(COMTEX) B: StockGate: The Global Links Who Owns What Saga Continues ( fin
B: StockGate: The Global Links Who Owns What Saga Continues ( financialwire.net
Mar 21, 2005 (financialwire.net via COMTEX) -- March 21, 2005 (FinancialWire)
Global Links Corp. (OTCBB: GLKCE), the subject of a U:S. Senate committee
hearing and two 13D filings with the U.S. Securities and Exchange Commission
that claim ownership of between 115% and 125% of the issued and outstanding
shares, has finally come out of the woodwork to speak for itself, and it was a
bit of a shocker.
The first 13D stated that 100% of the outstanding shares had been purchased by
Robert Simpson, who is also CEO of Zann Corp. (OTCBB: ZANC), who told
FinancialWire he has been so far unable to get delivery on his shares from his
broker, Oppenheimer Holdings (NYSE: OPY), which told him none could be found.
The company claims to have a real estate deal with Diversified Financial's
(OTCBB: DFLR), and some observers say this transaction may or may not have
something to do with the disparity between Global Links' filings and its new
public statement.
The statement, at globallinkscorp.com , is in the
form of a "Letter to our Shareholders" from Global Links CEO Frank J.
Dobrucki:
"On February 1, 2005, the Company implemented a one for 350 reverse split of its
authorized and outstanding shares of common stock. The number of authorized and
outstanding shares of the Company's common stock following the February 1, 2005
reverse split is 5,428,571 and 1,158,064, respectively." (Released on
BusinessWire February 2, 2005)
"What happened the first week of February, 2005 really took us by surprise.
Our trading volume for the first (4) days of February was 143,463,600 shares. We
only had 1,158,064 shares in the "float" and of these shares; the Depository
Trust only had 929,277 shares.
"4-Feb-05 0.02 0.04 0.02 0.02 22,471,600 0.02
"3-Feb-05 0.00 0.02 0.00 0.01 37,044,600 0.01
"2-Feb-05 0.00 0.00 0.00 0.00 35,993,100 0.00
:1-Feb-05 0.10 0.10 0.00 0.00 47,954,300 0.00
"What was particularly alarming was the way our stock plummeted from an
opening price of $0.10 on February 1, 2005 to a low of $0.0008 in a matter of
hours. It became very clear that we had no control of the volume or price of our
stock in anyway. Outside forces were now manipulating our stock.
"I made a decision to stop any additional stock being sold by the company at
this time until we had a better picture of what was happening. We closed the
month of February, 2005 - maintaining our outstanding shares at 1,158,064, and a
total stock volume of approximately 208 million shares.
"During this time, I received many phone calls and email messages from
stockholders asking why the company is not issuing any shares and why they
cannot get delivery of their stock. I received several email messages from
shareholders, which was sent by their brokers indicating that share certificates
could not be issued at this time because (a) the company is going through a
reorganization and that the 'company' was not issuing shares at this time; (b)
the transfer agent was not issuing shares at this time; and (c) that the company
is in a 'chill' mode and that shares cannot be issued at this time.
"None of these answers are true.
"If you purchased shares in Global Links Corp., you have the right to demand
delivery of your shares. If the shares simply do not exist, then the problem of
Naked Short Selling will come to the surface. The broker that sold you the
shares has to provide delivery of your shares. Exchange Act, Rule 10a-2 requires
delivery of shares sold to our stockholders.
"Global Links Corp. was placed on the SHO list as of Friday, February 11,
2005 and has remained there since that date.
"The company and its shareholders have the right to expect a fair playing
field. When illegal trading occurs, the company cannot meet its goals, and
shareholder equity is diluted so that brokers can line their pockets with
illegal cash. I cannot tell you how long this has been going on. If we had not
completed the reverse of both our authorized and outstanding shares on February
1, 2005, we may never have discovered how blatantly our stock was being abused.
"Global Links Corp. is not the common penny stock company. We actually have
millions of dollars in real estate assets. We are not going to fall apart
because we didn't trade any stock for an entire month. Our goals may be
postponed, but our future is solid. Many companies would have collapsed when
their stock price drops so sharply and the number of shares being traded is so
staggeringly high. I feel very fortunate that we were able to discover what has
been hurting our stock price, and now, we will have a chance to correct this
imbalance.
"As of today's date (March 15, 2005), our authorized still stands at
5,428,571 and our issued and outstanding common is 4,028,362. No preferred
shares have been converted into common shares and no officers are selling any
stock. This is not possible because our authorized would have to be sharply
increased to accomplish any conversion.
"I cannot tell you how may shares have been sold or how many stockholders
have demanded delivery of their shares. I believe that this number is much
higher than the stock we have available. I strongly encourage our stockholders
to demand delivery of their shares. If you would kindly forward a copy of any
such requests to pdonahoo@globallinkscorp.com , this would give us a better
picture of what is really happening with our stock.
"Thank you for your concern and loyalty to our company," Dobrucki
concluded.
Simpson said his 13D filing was in error, as Simpson believes he has bought 110%
of the outstanding shares of Global Links. The filing is at:
sec.gov
Actually, 125% of the known outstanding shares are now claimed in filings with
the U.S. Securities and Exchange Commission. On March 9, Paul Floto of Dallas
said he had acquired 180,000 shares, "constituting a total of 15.45 percent
of the issued and outstanding common stock of the Issuer, in the open
market." He paid $6,463.95 for them. Simpson's 1,158,209 shares were
purchased in February for $5,205.
The question now, of course, is how many shares there are. The company is now
saying it has issued 3 million more shares than it has previously announced, and
there are no filings regarding what the shares were issued for. Some speculate
the 3 million may be restricted shares issued for the purported real estate, but
until the company's filings are brought up to date, none of that can be known
unless the company voluntarily explains the disparities.
Like Simpson, Floto's purpose in purchasing another 15% of a company that was
already owned 110% by another party, and which continues to trade millions of
shares, including 918,540 on Thursday alone, was to make a point, and said he,
too, may purchase 100% of the outstanding shares.
Said Floto in his filing:
"The Reporting Person acquired his interest in the Issuer primarily to point
out the complete failure of government and exchange regulatory bodies to
maintain honest, orderly markets, and the corrupt actions of market makers and
securities clearing bodies, which facilitate the sale of unissued, unregistered,
counterfeit, or simply nonexistent securities.
"On February 3, 2005 a single investor reportedly purchased all the common
shares issued by the company, plus 145 additional unissued shares.
"Subsequent to that date, over 95 million shares, or over 82 times the total
shares issued, were reportedly traded, none of which were reportedly sold by the
100% owner of the common stock.
"On March 4 and 7, I purchased a total of 180,000 shares, resulting in my
obtaining 15.54% ownership of a stock reportedly already 100% owned by another
investor. I assume that there may be additional investors who may also claim
ownership of common shares of this company.
"I have requested that certificates be issued to me representing my full
15.54% ownership interest, to protect my right to vote and enforce any other
claims that may accrue to an actual documented owner.
"I understand that Reg. SHO was supposed to detect and prevent the
fabrication of millions of nonexistent shares. It would appear that my
securities purchases prove that Reg. SHO has been systematically violated by
market-making brokers and securities-clearing firms.
"From time to time I may continue to purchase additional securities on the
open market to increase my ownership interest to up to 100% of the company's
common stock to give me an ownership interest equal to that of the current 100%
owner," Floto concluded in his SEC filing.
Simpson told FinancialWire that Oppenheimer has told him, after it sold him the
shares, that it can not find shares to deliver to him. He said he has been
discussing this with his attorney and plans soon to take action.
Simpson is also considering court action in Nevada, the domicile of Global
Links, to prevent the issuance by the company, whose executives he does not know
nor seems to be interested in knowing, of any additional shares.
He may also seek to become a director.
Simpson is concerned that there may be a form of preferred shares that could
prevent him from taking control of the company, so is exploring all his options.
Simpson also said he received a call from a national reporter with the Dow Jones
(NYSE: DJ) News Service, who he said accused him of "insider trading,"
and trying to flip his shares, and said she did not seem to know that his filing
of the 13D prevents him from selling the shares for a year.
That is not the least of his worries, however. A poster on Raging Bull with the
monicker igroup), in post 27429 under the Zann Corp.'s message board, stated,
"I would'nt be surprised if someone put bullet in the back of his head
.." The message has been turned over to the Federal Bureau of Investigation.
Also turned over to the FBI was a direct email Simpson received from
jgtc01@aol.com that stated just as ominously, "I FOUND YOU JER-S YOU ARE IN
A HOTEL ROOM AND I WILL SHUT YOU DOWN WHAT YOU ARE DOING IN ILLEGAL GET READY TO
BE ON THE NEWS YOU JER-S." Executives at Time Warner (NYSE: TWX), which owns
AOL Online, have not responded to inquiries from FinancialWire as to the
legitimacy of the email address or the identity of the emailer.
Finally, there is the matter of Global Links itself.
The filing that attracted Simpson's, and later Floto's attention, stated:
"Effective February 1, 2005, the Registrant implemented a one for 350
reverse split of its authorized, issued and outstanding shares of common stock.
The number of authorized and outstanding shares of the Registrant's common stock
has been reduced in accordance with the one for 350 split ratio to 5,428,571 and
1,158,064, respectively, following the February 1, 2005 reverse split."
Another filing, however, on January 3, described a stock incentive plan for
employees, non-employee directors and consultants.
It called for the issuance of 500,000,000 options to purchase common stock, and
100,000,000 shares of common stock to be registered.
There may be yet another shoe left to drop, but Simpson isn't worried. He said
his attorneys have assured him that the company can not now issue more than 5
million shares following his filing of the 13D, and he expects to have other
actions in place to prevent even that.
A video of the exchange between Bennett and Donaldson is at Investrend
Information at investrendinformation.com
Bennett questioned Donaldson in his appearance before the US Senate Committee on
Banking, Housing, and Urban Affairs. The Senator chairs the committee's
Subcommittee on Financial Institutions, and serves on the Subcommittee on
Securities and Investment. He also serves on the Senate Small Business Committee
and is Vice Chair of the Joint Economic Committee.
"This article in a national publication shows that people are still selling
short," Bennett told Donaldson. "Regulation SHO is clearly not
working."
He told the SEC Chair that short sales under Regulation SHO are not settled in
the 13 days allowed because one broker passes off to another, and so on,"
inferring that this process can go on indefinitely.
Donaldson said that his staff would be glad to meet with Bennett's staff to
describe what the Commission is doing to resolve these matters under Regulation
SHO. The SEC Chief of Market Regulation, Annette Nazareth, in a recent interview
with Floyd Norris of the New York Times (NYSE: NYT), dismissed complaints about
naked short selling as "people who want their stock to go up."
With conflicting 13D filings for shares that apparently exceed the issued and
outstanding for Global Links, perhaps a seat Senator Bennett's office when that
discussion is held should be put on EBay (NASDAQ: EBAY)?
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