According to Bill Alpert, the journalist who writes the "Plugged In" column for Barron's and deals with LOAX in the May 3, 1999 issue of Barron's in his column entitled "One Internet Supernova, Log On America, Seems to Be Dancing With Some Dubious Characters", LOAX hired four consultants last August in exchange for warrants on 1.0 MM shares. These warrants are exercisable at $1 per share and have a value of approximately $28.5 MM, based on Friday's closing price of $29.50. Mr. Alpert later adds that the warrants are subject lock-up agreements and that Dirks & Co cannot release them from the lock-up agreements for six months without the consent of Nasdaq.
Mr. Alpert reports, "A cool 250,000 of those warrants went to ICC Consulting, owned by a Wayne Robbins. Another quarter-million went to Scofield Dennison, owned by a Jacqueline Richardson. The prospectus shows both corporations with addresses in Port Washington, New York. Scofield Dennison's address turns out to be a post office box at Port Washington's Mail Boxes Etc. Both Richardson and Robbins have previously shared the same addresses, including some presumably cramped postal boxes."
When Mr. Alpert called both Dirks & Co. and LOAX to enquire about these consultants, he received a call from a Leonard R. Sperber, an attorney representing Wayne Robbins. Mr. Sperber refused to comment on "...whether ICC Consulting's proprieter was the Wayne Robbins arrested in 1987 for cocaine possession while he presided over a notorious penny-stock firm called Brooks Weinger Robbins & Leeds. the arrest of that Robbins and 16 others got headlines as far away as Australia for Rudolph Guiliani...Federal affidavits painted a lurid picture of Robbins' operation, where the Feds alleged Robbins used coke as a routine medium of exchange for inside information, stock and client lists. The broker's lawyer in the drug case did not return Barron's call, and case records on the drug bust had gone to archives. By the way, just before the drug bust in 1987, Robbins and other co-owners of Brooks Weinger consented to temporary suspensions, to settle SEC allegations of underwriting fraud - which Robbins neither admitted nor denied."
Mr. Alpert concludes, "So it is still possible that the Wayne Robbins of ICC Consulting is not the former penny-stock broker. If that's the case, both Robbinses are the same age and have somehow managed to live at the same addresses."
David Paolo would not describe the "business promotion and marketing" efforts of the consultants, citing "quiet period" concerns and noting that the information was confidential.
Ray Dirks claims not to have been involved in the IPO due diligence process. Of course, Mr. Dirks also claims that his wife, not he, owns and operates Dirks & Co. However, Mr. Dirks does claim to be a stock analyst at Security Capital Trading, which did a private placement for LOAX last December. |
