Vancouver Sun
Saturday, April 8, 2000
Banned Howe Street promoter still turns profit
David Baines, Sun Business Reporter
The net worth of a Howe Street promoter who has been
suspended for stock offences has jumped to more than $200 million due to a sharp advance in the value of his shares in a money-losing Vancouver public company.
Robert Moore, now serving a five-year ban for offences relating to Cam-Net Communications Network Inc., owns or has the right to acquire five million shares of LML Payment Systems Inc.
LML's share price, which trades on the Nasdaq small-cap market in the United States, surged from $10 US in early February to $73 on March 27.
With 16 million shares outstanding, the company's total stock market peaked at more $1.2 billion US. Since then, the stock has plunged by more than half to $29.
Even at this price, Moore's holdings are worth about $145 million US ($213 million Cdn).
His close associate, Don Choquer, who was suspended for two years for offences relating to Cam-Net, owns just over two million shares worth $58 million US ($85 million Cdn).
His suspension expired in March 1999, enabling him to sell $2.9 million US ($4.26 million Cdn) worth of stock during the past few months.
LML Payment Systems provides cheque verification and collection services for retail merchants through a subsidiary, CFData Corp., which employs 124 in Dallas, Tex., Wichita, Kan., Jacksonville, Fla., and Vancouver.
The company claims that through acquisitions, it has become the ninth-largest cheque-authorization organization in the U.S., handling more than 114 million cheque transactions worth more than $4.4 billion US per year ($6.4 billion Cdn).
So far, the company's financial performance has been dismal. During the nine months ended Dec. 31, it generated $486,634 US in revenues, but suffered a net loss of $1.6 million US.
LML president Patrick Gaines issued a release last Friday stating the company is unaware of any change in its affairs that would account for recent trading activity.
Gaines said results for the fourth quarter ending March 31 will be ''affirming''. He said the company will report record revenues, but mentioned nothing about profits.
James Ness, who is handling investor relations for the company, refused to talk with The Sun last week.
Gaines and Ness were also cited for alleged stock-market violations in the Cam-Net affair, but regulators decided not to pursue them.
Moore's Lancia Investments Ltd. shares an office with Choquer's International Venture Capital Management Ltd. adjacent to LML's office on the 16th floor of 1140 West Pender.
Approached by a Sun reporter outside his office last Friday, Moore refused to discuss his involvement with LML other than to say he is a major shareholder. Choquer also declined comment.
From August 1989 to August 1994, Moore served as president of Cam-Net, a re-seller of long-distance services. Listed on the former Vancouver Stock Exchange, the company enjoyed a lofty share price despite suffering huge losses.
In 1994, the B.C. Securities Commission cited Moore for failing to report the purchase and sale of $2.7 million worth of Cam-Net shares, and the sale of $3.4 million worth of shares in another VSE company, Hovik Medical Corp.
The commission also alleged Moore and associates were involved in a scheme to enable him to illegally margin his controlling share position in Hovik, and thereby finance trading in both Hovik and Cam-Net shares.
The associates were Choquer, Gaines, Ness, Phyllis Moore (Robert Moore's sister) and James Stallwood.
In March 1997, Moore settled the allegations against him by admitting he bought and sold shares of Cam-Net and Hovik without filing insider reports. He also admitted he entered into an illegal trading scheme with Choquer.
Moore agreed to a five-year suspension and a $100,000 penalty. Choquer agreed to a two-year suspension and a $50,000 penalty. The commission decided not to pursue allegations against the other respondents.
At the time, Moore and most of his co-respondents were involved with LML Payments Systems, then called Leisureways Marketing Ltd., which was listed on the VSE. Due to the Cam-Net problems, the VSE forced the firm off the exchange and it subsequently obtained a listing on Nasdaq.
According to insider trading reports, Moore still owns 1.55 million common shares plus 883,283 preferred shares convertible to 3.53 million common shares at 25 cents US each.
Reports also show Choquer, whose suspension expired in March last year, owned just over two million shares as of the end of February. They also show he has been an active seller in recent months:
- From June to December, he sold 276,500 shares in the open market at prices up to $5.50 US.
- During January, he sold another 225,000 shares in a private transaction at $2 US.
- During February, he sold 220,000 shares in both private and open-market transactions at prices up to $16 US.
Proceeds before brokerage commissions were $2.9 million US, or $4.2 million Cdn.
Gaines also sold 70,000 shares at $15.83 US each in February for total proceeds of $1.1 million US.
Although Moore cannot, due to his suspension, be legally involved in LML's corporate affairs, his sister Phyllis has been actively working on the company's behalf. In November 1998, her private company, Pamanos Holdings Ltd., was granted options to buy 20,000 shares at $3.50 each.
A private company owned by Linda Moore was also granted options to buy 75,000 shares at the same price. She also served as an LML director from June 1998 to October 1999.
Asked whether she is related to Robert Moore, she replied: ``None of your business,'' and hung up the phone.
Ness and Stallwood were also granted options to buy shares. Ness is still working for the company. Stallwood is said to have left last year. |
