|From: zukisafatpig||10/4/2012 10:32:47 PM|
|Robert Zuk is an associate Michael Lee Mitton, both are (were) RCMP informants. Mitton is most famous for his recent Pender promotion, where he used the alias Michael Douglas to defraud a few Canadian banks for a few million. Zuk is still a light weight, but he is out there looking to make deals ( give a bit to the RCMP, keep a little bit more for himself).|
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|From: zukisafatpig||10/4/2012 10:37:32 PM|
|fraudster Michael Lee Mitton for life |
Published on Monday December 12, 2011
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Tony Van Alphen
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Note: This article was edited from a previous version
Ontario’s stock regulator has finally banned serial fraudster Michael Lee Mitton for life.
The Ontario Securities Commission approved a settlement between staff and Mitton late last week that permanently prohibits him from trading in or acquiring any securities after he admitted acting contrary to the public interest in the Pender International scandal.
Furthermore, the commission said Mitton can’t become an officer and director of any public company and investment fund firm or act as a registrant, investment fund manager or promoter.
The OSC added Mitton, who has a rap sheet of more than 100 convictions, also agreed to permanently cease telephoning from Ontario to any residence in the province or outside it to trade securities.
He left an Ottawa area prison this summer after serving two thirds of a six-year, eight-month sentence for masterminding a classic pump-and-dump stock manipulation scheme in Markham, Richmond Hill and Vancouver in 2004.
The OSC halted trading in Pender, a junior mining company with an idle operation near Kirkland Lake, after it became aware of unusual price movements. The regulator also froze numerous brokerage and bank accounts.
Mitton, who is in his early 50s, had issued phony news releases to boost Pender’s stock price and orchestrated the artificial jump in shares and sales to unsuspecting investors. A small inside network of associates unloaded their holdings at a profit just before the stock crashed.
Ironically, the mine, which was partially flooded at the time, has turned into a gold producing mine under another name.
After police caught and charged him, Mitton pleaded guilty in 2007 to fraud and money laundering which included moving thousands of dollars through his lawyer's trust account. A judge also slapped him with a $2.6-million restitution order but he has not repaid any money.
While in prison last year, Mitton helped operate a local restaurant with the use of a cell phone contrary to prison rules. Family members operated the restaurant, which later closed.
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|From: zukisafatpig||10/4/2012 10:53:14 PM|
|************************************************************ --LUMINART STORY... Something is amiss in Toronto or Vancouver. I am not permitting this |
story to be issued on the wire services and will remain on email only.
I have spent approx. 2.5 hours with the head of Merit Investments.
He had already phoned attorneys in Canada and the US to use every
means to silence me. We have reached an agreement whereas I will
hold back from additional writing about LUMN with regards to Merit
Investments while he conducts his own investigation into the
company. I did so as a courtesy and made it very plain and clear that
I will not be intimidated by any threat of lawsuit or legal action. He
has already started his investigation. He claims up and down that
Merit Investments is NOT shorting the stock, has not shorted the
stock since January and only did so as it rose from C$6 to C$10. Mr.
Kasman, himself, admitted he went long at C$8.75 for 1000 shares,
watched it go up to C$10 and sold on the way back down at C$8.75.
He claims that Merit has their own Luminart sign in their offices. I
have mine for conferences where I speak. Luminart gave it to me as
a gift (smart people since I like the product and it's free PR for them
hanging up in my booth where investors can ask me "oh where did
you get that lovely sign?"). I guess Merit got theirs as a gift too --
from Dane Walton! In the midst of his ongoing investigation, Kasman turned up that
Wood Gundy posted the "false trade" of C$4.50 last Friday for a small
amount of shares and then canceled it. Also, Bay Street traders knew
that Scotia McLeod had approx. 200,000 shares they were trying to
dump into the market. I expect traders took the price down as those
shares were being unloaded. This information was provided to me by
Mr. Kasman. Mr. Kasman seems earnest in proving that he is "not a crook" and
claims I called him one, which I did not -- I wrote that "some call
him a crook." I am fence-sitting on this one until new evidence
convinces me otherwise. He sounds convincing, but I'm not saying
anything either way, until I know for sure. It could be that someone is hanging out Kasman and Merit out to dry.
Merit was expecting C$4 million in Chinese money on Thursday.
Kasman claims that my wire story killed his deal and the Chinese
have backed out. They were to buy shares in Merit and now they
will not. I am not interested in ruining someone's reputation. I AM interested
in reporting news and ensuring that the small investor gets a fair
shake. If Kasman is an honorable, respectable man, then I would
defend him. Evidence shows past problems. We have all experienced
some problems in the past. However, illegal activities should be dealt
with properly. I don't have hard evidence yet on Kasman or Merit
Investments to convince me they are a den of thieves. Actually, all I
am interested in is knowing if they are really short and I have been
lied to all along. Mr. Kasman's investigation into Dane Walton begins
on Thursday morning. It will probably not be a pleasant, quiet
investigation. I am backing off to see the results of that invest. Barry Kasman has offered me the opportunity to come into his office
and see his books. Time and previous commitments prevent me from
flying to Toronto to obtain hard evidence either way. IS THERE
ANYONE WHO WOULD LIKE TO VOLUNTEER TO DO THIS IN MY
PLACE? (You would need to be trained on what to look for and not be
misled by anyone while there.) This would be a big help to myself and others who want to know
what the heck is going on with LUMN. ALL the email I have gotten from anyone about Luminart confirms
my story about the company. It is an outstanding company. It has
excellent prospects, great earnings coming out soon, a wonderful
product, etc. I spoke with Mike Ivezic who has asked me for (a) a
name, (b) a document, (c) anything he can use to nail Rob Zuk and get
him out of there. So far, he has gotten nothing. Every lead has come
up dry. I can't meet with Mike Ivezic until May 14th in NYC at the
Equities magazine conference. IF anyone has hard evidence, other
than what I have reported, I would greatly appreciate this
information. I have a few documents, but I would like more. The bigger the pile,
the stronger the evidence. Several things of import did materialize during our conversations. "I
have no love for the Zuk's," claimed Mr. Kasman. That's for starters
and it headed downhill from there. Also, Dane Walton's father was
Chief Investigator for the Toronto Stock Exchange. That may be of
interest since it was Dane's father who brought Dane to Barry
Kasman to work there. Frank Holmes used to be a partner in Merit
and I respect Frank (United Services Advisors of San Antonio, Texas).
Roy Hill, head of the Canadian Dealing Network, also used to work at
Merit. One has to weigh these little points somewhat in reaching a rational
conclusion. I would like any other evidence, either way, on Merit,
Dane, the Zuks and/or Luminart. We now have the power of the
Internet to conduct an investigation. Let's use it. There are thousands
of LUMN shareholders who are concerned by what is going on with
this company. This could be a test case for future stocks... and for
driving the crazies out of the financial marketplace. By the way, the
latest rumor going around is that I, George Chelekis, am short on
Luminart. That is a crock. I knew something was going wrong with
LUMN at the end of March and emailed a number of people about
selling my shares. I did not and waited patiently as the stock
retreated. Finally, enough was enough. Too much evidence surfaced
which convinced me that Luminart was being sold short. It IS a red flag when two prominent guys show up in Nassau,
Bahamas with women that are not their wives. This is proven and
witnessed. No, you can't be hung for this. Yes, it is adultery. Yes, this
is a "common" thing in today's society. However, in business, this is a
red flag to me. Last year, I noticed the bizarre sexual practices of one
CEO and Chairman of a gaming company, which I will keep nameless
at this time; that stock dove from $4.50 (US) to under $1 (US). There
were other shady dealings within this company and I didn't trust
them and stopped writing about them. It's just a string, but if you
keep pulling the little strings, pretty soon you find the landmines.
Rob Zuk and Dane Walton promoting WWTI stock to me and trying to
get me to recommend it are just another example. Those are two red
flags. I hope you will contact me with whatever you know which is usable.
Please email directly to me < hots...@gate.net>. All information will
be kept in the strictest of confidence unless you note otherwise. I DO
protect my sources. Now and always. Period. Best, George Chelekis ************************************************************ COPYRIGHT (c) 1995 by George Chelekis. ALL RIGHTS RESERVED.
Copyright violation will be prosecuted to the fullest extent of the law.
The information presented in George Chelekis' Hot Stocks Confidential
is not an offer to buy or sell securities referred to herein. This is an
irregular financial gossip column, strictly for information purposes,
possibly reliable but not guaranteed as to accuracy or completeness.
Investors are urged to obtain complete financial and other
information directly from the company as George Chelekis is not
liable for any investment decision made. While he is not an
investment advisor, George Chelekis, from time to time, invests in
North American securities, and provides information about selected
companies which catch his eye. Stocks featured in this column are
extremely speculative investments, laden with considerable risk and
plenty of volatility. Past performance does not guarantee future
results. Investors should take profits to cover their initial
investments because these stocks are extremely volatile. George
Chelekis is not responsible for the timing on these investments
should information be delayed between the time it is written and
when it is actually received and/or acted upon. Hot Stocks
Confidential is not subsidized by featured companies. ************************************************************
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|From: zukisafatpig||10/5/2012 4:45:17 AM|
|Delays end Zuk charges|
Friday, October 31, 2008
In a case billed as an example of a new alliance between police and regulators to fight white-collar crime, fraud charges have been dismissed against Toronto stock promoter Robert Zuk because of an unreasonable delay by prosecutors.
Peter J. Thompson, National Post
Robert Zuk agreed to a settlement with the Ontario Securities Commission in March, 2007.
| ||The Ontario Ministry of the Attorney-General acted in a "dilatory" and "haphazard" manner and did not meet its obligation to prosecute Mr. Zuk in a timely fashion, said Ontario Superior Court Justice Alison Harvison Young, in a ruling released this week. Mr. Zuk, 45, was charged in March, 2005, and accused of "cheque kiting," involving more than $157,000 in funds that were allegedly part of a plan to defraud Canadian Imperial Bank of Commerce.|
The RCMP issued a news release at the time trumpeting its co-operation with other police agencies and the Ontario Securities Commission. "Criminals need to take notice that police services and regulatory agencies across Ontario and Canada are co-ordinating their investigations to attack crime," the RCMP stated.
Mr. Zuk was the only person charged criminally in a more than three-year-long RCMP organized-crime investigation into alleged stock fraud and money laundering -- a probe dubbed Project ORA. The cheque-kiting charges were announced the same day the OSC alleged that Mr. Zuk and five others were involved in creating "a misleading appearance" of trading activity in Visa Gold Explorations Corp. The Toronto-based company was involved in searching for shipwrecks and underwater artifacts in the Caribbean.
Mr. Zuk agreed to a settlement with the OSC in March, 2007, admitting that he engaged in "wash" trades of shares of Visa Gold, both buying and selling shares without changing beneficial ownership, to artificially inflate the share price.
The promoter was banned from trading in securities or acting as an officer or director of a public company for 15 years. Four brokers also named by the OSC agreed to lesser sanctions. Allegations were withdrawn against one of the defendants.
Mr. Zuk maintained his innocence of any wrongdoing yesterday in an interview with the Financial Post.
"I was fighting a war on two fronts," said Mr. Zuk of his decision to settle with the OSC. "I think there should be a public inquiry to see how the taxpayers' dollars were wasted," by the RCMP in its investigation.
At least 40 people were the subject of wiretaps initiated in 2001 in Project ORA, according to court documents. An RCMP officer testified during Mr. Zuk's trial that no one else was charged criminally in the investigation, which alleged organized-crime figures were involved in stock fraud.
"The RCMP acted like it was looking for Al Capone," said lawyer Christopher Murphy, who represented Mr. Zuk. "At the end, all they nabbed was a guy accused of bouncing a few cheques."
Mr. Murphy was met with repeated obstruction by the Crown and a "half-hearted" handling of the case when he asked for disclosure of wiretap evidence against his client, noted Judge Harvison Young. Mr. Zuk filed for bankruptcy in 2003 and was acquitted of tax-evasion charges in 2005.
He said yesterday he feels like he has lost seven years of his life. "Time doesn't matter" to police or prosecutors, suggested Mr. Zuk. "There is no penalty for trashing someone's life."
An RCMP spokesman said yesterday he was unable to comment on the court ruling.
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|To: Bear Down who wrote (115136)||10/5/2012 10:24:42 AM|
|QUAN: Could Robotics Be the Cure for Cancer?|
2012-10-03 05:00 ET - News Release
HOUSTON -- (Business Wire)
As Quantum International Corp. (OTCBB: QUAN) explores the potential of tiny nanobots to revolutionize medicine, new robotics breakthroughs could soon pave the way for a potential cure for cancer.
Scientists at the NanoRobotics Laboratory at Canada’s École Polytechnique de Montréal have discovered a way to wirelessly steer tiny robots and other objects through the blood vessels of living creatures using the magnetic coils in MRI machines. These microbots can travel deep inside the body, visiting places that catheters can’t go and performing tasks previously impossible without invasive surgery.
While the tech isn’t quite ready for human testing yet, one of the first medical applications for these microscopic machines could be treating cancers.
“Using robots to deliver cancer-killing medicine directly to a tumor deep within the body could forever change the treatment of the disease,” said Quantum CEO Robert Federowicz. “The market for such astonishing technology would obviously be enormous. Quantum is dedicated to bringing just such innovations out of the laboratory and into the global marketplace.”
In fact, Quantum is already working to leverage demand for powerful new medical technologies. The company is close to an agreement with Poland’s Industrial Research Institute for Automation and Measurement (PIAP) to assist in the commercialization of the Resuscitator, a portable device designed to ensure that chest compressions, the element of CPR most prone to human error, can be easily administered perfectly by amateurs and professionals alike.
Quantum is working to develop the next generation of robotics technology to compete in a booming global industry alongside Intuitive Surgical, Inc. (NasdaqGS: ISRG), iRobot Corporation (NasdaqGS: IRBT) and Dover Corp. (NYSE: DOV).
For more information on Quantum International’s robotics initiatives, please visit www.quantuminnovators.com/investors.html.
Follow us on Twitter at www.twitter.com/QuantumIntlCorp.
About Quantum International Corp.
Quantum International Corp. (OTCBB: QUAN) is a robotics innovation company working to commercialize the next generation of sophisticated, automated technology. The Company is positioning itself to develop, deliver and market the most cutting-edge innovations in robotics in order to leverage the worldwide demand for the precision, speed, and cost-effectiveness these technologies offer.
For more information about Quantum International Corp., please visit www.quantuminnovators.com.
Notice Regarding Forward-Looking Statements
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: This news release contains forward-looking information within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, including statements that include the words “believes,” “expects,” “anticipate” or similar expressions. Such forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from those expressed or implied by such forward-looking statements. In addition, description of anyone’s past success, either financial or strategic, is no guarantee of future success. This news release speaks as of the date first set forth above and the company assumes no responsibility to update the information included herein for events occurring after the date hereof.
Quantum International Corp.
Robert Federowicz, 832-308-1260
President and CEO
Source: Quantum International Corp.
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|From: zukisafatpig||10/5/2012 10:44:26 AM|
Capital Market Pros: - New Technology for US Exchange Traded Equity Markets. Learn More From: Thomas Plaut
2nd Robert Zuk International Business Development Focusing In Africa
Location Toronto, Canada Area Industry Mining & Metals
More options ENGAGE
Ask for more info
Get introduced Find references PROFILE Share Learn More Save Export to PDF Flag
International Business Development Focusing on building strong relationships with African Governments who want to develop their mining and energy industries.
Robert has 20 years experience in Corporate Finance, Investment Banking and Investor Relations. He has assisted Governments in Industrial Development initiatives and technology ventures in North America, Europe, and resource companies in Canada
Robert conducted international contract negotiations and business development. Most recently he has been involved in the resource sector in Africa, developing relationships with all levels of government and the business sector.
In 2010 he created a unique program, which was implemented for the Government of Equatorial Guinea. The program consisted of a complete airborne survey covering the entire mainland area (27,000 square kilometers) in exchange for a large percentage of the mineral rights. The contract was signed in April 2010 and the airborne survey was completed at the end 2011.
Specialties Creating fair and equitable partnerships between African Nations and the Canadian Investment community,
Manager Business Development Gauge-FCMI Africa Corp
2011 – Present (1 year) Lyon, France
Managing Partner FCMI Global
January 2010 – 2011 (1 year) Toronto, Canada
|RecommendKeepReplyMark as Last Read|
|From: zukisafatpig||10/5/2012 10:51:48 AM|
IN THE MATTER OF THE SECURITIES ACT
R.S.O. 1990, c.S.5, AS AMENDED
- AND -
IN THE MATTER OF NEST ACQUISITIONS AND MERGERS,
IMG INTERNATIONAL INC., CAROLINE MYRIAM FRAYSSIGNES,
DAVID PELCOWITZ, MICHAEL SMITH, and
ROBERT PATRICK ZUK
STATEMENT OF ALLEGATIONS
OF STAFF OF THE ONTARIO SECURITIES COMMISSION
Staff of the Ontario Securities Commission (the “Commission”) make the following allegations:
1. This proceeding centres on the solicitation of various residents of the United Kingdom (the “U.K. Residents”) by Nest Acquisitions and Mergers (“Nest A&M”) and IMG International Inc. (a.k.a “Investors Marketing Group International Inc”, collectively, “IMG”) in respect of the sale of securities.
2. Staff allege that the respondents’ course of conduct spanned the period from August 14, 2008 to June 11, 2009 (the “Material Time”).
A. The Individual Respondents
3. None of the individual respondents were registered in any capacity with the Commission during the Material Time.
4. Caroline Myriam Frayssignes (“Frayssignes”) is a resident of Oakville, Ontario. Frayssignes is the sole proprietor of a business called “Nest”. Frayssignes is one of two signatories to a bank account she set up in the name of Nest at a Royal Bank of Canada branch in Oakville, Ontario (the “Nest Account”).
5. David Paul Pelcowitz (“Pelcowitz”) is a former registrant in various capacities, who was last registered as a trading officer, director and supervisory procedures officer. His registration with the Commission ended on June 27, 2000. Pelcowitz is a resident of Thornhill, Ontario.
6. Michael Smith (a.k.a “Micheal”) (“Smith”) is the sole director and officer of IMG and resides at an unknown address.
7. Robert Patrick Zuk (“Zuk”) is a resident of Oakville, Ontario and is Frayssignes’ boyfriend. He is the other signatory to the Nest Account. Zuk was the subject of an order of the Commission to, among other things, cease trading in securities for a period of 15 years from March 1, 2007 (the “Zuk Order”). Zuk was registered with the Commission in the category of salesperson from February 13, 1987 to November 15, 1990.
B. The Corporate Respondents
8. None of the corporate respondents were registrants in Ontario during the Material Time.
9. IMG was incorporated in Ontario on June 17, 2008. Smith was the sole director and officer of IMG during the Material Time.
10. Nest A&M is a fictitious business, purporting to be based in St. Vincent and the Grenadines.
III. THE ADVANCED-FEE SCHEMES
A. The Solicitations
11. The U.K. Residents received unsolicited phone calls from representatives of Nest A&M or IMG and were told that Nest A&M or IMG had buyers for securities already held by the U.K. Residents.
12. The U.K. Residents were then told that they would have to pay “performance bonds”, “non-resident taxes” and/or fees to remove “share restrictions” to Nest A&M or IMG before Nest A&M or IMG could complete the sale of the securities.
13. Pelcowitz provided documents to the U.K. Residents on behalf of Nest A&M and IMG, which provided details of the proposed sale of the securities, including that the U.K. Residents would received significant premiums to the value of the securities held by them. The documents also detailed the wire-transfer information for, in the case of Nest A&M, the Nest Account, and, in the case of IMG, the U.K. Residents were instructed to send funds to a bank account in the name of IMG at the Parama Lithuanian Credit Union located in Toronto, Ontario (the “IMG Account”).
14. The U.K. Residents sent their “performance bond” or other advance-fee funds via wire transfer to the Nest Account or the IMG Account.
15. The U.K. Residents were subsequently approached and advised they would have to pay further fees so that the transactions could proceed. When the U.K. Residents refused to send further funds to either the Nest Account or the IMG Account, they stopped receiving communications from representatives of Nest A&M or IMG.
16. None of the transactions for which the U.K. Residents wired funds to the Nest Account or the IMG Account have been completed.
17. During the Material Time, Smith, Pelcowitz, Zuk and Frayssignes misappropriated the funds obtained from the U.K. Residents.
18. The respondents participated in acts, solicitations, conduct, or negotiations directly or indirectly in furtherance of the sale or disposition of securities for valuable consideration, in circumstances where there were no exemptions available to the respondents under the Securities Act, R.S.O. 1990, c. S. 5, as amended (the “Act”).
B. Fraudulent Conduct
19. During the Material Time, Smith, Pelcowitz and other employees, representatives or agents of Nest A&M or IMG provided information to the U.K. Residents that was false, inaccurate and/or misleading, including, but not limited to, the following:
(a) that Nest A&M or IMG could arrange to sell securities held by the U.K. Residents for significant premiums over the current market value of the securities; 20. The false, inaccurate and misleading representations were made with the purported intention of effecting trades in the securities belonging to the U.K. Residents.
(b) that Nest A&M or IMG had received funds from the purported purchasers of the securities held by the U.K. Residents and that these funds were being “sequestered in our Trust Account”;
(c) that within three business days of the U.K. Residents providing advance fees they would receive all of the funds for the sale of their securities;
(d) that the funds were “fully refundable”; and
(e) that certain U.K. Residents were offered a five percent discount on a “non-resident tax” because the U.K. Residents were over sixty-five years old.
21. Once funds were wire transferred by the U.K. Residents to the Nest Account or the IMG Account the funds were withdrawn as cash or cheques, which were primarily payable or provided to Pelcowitz, Zuk, Frayssignes, David O’Brien Professional Legal Corp., and others.
22. The respondents and other employees, representatives or agents of Nest A&M or IMG engaged in a course of conduct relating to securities that they knew or reasonably ought to have known would result in a fraud on persons.
IV. MISLEADING STATEMENTS MADE TO THE COMMISSION
23. Frayssignes gave evidence to Commission Staff appointed to investigate this matter on July 16, 2009, which contained materially misleading and/or untrue statements, contrary to s. 122(1)(a) of the Act, relating to the following:
(a) the source of funds received into the Nest Account; 24. Zuk gave evidence to Commission Staff appointed to investigate this matter on November 12, 2009, which contained materially misleading and/or untrue statements, contrary to s. 122(1)(a) of the Act, relating to the following:
(b) the disposition of funds received into the Nest Account; and
(c) whether she had received instructions to purchase securities of an Over-The-Counter issuer called Church and Crawford.
(a) the source of funds received into the Nest Account; V. CONDUCT CONTRARY TO ONTARIO SECURITIES LAW AND CONTRARY TO THE PUBLIC INTEREST
(b) the disposition of funds received into the Nest Account; and
(c) his knowledge concerning Church and Crawford and whether he instructed Frayssignes to purchase its securities.
25. The specific allegations advanced by Staff are:
(a) During the Material Time, the respondents traded in securities without being registered to trade in securities, contrary to section 25(1)(a) of the Act; 26. Staff reserve the right to make such other allegations as Staff may advise and the Commission may permit.
(b) During the Material Time, the respondents engaged or participated in acts, practices or courses of conduct relating to securities that the respondents knew or reasonably ought to have known perpetrated a fraud on persons, contrary to section 126.1(b) of the Act;
(c) During the Material Time, Smith, being the sole director and officer of IMG, did authorize, permit or acquiesce in the commission of the violations of sections 25 and 126.1 of the Act, as set out above, by IMG or by the employees, agents or representatives of IMG, pursuant to section 129.2 of the Act;
(d) Frayssignes gave evidence to Commission Staff appointed to investigate this matter on July 16, 2009, which contained materially misleading and/or untrue statements, contrary to s. 122(1)(a) of the Act;
(e) Zuk gave evidence to Commission Staff appointed to investigate this matter on November 12, 2009, which contained materially misleading and/or untrue statements, contrary to s. 122(1)(a) of the Act;
(f) During the Material Time, Zuk breached the Zuk Order by trading in securities, contrary to section 122(1)(c) of the Act; and
(g) The above-described conduct of the respondents was contrary to the public interest.
DATED AT TORONTO this 18th day of January 2010.
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|From: scion||10/5/2012 12:10:45 PM|
|SEC Charges Four Brokers With Defrauding Customers in $18.7 Million Scheme |
FOR IMMEDIATE RELEASE
Washington, D.C., Oct. 5, 2012 – The Securities and Exchange Commission today charged four brokers who formerly worked on the cash desk at a New York-based broker-dealer with illegally overcharging customers $18.7 million by using hidden markups and markdowns and secretly keeping portions of profitable customer trades.
The SEC alleges that the brokers purported to charge customers very low commission fees that were typically pennies or fractions of pennies per transaction, but in reality they were reporting false prices when executing the orders to purchase and sell securities on behalf of their customers. The brokers made their scheme especially difficult to detect because they deceptively charged the markups and markdowns during times of market volatility in order to conceal the fraudulent nature of the prices they were reporting to their customers. The surreptitiously embedded markups and markdowns ranged from a few dollars to $228,000 and involved more than 36,000 transactions during a four-year period. Some fees were altered by more than 1000 percent of what was being told to customers.
The SEC further alleges that when a customer placed a limit order seeking to purchase shares at a specified maximum price, the brokers filled the order at the customer’s limit price but used opportune times to sell a portion of that order back to the market to obtain a secret profit for the firm. They falsely reported back to the customer that they could not fill the order at the limit price. Meanwhile, the brokers made millions of dollars in illicit performance bonuses based on the fraudulent earnings they were generating on the cash desk.
The brokers charged in the SEC’s complaint are Marek Leszczynski, Benjamin Chouchane, Gregory Reyftmann, and Henry Condron.
“These brokers stole millions of dollars by overcharging customers for trades involving stocks with high trading volumes and price volatility, which are characteristics they wrongly thought would conceal their illicit pricing scheme,” said Robert Khuzami, Director of the SEC’s Division of Enforcement. “They underestimated the SEC’s ability and resolve to pursue such illegal schemes.”
In a parallel action, the U.S. Attorney’s Office for the Southern District of New York today announced criminal charges against Leszczynski and Chouchane. Condron has pled guilty to criminal charges.
According to the SEC’s complaint filed in federal court in Manhattan, the brokers were employed at an interdealer broker firm. Interdealer brokers typically operate only as agents and execute large volumes of securities trades on behalf of customers for low commissions. The cash desk where these brokers worked executed trades in U.S. and Canadian stocks, and customers were primarily large foreign institutions and foreign banks. The firm’s internal records show that customers were to be charged flat commission rates between $0.005 and $0.02 per share.
The SEC’s complaint alleges that the scheme spanned from 2005 to 2009. Reyftmann, Chouchane, and Leszczynski were sales brokers on the cash desk who were responsible for finding customers, developing relationships, and taking orders from customers. Reyftmann supervised the cash desk. Condron was a sales trader and middle-office assistant on the cash desk who entered orders received from the sales brokers and ensured the orders were executed.
The SEC alleges that the fraudulent scheme worked as follows:
Leszczynski, Chouchane, or Reyftmann received a customer order by phone, instant message, or e-mail and gave the order to Condron, who executed the trade.
Condron recorded the actual execution price on the trade blotter and informed the sales brokers of the execution.
Shortly after the trade was executed, Leszczynski, Chouchane, or Reyftmann examined other market executions around the time of the actual execution to determine whether the stock price fluctuated.
If the stock price’s fluctuation was favorable to the firm and sufficient to conceal the fraud from customers, the sales brokers instructed Condron to record a false execution price in the gross price field on their internal trade blotter.
Leszczynski, Chouchane, Reyftmann, or Condron then reported the false execution price and the commission to the customers.
The SEC alleges that the brokers further defrauded customers by stealing portions of their profitable trades and keeping them for the firm:
After receiving and executing a customer’s limit order to buy shares, Reyftmann, Chouchane, or Leszczynski looked for an opportunity to sell that same stock at a higher price than the price at which the customer’s trade was executed.
Leszczynski, Chouchane, or Reyftmann then instructed Condron to sell a portion of that customer execution back at the higher price.
Rather than properly recording the actual price and quantity of the order fill, Condron entered a partial fill into the trade blotter, keeping the secret profits for the firm.
Leszczynski, Chouchane, Reyftmann, or Condron then reported a partial fill to the customer, falsely stating that they were unable to fully execute the customer’s limit order.
Meanwhile, the SEC alleges that the brokers’ scheme enriched not only the firm but themselves as well. The four brokers received substantial performance bonuses totaling more than $15.6 million based, in part, on the fraudulent earnings generated by the cash desk.
The SEC alleges that Leszczynski, Chouchane, Reyftmann, and Condron violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The SEC is seeking disgorgement of ill-gotten gains with prejudgment interest, financial penalties, and a permanent injunction against the brokers.
The SEC’s investigation, which is continuing, has been conducted by Mary P. Hansen (Assistant Director in the Market Abuse Unit in the Philadelphia Regional Office), A. Kristina Littman (Senior Counsel in the Philadelphia office) and Darren Boerner (Specialist in the Market Abuse Unit in the Chicago Regional Office). G. Jeffrey Boujoukos (Regional Trial Counsel) and John V. Donnelly (Senior Trial Counsel) in the Philadelphia office are handling the litigation.
The SEC acknowledges the assistance of the U.S. Attorney’s Office for the Southern District of New York and the Federal Bureau of Investigation.
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|From: scion||10/5/2012 2:09:47 PM|
|Lehman Brokerage and Europe Unit Settle $38 Billion in Claims |
October 5, 2012
(Reuters) - The U.S. brokerage unit and a European unit of the former Lehman Brothers Holdings Inc said they settled litigation over $38 billion of asset claims, a major step toward customers and creditors recovering money.
The announcement Friday by Lehman Brothers Inc and Lehman Brothers International Europe comes four years after Lehman, once Wall Street's fourth-largest investment bank, filed for bankruptcy at the height of the 2008 global financial crisis.
James Giddens, the trustee liquidating the brokerage unit, said the accord was a "critical milestone" that would let customers recover 100 percent of their property much sooner than if LBIE litigated claims over more than 200,000 trades.
Tony Lomas, joint administrator of LBIE, said the pact enables him to focus on distributing more than $7 billion of assets.
The agreement in principle requires approval by U.S. Bankruptcy Judge James Peck in Manhattan - possibly in the first quarter of 2013 - and by the English High Court.
LBIE had been the U.S. brokerage unit's largest customer claimant.
The U.S. unit announced a separate accord Thursday with former Swiss-based derivatives unit Lehman Brothers Finance AG, reducing a $6 billion claim to $550 million.
Under Friday's agreement, LBIE will be allowed $8 billion in claims for customer accounts, which includes $7.5 billion in securities and cash and $500 million in cash net equity. It had earlier sought $24 billion.
LBIE will also get a $4 billion general property claim, plus $600 million of "post-filing income."
Lehman Brothers Inc's $13.8 billion unsecured claim against the European unit will be eliminated.
Litigation will be suspended through mid-December while the parties craft a final accord.
The Chapter 11 filing by Lehman on September 15, 2008 is the largest in U.S. history.
Lehman emerged from bankruptcy in March, and has paid out or plans to pay out $33 billion of an expected $65 billion to creditors, recovering an average of 21 cents on the dollar. The company is also being wound down.
The cases are In re: Lehman Brothers Inc, U.S. Bankruptcy Court, Southern District of New York, No. 08-01420; and In re: Lehman Brothers Holdings Inc in the same court, No. 08-13555.
(Reporting by Jonathan Stempel in New York; Additional reporting by Tom Hals in Wilmington, Delaware; Editing by Jeffrey Benkoe and Bernadette Baum)
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|From: StockDung||10/5/2012 10:00:24 PM|
|SEC halts Liberty Silver |
2012-10-05 19:11 ET - Street Wire
Also Street Wire (C-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-LBSV) Liberty Silver Corp
Also Street Wire (C-LSL) Liberty Silver Corp
by Mike Caswell
The U.S. Securities and Exchange Commission has halted Liberty Silver Corp., a company listed on both the OTC Bulletin Board and Toronto Stock Exchange that has roughly doubled in value over the past month. The SEC cites a lack of current and accurate information about the control of the company, its price and its trading. Although the SEC halt only applies to the OTC-BB, the TSX issued a halt of its own 30 minutes after the SEC notice, in which it said it trading would cease "pending company contact."
The SEC action comes after a four-week run in which Toronto-based Liberty Silver climbed to $1.58, up from 79 cents. The rise gave the company a market capitalization of $127.5-million, which is substantially higher than the $1.9-million in assets it recently reported in its June 30, 2012, balance sheet.
Although Liberty Silver has provided little news that would explain its rise, at least one stock tout recently said the company was worth even more than its present price. James West, who writes for an on-line tout sheet called the Midas Letter, calculated in a Sept. 27 report that the company's flagship Trinity project in Nevada is worth about $750-million (U.S.). He said that Trinity has 50 million ounces of silver which, when calculated on a per-share basis, work out to a value of $9.38. "Chop that in half for the sake of conservativeness, and you still get a price of $4.68 per common share outstanding," he figured. (He qualified the calculation by saying it was simplistic "non-43 101 compliant math.")
A much less optimistic valuation, however, came to light during a dispute between Liberty and a TSX Venture Exchange company, Sennen Resources Ltd. (On July 16, 2012, Liberty launched a bid to acquire Sennen, offering 0.28 share for every Sennen share. It was clear that the offer was a hostile one, with Sennen calling it an "insult to the intelligence" of shareholders. It was not clear how many shareholders tendered to the offer, but the bid expired incomplete on Sept. 14, 2012.)
After receiving the offer, management of Sennen Resources examined Liberty and concluded that the company was extremely overvalued. On a net-asset-value basis, the company was actually worth between half a cent and seven cents per share. Also of concern to Sennen was a technical report on the Trinity property. The authors of the report stated that they were "concerned about the accuracy of the USBRC analyses ... that represent 82 per cent of the values used in the inferred resource estimation." The property, in Sennen's view, was not close to becoming a producing mine, as Liberty had asserted.
Liberty, for its part, contended that Sennen's statements did not reflect the "significant progress" it had made at the Trinity project. It also pointed out that Sennen would have been able to review the latest data on the company had it agreed to go through a friendly process.
Sennen, however, said there were other problems with Liberty. The company had issued 68.4 million shares at prices between 0.005 cent and 0.25 cent, after taking into consideration a 20:1 split. If Sennen shareholders accepted Liberty's takeover offer, they would be receiving stock at a substantially higher price. Moreover, the prices at which Liberty's management had acquired shares were not available in insider trading reports. (Insider reports on SEDI show that the company's largest single shareholder is one of its directors, John Pulos, who has 10 million shares. The reports do not state how he acquired the shares or the price at which he bought them, simply listing them in an opening balance.)
The SEC's halt lasts for 10 business days, or until Oct. 18. Once the 10 days have passed, brokers in the U.S. wishing to trade the company will face an onerous burden. They must keep up-to-date information on the company's financial status and on its insiders. They must also have copies of the company's prospectus, its most recent annual report and any subsequent quarterly reports. In addition, brokers must maintain current information on the company's name, address, state of incorporation, number of shares outstanding, the name of its transfer agent and the nature of its products. Brokers must also know if a price quotation is from another broker or from an insider. They must provide this information to anyone interested in trading the company.
The SEC has not launched any other action against the company, or provided any details on its reason for the halt.
Liberty Silver's chief executive officer, Geoff Browne, did not respond to a phone message seeking comment about the halt. The company issued a news release late Friday in which it said it was in compliance with disclosure and regulatory requirements.
The stock traded on the TSX for about 30 minutes after the SEC halt, falling 61 cents to 97 cents.
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