Marty
I've presumed that there is a good bit of truth/reality to this disclosure, since it is what GRNO, with its NEW legal counsel, has disclosed.
As for where the money goes - I agree that this is not clearcut - but the disclosure seems to indicate that the issue is realized short-swing profits, in which case, in my experience, the usual remedy has been to return the short-swing profits to the company for the benefit of all shareholders.
It's not a matter of an SEC fine/sanction - the theory is that this is the recovery of illegally gained profits which are properly recoverable by the company - and thereby the shareholders. So this is also, in effect, the correction of an 'indiscretion' - although apparently not one done voluntarily.
And all the while, as the 10-Q's disclose, it is the company (and thus the shareholders) that are paying to battle the SEC - "...during the second and third quarters of 1997 the Company has paid $184,000 in legal fees for its CEO and other directors. The legal fees are related to the SEC investigation."
Whether the company is a fraud is not an issue. I certainly don't think it is. But it is not an operating company and has not yet demonstrated that the system will actually work as promoted, in day-after-day steady use for a period of 6 months or more. Perhaps if more time had been devoted to moving to Texas (or some other venue with a more favorable regulatory climate) instead of promoting and selling shares GRNO might be in a different position today...
At issue is the curious fact that the chief stockholder, promoter and CEO, while telling one and all what a great future GRNO had, was busily selling more than $1 million worth of stock - and not disclosing same. Not that he was required to do so - that's the trick - as GRNO was NOT - and is NOT now - a 'reporting company' in the SEC sense (the SI/GRNO web page to the contrary). Instead it 'voluntarily' files most, but not all of the reports that a 'reporting company' is required to file - and those NOT filed include those relating to the purchase and sale of securities by insiders - officers, directors and 5%+ shareholders.
All this under the direction of GRNO's attorney...Of course...
On another matter - would any of the limited partners care to share the operating results of the partnership for the past year - assuming that the limited partners have received financial statements in connection with the partnership tax information - assuming that such information has been provided by GRNO by now.
This would provide some factual information on the ACTUAL product sales, and perhaps the operating costs, of the system - even though operating at a low level.
Bill Fuller |
