Dan Frishberg apparently in violation of SEC order not to offer Investment Advice. Will there ever be Justice in this case?

November 6, 2012

Hello everyone Dan, here. How often do you hear yourself saying “no I haven’t looked at that yet, but I’ve been meaning to?”

Thus began an email written to my by none other than Dan Frishberg.  Yes, Dan Frishberg of disgraced BizRadio fame, the same Dan Frishberg that is banned from the SEC in offering investment advice…not that it seems the SEC has any teeth when it comes to Dan and his continued radio commentary.

I just read yet another email from a frustrated trader telling me that the trading techniques, the pattern recognition software, or the black box strategies that he believed in are simply not working.

Wow…again I’m confused.  You received “yet another email from a frustrated trader” – but Dan you’re not supposed to be offering investment advice so why would you be receiving any emails from traders?  What am I missing here?

Brokers are telling their customers to ignore their losses and hang on, but that’s what they always say. Sometimes that advice works, but it has also resulted in some of the biggest losses in the past twenty years.

Oh my…”some of the biggest losses in the past twenty years” – wonder if that isn’t exactly what happened to people – good folks who couldn’t afford to lose – when they listened to your line about BizRadio and why they should invest in you.  Dan tell me – if they lost in you, why should they now listen to you – especially when you’re not supposed to be offering investment advice?  Damn this perplexes me!

One listener said he has finally realized technical analysis doesn’t work. This isn’t true, the current price is unquestionably a key part of the story but this is only part of it.

Only part of the story…seems that’s a mantra for you.  Has anyone who invested with you in BizRadio ever gotten the truth – the full story or even as much as an apology?

The paradox of investing is – it’s easy to make money when you stop searching for the easy answer.

Yet you and Al Kaleta offered “easy answers” to investors who by all accounts were defrauded.  Have you made restitution?  Have you made it easy for them to recover their monies?

Instead, get an update on what’s working now — the most up to the minute insight into the trends, turning points, and my best stock and option trade ideas in my all new newsletter, Whats Working Now.

You do have a big set of (whatever)…get “my best stock and option trade ideas” – good lord is that not in direct violation of the SEC requirement that you not offer investment advice?  Justice?  Doesn’t seem to be any here!

CLICK HERE – (I disabled this link as I’m not giving Dan Frishberg a link from my blog)

DANIEL FRISHBERG
THE MONEYMAN REPORT
themoneyman.com

YOUR COMMENTS ARE WELCOME!


Michael Van Gilder, Insurance Executive indicted for Insider Trading – Van Gilder responds with profession of Innocence.

October 30, 2012

If your buddy or close friend shares information about what’s going on with their company, visit in your head (www.zipit.com – made up website) and keep your mouth shut.  You can’t know something that someone else does not know, act on it for personal gain, and expect to remain free.  Van Gilder, a young man, now faces substantial time in federal prison – something that is life changing.

Notice how simply his alleged crime started and how it mushroomed.  There is a lesson here for others to learn!

NEWS RELEASE

Insurance executive Michael Van Gilder, age 45, of Denver, was indicted by a federal grand jury in Denver on five counts of insider trading.  The U.S. Securities and Exchange Commission, which today filed a complaint charging Van Gilder with civil insider trading violations, conducted a parallel civil investigation and substantially contributed to the criminal investigation of the case as well. The defendant allegedly traded based on inside information regarding a Denver oil and natural gas company called Delta Petroleum Corp.

According to the indictment, Van Gilder was the chief executive officer and a member of the board of directors of Van Gilder Insurance Company, an insurance business owned by the defendant’s family. Van Gilder was a close personal friend of an executive at Delta Petroleum. Delta Petroleum was a Denver-based oil and gas exploration and development company whose core area of operations was in the Gulf Coast and Rocky Mountain regions. The company’s stock was traded on NASDAQ under the ticker symbol “DPTR.” Van Gilder at times arranged for and provided insurance policies covering certain of Delta’s business operations.

From November 5, 2007 and continuing until at least January 9, 2008, Van Gilder allegedly committed securities fraud by trading in securities based on material, non-public information.

Specifically, on November 8, 2007, Delta publicly announced and filed with the U.S. Securities and Exchange Commission (SEC) a quarterly report disclosing its operational performance, revenues, earnings and other financial performance for its quarterly period which ended September 30, 2007. Three days prior to the disclosure, the financial publication Barron’s disseminated an article entitled “Day of Reckoning” focusing on Delta, expressing pessimism about the company and its stock. Following the publication of the article, the price of Delta’s common stock dropped $1.49 per share. Van Gilder was, at the time, a shareholder of Delta and held shares of its common stock and long-term call options to purchase Delta common stock in a brokerage account with Merrill Lynch and Company.

The Barron’s article was brought to Van Gilder’s attention. Based on the article, the defendant called his stockbroker and asked whether he should sell his shares of Delta. Later that day, Van Gilder spoke with a Delta executive. According to the indictment’s allegations, the executive conveyed to the defendant that Delta planned on announcing figures in its third quarter financial report that would not miss its third quarter forecasts and projections for its financial and operational performance, a first in a number of quarters that Delta would meet its projected numbers. At the time Van Gilder received this information, the financial and operational performance had not yet been publicly released and was not generally known to the investing public.

Based on this confidential material, Van Gilder decided not to sell his Delta investment but instead instructed his stockbroker to buy more Delta common stock on his behalf. As a result, the stockbroker purchased an additional 1,250 shares of Delta common stock at $15.55 per share. Several hours after he purchased the additional stock, Van Gilder emailed two friends and told them that the Barron’s article was “bogus” and that they should buy Delta stock because Delta “will hit their numbers.” In the November 8, 2007 third quarter results Delta disclosed earnings and other financial figures that were in line with or exceeding previous forecasts and predictions of its performance for the quarter.

In late November 2007, discussions also began for Delta to get a large cash infusion from a privately held investment company called Tracinda, owned by California resident Kirk Kerkorian, through a large equity investment by Tracinda in the oil and gas company. The indictment alleges that the Delta executive shared confidential information about the possible investment with defendant Van Gilder, and that, on November 26, 2007, following a series of calls and other communications, Van Gilder contacted his stockbroker and purchased an additional 1,750 shares of Delta common stock at $13.87 and $13.88 per share.

As the indictment further relates, the Delta Executive continued to share information about the confidential discussions about the contemplated Tracinda equity investment in Delta with defendant Van Gilder, as the confidential discussions progressed over the course of early December 2007. As result, according to the indictment, on December 8, 2007, Van Gilder, in turn, emailed his stockbroker to advise him that he “wanted to purchase as much Delta stock as possible” and two days later arranged through the stockbroker to purchase an additional 4,000 shares of Delta common stock at $17.64 per share. Within minutes of execution of these purchases, Van Gilder spoke by phone with a family member, who, several minutes later, instructed his own stockbroker to purchase Delta common stock.

On December 17, 2007, the Delta executive advised its board of directors of his discussions with Tracinda. The board authorized the executive to proceed with negotiations with Tracinda. That evening, the executive exchanged a series of text messages with the defendant regarding the board’s decision. Several hours later Van Gilder directed that $40,000 be wire transferred from a bank account to his Merrill Lynch brokerage account.

On December 19, 2007, a representative of Tracinda contacted the Delta Executive and made an offer for Tracinda to purchase a one-third interest in Delta through a purchase of Delta’s common stock at $17 per share. At the time, Delta’s stock was trading at approximately $14.65 per share. Tracinda’s overture remained confidential. Van Gilder, knowing about the overture, purchased 200 call options, entitling him to purchase up to 20,000 shares of Delta common stock at $20 per share. Delta continued negotiations with Tracinda, and on December 22, 2007, Tracinda agreed to increase its stock purchase to $19 per share. The indictment alleges that in a series of calls Van Gilder was informed of the progress of the confidential negotiations. Immediately following one of these conversations between Van Gilder and the Delta executive, Van Gilder sent an email to two of his family members, with the subject line entitled “Xmas present.” In the email, he advised the family members to purchase Delta stock because “something significant will happen in the next 2-4 weeks.”

On December 24, 2007, Van Gilder, through his stockbroker, purchased 3,000 more shares of Delta common stock at prices ranging between $15.63 and $15.65 per share, and 90 more call options to purchase up to 9,000 additional shares at $20 per share. On December 28, 2007, during the course of working to finalize the Tracinda stock purchase, the Delta executive exchanged a series of cell phone text messages with Van Gilder. As a result, the defendant caused $272,212 from a bank account to be wire transferred into his Merrill Lynch brokerage account. The following day Van Gilder emailed his stockbroker, requesting the broker to “get it on Delta asap.”

On December 29, 2007, Delta’s board of directors approved a finalized stock purchase agreement for Tracinda to purchase approximately 35% of Delta’s common stock for $19 per share. On Monday, December 31, 2007, before the commencement of NASDAQ’s regular trading hours, Delta and Tracinda issued a press release announcing the stock purchase agreement. Within an hour of the commencement of regular trading hours that day, Van Gilder’s stockbroker purchased an additional 4,000 shares of Delta common stock at prices ranging from $19.28 to $19.33 per share, and 114 additional call options. By the close of regular hours trading that day, Delta’s common stock price had risen $3.34 from its previous close of $15.51. Over the course of the next three trading days, Delta’s stock price continued to rise, closing at $22.82 per share by January 4, 2008. On January 9, 2008, Van Gilder sold the 290 call options that he had purchased between December 19 and December 24, 2007, realizing a profit of approximately $86,100 on the transaction.

The indictment charges Van Gilder with five counts of securities fraud, reflecting five transactions between November 6, 2007 and December 24, 2007 where Van Gilder purchased Delta common stock based on confidential insider information. If convicted on all counts, the defendant faces up to 100 years in federal prison, and up to $25 million in fines.

“Trading on inside information undercuts the fairness and transparency of our financial markets,” said U.S. Attorney John Walsh. “This case demonstrates that in the highly networked world we now live in, insider trading knows no geographic boundaries. This office, and U.S. Attorney’s Offices around the country, will continue to target insider trading wherever it may occur. Thanks to the hard work of this office, the U.S. Attorney’s Office in the Southern District of New York, the SEC, and the FBI, a Denver insurance executive has been charged for profiting using confidential information.”

WORDS FROM MICHAEL VAN GILDER:

Saturday greetings,

If you are getting this e-mail you are a family member or a friend of mine. There is a massive amount of gossip and press as a result of my having been charged yesterday in an indictment, so I feel compelled and have wanted to reach out to you so you hear directly from me.

Yesterday was nothing short of a tough and bizarre day. Emotions included anger, humiliation, depression and gratitude. The last emotion was created by the outpouring support from family, friends and truly amazing employees at Van Gilder Insurance. For this, I am extremely humbled and thank each and every one of you for your love, friendship and support.

I never in my wildest dreams imagined I would be the cause of my employees fighting for our company and reputation. For this there is no end to my agony.

For starters please recognize that for legal reasons I cannot give you details regarding the assertions made in the indictment. I simply ask that you have faith in me, you know me, my character, and my family. This will be a grind but I’m confident you will see my side unfold as I strive to be exonerated.

I’m 45 years old, I’ve spent these years striving to build a sterling personal and business reputation, wow, did it hurt seeing what is in the press. . . . 100 years in prison and a $25,000,000 fine! Apparently reported by someone who has no clue about the federal sentencing process. While I feel I won’t spend one day in jail, “if,” I were guilty of these “allegations,” then it would be months of possible confinement, not years.

As you know, I have worked very hard to become C.E.O. of Van Gilder Insurance, an amazing 107 year old company started by my great-grandfather, Hal Van Gilder. During my more than 20 years with the company, our employees have become a family to me. As a leader it’s critical to recognize when change is needed. Knowing this legal situation was heating up it was critical that I separate what is personal from what is business, therefore I stepped down this past week as C.E.O. This indictment has nothing to do with Van Gilder Insurance; it is not named in the indictment because the company had absolutely nothing to do with any of the allegations contained in that document. This is strictly personal. I feel extremely fortunate to have a deep and talented leadership team and mature group of employees. Many of you know Don Woods, there could not be a better man to take the reins of Van Gilder. Of course my father Dell Van Gilder is our Chairman and remains highly active in the operations of our business.

By the way, I’m still working for our company and will continue to work to maintain its leadership status in our industry.

So what’s an indictment? As explained to me, an indictment is purely the vehicle in which accusations are brought against an individual in federal court. An indictment is just that, it is merely an accusation. It has absolutely no evidentiary value and is not considered evidence of any charge alleged in the indictment.

An indictment is returned after a limited and selected amount of information is presented by the government attorney to a grand jury, which consists of up to 23 citizens. The grand jury meets in secret, and the government prosecutor exclusively decides who he will call as a witness in order to obtain an indictment. No judge presides over this limited presentation of evidence and no attorneys for any witness or targeted accused can be present during the grand jury proceedings. Thus, my attorney was not permitted to attend these proceedings and cross examine any witness who testified. Finally, it takes only 12 of the 23 grand jury members to agree to the returning of an indictment.

In order for me to better understand the nature and quality of evidence needed to obtain an indictment versus unanimously convicting 12 jurors at trial beyond a reasonable doubt, this is what has been explained to me. It may take the relatively low weight of a 10 – pounds of selected evidence to convince 12 out of 23 grand jurors to return an indictment, but it will require the much heavier weight of a 100 – pounds of legally admissible evidence to convince each and every one of the 12 trial jurors to render a finding of guilt.

Until the 100 – pounds of evidence convinces 12 jurors unanimously of my guilt, I am presumed innocent of each and every charge in the indictment. This constitutional presumption of innocence is one of our bedrock constitutional rights. No one in the world, except the 23 grand jurors, has even heard the 10 pounds of selected evidence presented by the government, which is why I am hopeful that no one will prejudge me on the mere basis of an indictment but instead allow the judicial processes to unfold so I can have the right to my day in court. It goes without saying that I will defend this vigorously and fully expect to be exonerated.

I’ve been dealing with my situation for months now, I’d like to share with you how I’ve made a massive mental shift in the way I look at adversity.

No great man, woman, or company has achieved greatness without going through massive adversity.

Two examples:

Nelson Mandela spent 27 years in prison before becoming president, leading the people. During that time in prison a white man taught him the white man’s language. Because of this, when he was released he was able to speak to all the people, thus allowing him the ability to be elected president. When asked don’t you wish you could have become President w/out the 27 years in prison? His response: NO! I needed every day to enable me to become president!

Steve Jobs founded Apple in his basement, later he was FIRED as C.E.O.! What did he do? He founded Pixar Entertainment. In the meantime Apple was spiraling down when he was asked to come back. You know the rest, Steve Jobs built the greatest company our planet has ever seen.

Through adversity comes growth, strength and determination!

Regardless of what happens to me, I am going to grow, get stronger, be smarter. I will become a better son, brother, father, friend, and leader.

You might think I’m going to stay home and hide, stay invisible? Wrong, I plan to be as visible as ever, I won’t let this beat me down.

Your outpouring of support has been nothing short of amazing, I am truly blessed.

Warm Regards and Love,

Michael

COMMENTS:  I have been to federal prison and served time with people who have been accused and convicted of doing less.  That said, I respect Van Gilder’s comments above and know first hand the emotional trauma that he’s experiencing (even as I write this article).

Now comes the hard part: (1) Generally the US Attorney wins their case.  Rarely do they bring an indictment that they do not win.  Their job is to win and they pride themselves on their winning percentage.  So with that said, while Van Gilder professes his innocence, all it takes is one of the allegations listed above to be found accurate and Van Gilder will be found guilty.  (2) Based on years of experience, negotiate a settlement!  If you fight for your innocence, know in advance that is a losing battle.  The statistics are not in your favor.  And, frankly, if you make the Fed’s spend money trying the case, they will work hard (very hard) to make your life a living hell and your prison time (if found guilty) substantial.

I believe in our system of justice and the fact that you are innocent till found guilty.  Likewise, I know from experience that they don’t indict unless they are fairly confident they will win.  Keep in mind, two things: (1) Martha Stewart did not go to prison for insider trading (and likely she had less info that Van Gilder had).  (2) Martha did go to prison for lying.  So now is the time to be squeaky clean.  Be careful what you say and make sure if you say it that it is the provable truth.  When the feds are out for you…they often win.  Just ask Wesley Snipes.

YOUR COMMENTS ARE WELCOME!


After dropping the ball on the Bernie Madoff scandall – the SEC changes its focus on Tips!

July 31, 2011

Sometimes government agencies just don’t get it…they miss the obvious and ignore competent data that’s provided through tips.  Perhaps they aren’t staffed to follow up.  Perhaps they feel that most tips are grudge tips and not credible.  Who knows?  But after the Madoff scandall – the largest Ponzi scheme in US history, the SEC has now changed their focus when it comes to tips.  Below is a well written article that shows the power of tips and it’s impact on busting fraud wide open.

(Sarah N. Lynch and Matthew Goldstein) – For more than three years, U.S. securities regulators investigated allegations of accounting fraud at a small telecom firm called China Voice Holding Corp, but could not make a case.

Then last November, they got an unexpected break. A Texas-based tax consultant doing work for a firm affiliated with China Voice contacted the U.S. Securities and Exchange Commission with information about suspicious money transfers she’d detected.

The call from Dee Dee Stone was quickly routed to a preliminary version of the SEC’s new $21 million “Tips, Complaints and Referrals” or TCR Database, which the agency later fully deployed in March. Within 24 hours, Stone, a former Internal Revenue Service agent, got a call from an SEC attorney spearheading the China Voice inquiry.

Five months later, the SEC on April 29 sued several China Voice executives, claiming they had duped investors out of $8.6 million in a Ponzi scheme. Agency lawyers say without Stone’s help, regulators may not have even discovered the scheme, let alone made a case so soon.

The alleged fraud at China Voice was small in the annals of Wall Street sins. But the SEC’s response to Stone is an indication that after dropping the ball on Bernie Madoff, the nation’s top securities cops are trying to modernize the way they handle tips and complaints about potential wrongdoing.

The TCR Database is the SEC’s most significant response to its well-documented fumbling of early tips about Madoff’s $65 billion fraud. The SEC’s new Office of Market Intelligence, which last summer also forged a first-of-its kind partnership with the Federal Bureau of Investigation, is using the database as a key tool.

The changes are part of an effort by SEC Chairman Mary Schapiro to overcome the agency’s reputation for being a step or two behind the bad guys. It is far too soon for the SEC to declare victory. But some of the agency’s harshest critics notice a change.

Among them is Harry Markopolos, the Boston-based financial analyst and fraud investigator best-known for trying to alert regulators about problems with Madoff’s operation. Markopolos said since the database went into operation, he has submitted three of his own tips. In all three cases, he heard back from an SEC attorney within days, or in one case, a few hours.

“Everything they should have done in the Madoff case they are now doing,” said Markopolos. “They have done a fantastic job of reforming themselves.”

In February 2009, Markopolos told the House Committee on Financial Services that the SEC’s “investigative ineptitude and financial illiteracy” permitted Madoff’s crimes to go on for so long.

PAPER, PENCILS & FAXES

It took the embarrassment of the Madoff scandal to drag the SEC into the 21st century when it comes to tracking tips and complaints.

Tips used to come via phone calls, e-mails, faxes and even handwritten letters into the SEC’s 11 regional offices and Washington headquarters. Before the Madoff case, the SEC’s Los Angeles office might receive a written complaint about a bad broker, for instance, and stuff the letter into a filing cabinet if it was deemed without merit. So, if later on a complaint about the same broker was sent to the SEC’s Chicago office, staff there would have no easy way of knowing about the earlier tip and connecting the dots.

Sometimes, the only way an attorney could find out if someone had looked into a complaint would be to call all the other SEC offices.

“It was a sieve, basically,” says Russ Ryan, a partner in the Washington law office of King & Spalding who spent a decade at the SEC before leaving in 2004. “It probably got better as I went along in my career, but I remember back when I first started there, it was a lot of paper and pencil type stuff.”

Now with the TCR Database, once a tip or complaint is entered into the system, about 2,300 SEC employees can see it and add new information.

“All of the plumbing was brought into one place,” said Thomas Sporkin, a nearly 19-year veteran SEC attorney in Washington, who oversees the agency’s new Market Intelligence Unit and its 41-member team.

The database is emerging alongside a new program by the FBI’s criminal profiling group in Quantico, Va. that is creating a series of behavioral composites to help agents investigate white collar crime.

The more systematic approach by the SEC and FBI comes in response to the growth and complexity of financial crimes in recent years. In the US government’s 2010 fiscal year, the FBI’s economics crime unit reports the bureau had 1,703 active securities and commodities fraud investigations, a 41 percent increase over the number of active investigations in 2008.

Over the past year, the amount of monetary penalties the SEC has imposed on wrongdoers has almost tripled, with high-profile cases against companies such as Goldman Sachs, Citigroup and Morgan Keegan for their roles in the crisis.

Sporkin’s 41-member Market Intelligence Unit last month moved into new offices in Washington that look a little bit like a Wall Street trading floor, where they process more than 100 tips, complaints and referrals that come in each day.

The group’s chief task is to ensure legitimate tips, like the one from Stone about China Voice, get routed to the right attorneys. The triage process begins with analyzing the information provided by tipsters, whistleblowers and self-regulatory organizations on an online questionnaire in the TCR Database portal.(here)

The SEC is also trying to revamp the way it uses the raw data it gathers. Sporkin’s team is working side-by-side with an FBI expert in financial crimes under a deal agreed to last August.

The FBI agent gets to look at all the tips about securities fraud as they come into Sporkin’s team. For the FBI, the partnership offers the promise of faster criminal investigations. For the SEC, it’s a chance to learn a trick or two from law enforcement.

Having an FBI agent embedded with the SEC “is really revolutionary,” Sporkin said.

Other regulators are trying to set up their own FBI partnerships, including the Commodity Futures Trading Commission, which regulates the futures and over-the-counter derivatives market. The CFTC, which declined to comment, has also been closely studying the operation of Sporkin’s team.

THE FBI EMBED

Jeffrey Horner, the FBI agent embedded with Sporkin’s group, is an accountant who worked for audit giant PriceWaterhouseCoopers before joining the bureau in 2004.

Horner says he’s not allowed to talk about specifics, but the nearly year-long partnership has led to new leads and bolstered existing FBI files.

“Some of the raw data that comes into the SEC, the (FBI) case agents may not be aware of,” he said. “So plugging them in with the SEC and the information that the SEC has can be very valuable to an ongoing investigation.”

FBI agent Horner is also sitting in on two SEC working groups examining micro-cap fraud and Chinese businesses that have done so-called reverse mergers with small U.S. shell companies. The FBI has opened its own broad investigation into reverse mergers and allegations of accounting irregularities.

Horner also uses the SEC’s tips system to drill into areas of particular interest to the FBI. Right now, for instance, he is on the lookout for tips about high-yield investment scams as well as high-priority areas such as insider-trading and market manipulation.

The real test of the partnership — and the effectiveness of the TCR Database — will lie in the kind of cases the SEC and federal prosecutors file.

An independent analysis of the work of Sporkin’s team could come when SEC Inspector General David Kotz conducts a planned audit of the Market Intelligence Unit’s triage work. Kotz, who issued a scathing report on the SEC’s failures in the Madoff affair, has called the new database an adequate response to ensure tips are “acted upon in a timely and appropriate manner.”

Former SEC lawyers and securities attorneys wonder whether more agents need to be assigned to the SEC-FBI partnership.

“My sense is that there would be so many things going across that person’s desk, I am not sure one person can manage it,” said James Cox, a law professor at the Duke University School of Law.

Officials with the SEC and the FBI don’t rule out an enhanced relationship. They note that before Horner was embedded with the SEC, the two agencies coordinated on major investigations, such as the probe into insider trading by hedge funds.

At the same time, officials say they are sensitive to law enforcement protocols prohibiting prosecutors and the FBI from sharing investigative materials, such as wiretapped conversations, with securities regulators. They say it’s easier for the FBI and SEC to work hand-in-hand before an investigation gets going to avoid any defense allegations of improper collaboration or information-sharing.

REWARDING WHISTLEBLOWERS

Sporkin’s group is a work in progress and the TCR Database has some limits. It can’t yet be cross-checked against other internal databases. The system s not advanced enough to perform more sophisticated analysis or data-mining, such as cross-checks against trading activity, company filings or news feeds.

“It will be several years before we really see whether this new system is a success,” said Bradley J. Bondi, a former SEC attorney who is now a partner with Cadwalader, Wickersham & Taft LLP. “But I think the new system is a step in the right direction.”

It’s a system Sporkin expects will become bigger and better over time, especially now that the SEC in May finalized rules for its own whistleblower program, rewarding individuals who provide the agency with a high-quality tip that leads to a successful enforcement action.

Stone’s tip about the potential Ponzi scheme at China Voice came in November 2010, after she says she grew concerned about the number of complaints she was hearing from investors in China Voice and related partnerships.

On May 31, Stone, testifying before a U.S. judge in Dallas in the China Voice case, said she learned about the new whistleblower rule only after hiring an attorney in advance of her court appearance. Her attorney, Misty Gutierrez, declined to comment; Stone didn’t return telephone calls to her consulting business, Number Crunchers.

Stone told U.S. District Judge Reed O’Connor she started reviewing the bank statements for China Voice and those related companies after hearing the complaints, and quickly concluded, “something was wrong.”

She talked about the money transfers with a friend who also once worked for the IRS and agreed the math didn’t add up. The next day, Stone said she called the SEC.

(Editing by Bill Tarrant)

Copyright 2011 Thomson Reuters.

QUESTION: Do you think that you have information that would help law enforcement in discovering or uncovering fraud?  If so, would you be willing to share that in the form of a tip?  Not asking you to do that here on this blog, but rather discuss why you would or why you wouldn’t.

YOUR COMMENTS ARE WELCOME!


Elisea Frishberg – “Money Money Money!” What a difference two years makes!

June 29, 2011

From 2009 on Fox 26 to today…sometimes its hard to hide the truth.  Then Elisea Frishberg was a multi-millionaire – now we find that the millions she bragged about were scammed from unsuspecting investors. Before reading the discussion below and sharing your comments…watch this video.  It’s quite telling!

The interviewer said, “You’re a multimillionaire, but you were not born with a silver spoon in your mouth.”

Elisea responds, “In everyone’s book what I’ve done is impossible.  I am the co-founder of BizRadio Network.  We reach millions of lives and improve their lives.  We buy businesses.  We build cities.  We have monetary financial advantages, material advantage that I could never imagine I could reach.”

STOP FOR A MOMENT…I’ve got a question.  Does the news media do any (ANY) due diligence on their guests.  Come on – “We build cities.”  What a crock…

The interviewer asks in so many words how did you do this?

Again Elisea states, “For 48 years I wished someone would have come up with a box – a set of instructions – to lower my pain and anxiety.  So that makes you ask what makes you inspired to write this book? So I said I’ll box them up.  I’ll box up everything I’ve learned to get to where I am and I’m inspired and excited and want to give it to your listeners…”

HUM…PERHAPS THE BOOK SHOULD BE USED BY THE FBI…cause if you’ve boxed up all you’ve learned you should find the content to include chapters on: (1) how to scam unsuspecting investors out of their money; (2) How to live off of other people’s money (that they will never get back); (3) How to con the media into believing in the illusion instead of searching for the truth; (4) How to lie with a straight face; and (5) How to thumb your nose that those who supported your vision of a valuable business radio station.

HERE POINTS:  (Ya gotta check these out)

  1. Face Yourself
  2. Do Not Lie To Yourself (wonder if she’s O.K. with lying to others since that seems to be what happened?)
  3. Know What You Really Want (again wonder if she knew that was other people’s money?)

Elisea ends the interview by saying what people really want is MONEY…MONEY…MONEY!  Well…she got it.  The problem was it was other people’s money.  Wonder now what she has to say about that show?

YOUR COMMENTS ARE WELCOME!


One Step Ahead of the SEC – The Mystery behind Dan Frishberg – The Brains Elisea Frishberg – who knew?

June 29, 2011

I feel like I owe my readers an apology.  All this time I thought that “The Money Man” Dan Frishberg was the brains behind the massive theft involved with what is now known as BizRadio.  But it looks like I was wrong.  Seems that all was an illusion.  Perhaps Dan was not that smart after all, cause now the truth behind the myth appears – Elisea!  Shocked…well no, rather mystified.  Read this recent announcement by Elisea and then let’s talk…

I’m Elisea Frishberg and I’ve served as Executive Producer of “The MoneyMan Report” for twenty years. For all that time, when Dan has been on the radio, CNBC,  or Fox, I have been right there behind the scenes.

Through all these years, our show has been about helping people get themselves off the emotional roller coaster so they can be among the very few who actually make money in the markets AND KEEP IT.

Here is a picture of that roller coaster.

From despondency to depression to hope to relief, on to optimism then excitement and euphoria, and the herd’s emotional roller coaster ride starts back down into anxiety, denial (where they feel the market can’t fall any further,) and finally to capitulation. Then the whole thing starts all over again.

It’s all so human isn’t it?

I want to propose a solution – an easy way to escape from the herd and start to enjoy the markets.

Join us for our No B.S., Plain English, No Jargon, Everyone-Can-Do-It…

The MoneyMan’s Live Training…

BECOMING INVESTOR 2.0.

Morning Session: Becoming Investor 2.0

We’ll learn once and for all how to free ourselves from the emotional roller coaster most investors stay stuck on all their lives.

Find out how, at each stage, the markets serve as the primary mechanism to transfer wealth from the uninformed to the smart money, and find out how to make sure you’re on the winning side. Once you’re free, you’ll know there is a profitable play for every situation, just as in baseball.

Take a look at the small space between DEPRESSION and HOPE on the right hand side of the picture. Between those two little dots, investors go through highly predictable emotions…

Contempt: According to the cycle, a bull market typically starts when a market is at a low and investors scorn stocks.

Doubt and suspicion: They try to decide whether what they have left should be invested in a safe haven, such as a money market fund. They’ve burnt their fingers on stocks, and vow never to invest again.

Caution: The market then gradually starts showing signs of recovery. Most remain cautious, but prudent investors are already drooling at the possibility of profit.

What does the smart money do at that point?

First the big hitters begin to buy convertible bonds. Solid companies issued bonds that are paying only about 5% or 6% because they companies are so solid, but in this coming out of panic situation, panicked investors are still afraid to take action, so highly desirable and safe bonds are selling for 70 or 80 cents on the dollar. It happens in every cycle, and now that you’ve learned how to escape from the herd, you’ll be right there, ready to take advantage of the opportunity.

In fact, you’ll wonder how making money could be so easy, and how you missed all these opportunities for all these years.

Next, once they see the high yield bonds start to recover, they know the stock market won’t be far behind, so they take their profits on the bonds, then back up the pickup truck and load up.

While the experts are claiming to be in a “stock pickers’ market” as usual, the educated investor knows very well that at this stage, buying the whole market is better. There will be plenty of time for fine tuning later in the cycle, when the herd is moving between the OPTIMISM and EXCITEMENT stages.

Is it really that easy?

I don’t want to kid you. It really is that easy to understand, but being able to actually execute the right strategies and tactics takes courage, brains, and the ability to resist the hypnosis of the herd. That’s the part you’ll have to practice for the rest of your life.

Cycles constantly repeat. We move through the same seasons every year, and we’ve all learned how to anticipate the changing seasons. We follow the weather, the harvest and the sports cycle every year of our lives. We easily adapt to the cycle of the seasons, so they never surprise us. In fact, we learn to love each season, because we anticipate the predictable changes, and we successfully plan our activities to match.

For example, when the stock market rallies, stockholders win.

At the moment of EUPHORIA or maximum confidence, some chinks in the armor start to show up, suggesting the early signs of economic slowing. Stock prices go down, and the new winners are…

  • the short sellers,
  • the bond buyers
  • the patient investors who kept their cash ready,
  • the put buyers,
  • and the smart investors who Rent Out Stocks.

They all prosper when the rally stalls. Who loses? Simple! Those who blindly buy into the intoxicating euphoria of the herd.

Learn the winning play for every situation. The reason experienced investors and traders are able to achieve better results over time, is that they understand exactly what the herd is going through.

Why? Because this isn’t their first rodeo!

In the afternoon session: Master R.O.S. and you will know…

1. How to increase your annual returns by 20%-30% per year in a sideways stock market.

2. How to pinpoint your most accurate economic and market forecast, then choose the exact right tactics for that precise situation.

3. How to pinpoint your exact risk profile, then choose the exact right tactics to fit.

4. How to decide if collecting rent on a stock is a better deal than just holding the stock.

5. How to take consistent profits from a sideways consolidating market

6. How to choose which stocks make the best long term holds, so you can collect your rents while you minimize the downside risk of owning stocks.

7. How to tell when the speculators are paying too much for their long options.

8. How to understand the profit potential is in an option, so you can consistently outsmart your renters, by out-timing them.

9. How to consistently buy stocks cheaper than their ticker prices.

10. How to know which month’s options offer the best rental rates

11. How to know which stocks in which industries make the best “rental properties.”

12. How to take advantage of market fluctuations to increase market profits by over 35%

13. Learn how the top pros can consistently spot THE optimum moment to collect their rents, by knowing how to estimate future volatility. This skill will also help you know when and how to protect the downside in you equity holdings.

14. How to understand more about how to price the rents on your stocks than the speculators and gamblers whose money you collect.

15. How to use time decay to consistently make the optimum rentals on your long term stock holdings.

16. How to know when to make a above the market offer, and when to accept the current market price.

17. How to know when to pass on a high rent, to keep more upside in your stock holdings.

18. How to read the market trends and directions.

19. The three most common mistakes investors and traders make in reading market trends.

Also Includes a Special Lesson On Iron Condors, the more advanced play for a sideways market. Warning: This technique works terrific in when markets chop and don’t go anywhere, but it may require some more study and practice for some themoneymanreport.com/newsletters-a-reports/item/767-learn-more–sign-up.htmlstudents.

Most people assume that when the markets aren’t moving you can’t make money. Not anymore. Low volatility markets can be extremely profitable.

With the Iron Condors strategy, we will trade a single complex option spread which includes the simultaneous vertical spreads in the same expiration month.

The strategy will advise on market neutral and well defined risk iron condors with limited profit. Each month we will identify an index or ETF that is range bound, allowing us to profit from the non-directional movement. The main advantage to trading this strategy is that it will give you near-term hedging with defined and manageable risk characteristics.

Click here for a short video on exactly what the smart money is already doing at every turn.

Sincerely,

Elisea Frishberg

The MoneyMan Report

Radio Wall Street

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9800 Richmond Avenue Suite 250 Houston, Texas 77042 United States (713) 785-7100

WOW…DO YOU SUPPOSE THIS VEILED ATTEMPT WILL WORK?

Let’s consider the fact that the SEC was supposed to have shut up Dan Frishberg from offering investment advice.  Why?  Cause he was actively involved in defrauding investors according to SEC reports.  Dan and the SEC agreed on the outcome.  From my perspective Dan was to have gone to http://www.zipit.com with his glorious investment advice.

Ah…but there is nothing to muzzle the mouth of Elisea and apparently she was the brains behind the man…after all she was the Executive Producer of “The Money Man Report”.  Well…let me ask some questions:

  1. Elisea…if you were the Executive Producer – did you know that your husband was cheating many people out of their life time savings to support your failed business and personal lifestyle?
  2. No…you say, well then how smart were you?  Shouldn’t (as Executive Producer) you have known that financially BizRadio was in the tank and that you should have helped Dan cut back on lavish expenses?  Oh…I guess not as I’ve been told that you pushed for those lavish indulgences.
  3. And, lastly Elisea – do you have any remorse for those who lost their money at what you now seem to admit was your and Dan’s hand?  What are you doing today to make restitution?  Do you even care?

My strong suspicion is that Elisea won’t answer these questions – as it seems that it’s business as usual for the Frishbergs.

WHAT ARE YOUR THOUGHTS?


David Wallace and Costa Bajjali fined by the SEC for BizRadio related issues! Will Investors Be Made Whole?

May 24, 2011

David Wallace is the author of “One Nation Under Blog: Forget the Fact and Believe What I Say” – wow…I was reminded of that as I began this post and thought how telling.  David and Costa wanted investors in their private placements and it seemed that they wanted investors to “forget the facts” and believe what they said…although what they said led to massive losses when they over invested in the money losing BizRadio driven by Dan “The Money Man” Frishberg.

Fined by the SEC for their roles in misleading investors – David Wallace and Costa Bajjali each have agreed to pay a $60,000 fine.  The SEC news release states the following:

On May 20, 2011, the Commission filed suit in U.S. District Court for the Southern District of Texas against Houston area real estate developers David Wallace and Costa Bajjali in connection with two fund offerings. This suit is a related case to SEC v. Albert Fase Kaleta and Kaleta Capital Management, Case No. 4:09-cv-03674 (filed November 13, 2009) and SEC v. Daniel Sholom Frishberg, Case No. 4:11-cv-01097 (filed March 23, 2011).

The Commission’s complaint alleges that from November 2006 through December 2008, Wallace and Bajjali offered and sold interests in the Wallace Bajjali Investment Fund II, L.P. (“WB Fund”) and the Laffer Frishberg Wallace Economic Opportunity Fund, L.P. (“LFW Fund”). The complaint further alleges that the private placement memoranda (“PPMs”) for these funds stated that investment in any one business would be limited—to 33% in WB Fund and 20% in the LFW Fund.  Both funds exceeded the PPMs’ stated limitations by investing heavily in Business Radio Networks, L.P. d/b/a BizRadio, a struggling media company. As a result, they subjected the Funds’ investors to substantially greater investment risk than the Fund’s written materials disclosed.

The complaint alleges that Wallace and Bajjali violated the Sections 17(a)(2) and (a)(3) of the Securities Act of 1933. Without admitting or denying the Commission’s allegations, Wallace and Bajjali each consented to the entry of a permanent injunction and to pay a $60,000 civil penalty.

The actual SEC Complaint is here:  SEC Complaint – David Wallace Costa Bajjali

The Amarillo Globe News reports the following:

“When we sell the real estate,” Wallace said, “we believe we will be able to absorb whatever we’ve written off as it relates to news radio.”

In written disclosures related to the securities offerings, the suit says, Wallace and Bajjali told investors the funds’ investments in any one business would be limited to no more than 33 percent from the Wallace Bajjali Investment Fund and no more than 20 percent from the Laffer Frishberg Wallace Economic Opportunity Fund.

By May 2007, $6.5 million, or 40 percent, of $16 million raised under the Wallace Bajjali Fund had been invested in BizRadio, the suit says. By the time the Opportunity Fund closed in December 2008, roughly 57 percent, or $4 million, of about $7 million raised had been invested in BizRadio, the suit says.

The result was that Wallace and Bajjali, “subjected the Funds’ investors to substantially greater investment risk than the Funds’ written materials disclosed,” according to SEC filings.

Wallace called it a “technical” problem, saying he and Bajjali thought other money was being raised for the two funds that would have ensured that the limits were not surpassed.

The $120,000 fine wasn’t the only payment Wallace and Bajjali had to make in this case. Last November, in negotiations with Thomas Taylor III, the Houston attorney who is overseeing the SEC-ordered receivership of KCM, Wallace has paid back $92,348 and Bajjali has paid back $45,550 to date, according to the publicly available information. At that time, Taylor said negotiations are ongoing about further repayments by Wallace and Bajjali.

REALLY DAVID A TECHNICAL PROBLEM?

Sorry, but sometimes you have to call bull s**t when you see it.  Technical problem my ass!  David and Costa got their hands slapped when most who lost substantial monies likely feel that more is in order.  It is not a TECHNICAL PROBLEM when you substantially commit massive funds into an investment that you know is a losing proposition hoping that more investor funds would be forthcoming so that you could then avoid the TECHNICAL ISSUE.

SO HERE’S THE QUESTION DAVID – If, as you stated, when you sell the real estate you will be able to absorb what you’ve written off related to news radio – does that mean that the investors who lost millions at your hand will be made whole?  WILL INVESTORS BE MADE WHOLE?  That’s a question those who lost millions would like an answer to.  DAVID WHAT’S THE ANSWER?

THE NEXT QUESTION:  For those who were lucky enough not to be sucked into the Dan Frishberg scambus…doesn’t that mean that their gains (you know when the real estate sells) will be less?  David…REALLY DOESN’T EVERYONE LOSE HERE?

Put clearly – David – if you had followed the terms of your investment private placement memorandum – BizRadio and Dan Frishberg would have been out of business long ago and you would have not been embarrassed at their hand.

The Amarillo report also says:

“We have been impressed with the level of transparency in this issue, as David Wallace has kept us informed throughout the SEC process,” Amarillo Mayor-elect Paul Harpole said in a Wallace Bajjali news release. “We are pleased with this positive resolution and appreciate Wallace Bajjali’s forthright, thorough and ongoing communication about the issue.”

Melissa Dailey, executive director of Downtown Amarillo Inc., the nonprofit group leading downtown redevelopment, said in a statement: “The SEC review ended with a settlement announcement noting a single technical error regarding a Fund managed by Wallace and Bajjali.”

Perhaps David has figured out – stick to Real Estate and out of Radio!  My hope is that the profits from the Amarillo venture might be used to pay the investment losses from David’s mind fart in investing in BizRadio.

YOUR COMMENTS ARE WELCOME!


SEC Issues Daniel Frishberg Order! Will Dan Frishberg continue his Investment Advice Now?

May 16, 2011

The long awaited order from the SEC is hereby presented and (to the best of my knowledge) was filed to be effective today.  See Questions below:

The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that public administrative proceedings be, and hereby are, instituted pursuant to Section 203(f) of the Investment Advisers Act of 1940 (“Advisers Act”) against Daniel Sholom Frishberg (“Respondent”).

The Commission finds:

1. Frishberg was the president and majority owner of Daniel Frishberg Financial Services, Inc. d/b/a DFFS Capital Management, Inc. (“DFFS”), an investment adviser registered with the Commission. Frishberg, 65, is a resident of Houston, Texas.

2. On March 30, 2011, a judgment was entered by consent against Frishberg, permanently enjoining him from future violations of Sections 206(1) and 206(2) of the Advisers Act, in the civil action entitled Securities and Exchange Commission v. Daniel Sholom Frishberg, Civil Action Number 4:11-cv-1097, in the United States District Court for the Southern District of Texas.

3. The Commission’s complaint in the civil action alleged that, in connection with two separate promissory note offerings to DFFS clients, Frishberg violated Section 206(2) by approving unsuitable investments for recommendation to his advisory clients. In addition, the complaint alleged that Frishberg aided and abetted the Section 206(1) and 206(2) violations committed by Albert Fase Kaleta and by DFFS. Frishberg approved investments despite conflicts of interest between himself and DFFS on the one hand and the advisory clients on the other. In particular, Frishberg controlled the company that issued the promissory notes. Moreover, the issuer’s poor financial condition made it unlikely that it could pay its promissory-note obligations. Frishberg knew such conflicts had not been disclosed to clients or recklessly disregarded whether such conflicts had been disclosed to clients.

In view of the foregoing, the Commission deems it appropriate and in the public interest to impose the sanctions agreed to in Respondent Frishberg’s Offer.

Accordingly, it is hereby ORDERED:

Pursuant to Section 203(f) of the Advisers Act that Respondent Frishberg be, and hereby is barred from association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent.

Any reapplication for association by the Respondent will be subject to the applicable laws and regulations governing the reentry process, and reentry may be conditioned upon a number of factors, including, but not limited to, the satisfaction of any or all of the following: (a) any disgorgement ordered against the Respondent, whether or not the Commission has fully or partially waived payment of such disgorgement; (b) any arbitration award related to the conduct that served as the basis for the Commission order; (c) any self-regulatory organization arbitration award to a customer, whether or not related to the conduct that served as the basis for the Commission order; and (d) any restitution order by a self-regulatory organization, whether or not related to the conduct that served as the basis for the Commission order.

Timothy S. McCole, Esq.
Fort Worth Regional Office
Securities and Exchange Commission
Burnett Plaza, Suite 1900
801 Cherry Street, Unit #18
Fort Worth, TX 76102

QUESTIONS:

1.  Since it says, hereby is barred from association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent, what impact does this have on Dan’s keynote address at Barrington’s meeting on May 18, 2001?  If Frishberg speaks for Barrington on the 18th, I would be willing to bet that Frishberg’s fee would make Bill Clinton feel incompetent…  what an effective way to be paid for his work than a huge check for speaking!

2.  Since it says,  is barred from association with any broker, dealer, investment adviser, municipal securities dealer, or transfer agent, does that mean that Dan Frishberg is barred from ANY ASSOCIATION with Barrington (even as a guest speaker or seminar leader)?

3.  It would appear that Frishberg could reapply, but since there was an order issued against Al Kaleta and Frishberg for disgorgement shown here (69-main) it would stand to reason that FAILURE to satisfy this order would prohibit Frishberg from re-establishing Investment Advisor credentials?

4.  Lastly, does any part of this order have any impact on Frishberg’s ability to continue to offer his style of investment advice on Salem Communication stations?

YOUR COMMENTS ARE WELCOME!