It not Elgindy clearly. Go back and read it. They are talking about someone doing the trading in GENI at a firm. The million dollars they are talking about was sent to Freeman so you can conclude Anthony is someone at Freeman.
"Angelo: I hadda buy close to two million dollars worth of stock over the last
four days and I had to have Freeman lend me two million dollars
because I had to send a check into Anthony for a million eight plus."
- 59 -
Partial conversation between Wayne Breedon and Ken D Angelo (6/14/01)
Breedon: Ah . . . did um . . . you talk to Scott today?
Angelo: No I didn t. I m tra . . . I m trading GENI today for Ramy cause he s
out of the office.
Breedon: Uh-huh. I thought Anthony does the trading?
Angelo: Yeah, but I m watchin it.
Breedon: I see.
Angelo: We re up to . . . we re up to ahh thirty two thousand shares.
Breedon: Wow.
Angelo: It s not funny.
Breedon: He wants to buy it so he can sell it?
Angelo: No.
Breedon: (Laughter)
Angelo: No, all he s doing is protecting it.
Breedon: You know pretty soon he s going to own more shares than there are
outstanding cause of the shorts. (Laughter)
Angelo: If he don t already.
Breedon: Huh?
Angelo: If he don t already.
Breedon: Yeah really. Can you imagine?
Angelo: Yeah I can imagine.
Breedon: I I own thirty two point five million shares of this and there s only
twenty nine million shares outstanding.
Conversation between Wayne Breedon and Ken D Angelo (7/11/01)
Breedon: Yeah?
Angelo: Where is it?
Breedon: Sixteen seventy-six.
Angelo: Oh my God.
Breedon: Uh, they ve got news that somebody s . . . that Ultimate s selling seven
hundred thousand.
Angelo: That ain t right. How much volume?
Breedon: Fifty-nine four.
Angelo: Oh God. Sixteen what?
Breedon: Sixteen seventy-five. Sixty thousand one hundred.
- 60 -
Angelo: What a day for my machine to be out.
Breedon: No support there?
Angelo: That s exactly the problem.
Breedon: What s, is there something wrong with the transmission or something?
Angelo: Yep. They had a thunderstorm or something last night and knocked the
power out.
Breedon: Oh, in the, in your building?
Angelo: Yep. Where is it now?
Breedon: Sixteen seventy-five.
Angelo: And how many volume?
Breedon: Sixty-one two.
Angelo: Jesus Christ. It s just not a good day. Where s the bid and offer now?
Breedon: Seventy-five - Seventy-six.
Angelo: How much volume?
Breedon: Sixty-four four.
Angelo: It s really gonna cost us to get it back up again now. Where s it now?
Breedon: Still the same.
Angelo: Alright, let me come back to you.
Breedon: Yup, bye.
Partial Conversation between Wayne Breedon and Mosey (RBF) (7/11/01)
Breedon: Did you get, did your traders get their machines going now?
Mosey: Um, Glen finally came up and Paul s gonna work on the other one.
Breedon: Well, at least one s going, right?
Mosey: Yeah. Yeah.
Breedon: I know Ken was having a fit.
Mosey: However good or bad that is.
Breedon: Yeah, really. Now GENI was down to fifteen seventy-five.
Mosey: Where is it now?
Breedon: Seventeen fifty.
Mosey: GENI made it down from fifteen seven to seventeen fifty now. I don t
know who jumped in no it s Wayne. I don t know who jumped in, but it
wasn t for Glen s or Kenny s benefit cause . . .
Breedon: No, that s two hundred eighty-nine
Mosey: Glen only came up a couple of minutes ago.
Breedon: Oh yeah, two hundred eighty-nine two hundred shares.
Mosey: No, somebody uh
Breedon: Yeah.
Mosey: I know, not good, not good.
Breedon: He says, it s gotta happen when I m not there. nah nah nah
Conversation between Wayne Breedon and Ken D Angelo (7/11/01)
Angelo: Hello?
- 61 -
Breedon: Hi.
Angelo: Yes?
Breedon: Back on the plus side.
Angelo: Where is it?
Breedon: Eighteen oh six.
Angelo: Okay.
Breedon: Five hundred and twenty-thousand shares.
Angelo: Yeah, well, did some magic here.
Breedon: Eh. How you making out with the bond guys?
Partial Conversation between Wayne Breedon and Mosey (RBF) (7/11/01)
Mosey: No, I spoke to him, I don t know, it must have been about 3:30. And he
wasn t sounding in any kind of a good mood at all.
Breedon: No?
Mosey: No.
Breedon: I m looking at umm, lot of volume on GENI. A million two fifty-one five.
Mosey: Yeah, I know, I saw that. Actually, me and Glen are laughing cause he
was just in here reading one of the teeny chat boards. These people are
pretty funny on this stuff. You know, the one that cracked me up the most
was where are the people who have been propping up this stock this
morning?
Breedon: Who are the other people?
Mosey: No, it said, no where were the people who have been propping this stock
this morning?
Breedon: Oh, is that what it said?
Mosey: Uh huh. And me and Glen just started laughing.
Breedon: You he s in Atlanta.
Mosey: Exactly. And the system is down so nobody could buy anything.
Breedon: Yeah, really. How much did you end up buying? Having to buy
Mosey: They weren t, they weren t, you know, that s what I said to Glen. I said
jeez, Glen, is this what would go on every day if you didn t just keep
jumping in and buying it?
Breedon: Yeah, I guess he ended up helping buy stock, right?
Mosey: What?
Breedon: He had to end up buying stock.
Mosey: Oh yeah. Glen who, I don t know, does Kenny give you all this
information?
Breedon: Oh, he, he tells me some of it. Like yesterday, I think he only had six
thousand or whatever.
Mosey: No, well he ended up with a lot of stock today.
Breedon: Lot of stock today?
Mosey: But it might have been in one of Ramy s accounts, not Kenny s accounts.
Breedon: Yeah.
- 62 -
Mosey: But Glen told me he traded over three hundred thousand shares today.8
Breedon: Oh, buying and selling?
Mosey: Mmm hmm.
Breedon: Yeah.
Mosey: Yeah, but he told me that he ended up up a bunch.
Breedon: He sell the stocks, selling it back at a higher price because he s gotta
support it.
Mosey: Well, that s exactly what he s been doing.
Breedon: I know, but that doesn t make sense.
Mosey: No, it doesn t make any sense at all.
Breedon: Like why doesn t he just give the money away to the guy?
Mosey: I know, it d be a lot easier.
Breedon: Right? Yeah. Why didn t he just give the guy, you know, four bucks a
share, you know, at two million dollars, right? For doing nothing. Except
causing aggravation
Mosey: Mmm hmm.
Breedon: Yeah, what can you do? Everybody s got a mind of their own, I guess.
Mosey: Yep.
Breedon: Alrighty, well, you have a good night there, dear.
Mosey: Well, you too, my Wayner.
Breedon: Okay, well a, well we might have a problem with the marks tomorrow
because at eighteen and a dime, I know Nomura and I know HSBC will not
want to do marks.
Mosey: Mmm hmm.
Breedon: You know, so
Mosey: Nope, maybe he ll be able to hold everybody off on that tomorrow.
Breedon: Yeah. I mean if, I mean that
Mosey: Okay.
Breedon: Nomura and, you know.
Mosey: Alright, we ll see what gets decided on that.
Partial conversation between Wayne Breedon and Ken D Angelo (9/6/01)
Breedon: Yes. How s it going? I saw the news. Three to one.
Angelo: Yeah.
Breedon: Yeah, that boosted the stock a little bit.
Angelo: Yep. Now we gotta go from here.
Breedon: Go from here.
Angelo: He wants to get it up to eighteen today.
Breedon: Oh yeah?
Angelo: That ll help you out.
Breedon: Yeah, eighteen is fine.
8 Records indicate that on July 11, 2001, 256,784 shares of GENI were purchased in one of Ken
Angelo s brokerage accounts for $4,600,610.
- 63 -
Angelo: You know.
Breedon: I don t have a problem with that.
Angelo: I didn t think so . . . .
92. Defendants market manipulation activities during 2001 are also
apparent from a review of the activity in various brokerage accounts. In 2001, Ramy
El-Batrawi, Ultimate, Bradford Keiller, Ken D Angelo, and others acting at their
direction collectively had a total of at least 51 different accounts with at least 16
broker/dealers. Those accounts were used to buy and sell GENI stock, with the sole
objective of raising (or at least maintaining) the market price and showing apparent
volume or liquidity in the market.
93. As a thinly traded security, GENI was subject to greater volatility than
more actively traded securities. As long as the GENI stock price did not decline, all
participants in the lending chain continued to make money and Defendants continued
to profit. Were the price of GENI to decline, however, Native Nations would have
been forced to meet marks-to-market sent by its downstream borrowers and return
cash collateral either held by Native Nations or paid by Native Nations to Ultimate,
El-Batrawi and others. However, Native Nations was not in a position to satisfy any
such cash demands, a fact that threatened the entire scheme. To avoid this risk and to
preserve their profit position, El-Batrawi and D Angelo, along with brokers working
at their direction, and with Breedon s and Deutsche Bank SL s assistance in
controlling the supply of GENI, engaged in a pattern of manipulative and deceptive
trading aimed at artificially inflating, or at least maintaining GENI s price.
- 64 -
94. For example, in August 2001, Mr. El-Batrawi himself bought more
than $23 million in GENI stock,9 and Mr. D Angelo that same month bought $30
million in GENI stock, at the same time he was selling about $27 million in GENI
stock. In fact, from June through September 2001, Mr. D Angelo cumulatively
bought more than $67.2 million and sold $68.7 million in GENI stock.10 On more
than one occasion during that time, Mr. D Angelo proudly maintained that he alone
was the market for GENI:
Partial conversation between Wayne Breedon and Ken D Angelo (6/14/01)
Angelo: Hello?
Breedon: Howdy.
Angelo: Howdy.
Breedon: How goes it?
Angelo: It was not a very good day today, Wayne.
Breedon: Hmm.
Angelo: Goodnight, Glen. This is not a good day, bud. Cause I got maneuvers
up the gazoo. Cause Ramy couldn t buy any stock today. So I had to
[expletive omitted] sit here. And get [expletive omitted] pounded, you
know. But, that s the way it goes.
Breedon: There s not that much volume today 139.
Angelo: Do you have an adding machine?
Breedon: Tina s still there?
Angelo: Do you have an adding machine? Do you have one now? Okay, thirtythree
thousand times sixteen eighty. What does that come to?
Breedon: Five fifty-four four.
Angelo: Fine. That s what I bought today, okay? Now, this is not Deutsche
Bank, this is not Freeman Securities, this is not Ramy El-Batrawi, this is
me.11
Breedon: I thought you were buying it for him.
9 This number includes purchases made through accounts in Mr. El-Batrawi s name, in the name of
GenesisIntermedia.com, in the name of Genesis Diversified, and in the name of John Gray, a part owner of
GENI.
10 These numbers include purchases and sales of GENI stock made in accounts of Mr. D Angelo and in
accounts of his relatives.
11 Records indicate that on June 14, 2001, Mr. D Angelo purchased 34,200 shares of GENI stock for
$575,128.25.
- 65 -
Angelo: No, he couldn t put it in his account. Don t you understand? Now I
gotta maneuver.
Breedon: Hold on.
Breedon: Yes?
Angelo: Hold on.
Breedon: I called him and you re buying so he can pay you or whatever, right?
Partial conversation between Wayne Breedon and Ken D Angelo (7/01)
Angelo: You can t even believe what I ve done in the last week.
Breedon: Yeah.
Angelo: Did I tell ya what I ve been doin? I m the new guy supporting the
market.
Breedon: Yeah.
Angelo: I hadda buy close to two million dollars worth of stock over the last
four days and I had to have Freeman lend me two million dollars
because I had to send a check into Anthony for a million eight plus.
Without me doing that? Believe me, the stock would have been
fourteen dollars.12
Breedon: Why, why is it not . . .
Angelo: Because he can t keep buying into Ultimate without reporting it. You
know what I m saying?
Breedon: Yeah.
Angelo: He s gotta go ahead and if he buys it he s gotta report it, and then when
he sells it he s gotta report it. Me, mine is just an in and out. I ain t
making no big money on this [expletive omitted] thing you know. I
sold a bunch of stock today so I think I should be ok with monies and
whatever the case d be in three days. So, I got maneuvers up the
[expletive omitted] gazoo here. You know and the way it works as per
Ramy if this all comes down, and everything works he said he ll
probably walk away with maybe five million or seven million which
don t sound like a lot, but he ll have nine million shares of stock, all his
stock back and then because he s under the one forty four rule, he can
sell one percent a month. Which is, I think I told you at ninety
thousand a month, and ah hey, nine million shares at twenty bucks is a
hundred and eighty million dollars. What the [expletive omitted]? You
know. So, I mean, he ll be fine. So you know, so don t think I forgot
about you I already told him that you and Richie have to share in
whatever, but he doesn t know how the compensation s gonna come.
Breedon: Hmm.
12 Records indicate that Mr. D Angelo purchased 101,227 shares of GENI for $1,822,175 between June 28,
2001, and July 3, 2001. In addition, $2,000,000 was transferred from Native Nations to Mr. D Angelo on
June 26, 2001.
- 66 -
95. Other Defendants engaged in the same feverish pattern of buying and
selling GENI stock in an orchestrated pattern of market manipulation. Bradford
Keiller actually sold about $11 million more GENI stock than he bought during 2000
and 2001 -- his purchases were approximately $11.6 million but his sales were $22.6
million. Presumably, the difference was stock he sold on behalf of Ultimate, since
between July 9 and September 17, 2001, he transferred at least $8 million to
Ultimate s brokerage accounts. Collectively, Ultimate and Messrs. El-Batrawi,
Angelo, and Keiller bought an astounding $230.8 million in GENI stock.
96. Defendants scheme achieved its ends for a considerable period of time.
GENI s market capitalization had been a modest $45.1 million at the time of its IPO.
In just over two years, Defendants drove the market capitalization to $460.9 million, a
phenomenal 921% increase, with no change in GENI s underlying prospects and in
fact worsening financial performance. Indeed, GENI s multimillion-dollar net losses,
its multimillion-dollar negative stockholders equity, and its multimillion-dollar
negative working capital during the period 1999 through 2001 highlight its poor
financial performance. |
