I found two disturbing items on Bloomberg - insider selling and trouble with finding out about the SEC probe.
The insider selling was 19,000 shares sold by director Wayne Godbout on 9/19 at $5.31. He got a good price, didn't he? About the time that he would have learned about trouble with the audit?
The Oct. 1 story about the SEC is that the co. SEC to try to find out
what info the previous attorney, Herbert Jacobi, gave to the SEC before he was replaced in May 1995, when John Vergiels took over as CEO. Before filing the suit, the co. tried to find out by filing a freedom of information act, but this didn't work because, according to the judge judge who heard the co.'s appeal, "Producing these records would risk allowing those under commission scrutiny to tailor their testimony, intimidate witnesses, manufacture favorable evidence, and conceal damaging evidence." (Judge Randoph for the Court of Appeals in the D.C. Circuit). The story adds that the SEC originally denied the FOIA request "because documents gathered as part of a law-enforcement effort are excluded from FOIA). The previous attorney "Jacobi was representing the co., its former top executive and about six otheres involved in the prove, and may himself have took part in the trasactions being investigated," according the the lawsuit filed Oct. 1 by the co. " 'We don't know the extent of the investigation or if it's still going on,' said Nathan Drazge, outside general counsel for the Las Vegas-baseed company. 'That's why we filed the lawsuit because we want to know what's going on.'"
Another disturbing thing I found is about Vergiels. The guy is a professor at UNLV, as many of you know. I did a search on him using the UNLV web server, and found that he teaches a night class in an education department. The guy isn't a professor of business or telecommunications, or anything like that. So what I don't understand is this: If the former mgt. was involved in shady dealings that the SEC found necessary to investigate, why was former mgt. replaced with a figurehead who apparently has nothing to do with the business? Does anybody know anything about Vergiels? Or about Mills? The only public info I've found about Mills is that he is secy of the board. I'm a little concerned about the use of a do-nothing figurehead of a holding co., when you don't know anything about the people actually running the co. -- especially when the prior mgt. was apparently breaking the law. Are the "about six other" former managers all gone, or are they still there, in Hi-Rim? |
