Post by ADVENTURE on Nov 10, 2005 23:53:10 GMT -5
FRIZZELL LAW FIRM
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
E-Mail jmartin@cmkxownersgroup.com
Greetings Group Members and CMKX Shareholders,
I am proud to be working on the task force with Bob, Urban and Don. I have shared with you many concerns that I have had with the company in the last year or two. I am glad to say we have a project now that allows us all to work together with a specific goal in mind. Bob Maheu said in the company PR on November 4th that we should concentrate our efforts on the future without dwelling on the past concerns.
The task force members have quite a responsibility to make all shareholders aware of this request for certificates. This means that ALL shareholders are entitled to notification, not just the ones reading the boards. I began discussing my concerns about the plan for notification with Urban, Don and Bob a couple of days ago. I am impressed with the company’s attitude towards the work suggested by the task force. The company is fully aware of the task force’s intention to contact all shareholders and using all resources necessary to do so. There have been discussions of using various forms of media as well as the sources normally called on for proxy type notices. The company understands the expense of undertaking a task of this size and has agreed to fund such expenses.
My experience in the stock market was like that of most investors. It was my understanding that I instruct my broker to take my money and locate someone who had the stock I wanted to purchase and purchase that stock for me.
1. I never imagined that a broker could take my money and pay his commission, the commission of the market makers, the fees of the SEC and the fees of the DTCC and never obtain my stock.
2. I did not know about Cede and Company.
3. I did not know about a “Stock Borrow Program”.
4. I had never heard of a “fail to deliver”.
Then, I find that “fails to deliver” is such a problem that it was necessary to pass a law called Regulation SHO which made the market report these fails to the SEC on a daily basis. On top of this, Regulation SHO does not appear to be working for anyone but the market manipulators that perpetuated this problem in the first place! When I learned that short sellers could amass these fails and drive a stock price into the ground, I became convinced there was a HUGE wrong in the stock market that needed to be corrected.
CMKX stock seemed to be a poster child for this illegal trading technique. Now how does this trading technique catch up to the wrongdoers. I have heard that occasionally short sellers get caught with fails on their books and they have to go into the market and buy stock to close out their position. Since it works to the short sellers advantage by causing the stock to go down when they naked short a stock, it should work in the opposite direction to cause a stock price to go up when the stock is hard to find because of their short selling techniques. Many people bought this stock because of this possibility.
How does the market correct itself? First, it must become apparent that a naked short exists. We must prove beyond a “shadow of doubt” that more shares have been sold into the stock market than was issued by the company.
Although the SEC, the DTCC, the NASD, and most Broker/Dealers know the daily positions on this stock, current law does not provide for the company to acquire this information through simple requests. Company stock comes from the transfer agent. Legitimate shares are all backed by certificates issued by the transfer agent. We know the stock market allows brokers to sell stock even if they do not own it.
Now, we must solve the mystery of how much real stock has been sold and how much stock has been sold that was not based on certs issued by the transfer agent.
The company wants to divide the Entourage stock among its shareholders. We must now force the market participants to tell us who has positions in this stock. Unfortunately, we can’t rely on the broker statements because we know that many brokerage transactions occur ex-clearing (remember the Jefferies letter) and we know that our shareholder’s statements do not say “this transaction is currently in a fail to deliver category”. Even though your broker has a fiduciary (this means they are required by law to tell you of bad things that might be going on in your account) relationship to you, you are not told that your stock is not actually being held for you. (in the case of a fails to deliver). I am NOT amused when I read a response from a broker dealer that says you should tell the company that you are a shareholder because we have sent you a statement that says you own stock.
This summer, we tallied 12,000 shareholder statements and documented 400 billion shares of stock. This did not include cert holders. We know there are approximately 60,000 shareholders based only on the figures given to us by ADP and the transfer agent. There appears to be many more! Combined, the NOBO/OBO list plus the cert list even proved a short in and of themselves of over 50 billion shares, and this did not include the billions of shares traded that were not reported through the DTCC and it did not include most Canadian brokerage holdings or other foreign accounts.
The company would be derelict in dividing the stock based on brokerage statements, we must require certs of your holdings. This may be one big inconvenience for you as shareholders, I know I hated to write my check out to my broker for my cert. I would imagine it will also be a big inconvenience for some market makers and brokerage firms to have any “fails to deliver” become a public problem. Our stock is not trading at the moment, so the shorts can’t simply send some bashers to the boards and buy the stock at a discount to close out their positions.
As a UNITED FRONT, this loyal group of shareholders has a chance to not only make history, but to start rebuilding the financial integrity of our U.S. markets for the sake of our children and grandchildren!
My job is to present to the company a list that represents all CMKX shareholders that own stock. All CMKX shareholders should all participate in this distribution. Due directly to the Stock Borrow Program and a market system which allows “fails to deliver” to exist, a shareholder list that is made from broker statements cannot be relied upon to make this Entourage distribution. The entities that are helplessly short would love for shareholders to lose interest or to justify non participation because of the cost of doing so. If enough shareholders are apathetic or simply don’t have the resources to get their certs, the shorts benefit. 50,000 to 60,000 motivated shareholders can make great changes in the market place. Give serious thought to any reasons you have for not pulling your certs. I would also suggest you read the article at www.cmkmtaskforce.com/dtcc.php about the DTCC and Cede if you are still not sure if you need to be holding certificates for your stocks.
I must ask all of you to please be patient as we record the certificates you send us. We have devised a system that requires to you to send only your certs and a cover page. Do not send other pages even if you think it is necessary to explain something. Use the task force web site to offer your comments or convey your problems. We have people that will be working long hours entering your information into a database. There will be times when you will experience a busy signal. We are using multiple lines connected to one fax number but there will still be delays. Do not panic. This is not an attempt to avoid including any shareholder. Quite to the contrary, it is an effort to make sure that everyone is included.
We have been told that Schwab and Etrade are beginning the process of automatically sending all CMKX shareholders their certs without request. These companies should be commended if in fact they follow through with such a course of action. Every brokerage company that claims to be holding your stock should be able to do likewise. We expect many other companies will follow suit. This will allow us to quickly and accurately compile a list of all shareholders and their positions in this stock.
Having said all of that, a word of caution, do NOT become complacent and assume your certs will appear. Remain diligent in following up often with your broker!!
On a final note, we have received many notices from shareholders about difficulties in obtaining their certs from their brokers. Some have problems with stock being in an IRA account, 401K account and many shareholders that have brokers that are just plain refusing to obtain certificates for them. As a task force member, I can only recommend that those persons continue to call their brokers often. Be assured that the Task Force is discussing ways to address these issues. We have been told by some shareholders that many banks provide a securities attorney to their customers for advice and that many times these services are free.
This group of shareholders can make a difference if we stay united!
Onward,
Bill
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
E-Mail jmartin@cmkxownersgroup.com
Greetings Group Members and CMKX Shareholders,
I am proud to be working on the task force with Bob, Urban and Don. I have shared with you many concerns that I have had with the company in the last year or two. I am glad to say we have a project now that allows us all to work together with a specific goal in mind. Bob Maheu said in the company PR on November 4th that we should concentrate our efforts on the future without dwelling on the past concerns.
The task force members have quite a responsibility to make all shareholders aware of this request for certificates. This means that ALL shareholders are entitled to notification, not just the ones reading the boards. I began discussing my concerns about the plan for notification with Urban, Don and Bob a couple of days ago. I am impressed with the company’s attitude towards the work suggested by the task force. The company is fully aware of the task force’s intention to contact all shareholders and using all resources necessary to do so. There have been discussions of using various forms of media as well as the sources normally called on for proxy type notices. The company understands the expense of undertaking a task of this size and has agreed to fund such expenses.
My experience in the stock market was like that of most investors. It was my understanding that I instruct my broker to take my money and locate someone who had the stock I wanted to purchase and purchase that stock for me.
1. I never imagined that a broker could take my money and pay his commission, the commission of the market makers, the fees of the SEC and the fees of the DTCC and never obtain my stock.
2. I did not know about Cede and Company.
3. I did not know about a “Stock Borrow Program”.
4. I had never heard of a “fail to deliver”.
Then, I find that “fails to deliver” is such a problem that it was necessary to pass a law called Regulation SHO which made the market report these fails to the SEC on a daily basis. On top of this, Regulation SHO does not appear to be working for anyone but the market manipulators that perpetuated this problem in the first place! When I learned that short sellers could amass these fails and drive a stock price into the ground, I became convinced there was a HUGE wrong in the stock market that needed to be corrected.
CMKX stock seemed to be a poster child for this illegal trading technique. Now how does this trading technique catch up to the wrongdoers. I have heard that occasionally short sellers get caught with fails on their books and they have to go into the market and buy stock to close out their position. Since it works to the short sellers advantage by causing the stock to go down when they naked short a stock, it should work in the opposite direction to cause a stock price to go up when the stock is hard to find because of their short selling techniques. Many people bought this stock because of this possibility.
How does the market correct itself? First, it must become apparent that a naked short exists. We must prove beyond a “shadow of doubt” that more shares have been sold into the stock market than was issued by the company.
Although the SEC, the DTCC, the NASD, and most Broker/Dealers know the daily positions on this stock, current law does not provide for the company to acquire this information through simple requests. Company stock comes from the transfer agent. Legitimate shares are all backed by certificates issued by the transfer agent. We know the stock market allows brokers to sell stock even if they do not own it.
Now, we must solve the mystery of how much real stock has been sold and how much stock has been sold that was not based on certs issued by the transfer agent.
The company wants to divide the Entourage stock among its shareholders. We must now force the market participants to tell us who has positions in this stock. Unfortunately, we can’t rely on the broker statements because we know that many brokerage transactions occur ex-clearing (remember the Jefferies letter) and we know that our shareholder’s statements do not say “this transaction is currently in a fail to deliver category”. Even though your broker has a fiduciary (this means they are required by law to tell you of bad things that might be going on in your account) relationship to you, you are not told that your stock is not actually being held for you. (in the case of a fails to deliver). I am NOT amused when I read a response from a broker dealer that says you should tell the company that you are a shareholder because we have sent you a statement that says you own stock.
This summer, we tallied 12,000 shareholder statements and documented 400 billion shares of stock. This did not include cert holders. We know there are approximately 60,000 shareholders based only on the figures given to us by ADP and the transfer agent. There appears to be many more! Combined, the NOBO/OBO list plus the cert list even proved a short in and of themselves of over 50 billion shares, and this did not include the billions of shares traded that were not reported through the DTCC and it did not include most Canadian brokerage holdings or other foreign accounts.
The company would be derelict in dividing the stock based on brokerage statements, we must require certs of your holdings. This may be one big inconvenience for you as shareholders, I know I hated to write my check out to my broker for my cert. I would imagine it will also be a big inconvenience for some market makers and brokerage firms to have any “fails to deliver” become a public problem. Our stock is not trading at the moment, so the shorts can’t simply send some bashers to the boards and buy the stock at a discount to close out their positions.
As a UNITED FRONT, this loyal group of shareholders has a chance to not only make history, but to start rebuilding the financial integrity of our U.S. markets for the sake of our children and grandchildren!
My job is to present to the company a list that represents all CMKX shareholders that own stock. All CMKX shareholders should all participate in this distribution. Due directly to the Stock Borrow Program and a market system which allows “fails to deliver” to exist, a shareholder list that is made from broker statements cannot be relied upon to make this Entourage distribution. The entities that are helplessly short would love for shareholders to lose interest or to justify non participation because of the cost of doing so. If enough shareholders are apathetic or simply don’t have the resources to get their certs, the shorts benefit. 50,000 to 60,000 motivated shareholders can make great changes in the market place. Give serious thought to any reasons you have for not pulling your certs. I would also suggest you read the article at www.cmkmtaskforce.com/dtcc.php about the DTCC and Cede if you are still not sure if you need to be holding certificates for your stocks.
I must ask all of you to please be patient as we record the certificates you send us. We have devised a system that requires to you to send only your certs and a cover page. Do not send other pages even if you think it is necessary to explain something. Use the task force web site to offer your comments or convey your problems. We have people that will be working long hours entering your information into a database. There will be times when you will experience a busy signal. We are using multiple lines connected to one fax number but there will still be delays. Do not panic. This is not an attempt to avoid including any shareholder. Quite to the contrary, it is an effort to make sure that everyone is included.
We have been told that Schwab and Etrade are beginning the process of automatically sending all CMKX shareholders their certs without request. These companies should be commended if in fact they follow through with such a course of action. Every brokerage company that claims to be holding your stock should be able to do likewise. We expect many other companies will follow suit. This will allow us to quickly and accurately compile a list of all shareholders and their positions in this stock.
Having said all of that, a word of caution, do NOT become complacent and assume your certs will appear. Remain diligent in following up often with your broker!!
On a final note, we have received many notices from shareholders about difficulties in obtaining their certs from their brokers. Some have problems with stock being in an IRA account, 401K account and many shareholders that have brokers that are just plain refusing to obtain certificates for them. As a task force member, I can only recommend that those persons continue to call their brokers often. Be assured that the Task Force is discussing ways to address these issues. We have been told by some shareholders that many banks provide a securities attorney to their customers for advice and that many times these services are free.
This group of shareholders can make a difference if we stay united!
Onward,
Bill
