Dear Zonkie-
Regarding the stock issue, I personally received stock from two companies, for
advertising services performed; the production of corporate videos, neither of
which were ever broadcast on the television program or had anything to do with it.
This occurred in the Spring of 1997. Each video was designed to explain the
technology of the respective companies, like any corporate video would do.
The companies approached me to have these videos written and produced, because of
their knowledge of my career background, which includes owning and operating an
advertising agency/production company.
Each company did appear on the Emerging Company Report program at other times,
nearly a year after the corporate videos were produced. Both contracts for the TV
program were for cash. While company A did indeed pay cash via a wire transfer,
company B sent us 3,000 shares of free-trading stock via DTC transfer.
Because this DTC transfer occurred during the Christmas/New Year's week of 1997,
we did not find out we had received stock until after the Emerging Company Report
program had aired.
We complained repeatedly to the company, requesting that the contract be fulfilled
in cash as agreed. When it became obvious the company was not going to pay as
agreed, we ended up selling the stock through our retail broker over the course of two weeks. We were victimized by Company B.
We cancelled the remainder of Company B's contract.
The only thing the SEC is concerned about is the fact we did not disclose the actual
amount of cash compensation (section 17b).
At that time we did not think that applied to
cash payments; we always disclosed quite clearly companies appearing on the
program had paid a cash fee.
The stock I had received from the companies for the production of corporate videos
in Spring 1997 was restricted (#144). During the time I owned that stock, the
disclaimer on the television program clearly said "the producers may own stock in one or more of the companies featured".
All of this was presented to the SEC, along with the supporting documents. The legal
fees associated with answering their inquiries can be enormous and when the
opportunity arose to accept a "cease and desist" settlement, which in effect, was
agreeing to do something we had already been doing for many weeks, we jumped on
it. Anyone who has ever undergone an IRS audit, can empathize with what we have
been through.
I was very upset to learn the news of our settlement was lumped in the same press
release as the other companies, some of which have actually been charged with
gross wrongdoing.
I have not and the Emerging Company Report tv program has not. Our involvement in this matter is over. We simply agreed to an administrative matter-of-record in the spirit of cooperation.
If you have any additional questions, please do not hesitate to contact me at 1-888-259-4449.
Donald A. Baillargeon
Executive Producer
Emerging Company Report |
