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   Strategies & Market TrendsAnthony @ Equity Investigations, Dear Anthony,


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From: StockDung4/8/2008 6:23:43 PM
   of 121962
 
Susanne Trimbath DTCC fact checker:

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

"According to the Press Release, the DTCC contends that they were not invited to speak at the NASAA Public Forum held in November to discuss the issues of Naked Shorting. Mr. Lambiase, Director of Securities for the State of Connecticut and moderator of the forum, specifically identified to the audience attending the forum that the DTCC was invited to attend but had declined the invite. Panelist Dr. Susan Trimbath, former Operations Manager for the DTCC, also confirmed the DTCC invite during the forum discussions."

from DTCC Continues Public Campaign Stop blaming us; it s not Our Fault January 26, 2006
David Patch

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

5. INSIDE THE BLACK BOX

I worked not only at DTC in New York, but also with the Pacific Clearing Corporation in
San Francisco. I have the experience necessary to talk about what happens inside clearing
and settlement. Please don’t misquote me as saying I worked for DTCC because I
actually worked for their predecessor DTC, with only one C. Last February a reporter in
New Jersey put an extra “C” in my resume and DTCC had to issue a media statement
clarifying my employment record. Let’s not put them to that trouble again, OK?
Seriously, all the details of my background are in my bio.

Susanne Trimbath

stpadvisors.com

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

hedgeworld.com

DTCC Questions Facts in Naked Shorts Squabble

By Christopher Faille, Financial Correspondent | Thursday, March 16, 2006


NEW YORK (HedgeWorld.com)—In the increasingly heated public dispute over "naked" short sales of securities, the Depository Trust & Clearing Corp. fired an unexpected volley Tuesday [March 14], issuing a statement on the "purported work experience of a former employee" at one of its subsidiaries.
The former employee, Susanne Trimbath, was a manager of transfer agent services at the Depository Trust Company from 1987 to 1993. This work experience became relevant to the controversy over what is now DTC's corporate parent, DTCC, because on Feb. 23 Ms. Trimbath participated in a hearing of the New Jersey State Senate Judiciary Committee, and there criticized Bradley Abelow, the governor's nominee for state treasurer.

Mr. Abelow (who has since been confirmed as treasurer) was a director of the Depository Trust & Clearing Corp. from 2002 to 2005 Previous HedgeWorld Story, so certain individuals who believe that DTCC has enabled short sellers' failures to deliver (FTDs), thereby empowering shorts at the expense of targeted issuers, used the opportunity created by the confirmation hearing to put their case before the public.

At the hearing, Ms. Trimbath referred to herself as a "former employee of the Depository Trust and Clearing Corporation," and then said that for simplicity she would thereafter refer to DTCC and its subsidiaries as the "Depository." She didn't indicate that she had ever been an officer.

Her self-introduction appears to have been a misstatement in at least one respect. She wasn't an employee of DTCC, which didn't exist until 1999. She was an employee of DTC, which later became a subsidiary of DTCC. In a telephone conversation the evening of DTCC's press release, Ms. Trimbath said that she agrees with the facts of her employment history as that release sets them out. She was employed at DTC prior to the formation of DTCC as a holding company in 1999.

DTCC's statement expresses concern about misrepresentations not by Ms. Trimbath but by unnamed third parties. It states, "[I]naccurate information … has appeared in the press and … on Web sites and in public forums" portraying Ms. Trimbath as a former officer, and an "expert on clearance and settlement and the Stock Borrow program."

DTCC said that Ms. Trimbath was a "manager of transfer agent services, a corporate middle-management position below officer level." Nothing in her testimony was inconsistent with that characterization, nor did she quarrel with it Tuesday. She testified that she wanted the committee to consider "how you can have year-long failures to settle trades," and that the answer to that question was and is "lax management at the Depository and a willingness to look the other way when broker members neglect their fiduciary duty to small investors."

She said that she saw the hearing as "an opportunity to bring to light a failure of management [at the Depository] to address this issue" concerning failures-to-deliver "a decade ago when it was merely a thorn in somebody's side." She also said that before she went to work at DTC as a transfer agent, she had been an operations analyst for the Pacific Clearing Corp. She was surprised and flattered to find that she's important enough for DTCC to issue a release making the distinction between Depository officers and employees with special reference to her.

Challenge and Response

On the more substantive issues in dispute, a challenge to DTCC and its policies this week from a former Clinton administration economist, Rob Shapiro, has drawn a point-by-point reply from its target.

Mr. Shapiro's consultancy, Sonecon, issued the report Tuesday under the dramatic headline "500 Million Shares of Stock Are Missing." It contends that DTCC's settlement and clearing process "implicitly permits naked short sales by using bookkeeping entries and the holdings of members uninvolved in those sales to ‘clear and settle' short sales even when the short seller persists in failing to deliver the shares he has sold short." In quantitative terms, the report states that the consequences of FTDs are concentrated on a small number of issuers.

On any given day, it states, almost half of Nasdaq and NYSE threshold stocks—from 50 to 80—may account for as much as 95% of all fails in listed firms. The average fails for those 50 to 80 shares are between 1.5 million and 2 million shares each.

On any given day, also, about two thirds of over-the-counter threshold securities, 60 to 80 stocks, make for the vast majority of FTDs in OTC companies, with average fails at 4.3 million to 4.8 million each.

The report argues for the following conclusions:

• Designation as a "threshold security" doesn't necessarily reduce short sales, and has proven consistent with an increase in the number of fails-to-deliver in the case of many securities;

• DTCC's lack of transparency "undermines the efficiency of U.S. capital markets and could damage investor confidence;" and

• Data indicates that Reg SHO "has not created the market conditions or regulatory requirements needed to ensure that naked short sellers (and others) resolve any large, outstanding fails."

When asked for a response, DTCC prepared a statement Wednesday [March 15] listing what it saw as the flaws of the report, beginning with the bias of its author. Mr. Shapiro "has admitted to DTCC he is a paid consultant" for law firms that are pursuing claims against DTCC.

DTCC objects to the report's presumption that it possesses, but has failed to employ, buy-in authority—i.e., authority to purchase the necessary shares itself for delivery, while charging the account of the naked short seller's broker. DTCC said that the Securities and Exchange Commission has repeatedly said it doesn't have that authority.

DTCC said that Mr. Shapiro misleadingly speaks of naked short sales and FTDs as synonyms, which is a distortion. There are many reasons aside from short selling why a delivery may not occur on settlement date. "Many times the member will experience a problem that is either unanticipated or is out of its control, such as … delays in customer delivery of shares to the broker dealer," it said.

DTCC said that SHO has in fact reduced the number of outstanding fails. Within the first three months of the program, it produced a 10% reduction in aggregate fails, and a 32% reduction in fails regarding companies on the threshold list.

As to disclosure, DTCC said that it doesn't necessarily possess the data that Mr. Shapiro demands it disclose. "While we have data on the volume of fails, we have no information on the underlying causes of those fails. As noted above, there are many causes of fails," it stated.

There are good reasons, it also argued, for it to be less than transparent: Data on fails could be used for purposes of market manipulation.

CFaille@HedgeWorld.com

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From: StockDung4/9/2008 10:31:38 AM
   of 121962
 
Even though no one seems to be trying very hard to find him, Khashoggi is currently a fugitive from justice in the case.

At one time, Khashoggi's chief lieutenant and fellow Saudi swindler, Ramy El-Batrawi, former President of Jetbourne, a Miami CIA proprietary which flew Oliver North's TOW missiles to the Iranians during the Iran Contra Scandal, owned both DC9's later owned by SkyWay.

Small world.

madcowprod.com

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To: anniebonny who wrote (103264)4/9/2008 11:33:08 AM
From: StockDung
   of 121962
 
Geoffrey Eiten used to promote criminal Marc Harris's stock fraud Juniper Group. Mad Cow Morning News has a interesting story about Marc Harris. Also stock fraud GenisisIntermedia which Geoffrey Eiten also promoted

here is the link madcowprod.com

From SHAME ON THE SEC by Christopher Byron:

rgm.com

This outfit, bearing the name OTC Financial Network, is headed by a stock promoter named Geoffrey Eiten, who has been the promotional muscle behind a long list of shaky penny stocks.

At the time he was taking on the Premier Enterprises account, Eiten was simultaneously promoting a Great Neck, L.I., company called Juniper Group.

An SEC filing shows that the largest shareholder of Juniper at that time was a Panamanian company called Bluffdale Corp., which Miami-based KYC News Inc., a leading newsletter publisher, has identified as a mail drop for an international crook named Marc Harris. That man was convicted last May by a federal jury in Miami and sentenced to 17 years in prison for his role in a freon gas smuggling ring.

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To: magicrecall who wrote (88243)4/9/2008 1:07:50 PM
From: StockDung
   of 121962
 
JOHN L. SMITH: Diamonds boondoggle a testament to the power of public relations
Urban Casavant has received news that not even he can spin into a positive press release.

Apr. 09, 2008
Las Vegas Review-Journal

The high-rolling front man of the Las Vegas-based CMKM Diamonds boondoggle and 13 of his colleagues have been hit with a civil injunction alleging they illegally issued and sold up to 662 billion shares of unrestricted stock and collected at least $64.2 million from investors who bought their story about the vast diamond fortune lying beneath the surface in far reaches of Saskatchewan, Canada.

The government alleges the proceeds generated from January 2003 to May 2005 were largely split between Casavant, who got $31.5 million, and the "scheme's mastermind," John Edwards, who got $26.4 million. The rest of the cash filtered down to various paperhangers, brokers and phone sales jockeys.

Casavant's diamond empire was initially run out of his home, where he generated a steady stream of press releases touting the promise of the vast deposits in the Canadian wilderness.

Like all good cons, there was a grain of truth to the promotional puffery. The behemoth DeBeers corporation has explored the Forte a la Corne region of Saskatchewan, which is believed to contain one of the larger diamond fields on the planet.

Not that Casavant found any, or used the millions his promotion generated to develop his claims. But he wisely left such details out of his dizzily optimistic media statements.

Meanwhile, our man Urban mostly stayed warm in Las Vegas, where he was known as a big casino customer and a promoter of the CMKM Racing team. From top-fuel dragsters to high-powered auto racers, Casavant ran fast and used the machines to market his stock. He even loaned a vehicle to weekend racing enthusiast and Nevada Secretary of State Dean Heller. Now a congressman, Heller distanced himself from the CMKM crowd several years ago.

Casino sources say Casavant made little secret of his big diamond promotion. For the record, I wouldn't for a moment suggest the Gaming Control Board step up and question how much Strip casino officials knew about Casavant's scam despite the press and SEC scrutiny. Our gaming moguls need all the good customers they can get these days.

Casavant's company is a testament to the power of public relations. With press releases, hyperbolic Internet chat rooms, and race event promotions across the country, he attracted more than 40,000 investors.

His glittering press releases not only promoted his worthless stock, but they also helped calm the fears of skeptical investors as they downplayed the SEC's criticism. And that often meant investors eventually poured good money after bad as they chased their dream of riches glittering from the Great White North like some penny stock aurora borealis.

They didn't, however, take a shine to my reporting. I long ago lost count of the number of CMKM investors who called to rip me to pieces after reading a column that dared to call into question Casavant's motives. And executives at Silver State Bank weren't too pleased when it was reported that millions floated through more than 100 accounts linked to Casavant.

As the SEC gathered evidence and began isolating the company, eventually suspending it, the calls of complaint slowed to a trickle.

Now the SEC has taken the next step. In addition to Casavant and Edwards, attorney Brian Dvorak, First Global Stock Transfer owner Helen Bagley, Kathleen Tomasso, Anthony Tomasso, James Kinney, Ginger Gutierrez, Anthony Santos, Sergei Rumyantsev, and Daryl Anderson also were named in the complaint.

Santos, Rumyantsev, and Anderson were employed at NevWest Securities Corp. They allegedly generated millions in sales, but I guess NevWest forgot to pay its phone bill. Its number has been disconnected.

CMKM's Pecos Road "home office" is closed, too. Casavant has supposedly returned to Canada, perhaps to be closer to his diamonds.

The Tomassos' reputation as Boca Raton, Fla., paperhangers is so well established they rate their own page on the Ripoff Report Web site. They helped promote and sell CMKM stock in a city known as a scammer's paradise. Attempts to reach the Tomassos via phone also were unsuccessful. You guessed it: The number is no longer in service.

I'd like to think we've heard the last of the CMKM Diamonds scam, but here's a twist the company's glittering impresario might appreciate.

After all these years, the SEC is writing press releases about Urban Casavant.

John L. Smith's column appears Sunday, Tuesday, Wednesday and Friday. E-mail him at Smith@reviewjournal.com or call (702) 383-0295.

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From: StockDung4/9/2008 2:36:55 PM
   of 121962
 
Feds Crack Down on Alleged Tax Fraud Schemes
Justice Dept. Claims Promoters Ran a 'Smorgasbord of Tax Fraud at Sea'
By JASON RYAN and PIERRE THOMAS
April 8, 2008—

The Justice Department today announced a crackdown against a growing number of companies that are telling tens of thousands of customers they don't have to pay federal income tax, and took legal action against a company for allegedly promoting one such scheme.

In seeking a civil injunction, the government hopes to shut down Pinnacle Quest International, which allegedly made $54 million between 2002 and 2006 by sponsoring various tax avoidance schemes at trade shows and resorts in Mexico, France and several locations in the Mediterranean to customers who sought to avoid U.S. taxes.

According to the Justice Department, PQI, which employed 830 salespeople, organized a conference aboard a cruise ship in the Mediterranean to allegedly educate clients on how to avoid paying federal income tax.

The cruise, dubbed a "smorgasbord of tax fraud at sea" in the Justice Department's civil injunction papers, was allegedly held aboard the Celebrity Cruise Line ship Galaxy in May 2007 and included lectures by Sherry Peel Jackson, a former IRS agent who was at the time under indictment for tax crimes.

The government says Jackson earned an estimated $138,000 from working for PQI. A federal jury in Atlanta convicted her last year on charges that she failed to submit tax returns, and a judge sentenced her to four years in prison in February. Jackson is appealing her conviction.

The lawsuits, filed against PQI and several of its alleged promoters in three federal courts in Florida, Oregon and Washington State, allege that the company sold its products to more than 10,000 customers who paid a fee to learn how to convince the federal government that they were not required to pay taxes.

In the Oregon case, the government claims PQI promoted the use of false entities to hide taxable income, and promoted seminars that wrongly told customers they could avoid paying taxes by revoking their Social Security numbers.

The federal lawsuit filed in Florida alleged that PQI engaged in a marketing scheme with financial incentives to keep customers buying the companies products and lectures. Customers initially bought into the PQI tax shows for $7,500 and were invited to attend the next level seminar for $18,750 before being invited to attend the cruise.

Attempts to contact PQI by phone and fax were not successful, and e-mail messages from ABC News were not immediately answered.

Nathan Hochman, assistant attorney general of the Justice Department's Tax Division said, "The size and sheer brazenness of the tax defier activities alleged in these complaints are staggering."

Justice announced the legal action, as well as the larger initiative to combat alleged tax fraud schemes, as millions of Americans finalize their tax returns before next week's April 15 deadline.

U.S. Attorney offices across the country are being told to target so-called "tax defier" companies, which often rely on the Internet to lure the gullible.

In recent years, the tax avoidance schemes have grown, especially on the Internet, with tax defiers asserting that they are not required to file federal tax returns for various reasons.

Some individuals claim they have renounced their U.S. citizenship, but "If they meet the minimum income requirement they absolutely have to pay their taxes," Hochman said at a press conference.

Other individuals claim they can avoid filing tax returns because they claim it is in violation of the 16th amendment, which limits Congress' authority to levy taxes. "The tax defier rejects the entire legal basis of our tax system," Hochman added.

As for the customers of the alleged sham organizations like PQI, the government says it's going to force them to pay their taxes, and in some cases, will prosecute them.

Copyright © 2008 ABC News Internet Ventures

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From: StockDung4/9/2008 3:06:17 PM
   of 121962
 
SEXI GEOFFREY EITEN:

"Companies that are still in the process of developing their businesses find it ''very difficult to get press, so they have to pay for it,'' said Geoffrey J. Eiten, who provided public relations for Systems of Excellence and another SGA client."

query.nytimes.com

December 15, 1996

Stock Tipsters Praised, and Profited
By LESLIE EATON

WHEN the stock of an obscure outfit called Systems of Excellence started to jump last spring, Internet-savvy investors knew whom to thank: SGA Goldstar, an on-line tip sheet.

When the Securities and Exchange Commission discovered this fall that Systems' stock was being manipulated, it knew whom to blame: SGA Goldstar, which regulators say received shares from the company's president to promote the stock.

And now it appears that Systems was not the only company that paid SGA to praise its stock. In fact, according to the S.E.C., there were at least nine more.

Last week, the S.E.C. filed an amended complaint against SGA and its proprietors, Theodore R. Melcher Jr. and Shannon B. Terry, whom the commission had sued on Nov. 7.

The new complaint contends that since 1991, Mr. Melcher and Mr. Terry secretly received shares in companies that they wrote about, and dumped some of those shares while telling investors to buy.

SGA plans to argue that there was adequate disclosure, said Michael R. Koblenz, a lawyer who represents the newsletter and Mr. Melcher. He pointed to a disclaimer on the newsletter that said, among other things, that ''personnel associated with SGA may own shares in the companies mentioned herein or may act as consultants thereto.''

Mr. Terry made almost $350,000 selling shares of seven of the nine companies he wrote about in return for stock, according to the S.E.C.

Most of these outfits are money-losers with few or no sales, and trade on Nasdaq's bulletin board, which has no listing standards. But three trade on Nasdaq, and one on the New York Stock Exchange (albeit for less than $1 a share). Most have changed their names -- and their businesses -- within the last few years.

Companies that are still in the process of developing their businesses find it ''very difficult to get press, so they have to pay for it,'' said Geoffrey J. Eiten, who provided public relations for Systems of Excellence and another SGA client.

The nine companies listed by the S.E.C. are:

* American Bio Medica of Ancramdale, N.Y., which is trying to sell drug tests. The company did pay SGA with stock, Mr. Eiten said, but is not to blame ''if SGA did something wrong.'' The stock has fallen from $8.50 in September to about $3.50.

* Affinity Teleproductions of Tampa, Fla., now known as Affinity Entertainment, says it produces films and television shows. A spokeswoman for Affinity referred questions about SGA to William J. Bosso, the company's chief executive, who did not return a telephone call. The company's shares rose as high as $10 in June, but now trade for about $2.

* Century Technologies of Beverly Hills, Calif., which has been bought by Affinity. In filings with the S.E.C., Century said the commission staff had recommended enforcement action against it, though the problems ''are with prior management.''

* Ameriquest Technologies of Hollywood, Fla., which sells computer hardware. Richard McIntire, vice president of sales and marketing, said he was unfamiliar with SGA. The company's shares hit $1.50 in May and are now under 45 cents.

* NVID International of Sarasota, Fla., which says it has developed a nontoxic disinfectant. After SGA promoted NVID, the company did hire it briefly as a consultant, said Robert Bunte, president of NVID. The stock, which reached only 65 cents last June, now trades for 18 cents.

* Chancellor Group, which is run from Sidney, Australia. The company has or plans to be in a variety of businesses, including gas production and investment banking. The company referred questions to its president, Neil A. Green, who could not be reached for comment. The shares, which topped $7 in May, now go for $1.

* The Aimrite Holdings Corporation of Las Vegas, Nev. The company, which hopes to start producing auto suspensions early next year, was written up by SGA, said Kenneth P. Coleman, the company's chairman. ''I told them to cease and desist.'' The stock had a reverse split of 1 for 20 in May, and now trades for 62.5 cents.

* Standard Brands of America of Pompano Beach, Fla., which used to run television and appliance stores. The company said in July it might file for bankruptcy; its phone has been disconnected. A year ago its shares brushed $3; they are now about 5 cents.

* International Standards Group of Boca Raton, Fla., which in October changed its name to Total World Telecommunications. The company ''had no relationship with SGA, nor did we pay them,'' said its chairman, Joseph L. Lents, who added that other consultants paid in stock might have passed some shares on to SGA. In October, the stock had a 1-for-15 reverse split and now trades for about $7.

At Systems of Excellence, meanwhile, the new management cheered the news that the S.E.C. had added to its complaint against SGA and against Charles Huttoe, the company's former president. The S.E.C. said Mr. Huttoe had issued millions of unregistered shares to accounts he controlled and, while promoting the stock, sold off shares, making more than $12 million.

Mr. Huttoe's lawyer could not be reached for comment on Friday, but has said in the past that his client is attempting to resolve his difficulties. The new S.E.C. action seeks to freeze the assets of 21 people and firms that received some of those profits.

Correction: December 22, 1996, Sunday

An article last Sunday about SGA Goldstar, an on-line tip sheet that the Securities and Exchange Commission has accused of manipulating small-company stocks, misstated the number of those stocks that trade on the Nasdaq market. It is two, not three.

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From: SamAntar4/9/2008 4:12:45 PM
   of 121962
 
Utah Attorney General Mark Shurtleff, bought and paid for

About a week before Utah Attorney General defamed me on behalf of Patrick Byrne and Overstock.com, he received a little gift from the company. On 10/30/07, he received $5,000 from Overstock.com. Looks like a bribe to me.

globe.utah.gov

Respectfully,

Sam E. Antar (former Crazy Eddie CFO and a convicted felon)

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From: StockDung4/9/2008 5:01:26 PM
   of 121962
 
CMKM Diamonds players face stiff penalties in SEC suit
stockwatch.com

2008-04-09 14:53 ET - Street Wire

Also Street Wire (C-*ASC) Alberta Securities Commission
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission

by Lee M. Webb

CMKM Diamonds Inc.'s key players Urban Casavant and John Edwards, along with their nominees and other defendants, face the possibility of stiff penalties in a $64.2-million securities fraud lawsuit filed by the U.S. Securities and Exchange Commission (SEC) on April 7. (All amounts are in U.S. dollars.)

As previously reported, the SEC filed a 27-page complaint against 14 defendants including CMKM, Mr. Casavant and Mr. Edwards in the U.S. District Court for the District of Nevada.

None of the defendants has yet filed an answer to the SEC lawsuit and the allegations have not been tested in court.

According to the U.S. regulator, the defendants were involved in "a massive and complex scheme" to dump hundreds of billions of shares of CMKM on gullible investors during the fraudulent promotion of the Las Vegas-based pink sheet woofer from January of 2003 until May of 2005.

Other defendants include Mr. Casavant's nominees and general-purpose gofers Ginger Gutierrez and James Kinney, both of Las Vegas. In addition to serving a stint as CMKM's investor relations representatives, the SEC claims that the pair unloaded approximately 88 billion shares of CMKM and, after taking a cut, funelled the proceeds to Mr. Casavant and his family members.

Anthony and Kathleen Tomasso, a husband-and-wife team from the notorious paperhangers haven of Boca Raton, Fla., allegedly served as nominees for Mr. Edwards, a British citizen living in Las Vegas.

The SEC alleges that approximately 77.3 billion unrestricted shares of CMKM were issued to five entities controlled by the Tomassos, who promptly sold the stock and wired more than $2.2-million to Mr. Edwards and transferred substantial amounts of money to other of his associates. The Tomassos allegedly cut themselves in for approximately $648,500.

CMKM's accommodating Las Vegas transfer agent, 1st Global Stock Transfer, and its owner, Helen Bagley, are also named as defendants.

According to the SEC, Ms. Bagley received hundreds of thousands of dollars in suspicious payments from Mr. Edwards and the Tomassos and turned a blind eye to "obviously incomplete and suspicious and, in some cases, forged documentation" while issuing more than 589.7 billion shares of unrestricted stock to Mr. Edwards, Mr. Casavant, their nominees and others.

The now-defunct NevWest Securities Corp., a Las Vegas-headquartered three-monkeys brokerage firm used by Mr. Edwards, and three of its principals are also named as defendants.

The SEC claims that NevWest's chief executive officer Sergey Rumyantsev, a Russian citizen living in Las Vegas, its chief compliance officer and lawyer, Anthony Santos, and former broker Daryl Anderson, now living in Laguna Beach, Calif., saw no evil, heard no evil and definitely spoke no evil as Mr. Edwards opened 36 accounts and unloaded a staggering 259.9 billion shares of CMKM for proceeds of more than $53.3-million.

Over the entire period of the fraud, the approximately $2.58-million in commissions generated by Mr. Edwards's trades accounted for 35.7 per cent of NevWest's total revenue. Mr. Anderson earned approximately $2.3-million for handling the trades.

Rounding out the list of defendants is shady lawyer Brian Dvorak, who is currently living in Boulder, Colo., and who recently filed for bankruptcy protection.

According to the U.S. regulator, in return for at least $495,000, Mr. Dvorak held his nose and wrote hundreds of bogus opinion letters fraudulently authorizing the issuance of more than 606 billion unrestricted shares of the smelly promotion.

Dozy gatekeepers

In conjunction with filing the lawsuit, the SEC issued an April 7 press release commenting on the subpenny promotion and the gatekeepers who allegedly facilitated the fraud.

"The allegations in this case highlight the significant investor harm that results from abuses in the penny stock market," the acting director of the SEC's Los Angeles office Rosalind Tyson remarked.

"Although CMKM's stock sold for well under a penny a share, the defendants were able to reap millions in profits by conspiring to flood the market with billions of unregistered shares while falsely promoting CMKM's value," Ms. Tyson added.

Indeed, Saskatchewan native Mr. Casavant, who honed his touting skills on a number of Canadian mining plays before moving his act to Las Vegas after getting the boot from former Alberta Stock Exchange company Petro Plus Inc., brought a whole new dimension to the world of pink sheet promotions.

Instead of trying to run up the price of his pink sheet dog, Mr. Casavant simply devoted his efforts to generating enough demand among gullible investors to sop up the flood of subpenny stock as he peeled off hundreds of billions of shares for himself, family members and associates.

In the process, Mr. Casavant issued more CMKM shares than previously issued by any company on the planet. By the time the SEC yanked CMKM's stock registration in October of 2005, a staggering 703.5 billion shares were outstanding.

The head of the SEC's enforcement division, Linda Chatman Thomsen, also had something to say about the lawsuit, issuing something of a warning to so-called "gatekeepers" of the securities markets.

"The perpetrators of this massive scheme include several securities professionals and an attorney," Ms. Thomsen commented. "Today's action demonstrates that we will aggressively pursue individuals who ignore their obligations as gatekeepers to our markets and instead collude with their clients to violate the federal securities laws."

Canadian regulators, comprising a patchwork of provincial and territorial securities watchdogs with limited jurisdictional powers, have a remarkably dismal record when it comes to enforcing their nebulous gatekeeper rules and a similarly poor record in suing stock fraudsters and their accomplices.

The SEC, however, has been cracking down on companies and individuals for gate-keeping lapses and is much more aggressive, as well as more successful, in suing crooked market players, including Canadians. Indeed, many consider the SEC to be Canada's most respected securities regulator.

The U.S. regulator is seeking significant penalties against the defendants in the CMKM lawsuit, including Saskatchewan native Mr. Casavant.

The penalties

Among other things, the SEC is seeking judgments against the defendants enjoining them from future violations of securities regulations. That, of course, is pretty standard fare in securities lawsuits.

The U.S. regulator is also seeking an order permanently banning Mr. Casavant from acting as an officer or director of any public company. That, too, is a standard request in such cases.

The SEC further seeks judgments permanently barring each of the 11 individual defendants "from participation in any offering of a penny stock, including engaging in activities with a broker, dealer, or issuer for purposes of issuing, trading, or inducing or attempting to induce the purchase of any penny stock." That would effectively boot the defendants out of the market.

With the exception of CMKM, which is penniless and a company in name only, the regulator is also asking for civil penalties to be assessed against the defendants.

Perhaps of most concern to the defendants, apart from CMKM, the SEC is seeking disgorgement of "all ill-gotten gains from their illegal conduct, together with prejudgment interest thereon."

The regulator claims that Mr. Casavant pocketed approximately $31.5-million, Mr. Edwards made off with $26.4-million and Mr. Casavant's nominees raked in approximately $6.3-million.

Ms. Bagley might be on the hook for several hundred thousand dollars, including $344,000 she allegedly received from the Tomassos, who might be looking at disgorgement of approximately $650,000.

NevWest, which had its registration yanked last year, allegedly made approximately $2.58-million for its participation in the scheme, with $2.3-million going to former broker Mr. Anderson.

Mr. Dvorak allegedly received $350 for each of the hundreds of opinion letters he wrote and received at least $495,000 from Mr. Casavant and his nominees during 2004.

It remains to be seen whether the SEC, if it prevails in the case and is successful in obtaining the disgorgement orders, will be able to collect any of that money.

Saskatchewan sightings

Mr. Casavant, who allegedly pocketed the most money from the scheme, abandoned his "extravagant lifestyle" in Las Vegas and lit out for Saskatchewan after handing the company off to one of CMKM's biggest cheerleaders, Kevin West, last March.

Mr. West, who once touted CMKM as being conservatively valued at $64-billion and possibly worth as much as $1-trillion and praised Mr. Casavant as a godly man doing God's work in redistributing the wealth of the world, apparently had something of an epiphany after the Saskatchewan promoter took a powder.

Under Mr. West's direction and with the assistance of his Texas associate and lawyer Bill Frizzell, another former cheerleader and proponent of the ridiculous claim that the pink sheet company was the victim of naked short selling to the tune of two trillion shares, CMKM is suing Mr. Casavant for allegedly looting the company of $200-million.

Mr. Casavant, now living a less extravagant lifestyle and frequenting Saskatoon casinos rather than his favourite Las Vegas gambling dens, has not yet been served with the year-old CMKM lawsuit. He is also dodging other U.S. lawsuits and creditors.

Perhaps the SEC will be more successful in reeling the Saskatchewan promoter in.

Meanwhile, in an administrative action that points to the peculiarity, if not dysfunctional nature, of the Canadian regulatory system, the Alberta Securities Commission (ASC) has scheduled a hearing for April 9 to consider whether a cease trade order should be issued against CMKM.

The ASC action comes more than three years after the Saskatchewan Financial Services Commission issued a cease trade order against the company and almost 30 months after the SEC revoked CMKM's stock registration, ending any public trading of the shares.

Stockwatch will pick up its review of the SEC lawsuit and continue to follow developments in future articles.

The saga continues.

Comments regarding this article may be sent to lwebb@stockwatch.com.

(Further information regarding CMKM Diamonds and associated companies can be found in Stockwatch articles dated Oct. 21, 2003; June 22; Sept. 16 and 24; Oct. 1, 15 and 20, 2004; Feb. 11, 14, 18, 22 and 23; March 1, 3, 4, 7, 14, 15, 16 and 21; June 6, 8, 9, 10, 13, 14, 15, 16, 17, 20, 21, 22, 29 and 30; July 1, 4, 6, 12 and 13; Aug. 2, 5 and 9; Sept. 7, 12, 27 and 30; Oct. 24, 26 and 31; Nov. 7, 11, 22 and 25; Dec. 1, 6, 9, 15 and 22, 2005; Jan. 3; Sept. 29; Oct. 4, 2006; Aug. 30, 2007; and April 7, 2008.)



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Reader Comments - Comments are open and unmoderated, although libelous remarks may be deleted. Opinions expressed do not necessarily reflect the views of Stockwatch.

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Will there be in bloody jail time for this wanker?

Posted by Gordon Ramsay @ 2008-04-09 15:34

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From: StockDung4/9/2008 10:42:37 PM
   of 121962
 
Better Late Than Never…SEC Files Charges in CMKX Case

by Mark Faulk

Three and a half years after the company was delisted, and over two and half years after the NASD filed charges against NevWest Securities in the same scam, the SEC charged 14 individuals in the CMKM Diamonds fiasco. Although thousands of shareholders were jubilant over the news, for many it seemed to be a case of too little, too late, and raised many questions about who wasn’t charged and why it has taken the SEC so long to bring charges in this case.

On September 9, 2006, an attorney representing a group of thousands of CMKX shareholders sent a letter to the company asking that they take action against six individuals and one company who he claimed illegally sold hundreds of billions of shares of stock to unsuspecting shareholders. In his letter, Bill Frizzell cited 36 trading accounts set up by John Edwards at NevWest Securities, both of whom were charged by the SEC yesterday. He also named CMKX attorney Brian Dvorak, CEO Urban Casavant’s secretary Ginger Gutierrez, and James Kinney, who received billions of shares of company stock, in the first of two shareholders’ derivative rights letters that Frizzell would pen. Edwards, Casavant, Dvorak, Gutierrez, Kinney, and NevWest (along with three individuals from NevWest) were among those charged by the SEC yesterday, along with Edwards’ associates Kathleen Tomasso and Anthony Tomasso and transfer agent Helen Bagley. Bagley’s company First Global Securities and CMKM Diamonds were charged as well.

Although the charges said that Edwards, Casavant, and their cohorts pocketed “at least $64.2 million” in the scam, estimates based on the average price of stock at the time that it was sold show that over 50,000 CMKX shareholders were defrauded of an estimated $250 million dollars. It is one of the largest financial scams in the history of the stock market.

Notable on the list of those who weren’t charged was another company attorney, former SEC attorney D. Roger Glenn, who wrote opinions letters that allowed hundreds of billion shares to be sold into the market based on little more than Brian Dvorak’s claim that the issuances were legitimate. Glenn was named by Frizzell in a second shareholders’ derivative rights letter on March 26, 2007 as another individual who defrauded shareholders. A soon to be released book about the CMKX saga, entitled The Naked Truth: Investing in the Stock Play of a Lifetime, discusses Roger Glenn’s involvement in CMKX:

Bill Frizzell laid out his case against the man who most shareholders had heralded as a savior to the company when he came on board in June of 2004. It was the trumpeted entrance of Glenn that almost single-handedly triggered the massive price run that sucked in thousands of shareholders when the stock rose over a thousand percent in a matter of days…and then dropped back to its original price of one one-hundredth of a cent. He ended his list with the most damning fact of all, that “Mr. Glenn had authored 11 opinion letters in a three-month period resulting in the issuance of 300 billion plus shares,” which were immediately sold to thousands of unsuspecting shareholders by John Edwards, David DeSormeau, James and Jeannie Kinney, and a host of others.

Another individual who wasn’t charged by the SEC was former CMKX Chief Financial Officer David DeSormeau, who was singled out in Frizzell’s first letter and later sued by the current company and its new CEO, shareholder Kevin West, who was named to take over just before Urban Casavant fled to Canada. The Naked Truth discusses DeSormeau’s involvement and comments by yet another company attorney, Donald Stoecklein, during the May 10, 2005, SEC hearing to delist CMKX:

Based on an average selling price at the time, David DeSormeau would have “earned” somewhere around $30 million from the sale of the more than 92 billion shares issued to his companies. It was an incredible amount of compensation considering that in return the company got, as Stoecklein phrased it during the SEC hearings, “25 sheets of paper that is merely shareholders’ equity.”

Among the others who shareholders feel should have been named by the SEC include convicted felon Michael Williams, U.S. Canadian Minerals CEO Rendal Williams (who has reportedly fled to Switzerland), Nevada Minerals president Ed Dhonau, and Casavant associate Emerson Koch, who made millions for simply holding the claims to the 1.9 million acres of mineral claims that were used to entice prospective shareholders to invest in the company. The SEC has still not addressed charges that brokers failed to deliver hundreds of billions of shares of stock in addition to the 703 billion shares that company insiders dumped.

CMKM Diamonds under the direction of Kevin West and Bill Frizzell has filed lawsuits against DeSormeau, John Edwards, Urban Casavant, Michael Williams, Brian Dvorak, James Kinney, Ginger Gutierrez and others. They are working to recoup money stolen from the company and have plans to widen their net to eventually include everyone who they believe defrauded the tens of thousands of CMKX shareholders.

Brian Pugh of the DOJ wouldn’t comment on a joint investigation into CMKM Diamonds by the FBI, the DOJ, and the IRS. He said that any criminal investigation within those departments would have to originate from a grand jury. However, the Faulking Truth confirmed the ongoing investigation in an interview with FBI agent Ryan Randall in September of 2007.

The SEC press release left the door open to additional action by ending with the statement: “The SEC’s investigation is continuing.”

Shareholders can only hope that eventually, all of the major players in the CMKX scandal will face both civil and criminal charges, as well as lawsuits filed by the company itself.

And that, as always, is the Faulking Truth.

(Editor’s note: We will present a special two-hour edition of The Faulking Truth Show on www.toginet.com this Friday, April 11th, from 9-11 AM CST. Listeners are welcome to call in to the show on our toll free number at 1-877-864-4869. TogiEntertainment will conduct a drawing from among the show’s callers to give away six autographed copies of The Naked Truth: Investing in the Stock Play of a Lifetime. The book, authored by stock market reform advocate and writer Mark Faulk, has been updated to include this week’s events, and will be released sometime in May. The Naked Truth: Investing in the Stock Play of a Lifetime is available for pre-order at www.togientertainment.com )

To read additional excerpts from The Naked Truth: Investing in the Stock Play of a Lifetime, go to:

faulkingtruth.com

faulkingtruth.com

To read the SEC complaint in its entirety, go to:

sec.gov

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From: train_wreck4/10/2008 12:04:14 PM
   of 121962
 
Ex-Refco exec tells of commodities fraud

By Leslie Gevirtz, Reuters
NEW YORK — A former Refco executive, who said he helped hide multimillion-dollar commodity trading losses from clients, testified Monday that his bosses said "we're all in this together."
Santo Maggio, a top deputy to former Refco Chief Executive Phillip Bennett and former President Tone Grant, told how the trio deceived banks, foreign exchange traders, hedge fund executives and even top managers at investor George Soros' funds, six years before the 2005 collapse of one of the world's largest commodity brokers.

Bennett pleaded guilty in February to fraud and other charges stemming from the collapse, but Grant chose to stand trial.

Maggio, who was president of the Refco Capital Markets unit, pleaded guilty in December and agreed to cooperate with federal authorities in their investigation of Refco.

In a second day on the stand in U.S. District Court in lower Manhattan, Maggio described how the company was perennially short of cash after meltdowns in the late 1990s sank clients Refco had financed.

With money tight, Maggio routinely had to pick which obligation Refco would fail on.

"If we were down $100 million," he told the jury, he would look for a client that had a $100 million that needed to be delivered and "we would fail on his $100 million...

"Basically, we were behind all the time," Maggio said, his voice quavering. "It would be like musical chairs...There were a number of excuses you would make...the bank screwed up, my computers are out. There was a list of excuses for people at the back office."

When he complained of the stress of lying to his friends on Wall Street, constantly picking which accounts to shortchange, he says both Bennett and Grant reassured him, saying, "We're all in this together. We will come up with a plan."

Rumors spread that Refco was in trouble and Soros Fund Management, its largest client, called Maggio to say it was withdrawing its assets, which totaled about $260 million at the time.

Maggio arranged for a meeting in 1999 between Soros fund top executives and Bennett, Grant and himself. At the meeting, he testified, the Refco executives lied about not suffering any significant losses and offered to provide monthly financial statements to the fund. They urged the Soros Fund executives to call the head of the Chicago Mercantile Exchange clearinghouse, to verify that Refco had always met its settlement duties.

After checking with the CME, the Soros Fund agreed to keep its assets at Refco for the time being.

"We dodged a bullet. We dodged a missile," Maggio said.

In later testimony, Maggio admitted that he had lied under oath in various litigation and to the U.S. Securities and Exchange Commission.

Refco, once a global clearing house for derivatives that served more than 200,000 customers, collapsed into bankruptcy shortly after it went public in 2005.

Copyright 2008 Reuters Limited.

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