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CMKX - May 10 - 05 D-Day - The next chapter
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[QUOTE]Originally posted by legaleagle: [QB] DR D Report 007/06/05 Topic: Per my conversation with Lori Livingston etc... (Read 1,607 times) DrDiamond Global Moderator member is offline Dr.D and Ron Casavant Joined: Aug 2004 Gender: Male Posts: 1,055 Location: Kentucky Per my conversation with Lori Livingston etc... « Thread Started on Today at 12:43am » -------------------------------------------------------------------------------- Per conversation with Lori Livingston, President and CEO of Transfer Online.com I spoke with Mrs. Livingston for around 40 minutes. We discussed the letters she had sent to the SEC and the DTCC. We spoke extensively concerning the developing regulations limiting Transfer Agents participation in companies withdrawing from the DTC, dematerilaization, NSS/Counterfeiting, electronic shares vs certificates, STP (Straight through processing), and more. Mrs. Livingston was very cooperative and assisted greatly in answering many of my questions. Too, she was a very nice, well spoken, independent and intelligent woman to communicate with. She knew her stuff, for sure! She works with many overseas companies as well as U.S. companies. She granted permission to use her letters or any parts of them for whatever purpose I desired. She suggested when communicating with our legislators that I simply incorporate what she said into my letters or communications so those reading will regard the information more highly than a letter from someone outside the state or area of representation. I will share some of her comments here regarding the state of the market system, in her opinion of course. The market system has spent 20 years in trying to make the market operations a complete mystery and have been in a process of making shareholders ignorant of what is really going on in the marketing world. As a part of that broker/dealers have been misinforming their clients to keep them in the dark concerning their true options and rights as shareholders. Many brokers deny the existence of Direct Registration of your security; neglect to share with clients information about the availability to hold their position in paper certificates; they place exhorbitant fees on the obtaining of certificates and in turn blame the high cost and lengthy time delays on the Transfer Agent. Concerning dematerialization (the removal of paper stock certificates) she informed that the States Laws in the UCC (May be the Uniform Commercial Code) regulates the issuing and use of securities by laws that address Paper certificates not electronic broker statements. She is not sure how dematerialization will ever be pulled off, unless the markets are going to be operating completely outside the parameters of the States Laws. There is no provision anywhere in the State’s UCC that gives any governance, guidance, preference, or even recognition to a broker statement upholding any legitimacy of lawful ownership of a security. Her summation of paper certificates vs electronic shares being that broker statements were not worth the paper they were written on when it comes to court cases and company recognition. She added that NO ONE presenting a "broker statement" for their position in a company's security to a transfer agent or company would be recognized as legal ownership. It is only recognized by the broker that issued it and his contacts. Mrs. Lori Livingston has served as an expert witness at trials and court cases over the years. She said that the first thing you had to do in the courtroom is to educate/school the Judge presiding over the case exactly what takes place in the market system and how it all works. In her expertise she readily stated that 99% of the time Paper Certificate holders are in the driver’s seat when it comes to trials and court cases. A broker statement means absolutely nothing to the Judge, a Transfer Agent, or the company the security is held on. There is no law anywhere that gives any value to a “broker statement” except the value agreed upon with that broker that the client entered agreement with. We also entertained the idea of possibly being able to reroute around the DTC and form a market system that functions fully outside the reaches of the DTCC, NSCC, etc... In our discussions about an alternative to the DTC being formed if we could ever get enough companies interested and/or involved, Mrs. Livingston stated that she already had the software and equipment in place to get things rolling. These are in her possession as they assist her in fulfilling her roll as an Transfer Agent. She agrees with my thoughts, as well as most of yours, that the DTC is a monopoly which is against our laws. The DTC accumulated the opposing Depository Trusts that were competing which obviously gave it a clear cut monopoly. The DTCC which has already became a monopoly on the Depository industry is now attempting to move into a monopoly for clearing, settling, and seizing hold of the transfer agents function as well. Mrs. Livingston had previously worked for a company that had both a Broker and a Transfer Agency Division and they were required to keep them completely separated. It appears that the DTC is trying to be both broker and T/A wrapped up in one. This would make the gathering or obtaining of information from them nearly impossible as it already is. Mrs. Livingston stated that there are basically 2 groups of T/A’s The Wall Street Giants that could care less about paper certificates or STP as they have revenue generating avenues from all sources and The Individual Agents that are trying to perform a vital service and mainly focused on the Transfer Agent business. Mrs. Livingston added that the average transfer agency is uniformly quiet to regulatory developments as they are fearful of drawing scrutiny from the SEC or the DTCC. As we all know, the squeaky wheel gets greased and that is not always a good thing. (NOTE: As a matter of note, remember Mrs. Lori Livingston was notified after her letters of concern to the SEC and the DTCC about “dematerialization” and the DTCC’s directional push of being the Transfer Agent for the country, that her company, Transfer Online Inc. was being “audited”. Go figure!) In closing I believe we have a lot of friends that are very aware of what is transpiring in the market system and from the regulators regarding CMKX. I still believe the company could furnish the filings and all of this revocation stuff would go away. It doesn't appear at this time they are "capable" of submitting the filings. I say that, because I firmly believe if they could then they would. I understand that Mr. Levine had documents that he was sent to be audited and he had 250 some odd pages of papers to turn in when he left and that the first 3 quarters of 2002 were already covered in the filings. I believe I am aware of most all of the scenarios that could be, should be concerning the filing of the necessary reports to settle the Administrative Hearings issues for CMKX. What is still outstanding is that they haven't filed and if they don't then they will probably get revoked. If they do get revoked the obvious solution is to 1st file an "appeal". If you stll can't file the reports by the end of the "appeals process", then I think you need to shut her down, accept the revocation, get some one in there that can get the job done one way or another, then either file the Form 10 to reregister or roll everything over into another comapny. A revocation only suspends the trading of the securities as they would no longer be registered, but it does not do away with the assets of the company nor does it do away with the shareholders stake in those assets. A revocation is not bankruptcy! I believe the company is taking the steps that they can take at this stage of the game and when they are finished with the reports, as I do believe they will accomplish the task within the next 45 days, then they will utilize whatever options are available to them at that time. Before I close I thought it would be fitting to sharew with you information that was passed on to me from a trusted source. It has to do with Ameritrade and their treating of securities that are deemed to be worthless by either the company, the transfer agent, the regulators, or the courts. Here is the email: Thank you for contacting us today regarding CMKX. Positions held in your account remain there for holding or negotiating at the discretion of the account holder(s). Ameritrade would remove a position from a client's account without client request if the shares have been deemed null and void by the company, transfer agent, regulators, or the courts. This removal could include a liquidation, an exchange, redemption, or no redemption at all. Although we do not have any bearing on whether this determination would ever be made, we will act in accordance to the above parties if the position is no longer valid. There is not a cost associated with holding positions that no longer trade or when a position is removed on a mandatory basis due to delisting or revocation If you wish, you can request a certificate be issued in your account name for your position. In this case, if the position is deemed null and void, you can continue to hold the certificate, even if it may have no value or recognition at that time. If you have further concerns or inquiries, please reply to this message. Sincerely, Joy Busse Reorganization and Safekeeping, Ameritrade Division of Ameritrade, Inc. Make of it what you will, but I would suggest everyone make contact with your broker before any decision is handed down and make sure that the broker understands what you want done with your CMKX position in case of a revocation from the Judge. I am just asking everyone to be safe and know your options before any scenario could develop and these broker/dealers that are out there start deleting positions. For the record, I don't believe the SEC proved its case to get a revocation. I don't believe the Judge "should" revoke CMKX because of the shareholdrs, the effort, the money spent, the assets, the progress reportedly made, etc... I do believe a suspension should be handed down with a definite time limit to provide the filings. I would expect 45-90 days should be sufficient. With all of that said, I still believe if the company doesn't file something and show progress then this Judge will revoke. JMHO These were not attempts to give exact quotes from Mrs. Livingston and I have shared with you what I believe she has communicated to me. These are all just my opinions and I do hope that you treat them as such. I do believe success is at hand. Dr.D [/QB][/QUOTE]
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