I share your worries about this stock. Another stock, USA Talks.com - USAT, in the same claimed business area (VOIP) was investigated and hit with a permanent trading ban by the SEC a few years ago. Another VOIP stock, Crys-Tel - OTC CYSS, was a pump and dump that made a few fake announcements and extravagant claims, but never got into operation, some of the backroom people have a long history of securities violations and legal wranglings over stock deals (Papalia family in Vancouver).
Given the history of these other VOIP stocks, I would question GlobalNet's claimed revenues from the recent 10-Q, and I wonder if a full audit has been done, and whether anyone can confirm that their claimed services are operational:
"Net revenue for the three months ended March 31, 2001 totaled $18,836,000 and were $4,349,000 or 30.0% higher than net revenue for the three months ended March 31, 2000. "
I came across GlobalNet while investigating a small Canadian company, Merilus - OTC MERH - that has a director in common with GlobalNet - Myron Gushlak. He is named in that fraud lawsuit described in the recent GlobalNet SEC filing.
Something I discovered from the GlobalNet filings is that they also have their registered address at the same place as Merilus: a building in Nicosia, Cyprus, Greece, and the same lawyer Xenios Xenopoulous is involved. Both GlobalNet and Merilus got their stock listings from OTC shell stock reverse takeovers. So the same "modus operandi" was used to set up both GlobalNet and Merilus.
Another interesting item is that Gushlak while as a director owned at least 700,000 shares of GlobalNet, and it looks like he sold them to the plaintiff in the fraud lawsuit. But there is no record in the Yahoo insider trading data that Gushlak sold his shares, so maybe he sold his shares as an insider and did not report it, which might be a violation of the SEC regulations.
A final item about Myron Gushlak. It appears that he does not live in the Cayman Islands, although he claims his Imperium Capital personal company is down there. I have also seen some documents that say Imperium is located in California. I believe Gushlak lives in West Vancouver, BC, Canada, and he is about 32. Maybe he is trying to hide his business income from Canadian tax by pretending to be operating in a foreign country, or to bypass certain SEC regulations on insider trading. It appears that Gushlak gave about $2,000,000 US to Merilus around Dec 2000 and he got several million MERH shares in return, how many of these he sold is unknown.
Here is the text obtained from the GlobalNet SEC filing, a 10-K dated 4/16/2001, from <http://www.freeedgar.com>
ITEM 3. LEGAL PROCEEDINGS
...
Rubin v. Gushlak
On December 26, 2000, an action entitled Rubin v. Gushlak, et. al, Case No. 00-13406, was filed in the United States District Court for the Central District of California. This action is against Myron Gushlak, a former director of GlobalNet until his resignation in April 2001, and 13 other named defendants, including GlobalNet. The action arises out of the purchase by the plaintiff of 1,000,000 shares of the Company's common stock at a price of $5 per share in a private transaction which Mr. Gushlak allegedly facilitated. The primary relief sought in the action is the rescission of the contract of purchase; and damages in the alternative. The action alleges violations of Sections 5 and 12 of the Securities Act of 1933, as amended, and alleged violations of Section 10(b) of the Securities and Exchange Act of 1934 and common law fraud. The complaint alleges that defendant Gushlak allegedly induced the plaintiff to purchase shares of GlobalNet's common stock and, in doing so, allegedly violated various provisions of the federal securities laws. While alleging various violative conduct and activity on the part of Mr. Gushlak, the complaint asserts that several of the named defendants, allegedly made untrue statements of material facts or omitted to state facts necessary to be stated in order to make certain facts stated not misleading. The complaint also alleges that GlobalNet failed to cooperate with the plaintiff in its efforts to confirm Gushlak's beneficial ownership of shares. The action is only in its formative stages and discovery or substantive proceedings have not as yet been initiated. We believe that the Company has good and meritorious defenses to the action.
On or about April 2, 2001, the Plaintiff filed an Amended Complaint in the action, setting forth various additional allegations principally relating to alleged wrongful conduct and activity by all defendants other than the Company and setting forth affirmative specified allegations that the wrongful acts and conduct which is complained of was allegedly undertaken and carried out by all defendants other than GlobalNet. The only specific allegation relating to the Company is that the Company had not cooperated with the Plaintiff in Plaintiff's efforts to confirm the beneficial ownership of shares and to supply to the Plaintiff books and records of the Company's transfer agent, and otherwise failed to take action to effect the reversal of the sale of the shares to Plaintiff. The time for GlobalNet to answer the Amended Complaint has not expired, and the Company intends to make a substantive motion seeking dismissal of the Complaint, as well as other relief.
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