Nutek CEO fed up and not going to take it anymore. Condemns 'handslap $2,500 fines' considered 'cost
of doing business.
ceocouncil.net
This is from an e-mail I received:
The CEO Council has formed a Special Task Force on Trading Practices. The Task Force's organizer is
Murray N. Conradie, President/CEO, Nutek Inc. He is also president of the Business Advisory Committee
representing the state
of Nevada to Congress, and chairman of the state's Republican Congressional Committee.
Here is his experience with shorting, and he is inviting all CEOs with similar stories to get in touch with
the CEO Council and volunteer to serve on the Task Force:
"I took over Nutek in April 1999 when it was no more than just a shell company, one employee, $2
million in debt, no history of sales, $3,500.00 cash in the bank, and a $0.035 share price. However,
there were over 460 shareholders who had invested their hard earned savings into this company
and many were of retirement age. Previous management had made promises, yet not fulfilled and
these investors were about to lose it all. I was approached by many of these shareholders to take over
as CEO and salvage the company. This was going to be a challenge yet at the same time, an
opportunity to salvage these shareholders life savings in some instances.
"In just over three years we have grown from nothing to a company now about to generate
approximately $5 million in revenues for 2002 and $600,000 in earnings. We now have almost 400
employees and still continuing to grow at a
tremendous pace with assets in excess of $6 million. We have announced contracts in excess of $12
million and well on our way to success. Sounds like a dream come true, in some instances yes in others
NO !!!
"Our share price is being forced down and manipulated on a daily basis, and are now approaching all
time lows since I took over as CEO, yet why is this.? Let me explain, we are considered a 'penny stock'
as we trade on the OTCBB, a privilege that cost us almost $160,000 in legal and audit fees to complete
our Form 10 filing just to return back to the OTCBB in 2000 when the NASD introduced Rule 6530. Many
CEO's thought this would bring legitimacy to the market and assist them in growing their companies. How
mistaken we were. Although, there was some clean-up necessary, the major problem I feel was not just
with the companies, but with the traders and market makers who trade these 'penny stocks'. They are
allowing this to take place and facilitate the trades.
"In early 2001 a known shorter started posting on the internet message boards that everyone should
start selling Nutek stock and do it immediately. This continued for a great deal of time and even
involved using the FBI to
perform background checks on myself to find something to throw out to my shareholders. Nothing was
found and this shorter along with two FBI agents and their accomplices have now been indicted by the US
Attorney's Office and
are sitting in jail. The very people who are supposed to be protecting us, are abusing their privileges to
steal money from the man in the street. HOW CAN THIS BE TOLERATED !!!!!. I have even received death
threats and
been subject to a barrage of abusive phone calls and abusive emails.
"Here is are excerpts from one of the boards (the expletives are deleted due to the email barriers on
many systems):
'Hey you criminal axx lying sack of cxxx, do something that matters and get me a cup of
coffee-NOW....then you can shine my shoes ... I'm a Veteran...Can you help me? I'm a veteran bullsxxx
sniffer-outer and you are the most bullsxxx mother I have come across...I have a clock, it's
lubricated with an oil well, and I sell them online to veterans with exercise tapes..... You lyxxx sack of
monkey sxxx....what kind of axxhxxx would believe this? Oh, they are called "NUTK
shareholders".....sxxxxxs....I'm going to that message board, I'm going to spread the truth....You can't
handle the truth can you boy... Where's my
coffee? Where are my shiny shoes? You bxxxx...I told you, "get me some motherxxxxxxx coffee
NOW-bxxxx"...'
"Again, is this what we call 'doing business in America….?' Is this what we have to tolerate because we
want to create a successful company.
"Many might ask why I included this excerpt; let me explain these shorters tactics. They find a penny
stock they feel they can manipulate, they then sell the stock short and then take to the message boards
and start their campaign of bashing and trashing the company. They attack the CEO's of
these companies personally in the hopes of driving them to despair. When a CEO is dealing with a
falling stock price for no reason at all, positive press releases do nothing but seem to move the stock
lower, this begins to
take its toll. The next thing we are dealing with concerned shareholders wanting to know where all the
selling is coming from and why is there someone selling so much stock when you have all these positive
announcements?
"The general sentiment is that the company must be in trouble or the company is selling stock, either
way this causes concerns and panic and many shareholders start to sell their stock for fear of losing it
all. What has
in fact taken place, is the shorters are playing their game, they then cover their short positions at
pennies or even fractions of a penny and make extremely large profits when either the CEO finally calls
it quits and walks
out or the company collapses. This is a very lucrative business for them. However, who is losing out, the
MAN IN THE STREET !!!! The shareholders, the elderly investors who bet their retirements, the new
parents who were
hoping to start a college fund, these are the people losing out.
"This is their money these shorters are taking and dashing their dreams. Many of the companies who
have fallen prey to this are now just 'shell companies' languishing at sub-penny values. What started off
as a dream for many with great potential has been destroyed through someone else's greed and in my
opinion illegal market manipulation.
"Take Nutek again, (OTCBB:NUTK) we have never been in a stronger position financially with a business
plan that has succeeded, yet we watch our stock manipulated on a daily basis. Why ?, I intend to show
Congress, the NASD and the SEC that these market makers have a large short position and are
manipulating the stock of Nutek to allow them to cover their positions at much lower prices. I can say
with certainty that many of the other CEO's of the OTCBB and pink sheet companies have similar
experiences to ours. In
other instances even if they do not hold short positions, they are manipulating the stocks on a daily
basis for their own gain.
"Now the issue is, what should be done about this. I believe it should be illegal to short any "pink sheet"
or OTCBB stock. I have been in contact with Staci Warden from the BBX and have been extended an
invitation to join
the advisory panel for the BBX Exchange once Nutek is listed with them. Should the CEO Council create
this task force, I intend to push very hard to make shorting an illegal activity on the BBX Exchange. Most
OTCBB and pink
sheet companies are just getting started on their business plans and basically at the infant stages and
rely on shareholder investment to grow their company. To have to be the brunt of market manipulators
right at the start is a sure recipe for failure as the companies are never given a fair chance to perform.
The shorters know this and revel in the demise of these companies, as it is such a lucrative business for
them.
"Another tactic very widely used is the 'so-called' funding of these public companies. Many of these
'bankers' will provide funding to the company on a convertible note, often with overseas investors. Many
companies have accepted these funding deals, only to be subjected to a slow death spiral of their stock.
Why? The stock is sold short and manipulated downward as these funders now have the protection of the
convertible stock to borrow against
and then look to cover these short positions. 99% of the time this is covered at greatly reduced prices
and they amass fortunes -- again who suffers -- the companies and ultimately the man in the street.
"The time has now come to put an end to all this, not only do these traders create short positions, but
many are creating 'naked short positions', why should we tolerate this? We need reform and change in
the regulations and
we need this sooner rather than later.
"Many market maker firms or traders that are caught making these illegal transactions most often settle
with the regulatory bodies by not admitting guilt and paying a $2,500.00 - $5,000.00 settlement. To get
to this
stage, it would cost companies thousands of dollars in legal fees and this is the sole remedy. Most
market maker firms have deep pockets and know the average penny stock is just trying to survive
through all this manipulation
and know they will not come after them legally. If however, they are finally penalized, this amount is
considered a 'COST OF DOING BUSINESS', it is never made a part of their record and they are free to get
back to doing the same
thing.
"I propose the following:
"1. It should be illegal to short any pinksheet, OTCBB or BBX stock, period.
"2. Any market maker, brokerage or private individual found supporting shorting or illegally
manipulating one of these stocks should be fined $500,000 and the individual trader at the brokerage
fined $50,000 personally with a loss of their license.
"Again, why should we as CEO's of legitimate public companies have to suffer the abuse and loss of
credibility of our companies through falling share prices due to illegal manipulation. I welcome all
support on this issue," concludes Conradie.
Marvin Mears, CEO, Environmental Products & Technologies Corporation (EPTC), responds that "EPTC had
a similar problem from 1999 to 2001. Every time we took a step forward and made an announcement of
progress with the
development of our products the price of our stock went down and the volume went up. We have had our
stock at $14.00 and it is now delisted!
"Our patents are now issued and we have a bright future with equipment and processed ready to market
with government grants available through a newly funded EQIP section of the Farm Bill in the amount of
6.1 Billion. I am
considering doing a corporate name change just so I can find those who are still short on our stock,"
said Mears.
"A second issue - in 1998 under a Reg D private placement EPTC issued 150,000 shares of stock to an
investor for $210,000. The check was never made good. The stock was sent to Canada and put in street
name and 26,000 shares sold in two or three days. We put a 'stop code' on the certificate and took the
investor (a) and the party who arranged the sale (b) to court. We obtained a judgment and authorization
to cancel the certificate. (b) was
given the certificate, took the certificate to an insurance company and used the certificate as collateral
for a 250,000.00 loan. The loan went into default and the insurance company called EPTC to have the
certificate
transferred into the insurance company's name. The insurance company was told the certificate had
been cancelled by court order and the information
forwarded to the insurance company. The laws of the State of Nevada say the 'Stop Code' is only
enforced against the party the certificate is issued to.
The insurance company now has a judgment against EPTC.
"This is the business surprise of my life," states Mears, who is joining the Task Force on Trading
Practices.
Postscript: a staffer at the NASD has privately stated that Nasdaq is interested in this issue, and looks
forward to meeting with the Task Force when it is organized. The Task Force has been provided a slot on
the agenda for the CEO Summit in Washington, September 25.
Two more quick points:
1) Mr. Conradie's letter mentioned a shorter and two FBI accomplices who smeared NUTK stock and are
now sitting in jail. I believe he is referring to Anthony Elgindy:
thestreet.com
2) If any of you have invested in other companies that you believe have been subject to unfair and/or
illegal manipulation, then Please post this message on their threads. The more the word gets out, the
greater the chance that something might get done about it.
Post from LBJ on RB.
By: LBJ_n_Aruba
19 Jul 2002, 03:53 PM EDT Msg. 11082 of 11082
FYI: I assume a few have seen the stuff about the CEO of NUTK and the "CEOCOUNCIL" and a Special
Task Force around. Its making its way around some of the more heavily bashed boards.
ragingbull.lycos.com
It appears the CEOCOUNCIL is something created by INVESTTREND.
FWIW, It appears VTSI CEO is also a member.
ceocouncil.net (page 3) |
