Isaac your Firm WSEI in trouble again. o you own thes accts? Do you control them?: The $2.3 Million Hot Potato
It may be hard to believe, but there's $2.3 million sitting in two accounts at a New York brokerage that no one wants to claim.
Securities regulators say the money and stock in the accounts represent some of the ill-gotten gains from the alleged stock scam
involving Enterprises Solutions, the Canton, Mass., Internet-security firm. The accounts are registered with two offshore limited
partnerships based in the British colony of Gibraltar. The Securities and Exchange Commission alleges that Herbert Cannon, a Florida stock
promoter, secretly controlled those entities — a charge Cannon denies.
At a recent hearing in Manhattan federal court to determine whether a temporary freeze on those assets should be lifted, no one appeared to
represent the Gibraltar partnerships. In the absence of any objection, U.S. Southern District Judge Miriam Cedarbaum extended the freeze
until a trial is held later this year on the underlying civil fraud charges against Enterprises Solutions, Cannon and John Solomon, the
company's chief executive. That means Wall Street Equities, the brokerage firm where the accounts are held, can't transfer or release the
money to the owners.
Government lawyers had rushed to court on April 6 to obtain a temporary restraining order after they got word that a representative of
the offshore entities had asked Wall Street Equities to liquidate the accounts and transfer the proceeds overseas. In court papers,
regulators contend Cannon personally instructed brokers at Wall Street Equities to sell shares of Enterprises Solutions when the
company's stock was rising sharply earlier this year.
The SEC suspended trading in Enterprises Solutions stock on March 30, after its shares shot from $7 to just under $22. Though the 10-day
suspension expired at midnight April 12, the stock has yet to resume trading on the OTC Bulletin Board. For the past two weeks, shares have
sporadically traded on the Pink Sheets, the loosely regulated trading platform run by the National Quotation Bureau. Daily volume has
averaged a few thousand shares, compared to the 260,000 shares that changed hands the day before trading was halted. At last count,
shares of Enterprises Solutions were selling for $7.
google.com. |
