OMAP HOLDINGS INC 0000717228 10KSB 9/26/1996 12/31/1995
"The Company and CIC also signed a Debt Settlement Agreement, effective September 22, 1994, pursuant to which the Company transferred ownership of certain office equipment, 10,000 shares of the common stock of Applied Technology, Inc., eleven original Sky Jones paintings and 40,363 restricted shares of the Company's Common Stock to CIC as payment for a $186,382 debt owed to CIC by the Company."
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October 22, 2003
SEC Not Going to Fall for the Sky Jones Paintings Trick
Beverly Hills Cop (1984):
Axel Foley: What are you all, the second team?
Detective McCabe: We're the first team.
Detective Foster: Yeah, and we're not going to fall for a banana in the tailpipe.
Attention would-be securities fraudsters: The SEC is not, repeat not, going to fall for the "Inflating the Asset Value of Sky Jones Paintings" Trick. Please add this as a close #2 on your "Do Not Use" list, behind only the legendarily unsuccessful "Insider Trading Based on Advance Copies of Business Week's 'Inside Wall Street' Column" ploy.
Yesterday, the SEC announced that following a five-day trial, a jury in the U.S. District Court for the District of Columbia found the CEO of C.E.C. Industries Corp. and his wife, the company's secretary-treasurer, liable for financial fraud based on their overstating the assets of C.E.C. Among other things, the SEC's complaint alleged that the couple overstated C.E.C.'s assets in SEC filings, including forty-one paintings by "Sky Jones," which they claimed had a value of $1.7 million. The SEC said it proved at trial that the paintings were worth no more than $10,350.
The value (or relative lack thereof) of Mr. Jones' artwork, one may recall, was also front and center in the SEC's settled administrative action in 2002 against the Utah CPA who audited the financial statements of Itex Corp.
Curious about Mr. Jones, I unearthed this gem of an article from Brent Mudry of Canada Stockwatch detailing Jones' alleged involvement in the Itex matter. Discussing certain suspect deals which accounted for about half of Itex's total revenues, Mudry states:
"Many of the deals involved the repeated swapping back and forth of paintings of an obscure artist named Sky Jones, who invented fictional appraisers to value his own paintings at astronomical values," states the SEC.
The prolific painter Mr. Jones, whose real name is Michael Richard Whipple, cranked out more than 8,000 pieces of "artwork," mostly while holed up in a trailer outside Fort Worth, Tex., without electricity, running water or even a telephone. While Sky Jones was not a household name in Sotheby's circles, the painter surmounted this problem by using numerous alto egos, especially Joseph B. Banker, a fictional character who, as founder of the Bankers Art Museum, was a great fan. Besides Mr. Neal's Itex, the artwork of Mr. Jones also popped up in several other bulletin-board promotions targeted by the SEC, including one which featured the long-time Howe Street promoter, Ms. [Beverlee] Kamerling.
On the other hand, however, I also discovered (1) this website labeling Mr. Jones a "national treasure" whose work graces the collection of Her Majesty Queen Elizabeth, and offering two of his paintings for sale, complete with appraisals setting a value for each of $118,750; and (2) this startling and unexplained statement that "after the sizzling Fort Worth show, the Securities and Exchange Commission (SEC) made it publicly known that more than a quarter of a billion dollars worth of Sky Jones paintings were in the collections of 125 corporations! Two years later, it became a half a billion dollars in over 200 corporations. Clearly, the charities and corporations loved Sky."
If you wish to draw your own conclusion on Mr. Jones' art, here's a sample. |
