What rights do investors have when it comes to their investments? If monies are p0ured into an entity – like BizRadio – do the investors have the right to know what type of business plan exists that would reasonably support a return on their investment? And, if you believe that investors do have rights, where should that information come from if management is unwilling to transparently provide it?
Those questions have been troubling me for some time and especially since I have had the opportunity to interview several BizRadio insiders. While several have been unwilling to share their identity, one young person was candidly open about his role in BizRadio and freely took part in an interview to share with me his beliefs and opinions about what BizRadio looked like from the inside out. The following represents part of the interview we had together. Will his insights help in shedding light on BizRadio as it formally existed? Not sure, but as the collapse is actively underway, perhaps this information may help others have a clearer understanding of, at least from one person’s perspective, the management (or lack thereof).
Tell me about your experience with BizRadio (that open ended question seemed to open a flood gate of expression – a portion of which is shared here):
I was hired several years ago – 2008. As a beginning, I received an email from Elisea Frishberg letting me know that they were interested in me interning with BizRadio. Elisea said they were intending to expand BizRadio into India and when we do expand, we want you to run the operations there, but that’s years down the road.
When I arrived they had just started making changes. I was supposed to be working for Brent Clanton – the general manager – and he was laid off the day I started working. So I didn’t really have a supervisor when I got to BizRadio and the first month I didn’t really do a whole lot.
After the first month I decided to take things into my own hands and I became very active. I became much more proactive. Therefore, at the end of my internship I received an offer to stay with them.
So what did you observe as an intern turned full time employee?
My first question was – they’re paying me, an intern, a very good salary and I wondered how they were getting their money because they had no advertising. Some of the younger folks were telling me that – they hate their job or they hate working for the company – but by the time they were 40 they be like – millionaires – because of how much money BizRadio was paying them.
NOTE: I felt like a point was being made but, likewise, it included an exaggeration – as no one practically becomes a millionaire off of wages. Was what I was being told shared in order to gain his/her 10 minutes of fame or was it more truth than fiction? I listened carefully to see if there were nuggets of information that would prove to be beneficial to the blog readers.
I remember at my interview, before I got the position, Elisea interviewed me and in a sense I guess she trusted my abilities, but at the same time I thought – they didn’t do a background check on me – they didn’t know what I had to offer – what my background was. I walked into the room. She told me about her life story – how she came from the Philippines and all that and then she just said – all right you’re hired.
As I heard this story, I began to believe that there might be some truth to the comments this individual was sharing. Not only had this person shared the “life story” saga…but I had heard the exact same thing from others. With skepticism I continued to listen…again hoping to find some benefit outsiders could find helpful.
She claimed that she went to law school at the University of Houston and passed the bar. I don’t know if that is true. On the other hand, Dan Frishberg claims he went to NYU (New York University) on a scholarship. The fact is he doesn’t have a college degree. I know this because I created his Wikipedia page… I know his background. I know what he’s all about.
NOTE: I don’t know whether the above statements are factual, but I am doing some research to determine if both claims are correct. Did Elisea Frishberg graduate from the University of Houston with a law degree and did she pass the bar? Likewise, did Dan Frishberg, in fact, attend NYU and does he have a college degree?
Tell me more about what you observed related to day-to-day operations.
Dan Frishberg never cared about his employees, he only cared about himself. He would come into the office for his radio show and that’s pretty much it.
The investment side of the business was run by Al Kaleta who I think you know. (Fact is I don’t know Al Kaleta, but know of him through what has been written, the SEC ruling and what has been shared from investors, etc.)
They had a lady named Sonja (perhaps spelled wrong). She is not a CFA and did not pass the series 7 exam and as best I could tell she was giving investment advice to prospective and current investors.
STOP: If this is true, then my guess is Al Kaleta may be in bigger trouble than he might think. Perhaps too – Sonja?
It seemed shady from the beginning. But at first I didn’t care. I was getting a paycheck and I didn’t care how I got a paycheck. I didn’t care too much about what was going on behind the scenes.
But at the same time everyone knew that something was wrong – from top to bottom.
Now David Wallace came on board to try to turn BizRadio around. Within, like, two months he completely cut off ties. What I mean by “completely cut off ties” is that he completely abandoned BizRadio. He turned a blind eye to it.
NOTE: I have communicated with David Wallace via email and he has been kind enough to answer a series of questions so please keep an eye out on this blog for my exchange with David…it is enlightening!
What happened to the money flowing into BizRadio (or do you know)?
Well after the Kaleta filing came out they moved all the money they had from the BizRadio account to his personal account because that they were afraid that the SEC would freeze their account.
Dan Frishberg’s assistant called me and said he wanted to meet. So we set up a meeting at his house for the next morning. I went to his house and after giving me drinks he completely blasted me. I could sue you for violating your non-complete agreement (oh but there was no non-complete agreement). He made me feel really bad as he said that I was unethical, a liar, this and that…because I left the company. Then he said that he would forgive me if I came back to work for us. And then he went on about BizRadio saying we’re doing big things – we’re expanding to China – we’re going to start a hedge fund – our trading business is expanding – our money really is growing. Come back and work for us.
I remember driving home feeling really bad about myself as he questioned my integrity and honesty. But, a week later I sent them an email rejecting their offer.
How did BizRadio get their funds?
More than a year ago my dad was looking to put his money with a fund manager and, of course, Al Kaleta approached him and my dad set up three or four meetings with Al Kaleta. The way Kaleta was trying to convince my mother and my father to put their money – was like you’re like family – we care about your son – I’m going to give you a discount. You won’t have to pay this much in fees. And my dad was very very close to putting all his life savings with Kaleta.
He called me up one day and said, was this a good idea? At the time I was still with BizRadio and I said, “Dad, don’t do it. There’s something very shady going on with BizRadio.”
When Kaleta was busted by the SEC – did Frishberg feel like he was going to be under investigation or did he feel like he dodged the bullet?
Well anytime your partner gets busted by the SEC you have to feel that you’re next. Even if you’re innocent, they’re probably going to investigate. What I’ve heard is that Frishberg has completely turned a blind eye to all these legal things.
I’ve really been pondering this. Was David Wallace sucked in by Dan Frishberg and Al Kaleta or was David active with them in raising money and then knowingly diverting it?
Well…this is tough. I have nothing but respect for David. To say that David Wallace had no idea what was going on is impossible. I was an intern and I had a clue something was going on. I want to think that he was sucked in. But he still knew what was going on and I think he left a little too late.
There’s a lady there who handles all the money. Linda Sikes. (may be misspelled) Where is Linda in all of this?
There was a CFO when I was there named John Lunsford (spelling?). It was not his job to know where the money was coming from, rather it was to allocate the monies in the account. John Lunsford should come out squeaky clean from all of this even though he knew exactly what was going on.
They got rid of Lunsford and I think he got something like $400,000 per year. They got rid of him while I was there and it was a huge deal. He was the CFO and he was leaving.
Linda Sikes (spelling) was the comptroller so all she was responsible for was making sure that people got paid. When you say, “where does she play in all of this” – I don’t think she… she was just doing her job.
While the interview continued…it was clear that it was winding down and comments were just repeats of earlier statements.
Of all of the blog entries written…this one has been most troubling. Troubling in that I was dealing with an former intern and employee of BizRadio who may have had a skewed perspective on reality while employed. Yet, in looking back over the interview and the comments made…I have to believe that this young man was smarter that I, perhaps, gave him credit for.
I did offer to keep his identity confidential which – had he desired that – would have caused me to write this entry in a different manner. But, after the offer, I received an email from him stating the following:
Enough information has come out now, and I’m comfortable with your using my name and title (intern).
And so it is… The BizRadio saga continues and soon there will be an interesting interview (via email) with David Wallace and it’s refreshing I might add.
FOR NOW…COMMENTS ARE WELCOME!