is this what happened to FTEL?Thomson Kernaghan being sued for $25 Million! in damages
by: _Tech__ (34/M/Denver, Co.) 47265 of 47310http://biz.yahoo.com/prnews/981221/az_consyge_1.htmlConSyGen,
Inc. Asserts Claims Against Canadian Debenture Holders
PHOENIX, Dec. 21 /PRNewswire/ -- ConSyGen, Inc. (Nasdaq: CSGI - news) announced today that it has filed a counter-claim seeking damages in excess of $25 million from three, Canadian-based convertible debenture holders, Sovereign Partners, L.P., Canadian Advantage Limited Partnership, and Dominion Capital Fund, Ltd. ConSyGen also asserted claims against the debenture holders' principals, Steve Hicks and Mark Valentine, and Thomson, Kernaghan & Co. Ltd., a Canadian brokerage firm. ConSyGen's claims were filed in conjunction with litigation
instituted by the Canadian debenture holders against ConSyGen seeking to compel the Company to convert $250,000 of debentures held by the Canadians into stock. ConSyGen has counterclaimed,
asserting that the debenture holders and their agents made material misrepresentations in connection with the promotion of the debentures, breached the debenture agreements, and may have engaged in related misconduct, including but not limited to unlawful short selling of the Company's common stock.
The Company understands that it is one of 30 or more small public companies that have entered into similar transactions with the same parties, and that in all cases the investors or their agents have engaged in similar behavior resulting in loss of market value of the combined companies' stock in excess of $500,000,000. The Securities and Exchange Commission (SEC) and the National
Association of Securities Dealers (NASD) reportedly have been notified of the investors' misconduct and unlawful short selling which, in ConSyGen's case, has driven the Company's stock down from a price of $4.75 per share before the debenture sales to a close yesterday of $1.31.
Thomas Dreaper, President and Chief Executive Officer of the Company, said, ''We are determined to do our part to expose what we believe to be an egregious case of market manipulation. These
debenture holders, and others like them, are making a mockery of our investment markets. They are pretending to make honest investments in growing companies only to short sell the stocks to the point that they destroy the investments made by hard-working people and long term supporters of companies such as ours. It doesn't seem fair that these off-shore debenture holders, who have open access to our markets, are not required to play by the same rules as the investors in this country, such as the rules that require an affirmative determination that a stock can be borrowed before you short sell it.'' Mr. Dreaper further stated, ''Even when we released good news, such as the signing of new contracts, or the formation of a new business products division, our stock was continually being sold short, thus lowering the price.''
For additional information, please contact: Raj Kapur of ConSyGen, Inc., Phoenix, 602-394-9100,
consygen.com .
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Posted: Dec 21 1998 2:00PM EST as a reply to: Msg 46949 by TwoJudys
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