All seems quiet on the western front – well at least for Dan Frishberg in Houston that is – and BizRadio. But don’t mistake quite for inactivity. Sometimes what is done in quiet can have profound and very loud consequences.
So…for those who have been following here is an update.
- On June 17, 2010 an order was filed in the US District Court effectively representing an agreement between the SEC Receiver and the Court. In the agreement the assets of BizRadio and DFFS (Daniel Frishberg Financial Services) were brought under the control of the Receiver along with the Kaleta assets. The Agreement in its entirety can be see here. 34
- A couple of items related to this that are noteworthy: (a) the Receiver initially was attempting to pierce the corporate veil and go after Frishberg personally. That did not happen. Instead the Receiver got to include directly the assets of the organizations that were first included in the SEC Receiver appointment for BizRadio and Frishberg. (b) the order stipulates that DFFS owes Kaleta Capital Mgmt. $1.2 million.
WHAT ABOUT THE BANKRUPTCY? It seems that since the primary assets from DFFS and BizRadio are now in the hands of the Receiver there is not practical reason to move forward with the bankruptcy. That is over as best I can tell. The Receivers role is to protect all people who have a vested interest in some form of monetary recovery and no sense in complicating that with another entity involved – namely a bankruptcy judge.
WHAT ABOUT THE LAWSUITS? Now that is another matter. I reported on a suit filed by Barbara Doreen House in an earlier blog. On June 10, 2010 the following was issued effectively dismissing the suit since a bankruptcy action was pending. But from what I understand from a conversation with the SEC Receiver – the bankruptcy is dismissed so what that means to Ms. House’s lawsuit and others – like the one for $18 million filed by Rehan Siddiqi I have no clue. Here’s the paperwork from the House dismissal. Fraud dismissal
WHAT ABOUT THE MONEY FROM THE RIA? Ah…now that’s where the seemingly quite issue gets interesting. Daniel Frishberg used BizRadio as his mouthpiece and voice to attract clients. The clients trusted Dan “The Money Man” and it has been reported that Dan (at one time) was earning some $700,000 per quarter for his work with DFFS – his RIA. Not a bad income for a suspected con artist like Dan.
Dan – realizing that he’s going down – works to preserve his income and sells his RIA to William Heath. I have tried calling Bill Heath several times for an interview. Surprisingly he’s never there. Go figure. But on May 25th, 2010 he was being deposed by the SEC Receiver so I’m sure that he knows far better than I the real truth behind the transfer. But there is some controversy. Between who you might ask? Guess… greedy Dan Frishberg who is trying to protect himself and the SEC Receiver – who is trying to protect those who have been victimized by Frishberg and Kaleta.
Frishberg says that the income from the “former” DFFS assets should go to him as he is a CONSULTANT and that the income was consulting fees. The Receiver (and these are my words not his) would claim that the assets earned from the monies invested are assets of DFFS and therefore under his control and dominion. Well…what would happen if Frishberg loses that argument? UH…he’s have no income! And I can hear many of you who read say – Rightly So!
We’ll see what happens with that battle… Stay tuned! (my bet is with the SEC)
WHAT ABOUT CIVIL OR CRIMINAL ISSUES? First, (old news) Kaleta lost his license as an investment adviser and therefore has effectively been rendered impotent when it comes to a career in the investment adviser world he once roamed and played in. I SUSPECT THE SAME WILL BE TRUE FOR FRISHBERG. I do not have a crystal ball, but if I were a betting man I would say that soon (by the end of the summer) the SEC will rule against Frishberg and he will lose his license – the same as Kaleta. When that happens Frishberg will be out of business. No more license. No more credibility. No more inside track. And, most of all – No more radio show to promote his scams.
Now…on the CRIMINAL SIDE. That seems to be up for debate. There are clearly two camps: (1) those that feel that the SEC civil is sufficient to protect the public; and (2) those who feel that Frishberg and his exploitation of the airwaves for gain should justify criminal prosecution. The problem is – there are too many crimes out there to prosecute so the US Attorney’s office just might pass on this one. Whether they do or don’t may, in part, be a function of whether there is sufficient public outcry for punishment beyond losing one’s license and livelihood. WHAT ARE YOUR THOUGHTS…CIVIL ENOUGH OR SHOULD CRIMINAL FOLLOW?
As more comes to light I will be one of the first to report. For now…all quite on the western front is a bit deceiving – cause take to the bank work is still be done to bring some right to this blatant WRONG.
YOUR COMMENTS ARE WELCOME!