NAC), or called for review by the NAC. If the decision is appealed or called for review, the sanctions may be increased, decreased, modified or reversed.

A Hearing Panel consists of an NASD Hearing Officer, along with two members of the securities industry. The NAC is a 14-person committee composed of seven industry and seven non-industry members that decides appeals from disciplinary, membership and exemption decisions; rules on statutory disqualification applications; and advises on other policy matters.

NASD's investigation into the suspected short selling scheme by Ryan and RYCO is continuing.

Investors can obtain more information and the disciplinary record of any NASD-registered broker or brokerage firm by calling NASD's BrokerCheck. NASD makes available BrokerCheck at no charge to the public. In 2003, members of the public used this service to conduct more than 2.9 million searches for existing brokers or firms and requested almost 180,000 reports in cases where disclosable information existed on a broker or firm. Investors can link directly to the program by going online to www.nasdbrokercheck.com. Investors can also continue to access this service by calling 1-800-289-9999.

NASD is the leading private-sector provider of financial regulatory services, dedicated to bringing integrity to the markets and confidence to investors through effective and efficient regulation and complementary compliance and technology-based services. NASD touches virtually every aspect of the securities business — from registering and educating all industry participants, to examining securities firms, enforcing both NASD rules and the federal securities laws, and administering the largest dispute resolution forum for investors and registered firms. For more information, please visit our Web Site at www.nasd.com.

Share RecommendKeepReplyMark as Last Read


To: afrayem onigwecher who started this subject7/9/2004 7:22:47 PM
From: StockDung
   of 977
 
Universal Communication Systems, Inc. and Chairman Michael J. Zwebner File a Class Action Lawsuit for $300 Million Against Lycos Inc., Terra Lycos Inc., d/b/a The Lycos Network
Friday July 9, 1:36 pm ET
MIAMI FL--(MARKET WIRE)--Jul 9, 2004 -- Universal Communication Systems Inc. (Other OTC:UCSY.PK - News) company chairman Michael J. Zwebner today announced that the company and himself individually have filed a Class Action Lawsuit against Lycos Inc., Terra Lycos Inc., d/b/a The Lycos Network.

The nature of the class action case alleges Consumer Fraud, CyberStalking and Dilution of the company's UCSY trademark. The plaintiffs are seeking $300 million in compensatory damages.

The case (#04-21618) was filed on July 2nd, 2004, in the United States District Court for the Southern District of Florida.
About Universal Communication Systems, Inc.
For further information, visit our web address: ucsy.com

About AirWater Corporation
For further information, visit our web address: airwatercorp.com

About Millennium Electric T.O.U. Limited
Visit our web address: millennium-electric-inc.com

About Solar Style Inc
Visit our web address: solarstyleinc.com

Safe Harbor Statement

Caution Concerning Forward-Looking Statements by Universal Communication Systems, Inc.

This document includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are based on management's current expectations or beliefs, and are subject to uncertainty and changes in circumstances. Actual results may vary materially from those expressed or implied by the statements herein due to changes in economic, business, competitive, technological and/or regulatory factors, and factors affecting the integration of the businesses of Universal Communication Systems, Inc. More detailed information about these factors may be found in filings by Universal Communication Systems, Inc. with the Securities and Exchange Commission, including their most recent annual reports on Form 10-KSB and quarterly reports on Form 10-QSB. Universal Communication Systems, Inc. is under no obligation to, and expressly disclaims any such obligation to, update or alter their forward-looking statements, whether as a result of new information, future events, or otherwise.

Contact:
Contact:
Universal Communication Systems, Inc., Miami Beach
Rolando Sablon
(305) 672-6344
Company web address: ucsy.com
For further information email us at: info@ucsy.com

Source: Universal Communication Systems, Inc.

biz.yahoo.com

Share RecommendKeepReplyMark as Last Read


To: peter michaelson who wrote (879)7/12/2004 9:30:52 PM
From: StockDung
   of 977
 
Anything new out there on GMXX?

Share RecommendKeepReplyMark as Last ReadRead Replies (1)
Previous 10 Next 10 

Copyright © 1995-2017 Knight Sac Media. All rights reserved.Stock quotes are delayed at least 15 minutes - See Terms of Use.