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Post by ADVENTURE on Jul 12, 2005 17:03:19 GMT -5
FRIZZELL LAW FIRM 305 S. Broadway, Suite 302 Tyler, Texas 75702 (903)595-1921 E-Mail jmartin@cmkxownersgroup.com Dear Group Members, July 12, 2005 We are posting on the CMKX owners’ group website www.cmkxownersgroup.com/ the initial decision of Judge Murray. I received my copy by fax at 1:37 p.m. (Central time). Judge Murray has entered an initial decision revoking the registration of all CMKX securities. I have been working with CMKX attorney Don Stoecklein for several days now on a proposal to settle this matter. This morning Mr. Stoecklein sent a settlement proposal to the SEC attorneys and to Judge Murray’s office. It is my understanding this settlement offer was received by the SEC and Judge Murray before this decision was handed down. I had signed the settlement proposal and we were hopeful this matter could be resolved without the Judge’s ruling. The ruling pretty well speaks for itself. The company had difficulty in reengaging a new auditor. The new auditor has been officially hired but the company believed it had to do a formal 8K before announcing the new auditor. I have been in discussion with Mr. Stoecklein and I will give you a more definitive response to this decision later on today. The company plans to immediately appeal this decision. As you can tell from the judge’s decision, this is not a final order until the Commission reviews the decision. Onward, Bill |
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Post by ADVENTURE on Jul 12, 2005 17:28:01 GMT -5
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Post by dianexgetisis on Jul 12, 2005 17:42:19 GMT -5
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Post by ADVENTURE on Jul 12, 2005 17:45:27 GMT -5
INITIAL DECISION RELEASE NO. 291
ADMINISTRATIVE PROCEEDING
FILE NO. 3-11858
UNITED STATES OF AMERICA
Before the
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
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In the Matter of
CMKM DIAMONDS, INC.
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INITIAL DECISION
July 12, 2005
APPEARANCES:
Leslie A. Hakala, Gregory C. Glynn, and John B. Bulgozdy for the Division of Enforcement, Securities and Exchange Commission.
Donald J. Stoecklein for CMKM Diamonds, Inc.
Bill Frizzell for John Martin, et al., (Owners Group).1
BEFORE:
Brenda P. Murray, Chief Administrative Law Judge.
PROCEDURAL HISTORY
The Securities and Exchange Commission (Commission) issued its Order Instituting Proceedings (OIP) on March 16, 2005, pursuant to Section 12(j) of the Securities Exchange Act of 1934 (Exchange Act). The OIP alleges that the common stock of CMKM Diamonds, Inc. (CMKM Diamonds), is registered with the Commission pursuant to Section 12(g) of the Exchange Act, and that since registering its stock, CMKM Diamonds has not filed an annual report on Form 10-K or 10-KSB since May 9, 2002, or a quarterly report on Form 10-Q or 10-QSB since November 18, 2002. As a result, the OIP alleges that CMKM Diamonds has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder.
CMKM Diamonds filed its Answer on April 12, 2005, in which it admitted that the factual allegations in the OIP are true but denied that it failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13. (Answer 1-2.)
I held a one-day public hearing on May 10, 2005, in Los Angeles, California, during which six witnesses testified for the Division of Enforcement (Division), three witnesses testified for CMKM Diamonds, and more than sixty exhibits were admitted into evidence.2 At the hearing, I read into the record the names of some twenty-five CMKM Diamonds shareholders who sent letters concerning this proceeding. I ruled that those letters would be treated as exhibits offered but not admitted into evidence. (Tr. 25-26.) Appendix A to this Initial Decision is a list of additional letters received after the hearing, which will receive the same treatment. The Division, CMKM Diamonds, and the Owners Group filed their Post-Hearing Briefs on June 6, June 17, and June 20, 2005, respectively. The Division filed its Reply Brief on June 29, 2005.3
ISSUES
If CMKM Diamonds has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13, the issue is what remedial sanction, if any, is appropriate pursuant to Section 12(j) of the Exchange Act.
FINDINGS OF FACT
The findings and conclusions herein are based on the entire record. I applied preponderance of the evidence as the standard of proof. See Steadman v. SEC, 450 U.S. 91, 102 (1981). I have considered and rejected all arguments and proposed findings and conclusions that are inconsistent with this Initial Decision.
Background
CMKM Diamonds was incorporated in Delaware in 1998 as Cyber Mark International Corp. (Cyber Mark). (Answer at 1-2.) In April 2002, Cyber Mark changed its corporate domicile to Nevada. (Answer at 2; Div. Ex. 3.) On November 25, 2002, Cyber Mark agreed to acquire certain mineral claims held by five companies owned by the family of Urban Casavant (Casavant) in exchange for $2 million and almost 3 billion shares of Cyber Mark restricted common stock with registration rights. (Answer at 2; Div. Ex. 3 at 5.) Prior to his resignation on November 25, 2002, Cyber Mark's sole director appointed Casavant sole director, president, and chief executive officer. (Answer at 2; Div. Ex. 3 at 7.) On November 26, 2002, Casavant appointed his wife, Carolyn Casavant, as vice president of claims, his son, Wesley Casavant, age twenty-two, to the position of corporate treasurer, and his daughter, Cindy Casavant, to the position of corporate secretary. (Answer at 2-3, Div. Ex. 3 at 7.) On December 3, 2002, the company changed its corporate name to Casavant Mining Kimberlite International. (Answer at 3; Div. Ex. 3 at 7.) In February 2004, it changed its name to CMKM Diamonds. (Answer at 3.)
CMKM Diamonds currently is a Nevada corporation based in Las Vegas, Nevada, which is purportedly engaged in the business of mineral exploration.4 (Answer at 6; Form 8-Ks, filed March-May 2005 (official notice); Div. Ex. 6 at 14.) In the most recent information it has provided to the public through a periodic filing, a Form 10-QSB for the quarter ending September 30, 2002, CMKM Diamonds reported total assets of $344.00, all in cash, and total liabilities of $1,672.00. (Div. Ex. 3 at 2.) Casavant currently is the president, chief executive officer, and co-chair of CMKM Diamonds's two-person board of directors. (Tr. 71-73; Div. Exs. 5, 18, 19, 24, 53; Form 8-Ks, filed March-May 2005 (official notice).) Casavant and his wife have signatory authority on CMKM Diamonds's bank accounts. (Tr. 183.) Casavant refused to testify at the hearing, and asserted his Fifth Amendment privilege against self-incrimination to all questions asked by the Division.5 (Tr. 242-61.)
From January 1, 2003 through April 19, 2005, the price of CMKM Diamonds's stock ranged from a low of $0.00013 per share to a high of $0.0135 per share. (Div. Ex. 17.) Its average price during this period was $0.00071. (Div. Ex. 17.) The trading volume of CMKM Diamonds's stock from January 2003 until August 2003 exceeded 100 million shares per day on four occasions. (Tr. 137-38; Div. Ex. 61.) From August 2003 to April 2005, however, the trading volume of the company's stock was significantly higher, frequently exceeding 1 billion shares per day and sometimes exceeding 2 billion shares per day. (Tr. 138; Div. Exs. 17, 61.)
In a Form 8-K filed on March 14, 2005, CMKM Diamonds reported that on two occasions during 2004, it had amended its articles of incorporation to change the number of authorized shares. The first amendment, on March 1, 2004, changed the number of authorized shares from 200 billion to 500 billion. The second amendment, on August 18, 2004, changed the number of authorized shares from 500 billion to 800 billion. (Form 8-K, filed March 14, 2005 (official notice).) As of December 31, 2004, CMKM Diamonds had 2,033 shareholders of record and more than 778 billion shares outstanding. (Tr. 159-61; Div. Ex. 14 at 504.)
Donald J. Stoecklein (Stoecklein), current counsel for CMKM Diamonds, owns the Securities Law Institute in Las Vegas, Nevada, which assists approximately forty-two public companies in their periodic reporting obligations, including CMKM Diamonds. (Tr. 315-16.) Stoecklein also owns Opus Pointe, which is an accounting and bookkeeping company and a division of the Securities Law Institute. (Tr. 167, 326-27.) Opus Point and the Securities Law Institute are working on CMKM Diamonds matters and an employee of each firm testified at the public hearing. (Tr. 167, 314.)
On March 4, 2005, CMKM Diamonds announced that, effective March 1, 2005, it had relocated its executive offices to 5375 Procyon Street, Suite 101, Las Vegas, Nevada. (Div. Ex. 53.) However, as of April 6, 2005, this address was occupied only by a "hot rod" shop. (Div. Ex. 55.) "Debbie" at the Securities Law Institute, which is owned by CMKM Diamonds's counsel, reported in an e-mail sent on April 6, 2005, that a shareholder had visited the site, discovered this fact, and reported it on the company's Web site.6 "Debbie" advised that "You might want to call Urban [Casavant] or Michael and have them 'move in' and talk to the owner of the hot rod shop and also tell Andy what to tell shareholders when they call." (Div. Ex. 55.) CMKM Diamonds continued to report this false business address in two subsequent Form 8-K filings. (Div. Ex. 12; Form 8-K, filed May 18, 2005 (official notice).)
Robert Maheu (Maheu) has known Stoecklein for a number of years and is part of a team assembled by Stoecklein, which Maheu believes will clear up past mistakes and will result in compliance going forward. (Tr. 285-86, 296.) Maheu set up the Small Defense Plant Administration fifty years ago, and later the Small Business Administration. (Tr. 285, 287.) Casavant appointed Maheu as co-chairman of CMKM Diamonds's board in February 2005. (Tr. 283-84, 286, 293; Div. Exs. 53, 56.) Maheu is paid $40,000 per month. (Tr. 286.)
Failure to File Periodic Reports
CMKM Diamonds registered its securities with the Commission in 1999, pursuant to Section 12(g) of the Exchange Act. (Answer at 1, 6.) Since that time, CMKM Diamonds has failed to file annual reports for its fiscal years ended December 31, 2002, 2003, and 2004. (Answer at 7; Tr. 51; Div. Ex. 1.) It has also failed to file quarterly reports for the periods ended: March 31, June 30, and September 30, 2003; March 31, June 30, and September 30, 2004; and March 31, 2005. (Answer at 7; Tr. 51; Div. Ex. 2.)
On March 31, 2003, the company filed a request for an extension of time to file its annual report for the year ended December 31, 2002, because it had not yet completed its financial statements. (Div. Ex. 4.) CMKM Diamonds never filed an annual report for 2002. (Div. Ex. 1.) On May 16, 2003, the company filed a request for an extension of time to file its quarterly report for the period ended March 31, 2003, claiming it had not yet completed its financial statements. (Div. Ex. 7.) Despite having not filed an annual report for 2002, CMKM Diamonds erroneously represented in this filing that it had filed all required reports for the preceding twelve months. (Div. Ex. 7.) CMKM Diamonds never filed a quarterly report for the quarter ending March 31, 2003. (Div. Ex. 2.)
On July 22, 2003, CMKM Diamonds filed a Form 15, signed by Casavant, pursuant to Exchange Act Rule 12g-4, in which it certified that it had approximately 300 shareholders of record as of that date.7 (Div. Ex. 8.) The trading volume in CMKM Diamonds's shares inexplicably experienced a sharp increase shortly after it filed the Form 15.
On February 16, 2005, CMKM Diamonds revoked its original Form 15 filing because it actually had 698 shareholders of record as of the filing date of the original Form 15.8 (Div. Exs. 9, 13.) The persuasive evidence is that the Division's inquiry to CMKM Diamonds's counsel on December 23, 2004, led CMKM Diamonds to revoke the Form 15 because it contained a materially false representation. (Div. Exs. 20, 21.)
Failure to Achieve Compliance
In early January 2005, CMKM Diamonds retained Bagell, Josephs & Company, LLC, to audit the company's financial statements. (Tr. 68-74, 79; Div. Ex. 24.) Neil Levine (Levine), a certified public accountant with that firm and the engagement partner on the audit, met with Casavant and others to discuss the requirements for the audit. (Tr. 68-73.) Since being retained, Levine and his firm have not performed any audit procedures because CMKM Diamonds has failed to provide them with any books, records, or supporting documents, despite their repeated requests. (Tr. 69-71, 82-86, 95, 103, 109.) For example, Levine requested, but never received, supporting documents, such as invoices, for the company's stock issuances. (Tr. 82-86, 91.) He did receive a memorandum with several pages of spreadsheets attached, identifying to whom stock was issued in 2002 and 2003, as well as the number of shares. (Tr. 84-85; Div. Ex. 26.) These documents were incomplete, however, as the stock price was not included for every issuance and there was no information about stock issuances in 2004. (Tr. 85; Div. Ex. 26.)
In late February 2005, Levine sent a letter inquiring about the status of the information he had requested, including general ledgers and documents supporting the company's stock issuances. (Tr. 90-91; Div. Ex. 27.) Levine never received a response. (Tr. 91.) Subsequently, Levine met with Casavant, Stoecklein, and others in Las Vegas. (Tr. 92.) They discussed Levine's requests for documents, and he was informed that the company's books and records were being assembled. (Tr. 92-94, 103.) Levine did not receive any documents at this meeting, and no one gave him a date by which he would receive such documents. (Tr. 93.) He later contacted the company to gauge their progress in assembling the books and records. (Tr. 93-94.) Its response informed him that things were progressing slowly. (Tr. 94.) One week before the hearing, Stoecklein told Levine that the company would be sending him documents. (Tr. 94.) Levine did not receive anything. (Tr. 95.)
Levine opined that if he received all the necessary information in proper form, he may be able to perform the required audits in three months. (Tr. 95-96.) Levine and his firm terminated the engagement with CMKM Diamonds effective at the end of the hearing, due to the company's failure to provide the requested documentation and information required to perform the audit work. (Tr. 96-98; Div. Ex. 59.)
In early March 2005, several months after the auditor was retained, Opus Pointe was hired to compile CMKM Diamonds's financial information for its financial statements.9 (Tr. 168.) Suzanne Herring (Herring) is an accountant with, and president of, Opus Pointe. (Tr. 167.) Since being retained, CMKM Diamonds has provided Opus Pointe with bank statements, cancelled checks, contracts, and reports from the transfer agent. (Tr. 171-72, 179.) Though Herring has made repeated requests for additional documents over several months, she has not been provided with a "pretty substantial" amount of information that she needs to prepare the financial statements. (Tr. 183.) For instance, Herring has repeatedly requested additional documents from Casavant, Ginger Gutierrez, who was the office administrator at the company, CMKM Diamonds's former attorney, and a former company employee. (Tr. 172-79, 181-83.) None of these persons have furnished any documents to Herring. (Tr. 172-79, 182-83.)
When Opus Pointe began its work in March 2005, CMKM Diamonds's balance sheet, financial statements, and general ledger were nonexistent. (Tr. 171.) Opus Pointe has since posted some transactions to draft general ledgers for the fiscal years ended December 31, 2002, 2003, and 2004. (Tr. 171-72, 185; Div. Ex. 58.) These draft ledgers, which are the only books and records prepared to date, are incomplete and based on incomplete information. (Tr. 185-86, 191, 204; Div. Ex. 58.) For example, Herring has not been provided documents that support CMKM Diamonds's issuance of more than $24 million in stock pursuant to an "unknown agreement." (Tr. 191-92.) She also is unsure whether CMKM Diamonds's purported acquisition of a jade collection, supposedly worth $56 million, has or has not been reversed. (Tr. 187-91.)
The draft ledger for 2003 reflects that deposits were made into CMKM Diamonds's bank account. (Tr. 193-96.) These deposits were not revenues earned by the company; instead, they were loans from Casavant. (Tr. 194-96.) The draft ledger for 2003 reflects no revenues because the company was not engaged in any revenue-producing activities. (Tr. 193-96; Div. Ex. 58.) Similarly, the draft ledger for 2004 reflects no business operations and no revenues or income.10 (Tr. 196-97; Div. Ex. 58.) CMKM Diamonds had an accumulated deficit of more than $36 million as of December 31, 2004. (Tr. 197-203.)
part1
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Post by ADVENTURE on Jul 12, 2005 17:45:58 GMT -5
Herring estimated that she would require approximately thirty days to reconstruct CMKM Diamonds's books and records for 2002, 2003, and 2004, once she had all the information that she needed. (Tr. 203-04.) She has been unable to proceed because she lacks the documents that she requested from the company. (Tr. 204.)
The meetings Maheu has attended concerning CMKM Diamonds have been held in Stoecklein's office, possibly because Casavant operates CMKM Diamonds out of his home. (Tr. 175, 291.) Maheu has no background in the mining business, and does not know how many employees CMKM Diamonds has, if any, who they are, how much they are paid, or what kind of work they perform. (Tr. 296-98.) He has never seen CMKM Diamonds's general ledger and does not know what the company's assets and liabilities are. (Tr. 307-08.) Maheu incorrectly assumed that an audit of the company's financial statements had started as of the date of the hearing. (Tr. 306-07.) Maheu was unaware that CMKM Diamonds had not responded to requests for financial information and, at the hearing, he learned that CMKM Diamonds had not provided auditors and bookkeepers with documents they requested from Casavant months earlier. (Tr. 288-91.)
CMKM Diamonds currently has no independent auditor to audit its financial statements. In fact, it has no financial statements to be audited. In addition, no drafts of any of CMKM Diamonds's missing periodic reports have been prepared. (Tr. 336-38.) No witness could specify a date by which CMKM Diamonds would file any of its delinquent reports. (Tr. 275, 296, 354.)
CONCLUSIONS OF LAW
Section 13(a) of the Exchange Act and Rules 13a-1 and 13-13 thereunder require issuers of securities registered pursuant to Section 12 of the Exchange Act to file periodic and other reports with the Commission. Exchange Act Rule 13a-1 requires issuers to submit annual reports, and Exchange Act Rule 13a-13 requires issuers to submit quarterly reports. No showing of scienter is necessary to establish a violation of Section 13(a) or the rules thereunder. SEC v. McNulty, 137 F.3d 732, 740-41 (2d Cir. 1998); SEC v. Wills, 472 F.Supp. 1250, 1268 (D.D.C. 1978).
The purpose of the periodic reporting provisions is to supply the investing public with current and accurate information about an issuer so that the investing public may make informed decisions. As stated in SEC v. Beisinger Indus. Corp., 552 F.2d 15, 18 (1st Cir. 1977) (quoting legislative history):
The reporting requirements of the [Exchange Act are] the primary tool which Congress has fashioned for the protection of investors from negligent, careless, and deliberate misrepresentations in the sale of stock and securities. Congress has extended the reporting requirements even to companies which are "relatively unknown and insubstantial."
CMKM Diamonds admits that it has not filed an annual report since May 9, 2002, or a quarterly report since November 18, 2002, but it contends that it did not violate the periodic reporting provisions, because it had a good faith belief that the number of shareholders of record identified in the original Form 15 was accurate, and that filing was not denied or revoked by the Commission. (Answer at 5, 7; April 13, 2005, Prehearing Conference Tr. 12; Tr. 51-54; Resp. Post-Hearing Br. at 2, 5-7, 15-16.) More specifically, CMKM Diamonds argues that the filing of the Form 15 on July 22, 2003, suspended its duty to file periodic reports until it revoked the Form 15 on February 17, 2005. (Answer at 5, 11-12; Tr. 51-54; Resp. Post-Hearing Br. at 2, 5-7, 15-16.)
Exchange Act Rule 12g-4 provides, in relevant part, that an issuer's duty to file periodic reports shall be suspended immediately upon filing a certification on Form 15 that its class of securities registered under the Exchange Act is held of record by less than 300 persons. Implicit in this rule is that the information reported be true and correct. See SEC v. Savoy Indus., 587 F.2d 1149, 1165 (D.C. Cir. 1978); SEC v. Kalvex, Inc., 425 F. Supp. 310, 316 (S.D.N.Y. 1975); see also Black's Law Dictionary, 124, 220 (7th ed. 1999) (a "certification" is an "attested statement," which means a statement affirmed to be true or genuine). The evidence establishes that CMKM Diamonds knew, or was reckless in not knowing, that it had more than 300 shareholders of record when it filed the Form 15 on July 22, 2003.
On January 12, 2003, CMKM Diamonds issued 994,083,000 shares to 360 people for "fieldwork in Canada."11 (Tr. 157-59; Div. Exs. 15, 26.) CMKM Diamonds also issued almost 3 billion shares to twenty-nine companies on January 22, 2003. (Tr. 87-89; Div. Exs. 16, 26.) On January 7, 2003, CMKM Diamonds announced that it was performing a shareholder audit designed to identify every shareholder of record. (Div. Ex. 29.) Two weeks later, the company announced that it expected the audit to be completed in the next few days. (Div. Ex. 30.) Given the company's recent issuance of shares, this shareholder audit would have determined that CMKM Diamonds had more than 300 shareholders of record as of January 2003.
Less than one month after filing the false Form 15, CMKM Diamonds announced a two-for-one stock split, payable to all shareholders of record as of September 12, 2003. (Div. Exs. 34, 36, 38, 41.) Also, the company announced in September 2003 that it was spinning off a portion of its business, and each shareholder of record as of September 19, 2003, would receive one share of the subsidiary's stock for each share of CMKM Diamonds stock they held. (Div. Ex. 40.) These announcements indicate that CMKM Diamonds was well aware of the true number of its shareholders of record in the months that immediately followed the filing of the false Form 15.
The records of CMKM Diamonds's transfer agent, 1st Global Stock Transfer, LLC (1st Global), establish that CMKM Diamonds had 698 shareholders of record on July 22, 2003. (Tr. 141-42, 146-47, 151; Div. Ex. 13.) 1st Global would have retained a copy of a request by a company for a shareholder list. (Tr. 155-57.) 1st Global has no record or recollection of CMKM Diamonds requesting a copy of a shareholder list or otherwise inquiring as to the number of shareholders it had in July 2003. (Tr. 155-57, 162, 165-66.) Thus, the evidence is that CMKM Diamonds made no effort to confirm or verify the number of shareholders of record before filing the Form 15.
Moreover, an attorney representing CMKM Diamonds wrote a letter to the transfer agent dated February 5, 2004, stating that 1st Global's records of the company's share issuances since January 2003 "match the records and remembrances of [CMKM Diamonds]."12 (Div. Ex. 57.) As such, CMKM Diamonds must have known that it had more than 300 shareholders of record when it filed the original Form 15.
In addition, Casavant and CMKM Diamonds issued statements throughout 2004 that: (1) support my finding that the company either knew, or was reckless in not knowing, that the original Form 15 was false; and (2) contradict the contention that CMKM Diamonds did not believe it had any reporting obligations subsequent to filing the false Form 15. These statements demonstrate that CMKM knew that the original Form 15 was false and that it remained subject to the periodic reporting requirements.
Beginning in January 2004, Casavant mentioned to a business partner that CMKM Diamonds "needed to be reporting," and he assured him ten or twelve times in 2004 that CMKM Diamonds was "working on getting reporting," and that the company was "getting close to be[ing] reporting." (Tr. 208-09, 214.) Casavant wanted to announce that CMKM Diamonds "was reporting" in October 2004 at a shareholder appreciation party. (Tr. 209-10.) In June 2004, CMKM Diamonds issued at least three press releases in which it announced that it was taking steps to becoming fully reporting and that it was dedicated to complying fully with all requirements.13 (Div. Exs. 43-45.) In September 2004, CMKM Diamonds announced that its accountants were "working to complete the audit of the company's financials. When that has been accomplished, the company will be well on its way to becoming a reporting company again." (Div. Ex. 49.) Furthermore, in October 2004, Casavant stated in an interview broadcast on an Internet Web site that the company was "working really hard" to bring current its reporting, and that it was "ahead of schedule." (Tr. 211; Div. Exs. 18, 19.) Although he did not provide an exact date by which the audit would be completed, Casavant indicated that it may be by the end of October 2004. (Div. Exs. 18, 19.)
Assuming arguendo that CMKM Diamonds honestly believed somehow that it had three hundred or less shareholders on July 22, 2003, there is no evidence is that it made an effort to confirm or verify such material information with its transfer agent prior to filing the false Form 15. By not doing so, and in light of its stock issuances and announcements before it filed the Form 15, CMKM Diamonds turned a blind eye to information that would have revealed the misrepresentation in the Form 15. See SEC v. Roor, 2004 U.S. Dist. LEXIS 17416 at *15, *26 (S.D.N.Y. 2004). Accordingly, CMKM Diamonds's conduct in this regard was, at a minimum, reckless. See id.; see also In re Fischbach Corp. Sec. Litig., 1992 U.S. Dist. LEXIS 373 (S.D.N.Y. 1992).
The evidence is overwhelming that CMKM Diamonds and Casavant knew or, at a minimum, was reckless in not knowing, that the original Form 15 was false. I therefore conclude that filing the false Form 15 did not suspend CMKM Diamonds's reporting obligations.14 To conclude otherwise would permit companies to deprive shareholders and the investing public generally of information about the company by knowingly or recklessly filing materially false forms with the Commission.
The facts of this case demonstrate a situation where management deprived shareholders and investors of material information in official filings, but promoted the company to investors through informal news releases and public statements that contained false information. Since filing the false Form 15, CMKM Diamonds has told the public informally that it has engaged in several multi-million dollar transactions. For example, in press releases issued on July 27, 2004, and September 13, 2004, respectively, CMKM Diamonds announced the receipt of $3 million from U.S. Canadian Minerals and $5 million from St. George Minerals. (Tr. 308-09; Div. Exs. 46, 48.) These press released also indicated that CMKM Diamonds would soon file its delinquent reports. As a result of CMKM Diamonds's failure to file periodic reports making formal public disclosure of material information, the investing public has received only self-serving statements from persons promoting CMKM Diamonds.
I conclude that CMKM Diamonds violated Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 by failing to file: (1) annual reports since May 9, 2002; and (2) quarterly reports since November 18, 2002.
Finally, at the hearing on May 10, 2005, CMKM Diamonds argued that its periodic filings were only delinquent by twenty-two days.15 (Tr. 51-57; Resp. Post-Hearing Br. at 2, 5-7, 15-16.) However, CMKM Diamonds knew that revocation of the Form 15 required CMKM Diamonds to file all missing periodic reports within sixty days, or by April 18, 2005. (Tr. 324.) As of the date of this Initial Decision, CMKM Diamonds had not filed the missing reports. Therefore, even if I accepted CMKM Diamonds's position that it acted in good faith and believed that the representations in its Form 15 were true, it is still in violation of Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13.
SANCTIONS
Section 12(j) of the Exchange Act authorizes the Commission, "as it deems necessary or appropriate for the protection of investors," to revoke the registration of a security or suspend the registration of a security for a period not exceeding twelve months if it finds, after notice and an opportunity for hearing, that the issuer of such security has failed to comply with any provision of the Exchange Act or the rules and regulations thereunder. Because I have already concluded that CMKM Diamonds violated Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13, the only remaining issue is the appropriate sanction.
In determining whether a sanction is appropriate under Section 12(j) of the Exchange Act, the public interest factors identified in Steadman v. SEC are instructive. 603 F.2d 1126, 1140 (5th Cir. 1979), aff'd on other grounds, 450 U.S. 91 (1981); see also WSF Corp. , 77 SEC Docket 1831, 1836-37 (May 8, 2002) (12(j) case applying Steadman). The relevant factors under Steadman are: (1) the egregiousness of the respondent's actions; (2) the isolated or recurrent nature of the infraction; (3) the degree of scienter involved; (4) the sincerity of the respondent's assurances against future violations; (5) the respondent's recognition of the wrongful nature of its conduct; and (6) the likelihood of future violations. 603 F.2d at 1140. No one factor controls. See SEC v. Fehn, 97 F.3d 1276, 1295-96 (9th Cir. 1996).
CMKM Diamonds's violations of the periodic reporting provisions were recurrent, egregious, and evidence a high degree of scienter. Over a period of several years, it failed to file: (1) required annual reports for its fiscal years ended December 31, 2002, 2003, and 2004; and (2) required quarterly reports for the periods ended March 31, June 30, and September 30, 2003, and 2004, and March 31, 2005. Several of these violations occurred after the institution of this proceeding, and each violation occurred after Casavant assumed control of the company. Furthermore, CMKM Diamonds filed a registration statement on Form S-8 in May 2003, more than two months before it filed the false Form 15. (Div. Ex. 6.) Thus, it was required to file periodic reports pursuant to Exchange Act Section 15(d) for at least the remainder of 2003. CMKM Diamonds failed to do so. Lastly, the instructions to Form S-8 require that an issuer may use Form S-8 only when it has filed all required periodic reports for the preceding twelve months. CMKM Diamonds, however, was delinquent in filing its annual report for the fiscal year ended December 31, 2002, when it registered its securities on Form S-8.
CMKM Diamonds's violations involved important provisions of the Exchange Act. Throughout the period during which it has filed no reports, CMKM Diamonds has operated in secret, revealing scant information to the investing public regarding its purported multi-million dollar transactions and stock issuances while the trading volume of its stock is consistently more than 1 billion shares per day. Finally, CMKM Diamonds continues to report a false business address in filings with the Commission.
The company's and Casavant's repeated statements during 2004 about "working on getting reporting" and becoming compliant indicate that the company was acutely aware of its failure to file required periodic reports. Furthermore, as discussed above, CMKM Diamonds misrepresented the number of its shareholders of record in the original Form 15.
CMKM Diamonds does not appreciate the wrongfulness of its conduct and the requirement that it provide the investing public with accurate information. It also has failed to offer adequate assurances against future violations. Although CMKM Diamonds was purportedly "working on getting reporting" during 2004, CMKM Diamonds's first actual efforts at becoming compliant were in January 2005, after the Division had already contacted it regarding its delinquent reports. Prior to that time, the company's financial statements were nonexistent and it had retained no auditor. (Tr. 68-77, 171.) In fact, to this day its financial statements remain nonexistent and its auditor has since resigned due to the company's failure to cooperate with the audit. In February 2005, CMKM Diamonds announced that it was "working toward completing an audit of its financial statements." (Div. Ex. 52.) In reality, however, the company had no financial statements to audit and an audit had yet to begin. Since that time, the company has refused to provide its auditor and bookkeeper with information, despite their repeated requests. Additionally, CMKM Diamonds repeatedly misrepresented its business address in the following months.
Maheu's appointment as director does little to assure me that the company will be able to effect prompt compliance, as he is without sufficient control of the company or the situation. For example, as of the hearing, he was under the mistaken impression that an audit had commenced. Furthermore, he learned at the hearing that the company had consistently failed to provide documents requested by its auditor and bookkeeper.
part3
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Post by ADVENTURE on Jul 12, 2005 17:46:32 GMT -5
Finally, CMKM Diamonds's violations of the periodic reporting provisions will likely to continue in the future. Opus Pointe has barely begun assembling the company's financial statements, and despite repeated requests, the company has yet to provide it with substantial information necessary for their completion. Moreover, CMKM Diamonds's auditor recently terminated the engagement due primarily to Casavant's failure to provide promised documents. Thus, CMKM Diamonds has no independent auditor and no financial statements to be audited. Furthermore, no drafts of CMKM Diamonds's missing reports have been prepared and no witness could specify a date by which the company would file any of its delinquent reports. As such, it is highly likely that CMKM Diamonds will continue to violate the periodic reporting provisions in the future. The public hearing was an opportunity for CMKM Diamonds to address the allegations in the OIP. It failed to do so. Casavant seems to be the only person running the company and he refused to testify. Several witnesses testified that they tried to get financial information from Casavant and he failed to supply it. CMKM Diamonds has been out of compliance since 2002, and has made no good faith effort to remedy the situation. CMKM Diamonds's failure to file required periodic reports has deprived the investing public of current, reliable information regarding its operations, purported million-dollar transactions, and financial condition. Viewing the Steadman factors in their entirety, I conclude that the appropriate sanction for the protection of investors is revocation of the registration of CMKM Diamonds's securities. RECORD CERTIFICATION Pursuant to Rule 351(b) of the Commission's Rules of Practice, 17 C.F.R. § 201.351(b), I hereby certify that the record includes the items set forth in the record index issued by the Secretary of the Commission on July 6, 2005. ORDER Based on the findings and conclusions set forth above: IT IS ORDERED THAT, pursuant to Section 12(j) of the Securities Exchange Act of 1934, the registration of each class of securities of CMKM Diamonds, Inc., is hereby REVOKED. This Initial Decision shall become effective in accordance with and subject to the provisions of Rule 360 of the Commission's Rules of Practice, 17 C.F.R. § 201.360. Pursuant to that Rule, a party may file a petition for review of this Initial Decision within twenty-one days after service of the Initial Decision. A party may also file a motion to correct a manifest error of fact within ten days of the Initial Decision, pursuant to Rule 111 of the Commission's Rules of Practice, 17 C.F.R. § 201.111. If a motion to correct a manifest error of fact is filed by a party, then that party shall have twenty-one days to file a petition for review from the date of the undersigned's order resolving such motion to correct a manifest error of fact. The Initial Decision will not become final until the Commission enters an order of finality. The Commission will enter an order of finality unless a party files a petition for review or a motion to correct a manifest error of fact or the Commission determines on its own initiative to review the Initial Decision as to a party. If any of these events occur, the Initial Decision shall not become final as to that party. __________________ Brenda P. Murray Chief Administrative Law Judge Appendix A Endnotes -------------------------------------------------------------------------------- 1 The Owners Group is a non-party granted limited participation. 2 The Division called an independent auditor, a Commission information and technology specialist, a transfer agent, a bookkeeper, a business man, and the president, chief executive officer, and co-director of CMKM Diamonds to testify. CMKM Diamonds called a business man, an attorney, and the co-director of CMKM Diamonds to testify. 3 Citations to CMKM Diamonds's Answer will be noted as "(Answer __.)." Citations to the transcript of the hearing will be noted as "(Tr. __.)." Citations to the Division's and CMKM Diamonds's exhibits will be noted as "(Div. Ex. __.)," and "(Resp. Ex. __.)," respectively. Citations to the Division's, John Martin's, and CMKM Diamonds's Post-Hearing Briefs will be noted as "(Div. Post-Hearing Br. __.)," "(Owners Group Post-Hearing Br. __.)," and "(Resp. Post-Hearing Br. __.)," respectively. 4 Cyber Mark was formerly engaged in the electronic game industry. (Div. Ex. 3 at 2.) 5 A trier of fact in a civil proceeding may draw adverse inferences from a respondent's refusal to testify. See Baxter v. Palmigiano, 425 U.S. 308, 319-20 (1976); John Kilpatrick, 48 S.E.C. 481, 486 & n.18 (1986). This may extend to a corporate defendant based on an officer's refusal to testify. See SEC v. Prater, 289 F. Supp. 2d 39, 50 (D. Conn. 2003). Nonetheless, I have not drawn any adverse inferences from Casavant's refusal to testify, because the evidence in the record is more than sufficient to decide this matter. Casavant was represented by David Z. Chesnoff, Las Vegas, Nevada, and Gerald W. Griffin, New York, New York. 6 In February 2005, Debbie Amigone was one of Stoecklein's employees working on CMKM Diamonds matters. (Tr. 163.) 7 Form 15 is titled Certification and Notice of Termination of Registration Under Section 12(g) of the Securities Exchange Act of 1934 or Suspension of Duty to File Reports Under Sections 13 and 15(d) of the Securities Exchange Act of 1934. 8 CMKM Diamonds's assertion that it brought the incorrect Form 15 to the Commission's attention in February 2005, when it learned that CMKM Diamonds had more than 300 shareholders on July 22, 2003, is false. (Answer at 5, 11-12; Tr. 318-24, 342-47; Div. Ex. 54.) On December 23, 2004, the Division inquired of counsel why CMKM Diamonds was not filing periodic reports. (Div. Exs. 20, 21.) At that time, CMKM Diamonds was represented by David G. Liston, Hughes Hubbard & Reed, LLP. (Id.) This correspondence establishes that the Commission knew in December 2004 that CMKM Diamonds's Form 15 was false. 9 CMKM Diamonds did not pay Opus Pointe's retainer; rather, it was paid by the Securities Law Institute. (Tr. 169.) 10 CMKM Diamonds's business partners testified that the company did, in fact, have some business operations. According to their testimony: CMKM Diamonds owns one mine shaft in Ecuador, and Nevada Minerals is the operator of the mine. (Tr. 220-22, 237-38, 263-64.) U.S. Canadian Minerals owns a processing facility in Ecuador, which processes the ore that is extracted from CMKM Diamonds's mine. (Tr. 216-21, 236-37, 267-68, 271.) Under the terms of Nevada Minerals's contract with CMKM Diamonds, Nevada Minerals is entitled to twenty percent of the revenue that CMKM Diamonds collects. (Tr. 272-75.) In 2004, CMKM Diamonds and U.S. Canadian Minerals purportedly split between $90,000 and $120,000 in revenues. (Tr. 217-19, 222-23.) CMKM Diamonds did not, however, actually receive this money, as it went to either Nevada Minerals or the purchase of safety equipment. (Tr. 238-39, 275-76) CMKM Diamonds owed Nevada Minerals $180,000, as of one week before the hearing. (Tr. 239, 273-76; Div. Exs. 22, 23.) As the result of a default letter, the parties agreed in May 2005 that Nevada Minerals will take possession of the "sands" in Ecuador to satisfy the debt that CMKM Diamonds owes Nevada Minerals. (Tr. 273.) Also, in December 2004, Nevada Minerals surrendered 75 billion shares of CMKM Diamonds stock to the company for a $2.2 million promissory note due in December 2005. (Tr. 277-78.) CMKM Diamonds and U.S. Canadian Minerals are also engaged in a joint venture in Canada, which has not generated any revenues. (Tr. 240.) 11 As sole director, Casavant has authorized the issuance of an unbelievable number of CMKM Diamonds's shares. The owner of CMKM Diamonds's transfer agent, who I find credible based on her demeanor, testified that she found this stock issuance to be strange, and she did not transfer stock for any other company with over 778 billion shares outstanding. (Tr. 159, 166.) 12 The letter was written by Brian Dvorak of Dvorak & Associates, Ltd., another attorney representing the company. (Tr. 176.) 13 In two of the press releases, Casavant announced that CMKM Diamonds had retained the law firm of Edwards & Angell. (Div. Exs. 44, 45.) 14 CMKM Diamonds presented no evidence to support its defense that it relied on the advice of counsel in filing the original Form 15. (April 13, 2005, Prehearing Conference Tr. 12; Answer at 3.) 15 Exchange Act Rule 12g-4(b) provides that if the certification on Form 15 is subsequently withdrawn, the issuer shall, within sixty days of such withdrawal, file with the Commission all reports which would have been required had the certification not been filed. www.sec.gov/litigation/aljdec/id291bpm.htm |
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Post by ADVENTURE on Jul 12, 2005 20:28:29 GMT -5
We have a protest rally scheduled July 29th in front of the DTCC in New York.
This is the last scheduled event in our ongoing fight against the NSS before Hugo completes his Counterfeit Conspiracy video. We are trying to get a number of high profile people to attend this protest rally and to get press coverage.
The revocation of CMKX that happened today underscores the necessity that we continue and increase the level of the fight against the NSS. This fight against the wholesale creation of counterfeit electronic shares has to be stopped. The only way that will happen is if every one of us does their part.
Hotel Info: The Holiday Inn at 15 Gold Street is within walking distance of the rally and we have a discounted rate there of $200 (and change) per night including all taxes. Hotel Link HOLIDAY INN NEW YORK CITY HOTELS | MANHATTAN-WALL STREET DISTRICT | Official Hotel Site
Holiday Inn
MANHATTAN-WALL STREET DISTRICT
15 GOLD ST
NEW YORK CITY, NY 10038
UNITED STATES
Tel: 1-212-232-7700
Fax: 1-212-425-0330
Email: Reservations@holidayinnwsd.com
Check-In Time: 3:00 PM
Check-Out Time: 12:00 PM
*** When making reservations say the rate is for HUGO or SHG and the hotel contact is Joe Ray if any problem getting the rates.
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Post by ADVENTURE on Jul 12, 2005 20:58:44 GMT -5
FRIZZELL LAW FIRM
305 S. Broadway, Suite 302
Tyler, Texas 75702
(903)595-1921
E-Mail jmartin@cmkxownersgroup.com
Dear Group Members, July 12, 2005
By now most shareholders probably know Judge Murray has rendered an initial decision revoking the registration of CMKX securities. I felt like I had been kicked in the gut when I saw the decision coming off of my fax line today. Frankly, when I saw the Administrative Law Judge’s letterhead on the first page, I thought it was remarkable that the Court would comment so quickly on the filing of our settlement offer. When I realized what the document contained, I was disappointed and a bit surprised. Not in the decision and not in the reasoning of the decision, but in the timing of the decision.
Settlement Proposal
Don Stoecklein and I had been struggling with the wording of our settlement proposal for a couple of weeks. It was our belief that no settlement offer would ever be considered by the SEC attorneys nor the Commission unless a qualified auditor was formally engaged. The auditor did extensive due diligence before accepting this job. The negotiations by Don Stoecklein were carried out with the auditor’s attorney as well. Once an agreement was reached with the auditor, Don Stoecklein felt the SEC rules required an 8K filing of the auditor’s engagement but we had not received a signoff from the prior auditor. The company began securing the signoff letter but the settlement proposal was sent without having it in hand. I am giving you only a bit of the background leading up to our settlement proposal. I am not making excuses nor suggesting that many of these delays could not have been avoided.
Brad Beckstead was engaged as our new auditor yesterday. I am not at liberty to discuss the actual amount paid to Mr. Beckstead but it was a six figure amount. It was not as high as the $360,000 figure rumored on the boards this morning, but a very substantial figure was paid to Mr. Beckstead according to the company. It is my understanding that the amount paid was a retainer and additional fees may be incurred. I expect the company to file an 8K by the end of the week announcing the engagement of this auditor. We are still under SEC rules since this decision is not a final decision. I am told the rules allow the company 4 days to announce this engagement.
What becomes of the settlement offer we have proposed? We will continue to seek settlement of this proceeding. Our offer of settlement remains. The appeals process can be a long one. I have been assured the auditor can complete the audit within 120 days. The completed audits will not take as long as the appeals process in any event. Our case has many of the same facts found in the E-Smart decision mentioned by Judge Murray at the beginning of the administrative proceeding. Our facts in my opinion are more compelling than the factual scenario of E-Smart. (assuming we get the financials filed in the next few months). I will try to get the three part decision of E-Smart posted for those of you who might want to read a similar case decided by the Commission. I am hopeful that there will be some future dialogue about settlement once we can convince the SEC that work on these financials is proceeding.
Our Trading Status Now?
As part of our settlement offer, we suggested a trading halt in the interim period while we await the filing of our past due financials. This offer was designed to satisfy the SEC’s concerns about future investors. It appears now that trading will continue in spite of our offer. Rule 360 of the SEC Rules of Practice basically says the status of the parties (trading allowed) remains the same until an aggrieved party (CMKX) prosecutes its appeal.
Where Do We Go From Here?
Folks, we took a risk (admittedly seems a bit larger than we thought at the time) when we bought this stock. We have watched this stock plummet to the bottom and now we have an initial order of revocation to overcome. The facts still remain-if the company has the goods and if the company gets these financials filed, there remains some significant gain to be made. John has told me that a few of his friends have sent him farewell notes. People speak of losing all of their investment and writing things off. This is music to the ears of the market makers and brokerage houses that have mountains of electronic markers backed by your hard earned dollars.
Hell folks, the stock is virtually worthless (.00008) as it is. Hang in there and lets fight these crooks. Penny stock investors always walk away. They do not usually have large investments in these stocks. That’s what convinces the short sellers that easy money is to be made when there is a mountain of outstanding stock and the SEC is coming down on management. Lets be different. Watch these people with the big short positions snatch up these shares (real shares) as people give up. In Texas you hear the old saying “When you always do what you always done, you always get what you always got.” Lets be different.
I have watched many live professional boxing matches. I had the pleasure of managing a world champion for several years. I was always amazed at how these guys could stand out there in the ring and pulverize each other (gashes, swelling, cuts, bruises) for 10 or 12 rounds and sit back in the dressing room after the fight and have a good laugh. Well, SEC, you have won the first round. Leslie Hakala and Greg Glynn did a very good job of presenting evidence to the judge which fully justifies her decision. For whatever reason, our company was unable to get the ship righted in time to win round one. But we will come off the stool for the second round.
I know there are those that think I must really be drinking the kool aid around here. I will not pump this stock because I still have some questions that I hope to have answered very soon. The company has invited me to go to Ecuador with the auditor at the same time. I have been invited to Canada for a tour of the assets. I refused to go thinking we could head off revocation if I stayed here and worked with the company attorney on this settlement proposal. Now we have another course. I will be scheduling my trip as soon as practical.
Lets Keep Fighting The Good Fight
Please understand we are not parties to this proceeding. I have no right to appeal anything. Only the company has the right to appeal this decision. My plans are as follows. I am going to suggest to Mr. Stoecklein and Urban that we would like to have an independent auditor to have a bi weekly conference with Mr. Beckstead to monitor his progress in these audits. I will also inquire if I can be given a status report from Mr. Stoecklein on the filing of the Petition for Review on an every other day basis if necessary. I will be more than willing to provide appellate assistance or provide any help to the company so that the appeals process will go according the plan as I understand it from the company at this time. I will report to you the response of the company to my requests. I will likewise report to you in whatever detail I can, my findings in Ecuador and Saskatchewan. Lets play this thing out folks. And to you short sellers out there, this game is not over with by a long shot.
Onward,
Bill
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Post by ADVENTURE on Jul 13, 2005 9:20:52 GMT -5
From Dr D I want to preface this post with the statement that I am still very confident in our position and I believe the company is fully able to prevail in the Appeals process and or the filing of a Form 10 to resolve the registration problems we obviously are having and can’t seem to deal with at this time. I fully support Mr. Casavant, Mr. Maheu and the company and their energies to accomplish what they have set out to do for all of us although I may disagree with the methodology. This initial decision of judge brenda is not the end, nor the beginning of the end for CMKM Diamonds. We have 21 days to Appeal and then I believe a 90 day process to present our case to have the revocation overturned. I intend to hold on and hang in here for the long haul as I have often said. I believe CMKX has the goods and I also believe that the company with or without having the securities registered will succeed. (Warning, I may vent a little bit here and there.) To start with, we fully expected that Judge Murray would revoke without filings from the company and she did. I do fully disagree with her decision as I do not believe the SEC presented an effective case to prove the Form 15 was filed in error intentionally by the company. Since the SEC did not prove intentional misconduct, then the filings should have been governed by SEC regulation allowing them 60 days to comply before they were even 1 day late. After consideration of Judge Murray’s conduct prior to and during the hearing, as siding with the SEC, along with comments she made prematurely about the Appeal, I believe her initial decision, IMHO, was made before the hearing was ever over and before all of the evidence was in. You can make of that statement what you will, but I believe her ruling should be thrown out, she should be disqualified, and her conduct and intent investigated. I just hope she can sleep at night after waving the options that were before her and opting to revoke instead of suspension, extension, or settlement. Why? I won’t say. I hope she understands what she is putting these shareholders through by her “rush to judgment”. It is only my opinion, but I believe she knew what she was going to do going into the hearing and that was revoke. I think we can all understand the frustration that many shareholders are experiencing right now with the company, the SEC, certain individuals, and the market system as a whole. It is true that it is very disappointing to all of us that the company could not supply an acceptable progress report or the filings that the SEC or the Judge wanted to see in order to prevent this “initial decision” of revocation from being handed down. We all expected that even a progress report with a few past due filings from 2002 and/or 2003 would have went a long way. I guess we were running a lot on trust, hope, and belief that the management of the company would be able to successfully thwart the efforts of the SEC and accomplices to revoke the securities registration during the hearing and we were wrong. After seeing the progressive moves from the regulators with: (1) A joke of a regulation with SHO being promoted as a solution to NSS (2) We find out that the regulators had been revealing to the Naked shorters the ins and outs of SHO, (3) Furnishing shorty with advanced lists of the Threshold Securities (4) Permitting Shorty to cover one naked short with another naked short to reset the dates of the failure to delivers (5) Limiting the liability of the SRO’s for willful misconduct, gross negligence, violations of federal securities laws, etc… (6) Refusing to investigate NSS positions being held against companies and mocking the shareholders when they complain (7) Allowing the SRO’s to intimidate Media sources from disclosing or revealing information such as StockGate (8) Blaming Paper Stock Certificates as the markets failure to deliver problem (9) Pushing Dematerialization across the U.S. to make it illegal to hold or own paper stock certificates (10) Protecting the Illegal Stock Counterfeiters by refusing access by companies and transfer agents to a company’s trading activities (11) Making it illegal for a company to voluntarily withdraw from the DTCC even if it is to protect the integrity of the company and it’s ability to operate in getting away from NSS being logged against the company’s security by the DTCC/NSCC unless it is permitted to withdraw by DTCC permission (Which it denies 99% of the time) (12) Anything else you care to enter! it became obvious that we were up against a clear “monster” or “mobster” in the SEC, DTCC, NSCC, and associates. They clearly have an agenda and are willing to do what it takes to see it carried out. There is a lot at stake for the SEC, the DTCC, and the NSCC to move to STP (Straight Through Processing) and if Stock Counterfeiting were proven on a huge scale in the market place it would stop their progress towards STP on a dime. Congress would have to step in and demand a fix to the system that would take years as they would have to rewrite some regulations and there would be no tolerance for the fails that STP would cause. With STP in place without paper stock certificates available and intervention by Transfer Agents being prohibited by new rules the DTCC/SEC/NSCC would rule the market and govern trading nearly worldwide with no resistance or transparency. JMHO of course. We knew we had to be on the top of our game to get through the Administrative Hearing favorably and as we all know, we were not on the top of our game. I’m not to sure at this point that we really ever got into the game at the Hearing. If I am correct in I disagreeumption, and I believe I am, then the company “will file the Appeal” and hopefully let us know that they have filed it. (I know that is a little sarcastic, but I believe it is warranted.) It is sad to see so many misinterpret what transpired today with this “initial decision” by the judge and unfortunately the SEC is going to allow trading for 21 days leading up to the appeals process and so many shareholders are already positioning themselves to make the mistake of selling their positions. Unfortunately after such a brave fight by many for so long, they are selling out to shorty and don’t even know it. Sometimes it’s hard to hold on and sometimes it is hard to hang in there, but I still believe Greenbaron was right when he said this is the “Stock Play of a Life Time”. By far it has been that for me and it isn’t even close to being over. I for one will be trying to get into position to buy more shares if at all possible over the next few days if for no other reason than to keep them out of shorty’s hands. The bottom line is that we didn’t get ANY filings and we don’t know why. We can only speculate that the filings simply were not ready to be filed with the regulators, because the company has not said a word to us. Unacceptable! They did say when the Form 15A was filed that we could not meet the 60 day deadline that would be imposed by the SEC regs, but nothing really since that time. Personally, I am very disappointed in the management of the company and their ability to communicate with us, as shareholders. It is one thing for the company/Mr. Casavant/Mr. Maheu to not be in a position to furnish the SEC with necessary 10K’s, 10Q’s, 8K’s, etc…, but in my opinion I believe the company reached the point of inexcusable when we the shareholders stand with the company through all of the BS we have been through and not one single word of explanation, direction, or condolence being uttered from those we have supported other than Mr. Frizzell. Thank you very much sir for your incredible efforts for all of us. I fully respect Mr. Casavant and Mr. Maheu as I believe they are incredible individuals in their own right, but this silence over the last month is and has been BS to the 10th degree. It has been since October when Mr. Casavant asked us to stick with him “ONE MORE TIME”. Now, I am asking you to PLEASE communicate with us about what is going on without all of the “clues and innuendoes” before we lose any more of our shareholder base. I am aware of the mining industry and the competitiveness that goes on, but IMHO this has nothing to do with that. I believe if we stay in we win, but if we are going to keep the shareholders of this company then we are in need of more than that. We were told to keep looking for 8k’s for info that had some confusing info and then even that dried up. If Mr. Frizzell is your communication to us, then tell us your communication is going to come through him. If someone is trying to take the company over let us know and we will help. If we entered toxic financing and difficulties have been raised let us know and we will do what we can. If you have everything under control and want us to shut up and stay put, then tell us. We simply need to know “what is going on”? It is my understanding that Mr. Casavant is in Ecuador at this time, but that does not make it impossible for him to communicate with us. Hopefully this is premature on my part and we hear from Mr. Casavant or Mr. Maheu today regarding these developments and the strategy that the company has in place to challenge this decision of judge brenda. (Non capitalization intended. Sorry I am perturbed). In my opinion acceptable communication has to be established between the shareholders and the company before any more damage can be done. Shorty is shooting shareholder fish in a barrel and we have little to no defense against their allegations as it appears that the trust factor is gone by the wayside. On the other hand I believe Mr. Frizzell has earned our respect and support and those that are still willing and able, I would suggest you get on board for Phase 2 now while we still have this opportunity to keep Mr. Frizzell going onward for us. I believe in his approach, plan, team, and his intent. I believe he has been an awesome asset, along with his team (Mr. Martin and others) and with him working alongside Mr. Casavant, Mr. Maheu, and Mr. Stoecklein we have an awesome opportunity to resolve the NSS position, expose the market manipulators/regulators, and get the company compliant over the next 90 days. JMHO of course. Thanks for listening. If you disagree with me that is okay as well. We are all just shareholders and we all make our own assessments and decisions. I do believe success is at hand in spite of the initial decision of judge brenda. These are just my opinions and I ask that you treat them as such. Be well. Dr.D fbruhm.proboards3.com/index.cgi?board=general&action=display&n=1&thread=1121253810 |
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Post by ADVENTURE on Jul 13, 2005 10:49:32 GMT -5
SEC Gets OK To Deregister CMKM Diamonds Shares
7:31am ET (Dow Jones Newswires)
By Carol S. Remond Of DOW JONES NEWSWIRES
(This article was originally published Tuesday)
NEW YORK (Dow Jones)--An administrative judge has ruled that the Securities and Exchange Commission can deregister the shares of CMKM Diamonds Inc. (CMKX) because the company failed to file annual and quarterly financial reports with the SEC since 2002.
The SEC said in an order on March 16 that it was taking action against CMKM Diamonds to protect investors. Earlier, the SEC had temporarily suspended trading in the stock of CMKM Diamonds because of questions about the "adequacy of publicly available information concerning, among other things, CMKM Diamonds' assets and liabilities, mining and other business activities, share structure and stock issuances, and corporate management."
CMKM Diamonds has 21 days to appeal the administrative judge's initial decision to allow the SEC to deregister its stock.
This tiny diamond mining company has been trading on the unregulated Pink Sheets market and has not made any regulatory disclosure with the SEC since 2002. Billions of shares of CMKM Diamonds routinely change hands daily and its elusive number of outstanding shares had been the topic of much speculation until earlier this year when the company said it had some 703.5 billion shares issued and outstanding.
CMKM Diamonds shares closed unchanged Tuesday at $0.0001 on a volume of more than 1.74 billion shares.
CMKM Diamonds has said that it's in the process of reinstating its reporting status. The company has been the subject of several Dow Jones Newswires "In The Money" columns which highlighted its huge daily trading volume and the lack of information surrounding the company and its mineral claims.
-By Carol S. Remond; Dow Jones Newswires; 201 938 2074; carol.remond@dowjones.com
(END) Dow Jones Newswires
07-13-05 0731ET
Copyright (c) 2005 Dow Jones & Company, Inc.
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Post by ADVENTURE on Jul 13, 2005 16:06:53 GMT -5
Today, I read that Andy was not taking calls, i.e., he was hiding because of the revocation recommendation by Judge Murry, therefore, I called; Andy answered; put me on hold; after one minute he came back on the line. While I was talking with him, he had to take five calls while placing me on hold: Here is Andy's message to all:~He apologizes for missing calls today; he said he had has "just been swamped with calls; no basher calls, just shareholders looking for some answers." ~He has not signed into the Boards today because of the flood of calls." ~He has not spoken with Urban since the revocation recommendation by Judge Murry. Urban is presently in Ecuador tending to business. ~Last week Andy asked Urban if he was worried about a potential adverse ruling/recommendation by Judge Murry; Urban, without hesitation said "No!" ~Andy believes there is a contingency "plamb" in the works. His message to all shareholders: "Stay the course; stay strong; Be a positive shareholder; and believe in the team and what they are doing."That's it. CDLIC cmkxdiamond.proboards32.com/index.cgi?board=general&action=post&thread=1121286312"e=1121286312&page=1 |
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Post by ADVENTURE on Jul 14, 2005 9:29:23 GMT -5
Demonstration Planned at DTCC - July 29, 2005 by Mark Faulk Counterfeit Conspiracy documentary to educate fellow Americans on acts of Financial Terrorism being committed against our country! Join us in front of the Depository Trust and Clearing Corporation building at 55 WATER STREET, NEW YORK, NY 10041 on July 29th, 2005 at 10am to help educate America on this act of terrorism. We have a counterfeiting problem in the United States of America that has corrupted our markets, ruined our small businesses, has and is destroying college funds, savings accounts, 401Ks, jobs and our American economy. It is as damaging to our countrys financial strength as putting counterfeit money on the streets and just as illegal! As we all know, the counterfeiting of anything of monetary value is illegal. It is a crime that is punished to the full extent of the law because of how much harm it can cause every single American citizen. The crime that we are talking about is the counterfeiting of U.S. securities, or more commonly known as Naked Short Selling. This is a counterfeiting crime and it must be stopped and the violators must be brought to justice, it is weakening our country. Did you know that brokers in foreign countries are selling stock in American companies that are counterfeit? It would be like you owning 100% of your own business and several other people from different countries claiming they own your business too, many times over. Only in this scenario, when the business fails because of this crime, the crooks make off with all the money and no one is stopping them! "We the People" of the United States of America are demanding that our government take action! If you need to know what this crime is and how it happens, we will educate you. If you need the help of "We the People", we will help you. But America cannot wait for politics, we need action on this matter and we need it now! How can you help your country? You can join us in front of the Depository Trust and Clearing Corporation building at 55 WATER STREET, NEW YORK, NY 10041 on July 29th, 2005 at 10am to protest this crime and help educate America. Please visit us at www.CounterfeitConspiracy.com to sign up to join us in New York and to be part of the solution. We need all Americans to unite together in this cause. ---------------------------------------------------------------------------------- Map of Depository Trust & Clearing, 55 Water St New York, NY by MapQuest This is the last scheduled event in our ongoing fight against the NSS before Hugo completes his Counterfeit Conspiracy video. We are trying to get a number of high profile people to attend this protest rally and to get press coverage. Hotel Info: The Holiday Inn at 15 Gold Street is within walking distance of the rally and we have a discounted rate there of $200 (and change) per night including all taxes. Hotel Link HOLIDAY INN NEW YORK CITY HOTELS | MANHATTAN-WALL STREET DISTRICT | Official Hotel Site Holiday Inn MANHATTAN-WALL STREET DISTRICT 15 GOLD ST NEW YORK CITY, NY 10038 UNITED STATES Tel: 1-212-232-7700 Fax: 1-212-425-0330 Email: Reservations@holidayinnwsd.com Check-In Time: 3:00 PM Check-Out Time: 12:00 PM *** When making reservations say the rate is for HUGO or SHG and the hotel contact is Joe Ray if any problem getting the rates. |
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Post by ADVENTURE on Jul 14, 2005 15:20:57 GMT -5
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