some good Corey court cases showing up there, some he's filed and some against. Am hoping it becomes a solid thread. Anyway, legal pro/con--good to "get a read" on his mindset/tactics, etc...
[ November 10, 2007, 20:38: Message edited by: T e x ]
posted
it seems to me that the PIPE deal has something to do with the naked shorts.
i've searched far and wide, but i've never been able to find out exactly how they create the naked shorts... even superior stock pickers like the motley fool were unable to decipher how it works for along time, then they started doing shorting themselves, so i suppose they figgered it out.
i suppose there must be a couple of ways to do it, but "toxic financing" seems to be one of the no-lose plays in the market...
death spiral convertibles is what the old-timers called it...
Death-spiral convertibles are privately held preferred stock or bonds that can be exchanged for shares of common stock. An investor will offer a company cash in exchange for a percentage of the company, but with a catch: The investor wants a guarantee that the investment's value won't fall (or won't fall much). If the stock does fall, the investor gets more shares -- and a bigger stake in the company.
If Acme's shares rise, the vulture capitalist keeps 30 percent of the business and makes money. [See chart.] But Let's say the stock price is cut in half-which means, of course, that the value of the company is cut in half. By the terms of this death-spiral convert, the vulture's stake cannot fall below $25 million. So instantly, a pile of new shares is handed over to the vulture capitalist, and his stake rises to 50 percent. And if the stock ever recovers, he'll still own half of Acme.com.
-------------------- It's never a good idea to change horses on the way to the apocalypse. Posts: 27090 | From: USA | Registered: Sep 2003
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quote:Originally posted by glassman: it seems to me that the PIPE deal has something to do with the naked shorts.
i've searched far and wide, but i've never been able to find out exactly how they create the naked shorts... even superior stock pickers like the motley fool were unable to decipher how it works for along time, then they started doing shorting themselves, so i suppose they figgered it out.
i suppose there must be a couple of ways to do it, but "toxic financing" seems to be one of the no-lose plays in the market...
death spiral convertibles is what the old-timers called it...
Death-spiral convertibles are privately held preferred stock or bonds that can be exchanged for shares of common stock. An investor will offer a company cash in exchange for a percentage of the company, but with a catch: The investor wants a guarantee that the investment's value won't fall (or won't fall much). If the stock does fall, the investor gets more shares -- and a bigger stake in the company.
If Acme's shares rise, the vulture capitalist keeps 30 percent of the business and makes money. [See chart.] But Let's say the stock price is cut in half-which means, of course, that the value of the company is cut in half. By the terms of this death-spiral convert, the vulture's stake cannot fall below $25 million. So instantly, a pile of new shares is handed over to the vulture capitalist, and his stake rises to 50 percent. And if the stock ever recovers, he'll still own half of Acme.com.
AJW is involved with a company that I followed over the past year RKLC. If you look at the filing for the financing this is part of what you see.
"On March 3, 2006, we completed financing agreements by executing a securities purchase agreement with the following entities: AJW Partners, LLC, AJW Offshore, Ltd., AJW Qualified Partners, LLC and New Millenium Capital Partners II, LLC. Under the securities purchase agreement, we will issue up to $2,000,000 in callable secured convertible notes. The notes are convertible into shares of our common stock. The conversion price is based on the average applicable percentage of the average of the lowest three (3) Trading Prices for the Common Stock during the twenty (20) Trading Day period prior to conversion. The “Applicable Percentage” means 50%; provided, however, that the Applicable Percentage shall be increased to (i) 55% in the event that a Registration Statement is filed within thirty days of the closing and (ii) 60% in the event that the Registration Statement becomes effective within one hundred and twenty days from the Closing. The timing of the conversion is at the option of the holder. The notes are secured by a grant of a general security interest in all of our assets both tangible and intangible. The Company simultaneously issued to the private investors seven year warrants to purchase 3,000,000 Series A warrants at an exercise price of $1.00 and 3,000,000 Series B warrants at an exercise price of $1.50"
It's my belief that they use the Offshore portion to short the stock, driving the PPS down. They know that they will receive more shares the lower the PPS goes so they are borrowing against stock that do not yet possess. So they make the money on the way down and buy/or are issued the stock after the fact.
At least that is what I believe they do.
Wally
Posts: 2988 | From: Los Angeles California | Registered: Jan 2006
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posted
OK, what did I miss? Looking at the court info...it looks like what I said months ago. How can Rufus defend himself and/or the company if he was fired/replaced/rehired, etc. etc. several times? Somebody may have hid something but it may not have been Rufus.
Let go back to the beginning...We have billions in bonds somewhere. Posts: 2406 | Registered: Mar 2006
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posted
I'm hoping to make back some of my CSHD loses with FFBU, anyone else in this? OTCBB reverse merger Shell company owned by Joseph Meuse. (I bought $500 worth at .008 today up to .07) FWIW
Posts: 942 | From: Wisconsin | Registered: Jan 2006
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posted
wow, just reading all the latest crepe on this over at hot stock, yikes sounds like a novel
Posts: 942 | From: Wisconsin | Registered: Jan 2006
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posted
Just fyi. I saw this when it was doing a RS. BTON to BRIT in the RS thread (still not able to trade yet - could be me) BUT ANYWAY.... John Arlitt was sponsoring this a bit last year as a buyer. BRIT is a jewelry entity up in Canada britton.com. The way it looks they haven't been doing anything with it for about a year. Something to keep a third eye on. Thought I'd put it here for the Arlitt fans. Not sure if he is still assosiated with britton or not.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 6306 | From: Virginia | Registered: May 2006
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posted
I doubt there are ANY cshd fans left. Just saw the connection with him and Jacek Oscilowicz. Following the money so to speak.
-------------------- All post are my opinion. Do your own DD. Who's clicking your buy/sell button!? Posts: 6306 | From: Virginia | Registered: May 2006
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I see the sec filed a motion today (on pacer) I'm sorry, I don't know how to cut and paste or I'd put it here.
I know, Tex, I should know by now but I forgot LOL
Here you go:
PACER UPDATE
IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF GEORGIA
ATLANTA DIVISION
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
Civil Action No.
v.
1:06-CV-2568-CC
CONVERSION SOLUTIONS HOLDING CORPORATION and RUFUS PAUL HARRIS a/k/a PAUL RUFUS HARRIS,
Defendants.
MOTION FOR DEFAULT JUDGMENT
AND SUPPORTING MEMORANDUM OF LAW
Plaintiff, Securities and Exchange Commission (“Commission”) hereby moves for a default judgment against both Defendant Rufus Paul Harris a/k/a Paul Rufus Harris (“Harris”) and Defendant Conversion Solutions Holding Corporation (“Conversion”), pursuant to Rule 55 of the Federal Rules of Civil Procedure. In support of its motion, Plaintiff submits the following memorandum of law.
PROCEDURAL HISTORY
The relevant facts are straightforward. The Complaint in this matter was filed on October 24, 2006. On November 4, 2006, Harris was served with the
Summons and Complaint, along with other associated documents. Harris’s Answer to the Complaint was thus due to be filed not later than November 24, 2006.
Conversion was served with the Summons and Complaint, along with other associated documents, through its registered agent for service of process, Harvard Business Services of Lewes, Delaware, on October 26, 2006. Conversion’s Answer to the Complaint was thus due to be filed not later than November 15, 2006.
On November 16, 2006, Plaintiff filed the returns of service of process for both Harris and Conversion with the Court. Thereafter, on November 16, 2006, Plaintiff applied to the Clerk for an entry of default as to Conversion. On November 17, 2006, the Clerk entered a default as to Conversion. On November 28, 2006, Plaintiff applied to the Clerk for an entry of default as to Harris. On Novemb
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