"MATRIXX and GUNNALLEN have ties that go back to March 1997, when an investment banking agreement between MATRIXX, then known as Gum Tech, and Sovereign Equity Management Corp., was transferred to PG&G Management Group. In December 1997, PG&G changed its name to GUNNALLEN Management. The name change was requested by GUNNALLEN Financial, according to Florida corporate records. About the same time that Gum Tech began its investment banking relationship with GUNNALLEN, a number of employees who worked at Sovereign transferred to GUNNALLEN. "
"We are not Sovereign or have anything to do with Sovereign," he said. Documents obtained by Dow Jones Newswires, show that Gum Tech entered in a banking advising agreement with Sovereign in November 1996. Under that deal, Gum Tech agreed to compensate Sovereign in cash and options to buy 100,000 shares. Those options were distributed to Gunn, Frueh and another Sovereign employee in March 1997.
MATRIXX' CEO Johnson said the company has had no "commercial relationship" with GUNNALLEN since he came on board. In 1999, Sovereign came to be at the center of the "Mob on Wall Street" case in the U.S. District Court for the Middle District of Florida. In that case, the federal government charged Philip Abramo, a captain in the Decavalcante organized crime family, Philip GURIAN, Glen Vittor, Louis Consalvo and Barry Gesser in a 21-count criminal indictment including charges of mail fraud, wire fraud, securities fraud, interference with commerce by extortion, conspiracy to commit money laundering and witness tampering. The government alleged that the defendants through Sovereign and another firm called Falcon Trading Group reaped huge profits after reselling, in the U.S., shares of several small companies obtained at a discount by several mob-controlled firms in the Bahamas.
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FLORIDA DEPARTMENT OF STATE
THIS DATA IS FOR INFORMATIONAL PURPOSES ONLY
CERTIFICATION CAN ONLY BE OBTAINED THROUGH THE ISSUING GOVERNMENT AGENCY
FLORIDA DEPARTMENT OF STATE
Company Name: P.G. EQUITIES GROUP, INC.
Mailing Address: % PHILLIP GURIAN
2000 GLADES RD, SUITE 110
BOCA RATON, FL 33431
Type: DOMESTIC FOR PROFIT
Status: INACTIVE
Filing Date: 1/8/1988
State or Country of Incorporation: FLORIDA
Registered Agent: GURIAN, PHILLIP
Registered Office: 2000 GLADES RD
BOCA RATON, FL 33431
Federal Employer ID Number: 000000000
Filing Number: K11454
Officers, Directors: GURIAN, PHILLIP
DIRECTOR
2000 GLADES RD, S-110
BOCA RATON, FL
EHLERS, STEVEN
DIRECTOR
2000 GLADES RD, S-110
BOCA RATON, FL
GLUCK, CHERYL
DIRECTOR
2000 GLADES RD, S-110
BOCA RATON, FL
History: File Date: 10/13/1989
Type: INVOLUNTARILY DISSOLVED
Source: Sources > / . . . / > Allsrc
Terms: Source Document(s)
View: Full
Date/Time: Thursday, April 22, 2004 - 3:07 PM EDT
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3/2/04 - [MTXX] Dow Jones: MATRIXX And A Brokerage Called GUNNALLEN
DJ IN THE MONEY: MATRIXX And A Brokerage Called GUNNALLEN
By Carol S. REMOND
A Dow Jones Newswires Column
NEW YORK (Dow Jones)---MATRIXX Initiatives Inc. (MTXX) has undergone a makeover over the past two-and-a-half years under the helm of Chief Executive Carl Johnson.
The company had a name change from Gum Tech International Inc. to MATRIXX and it revamped its product line, eschewing chewing gums for cold remedies. But there's one thing that hasn't changed: A small brokerage firm called GUNNALLEN Financial Inc. still has through its clients a hold over a big chunk of MATRIXX' 9.4 million shares outstanding.
In a telephone interview, Johnson said he was told that GUNNALLEN as a firm represented investors with about 50% of the company's stock when he became CEO in 2001. "I believe that over time that ownership position has been reduced" to about one third of our shares, he said.
GUNNALLEN's president Donald J. Gunn says that his firm has about 2 million shares of MATRIXX stock currently under management, or about 21% of the company's shares outstanding. Gunn said GUNNALLEN had about 40% of MATRIXX' float in accounts at the firm a "few months back."
Before it stopped making a market in MATRIXX stock about two weeks ago, GUNNALLEN had been, by far, the largest market maker for the company's shares. NASDAQ data shows that GUNNALLEN was lead market maker in MATRIXX shares for 2003, handling 42% of the 14.2 million MATRIXX shares that changed hands that year. In the fourth quarter of 2003, GUNNALLEN handled 48% of the 8.2 million MATRIXX shares traded during that period.
Gunn said his firm decided to stop making a market in MATRIXX shares because of the "constant trashing" of GUNNALLEN on Internet bulletin boards. It's unclear whether GUNNALLEN's decision to stop making a market in MATRIXX has affected liquidity in the stock.
MATRIXX's stock has had a poor diagnosis in recent weeks, plunging about 51% from a 52-week high of $20.89 on Jan. 8, to its current $10.15 level following reports by Dow Jones Newswires and others that the Food and Drug Administration is looking into complaints that Zicam Cold Remedy, a spray designed to deliver a zinc gel into the nose, may be causing some users to lose their sense of smell.
MATRIXX says reports linking Zicam to a loss of smell are "misleading and completely unfounded." Meanwhile, five lawsuits have been filed against MATRIXX by individuals that claim to have been harmed by Zicam. Short interest in the company's shares more than tripled last month, jumping to almost one million shares as of Feb. 13.
MATRIXX and GUNNALLEN have ties that go back to March 1997, when an investment banking agreement between MATRIXX, then known as Gum Tech, and Sovereign Equity Management Corp., was transferred to PG&G Management Group. In December 1997, PG&G changed its name to GUNNALLEN Management. The name change was requested by GUNNALLEN Financial, according to Florida corporate records. About the same time that Gum Tech began its investment banking relationship with GUNNALLEN, a number of employees who worked at Sovereign transferred to GUNNALLEN.
Several - including Richard Frueh, GUNNALLEN's chief executive officer, Gunn, its president and Alex Rivera, its head trader - still work at GUNNALLEN. Sovereign was shuttered by securities regulators in November 1997 for failing to pay a fine for previous misconduct. GUNNALLEN continues to use the same telephone number that Sovereign used and the firm's headquarters in Tampa, Fla. also occupies old Sovereign offices in that town.
MATRIXX' CEO Johnson said the company has had no "commercial relationship" with GUNNALLEN since he came on board. In 1999, Sovereign came to be at the center of the "Mob on Wall Street" case in the U.S. District Court for the Middle District of Florida. In that case, the federal government charged Philip Abramo, a captain in the Decavalcante organized crime family, Philip GURIAN, Glen Vittor, Louis Consalvo and Barry Gesser in a 21-count criminal indictment including charges of mail fraud, wire fraud, securities fraud, interference with commerce by extortion, conspiracy to commit money laundering and witness tampering. The government alleged that the defendants through Sovereign and another firm called Falcon Trading Group reaped huge profits after reselling, in the U.S., shares of several small companies obtained at a discount by several mob-controlled firms in the Bahamas.
The five defendants are scheduled to be sentenced later this month. No other individuals related to Sovereign and/or Falcon were charged in the case. Gunn said that the "seven or eight" Sovereign employees that left the firm to form GUNNALLEN were "independent" who had nothing to do with what happened at Sovereign.
"We are not Sovereign or have anything to do with Sovereign," he said. Documents obtained by Dow Jones Newswires, show that Gum Tech entered in a banking advising agreement with Sovereign in November 1996. Under that deal, Gum Tech agreed to compensate Sovereign in cash and options to buy 100,000 shares. Those options were distributed to Gunn, Frueh and another Sovereign employee in March 1997.
Speculation about GUNNALLEN and its interest in MATRIXX, and before that Gum Tech, is often bandied about on Internet Bulletin Boards. Back in 1999, Gunn himself posted on the Silicon Investors's GUMM thread to clarify that statements attributed to him by another poster were innaccurate and unauthorized. "We work hard in trying to do a good job for our customers," Gunn said. "We're being persecuted on bulletin boards because we have stock," he added.
(Carol S. REMOND is one of four "In The Money" columnists who take a sophisticated look at the value of companies and their securities and explore unique trading strategies.)
-By Carol S. REMOND; Dow Jones Newswires; 201 938 2074;
carol.REMOND@dowjones.com
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For Release:
Media Contact: May 23, 2000
Nancy A. Condon
(202) 728-8379
Other Contact: Steve Luparello
(301) 590-6730
NASD Regulation Sanctions Steven Ehlers for Trading Ahead of Research
Washington, DC—NASD Regulation, Inc., announced today that it suspended and fined Steven Ehlers for trading ahead of a research report. Ehlers, previously associated with former National Association of Securities Dealers, Inc. (NASD®)-member firm, Quantum Group, Ltd., was suspended for 60 days and fined $10,000 for his conduct.
Ehlers consented to a finding that over a two-day period in February 1998, while employed at Quantum he initiated trades which increased the firm’s short position in the security Saf-T-Lok, Inc. (Nasdaq: LOCK). Ehlers short sold LOCK in anticipation of Quantum issuing a research report which recommended that investors sell the security. After causing the report to be distributed, Ehlers immediately bought shares of the security to cover the firm’s short position, allowing his firm to profit as the price of the security fell. In settling this charge, Ehlers neither admitted nor denied NASD Regulation’s findings.
NASD rules governing just and equitable principals of trade prohibit members from trading ahead of research reports. Specifically, the rules prohibit any member from engaging in trading activity that purposefully affects the firm’s inventory position in a security in anticipation of the issuance of a research report in that security. These rules are designed to protect investors and the marketplace from individuals who have advance knowledge about a research report and thus, armed with that information, place them in a better position to take advantage of security prices prior to market reaction.
During the course of its investigation, NASD Regulation’s Market Regulation Department found no evidence that either Saf-T-Lok, Inc., or its officers knew that its shares were in any way involved in wrongful conduct.
Quantum was based in New York and maintained a branch office in Florida. The firm’s membership with the NASD was terminated as of September 23, 1998 due to its failure to pay fees.
Investors can obtain more information about NASD Regulation as well as the disciplinary record of any NASD-registered broker or brokerage firm by calling (800) 289-9999.
NASD Regulation oversees all U.S. stockbrokers and brokerage firms. NASD Regulation, Inc., The Nasdaq Stock Market, Inc., and the Amex are subsidiaries of the NASD, the largest securities-industry self-regulatory organization in the United States.
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