Gee Whiz.
Bouchy formerly held a controling interest in GUMM.
More importantly it appears he was behind bringing this POS to the public?
You aren't trying to mislead anyone are you Dan (Mr. all knowing about all things related to GUMM)?
Copyright 1999 UMI Inc.;
Copyright American City Business Journals Inc. 1999;
Business Dateline;
Orlando Business Journal
April 23, 1999
SECTION: Vol 15; No 48; pg 1
LENGTH: 1257 words
HEADLINE: Stock sales haunt team executives
BYLINE: Alan Byrd
DATELINE: Orlando; FL; US; South Atlantic
BODY:
ORLANDO - This week, the Orlando Predators kick off their defense of the Arena Football League championship and,' despite a turbulent season in the team's front office, the company's future has never looked better.
Since the final horn rang last year, the company has replaced its president and chief financial officer with brothers Brett and Jeffrey Bouchy. Since then, the team's oncestruggling stock has reached an all-time high. The team has doubled sponsorship sales. Season ticket sales are on the rise.
But the financial picture isn't altogether sunny: Later this summer, Brett Bouchy and another Predators board member will formally testify about past stock dealings to the Securities and Exchange Commission. And Bouchy's not alone. His brother, Jeffrey Bouchy, the newly tapped CFO, has had his own run-ins with federal stock regulators.
Arizona heat
The bulk of the problems are traceable to involvement by three of the four men in a Phoenix-based brokerage house, Franklin-Lord.
Brett Bouchy chaired the company. William Meris, now chairman of Orlando Predators Entertainment Inc., briefly worked there as a broker. Richard Whelan, another newly tapped Predators' board member, was Brett Bouchy's partner.
However, the brokerage foundered in 1995 - the year the Arizona Corporations Commission wound up an investigation into how the firm had handled stock sales.
Specifically, the state found that Brett Bouchy and Whelan had manipulated stock prices for two companies and filed misleading information with the state securities department.
Initially, the state came down hard, asking that both Bouchy and Whelan pay back six figure sums they allegedly made on the deals. A hearing officer recommended that each pay an $ 11,000 fine and lose their brokerage license for six months. Ultimately, the state permanently revoked both men's licenses.
The fallout wasn't over, though.
The National Association of Securities Dealers, which governs brokers, fined, censured and suspended Brett Bouchy for five days. Later, it revoked his registration to sell securities, writing that he had failed to pay fines, costs and provide proof of restitution.
That same year, the Securities and Exchange Commission sued Bouchy and Whelan, accusing the two of a "variety of fraudulent schemes in connection with the offer and sale of securities."
In comes the Gum
But by 1994, Bouchy's attention had settled on a small Utah company with a taste for the unusual: Gum Tech International manufactured gums for all reasons. There were brain gums designed to boost mental alertness; gums designed to curb smoking, even "love gums" aimed at improving a person's sex life.
Dale Holdings, a company jointly owned by Liechtenstein-based Riverlux Trust and Brett Bouchy, bought a controlling interest in Gum Tech.
The company was moved to Arizona and plans were started to take the company public.
At about that time, Jeffrey Bouchy was brought on board as chief financial officer. Meris was hired as a consultant.
But federal regulators, noting Brett Bouchy's majority interest in the company, balked at plans to take it public.
According to Securities and Exchange Commission filings, Gum Tech was advised that NASDAQ would not list the company as long as Brett Bouchy owned stock in the company.
Bouchy denies that he was forced out.
"I'm not really sure that I was forced to sell," he says. "It was more indirect. I never would have sold if I didn't get a fair profit."
In fact, he did make a substantial profit: Shares of Gum Tech purchased at 48 cents were sold back to company board members at $ 4.50 per share: $ 2.5 million.
Bouchy's barter
But even absent Brett Bouchy, the company's troubles with federal regulators weren't over.
At first, Gum Tech appeared to have made a successful, if modest, market debut. The company reported six-figure earnings for the nine months ended Sept. 30, 1997. It had a name brand antismoking gum, Cigarest, which was being marketed and sold nationwide. Its stock price climbed to $ 15 a share.
But there was a simmering financial problem. CFO Jeffrey Bouchy had agreed to barter company inventory to fund a $ 3.5 million ad campaign. But the inventory barters were listed as revenue - and both the NASD and the SEC began asking questions.
The upshot: the bartered credits could not be listed as revenue. The company would have to restate earnings. So, instead of a modest profit, the company recorded a $ 3.49 million loss. The company's CEO resigned. The stock price began dropping.
"I know it looks bad on me," says Jeffrey Bouchy. But, he adds, the barter credits had been the CEO's idea - an idea cleared by the company's auditors. "He (the CEO) duped the investors, the board and the executives," says Bouchy. "It was his company and we had to do what he wanted."
Bouchy resigned later that year - he cites a conflict of interest with the new CEO - as did board member William Meris.
But a potential job was waiting. One year earlier,
Meris had bought a controlling interest in the Orlando Predators.
Today, many of the same people once affiliated with Gum Tech are with the Predators, according to SEC filings.
Brett Bouchy is CEO. Jeffrey Bouchy is CFO. Meris is chairman. Richard Whelan is a director. And Riverlux, the Liechtenstein company that partnered with Brett Bouchy to buy a controlling interest in Gum Tech, owns 16 percent of Orlando Predators Entertainment.
Sometime next month, both Brett Bouchy and Whelan are slated to begin giving sworn testimony in the stillpending SEC case against them. Trial is slated for August.
A whole new ball game?
In Orlando, Brett Bouchy strikes a defiant pose - and an intriguing explanation for his troubles in Arizona.
The investigator who handled the case, says Bouchy, had a history. "He lived on the same street as I did when we were kids," says Bouchy. "He was the kid we used to beat up, and he was out for revenge."
In fact, Bouchy has filed a lawsuit against the Arizona commission that conducted the inquiry, and is asking for $ 50 million in damages for libel and slander by the commission.
"What they put my family through was a very humbling experience," Brett Bouchy says. "It is very upsetting."
As for the pending SEC case, he says, "They have the exact same case that the state had." But Bouchy notes the state eventually settled for a fraction of the $ 1 million in fines originally sought. "It wasn't even a case," he says. "There was no securities fraud."
Even so, both men say they will be playing by a much tighter rule book with the Predators.
For example, when Jeffrey Bouchy took the financial reins of the company, he discovered $ 5,000 in barter credits on the books -- which he promptly got rid of.
Brett Bouchy insists neither the SEC or the NASD would find fault with how the publicly held company is being run.
In fact, even some critics say shareholders will have little to complain about. That's because the team's lucrative agreements with the Arena Football League ensure 15 percent of the burgeoning league's profits come straight to the Orlando company.
"We've laid the groundwork for revenue to start flowing in," Jeff Bouchy says. "We're the only sports stock in a growth position."
Jim Drucker, the former commissioner of the Arena Football League now managing partner of New Yorkbased Marquee Global Sports Ventures, a sports team brokerage firm - agrees. "I'd love to buy a bunch of it," he says.
Author Affiliation:
Contact Alan Byrd via e-mail at abyrdgamcity.com.
UMI-ACC-NO: 0033987
LOAD-DATE: May 20, 1999 |
