Dan Frishberg & BizRadio – The Dan Cofall Interview: “I don’t like Dan Frishberg’s ethics.”

It’s hard when you try to uncover the truth.  Sometimes “truth” is illusive when there is a strong reason to feed an illusion.  As most who read know, I know that all too well…as (and I’m not proud of it) I fed an illusion that cost me everything but the love of my two sons.  But, I also found that time spent in federal prison was a unique and interesting way to learn that “truth” can set you free.

I’ve been, over the past several months, exploring what’s going on with BizRadio, Dan Frishberg and others as it relates to investment funds that now seem to represent unrecovered losses.  Each blog entry written seems to take the investigation into different more varied areas and exposes more opportunities to talk with people who have been touched by the BizRadio – Dan Frishberg fiasco.

In my last entry (since Dan Frishberg has yet to agree to an interview), I shared an email that he wrote to another investor which (in my opinion) seemed to provide some clarification or insight into where he is with this whole mess.   The entry is:  Dan Frishberg speaks – addressing investor concerns

In Dan Frishberg’s email to the investor he referenced Dan Cofall – who was basically new to me.  So like any reasonable person, I extended an opportunity to talk with Mr. Cofall and get his comments related to the situation that seemed to be unfolding daily.  I guess it is safe to say I got more than I bargained for in that my discussion with Mr. Cofall (I refer to him in that manner since it’s confusing to say Dan with both Dan Frishberg and Dan Cofall both have the same first name) produced some interesting comments and documents some of which I’ll share here.


Gallagher: Thank you for taking the time for this interview.  Recently I wrote a blog entry in which Dan Frishberg mentioned you.  Have you had a chance to read it by chance?

Cofall: Yes, I’ve been keeping up with what has been going on and I must say that I take exception to much of what Dan Frishberg has said.  Clearly he’s posturing.  His comments are inaccurate, to be polite.

Gallagher: Explain to me what is inaccurate please.

Cofall: Let’s take just a few of the more than 10 fabrications in the Frishberg letter.

Dan Frishberg stated, “Cofall, was accepting a salary from BizRadio to run our operation in Dallas in 2008 and 2009. He was charged with identifying a station for us in Dallas. When he found one on BizRadio’s nickel, he promptly resigned and contracted the station for himself.”  To be precise, Dan Frishberg asked me to do a daily radio show on BizRadio and I did.  The show was successful and Dan then asked me to help bring adult supervision to the DFW office of BizRadio.  It sounded interesting so I agreed to provide advisory services to BizRadio, for a fee, in addition to hosting my show.  Dan and Dave Wallace worked closely together to explore various radio properties in DFW and I was asked to do some basic research.  I tried for months to direct BizRadio to stations, available in DFW, that would improve the quality and reach of the signal.  One such property was 1190am.  I felt that it was one of the best that was, potentially, available.  My research fell on deaf ears.  When I left BizRadio in the spring of 2009, I moved our show, The Wall Street Shuffle, to an open time slot at CNN1190.  That is my entire relationship with CNN1190 and our show has entered its second year as the top rated financial talk show in DFW.  We do not and have not owned or managed a radio station in either DFW or Houston.  Dan should check his facts before he suggests something improper.

If he wants to air this in public, so be it.  Simply put, Dan’s definition of shareholder value and my definition are like night and day.  I tried to explain to him that since the shareholders in BizRadio were not the same shareholders as the  shareholders in his registered investment advisor, DFFS, he had an huge and opaque conflict of interest.  He paid nothing to BizRadio, from DFFS, for the prime two hours of air time he had each day nor for the huge amount of commercial and promotional time that he used.  This was the very core of the BizRadio model – selling airtime to shows, not selling advertising time, and he paid nothing to BizRadio.  Clearly his investment firm benefited from the relationship.  He said in open employee meetings that he would never pay a dime for those services and that BizRadio was just a loss leader for the investment advisory firm.  Countless employees heard him say this on multiple occasions.  This is the core of my difference with Dan Frishberg.  He knew this was a huge problem even before I told him.

In contrast, Bill Heath of Barrington, did not identify himself.  When asked, he said he represented a few investors at the meeting.  Only when I pressed him to identify who he was and what company he worked for, did he say “My name is Bill Heath, President of Barrington, the advisory firm who bought out Daniel Frishberg’s advisory firm.”  I then said ”You have a vested interest in protecting Bizradio to drive business to your advisory firm.”  Bill Heath also told me that Daniel Frishberg works for him and is on his ADV Part II as a consultant.

A close friend of mine is an equity investor in BizRadio but had not a dime in DFFS.  He will lose up to $200k.  He was not offered any ownership in DFFS.  The father of my good friend and business partner, Dan Stewart, has a great deal invested in various Frishberg entities and may lose all or part of his investments.  I became involved in this to help recover what value is left in these transactions.  There is no fee in this for me and I choose to do this to help my friends. Each day, DFFS received a huge benefit from BizRadio but I have no idea what BizRadio shareholders received in return.  Obviously, as of today, their investments have not performed well.  And if we were executing Frishberg’s business plan, we would own a poor radio station in Houston with no programming, we would be the likely target of numerous investor lawsuits, we would be the target of other investigations, we would be bankrupt and he would be writing this letter.

My business is debt management and we buy large amounts of charged-off debt and provide services to investors who buy charged off debt.  A logical extension of this business is asset management.  I asked Dan Stewart to join our board in mid-2009 and he agreed.  We are publically traded and fully disclosed Dan Stewart’s board seat in SEC filings so the idea of “hiding” his involvement is absurd.  I tried to recruit Dan Stewart to run our advisory firm for more than a year before he finally agreed to join us in February of this year.  I am very proud to have him as a friend and associate.
Chuck here is an email string that Dan Frishberg and I exchanged in 2008 that shows clearly that I brought 1190 AM to him and he wasn’t interested.  Please print the emails so that those who read can see for themselves the truth.  It is clear that Frishberg has forgotten the truth.  Please note the dates.  They are very important.

Here’s the first:

From: Cofall, Dan
Sent: Thursday, August 14, 2008 1:38 PM
To: Dan Frishberg
Subject: 1190am in DFW update


1190am in Dallas is a Clear Channel station.  They are 24 hours and have a very strong signal.  They used to carry Rush Limbaugh before he switched to WBAP.  Currently, they are renting their station (“LMA’s”) for $50,000 per month.

This info is from Ed and he is in the process of verifying the information right now.

If this is true, this appears to be an excellent opportunity.


That email was followed by another:

From: Cofall, Dan
Sent: Thursday, August 14, 2008 1:48 PM
To: Dan Frishberg
Subject: 1190am

50,000 watts daytime, 5,000 watts evening

We have the coverage maps and are looking at them right now.  Dallas is core, great coverage straight up north through key areas.  Looking for scale to see Ft. Worth coverage.

Then I followed that email with yet another showing that I was working in Dan Frishberg’s best interest.

From: Cofall, Dan
Sent: Thursday, August 14, 2008 3:12 PM
To: Dan Frishberg
Subject: 1190 update

The coverage is perfect and covers then entire metroplex many times over.

Station is a Clear Channel station purchased in 2001 for $18m.

It has been for sale for 4 years and the price is coming down.

First Broadcasting was LMA’ing it until end of 2007.

Now, CNN is full time and PSA’s.  No real revenue structure.  Rumor of $50k per month lease seems correct but still verifying.

I think it is worth a look when we can do so without tipping out hat to the 1110 seller.

When I find something else out, I will call.

Hope this is helpful.


Soon after I sent the third email, I received this response from Dan Frishberg:

From: daniel [mailto:dsf@themoneyman.com]
Sent: Thursday, August 14, 2008 3:32 PM
To: Cofall, Dan
Subject: RE: 1190am

We’ve been in negotiation with them on that station for 2 years. Still in conversation.

I responded as follows:

From: Dan Cofall [mailto:dan@noramcapital.com]
Sent: Thursday, August 14, 2008 1:48 PM
To: daniel
Subject: 1190am

50,000 watts daytime, 5,000 watts evening

We have the coverage maps and are looking at them right now.  Dallas is core, great coverage straight up north through key areas.  Looking for scale to see Ft. Worth coverage.

Now, frankly I have a hard time with the assertion that I found a station on BizRadio’s nickel and then took it for myself.  If anything, there was full disclosure here that I brought the station to Dan Frishberg and he rejected it.  I followed with this email and my involvement was over as Frishberg was clear (at least to me) that he was on top of the 1190 AM deal (if there was to be one).

From: Cofall, Dan
Sent: Thursday, August 14, 2008 3:32 PM
To: ‘dsf@themoneyman.com’
Subject: Re: 1190am

Ok, did not know. I thought it was news to you last night. Dogs officially off the hunt…

I left BizRadio but it was certainly not to take an opportunity away from Dan.

Gallagher: Well…why did you leave Dan Frishberg?

Cofall: I don’t like Dan Frishberg’s ethics.  Dan knew that the only chance for survival of any of the entities was to merge DFFS and BizRadio and for Dan to give up a significant, if not complete, ownership of DFFS to BizRadio.  This would align the interests of management, shareholders and bond holders of both firms.  Dan knew this.  The Shaffer plan is the same plan I outlined for Frishberg a year earlier.  It is old news.  Dan apparently did not keep or remember all of his emails.

Gallagher: Dan Frishberg clearly explains in his letter to the investor that in early 2010 that he had an investment/advisory firm look at BizRadio and offer opinions as to what needed to be done to make this a viable business enterprise.  His comments were as follows:

Mr.Shaffer reviewed the numbers, based on actual revenues and expenses of BizRadio and Daniel Frishberg Financial Services. He concluded that BizRadio was highly successful at generating business for financial services companies such as DFFS, Del Walmsly, Online Trading Academy, Ray Lucia and others, but was, in and of itself not likely to provide a good return on investment in the current environment.

He gave it to me straight. “If you combine BizRadio with the Investment Advisor by creating a holding company which  holds both assets, it can produce a very promising company with a solid business model and will likely attract the capital it needs. On its own as a separate business, BizRadio would not be nearly as viable.”

Since you were there before the end of 2009 and/or 2010, what perspective do you think that Dan Frishberg had regarding the viability of BizRadio?

Cofall: He knew the answer to the question before I left because I told him.   Dan Frishberg knew well into 2008 that BizRadio was not, I repeat, not a viable business enterprise on its own.  BizRadio believed in owning its stations instead of leasing airtime.  BizRadio did not own or control the content of its shows and hosts.  BizRadio did not believe in advertising revenue models and Frishberg was noted for saying these “old” models did not work.  BizRadio needed reliable revenue sources.  God knows it had a reliable expense structure!

Gallagher: How do you know this as fact?

Cofall: I received the email below from Frishberg after a heated discussion I had with him about fiduciary responsibilities, conflicts and shareholder value.  In this email, Frishberg boldly lied about BizRadio being part owner of DFFS (“FJS”) and Laffer Frishberg.  How anyone could solicit and accept funding for BizRadio after the date of this email, January 2009, will be a legal debate for some time to come.  And to suggest that if it is profitable for his advisory firm, it is profitable for BizRadio investors ignores the different shareholder and bond holder groups.

From: daniel
To: Cofall, Dan
Sent: Sun Jan 25 21:24:42 2009
Subject: RE: 870AM

I am grateful. I was the one who asked you to help. your points are well taken . would love to talk by phone or video right now. You are helping me think this thru.

My priorities are wholistic.

Bizradio is part owner of fjs. It is part owner of laffer frishberg as well as the educational facility. As a radio station, it does not generate enough money to justify its existence. As a marketing arm of fjs, lfw, and trading academy it is effective and can be very profitable.

The bottom line – if it is profitable for fjs, lfw and the trading school, it is profitable for the investors in the radio network. If not, it is not.

Can we talk now? You are helping me with this conversation.

Gallagher: O.K. I’m a bit confused.  I know that LFW means Laffer, Frishberg, Wallace fund and if I understand that correctly that is the fund where 60+% of the monies raised were “invested” in BizRadio.  What I read from the email from Dan Frishberg above is that BizRadio was a “marketing arm” of LFW yet everything I’ve seen to date doesn’t seem to disclose to investors that BizRadio was a marketing arm.  What am I missing?

Cofall: I believe that many if not all of the attendees (except for one) at the BizRadio investor meeting held in Houston several weeks ago were shocked when we discussed that Frishberg would openly say that BizRadio was a loss leader for DFFS.  My guess is that BizRadio investors were not scrupulously informed of this detail prior to their investment.

Gallagher: So what is FJS, as I’m still unclear? (too many initials to keep up with)

Cofall: Frishberg, Jordan, Stewart – that was the original name for the RIA.  It eventually became DFFS (Dan Frishberg Financial Services).  There were many names and iterations as original partners were bought out.  Overall, that is the name for the RIA.

Gallagher: So let me get this, Dan Frishberg states in his email that “As a radio station, it does not generate enough money to justify its existence.”  Wow…it’s early 2009 and Frishberg knew that BizRadio was nothing more than a loss leader for investments that either were under the control of his RIA or part of the web that included investments that David Wallace promoted.  Hum…are you familiar with David Wallace?

Cofall: Yes.

Gallagher: What do you think he know about the financial position of BizRadio?

Cofall: I can’t read his mind.  He’s an intelligent man and had a good political career.  He had access to more information than I did, but I think he had the best interests of the investors in mind.

Gallagher: How did you respond to the Dan Frishberg email?

Cofall: I suggested that if you are a radio network, act like a radio network and care about your content and signal.  I repeated that BizRadio had needs that DFFS (“FJK”) did not.  I emphasized that his priority should be BizRadio, not FJK.  Read for yourself…

From: Cofall, Dan [mailto:dan@noramcapital.com]
Sent: Sunday, January 25, 2009 8:18 PM
To: daniel
Subject: Re: 870AM

I get your point as I always have. I did not start this new search for a new station. I was asked to help and test the signal. Shoot the competition, not the messenger.
You can make an argument for abandoning the Metroplex and that may be your answer. It seems that if you intend to move to a new station, it would be for a better quality product or for lower costs. I have suggested for some time that you should rent and not own. That went for 1190 over 1110 when I told you that it was available months ago for $25k LMA. That goes for the station and facilities and Academy locations. Use your capital effectively and use it to grow, not to dig in. As you always say, be nimble.
The real issue is whether you are driving folks to FJK seminars or if you are building value for shareholders in a network. It is my opinion that a bad signal is a bad signal and if we are a real network, we should lead with a good signal. The quality of the message and the signal drive revenues from shows and from advertising and revenues drive shareholder value. We cannot maximize revenue with below market signal quality.
I believe that the consensus is that the markets I drove today are the core audience for FJK in Dallas. I believe that Danny and Dave share this opinion. Further, I believe that 870 will increase the number of complaints and reduce the number of listeners and will reduce the number of qualified potential clients for FJK and the seminars in the Metroplex. FJK can survive quite well with a small listener base but BizRadio cannot. I cannot speak to the San Antonio market.
I am not trying to be argumentative and I know you will make your own decisions. I may just not understand each of your priorities.
Dan Cofall

Gallagher: What happened with the On Line Trading Academy?  I thought that was bought by BizRadio and then I heard that the franchisor took the franchise back.  Help?

Cofall: It is my understanding that the national franchisor took back OTA but you could confirm that with Vince Rowe.


While we talked for a while longer, it became evident to me, at least, that Dan Cofall had been seemingly forthright with his responses and, more importantly, was able to back up his comments with documentary proof.  Amazing sometimes the impact of an email sequence.

I was most taken back with the comment that Frishberg made in his email when he said, “Bizradio is part owner of fjs. It is part owner of laffer frishberg as well as the educational facility.”  I had to re-read this several times.  But the more I read it the more I came to feel that perhaps this email was a “smoking gun”.  Here, Dan Frishberg is stating that BizRadio has an ownership interest in “his” RIA” – the same one that was transferred or sold in 2010…the same one that Frishberg wrote to investors in late 2009 needed to be an asset of BizRadio…the same one that he most recent adviser in 2010 suggested needed to be transferred or owned by BizRadio if it (BizRadio) were to have any economic viability.

Now, let me ask this question… if Dan Frishberg knew in early 2009 that BizRadio (without the RIA, LFW and the On-Line Trading Academy) was not a viable entity, then how could he continue to allow Kaleta, Wallace and others (perhaps) to continue to get money to keep it going?

I’m not an attorney, but “fraud” is often a function of intent and if Frishberg knew better but took no action to protect investors, then it would appear that he committed fraud.  Of course, law enforcement and the courts would ultimately make that determination.  But when you say that BizRadio is a part owner in the RIA and yet, at least thus far, NO ONE has said that Dan ever gave up any commission money from the RIA to BizRadio or that the sale/transfer of the RIA to Bill Heath of Barrington Financial Advisers benefited BizRadio – then how could you draw any other conclusion except that Dan Frishberg was willing to scam or defraud investors for his own personal gain?

Help me understand how another conclusion could be draw…cause I’m truly open to a differing point of view!



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