Well said. I think Steve Newman was a questionable choice since he was also connected as a director to another questionable company that was accused of fraud in the past
Davis visit to event raises questions
APPEARANCE FOLLOWED DONATION FROM FIRM WITH TROUBLED PAST
By Dion Nissenbaum
Mercury News Sacramento Bureau
Mercury News Archives
Gov. Gray Davis
SACRAMENTO - Three days after taking a $10,000 donation from its founder, Gov. Gray Davis traveled to Southern California earlier this year to promote a high-tech company that is little known in the industry but has drawn significant attention from federal regulators.
Documents obtained by the Mercury News show that Davis' decision to favor Kanakaris Wireless was curious for a number of reasons: Despite its claims of industry influence, the firm is an obscure, money-losing business run by an aggressive self-promoter who paid $25,000 in 1999 to settle charges of stock fraud by the Securities and Exchange Commission (SEC).
Davis aides rejected suggestions of a link between the political contribution and the Democratic governor's appearance. They said the governor often seeks to support California companies but didn't know of the specific concerns about Kanakaris Wireless.
But the administration's efforts in this case were extensive. Aides touted the governor's appearance at a January Web cast sponsored by Kanakaris Wireless, provided the company with Davis quotes to use in a corporate press release and promoted the event on the state Web site.
``Our challenge as a state is to keep California on the cutting edge of technology innovation,'' Davis said in a statement released by the company at the time. ``We've always been faster, newer, better than the other guy. Now, more than ever, we need to stay ahead of the curve.''
The business is an odd amalgam of entertainment Web sites catering to everyone from singles to bookworms. It is led by Alex Kanakaris, a former stockbroker who bills himself on his personal Web site as a ``visionary,'' ``Cyberguru'' and Internet pioneer.
But Kanakaris was also accused of fraud three years ago by federal investigators as he was trying to get traction for his struggling business.
According to a complaint from the SEC, the problems arose after Kanakaris agreed to buy out concerned stockholders who then had their reimbursement checks bounce. To help get out of the hole, Kanakaris sold $1.3 million in stock and used part of that money to pay off the fleeing investors.
But in an effort to make the stock sales more attractive, Kanakaris and his company falsely claimed that the firm had deals with AOL and Microsoft and the backing of prominent business leaders, the SEC said.
In the end, Kanakaris and his business partner both agreed to pay a $25,000 fine to settle the case without admitting wrongdoing.
Kanakaris blamed the problems on the attorney who he claimed ``ripped his company off'' and said his firm has learned from its mistakes.
``My company has struggled,'' he said. ``It was a mess. We need a couple of breaks, but I think we will be around for a long time to come.''
Despite the company's troubles, Davis agreed to travel to Orange County in January to take part in the ``Orange County Next Generation Internet & Technology World Wide Webcast,'' which was billed as a way for Davis to promote high tech.
Instead, the Web cast turned out to be a poorly produced interview with Kanakaris that was never carried live as promised.
Davis took part in this event just three days after his campaign received a $10,000 check from Kanakaris. Kanakaris also gave Davis a $15,000 donation last year that Kanakaris failed to properly report to state or local elections officials, documents show.
The Davis campaign properly reported both contributions, as well as a third contribution of $3,300 from Kanakaris in February.
In an interview, Kanakaris said he personally badgered the governor for weeks, cornering Davis at a West Hollywood party to show off his pocket PC technology.
``I think it was more the personal appeal to him than a $10,000 contribution,'' Kanakaris said.
Steve Maviglio, the governor's press secretary, said that Kanakaris promoted the event as something more than it turned out to be and that -- despite normal background checks done for state events -- administration officials knew nothing of the owner's past problems until contacted by the Mercury News.
``Our office thought it was an opportune time to pitch California's business climate for high tech to a critical audience,'' he said. ``We had no reason to question his background, just as we don't question the credentials of any of the outlets the Governor interviews with.''
A quick search of public records would have revealed a series of potential concerns. Over the years, Kanakaris has launched a foundering online bookseller, started an Internet TV station that primarily shows B movies, laid the groundwork for a singles Web site and tried to create a market for delivering video to pocket PCs.
None of these efforts has been a particular success.
``They're not on the radar screen of any cable, wireless or satellite video-on-demand system,'' said Richard Doherty, research director at the Envisioneering Group in New York. ``They're the Invisible Man of the industry.''
But Kanakaris has labored hard to get his company noticed.
After the Sept. 11 terrorist attacks, Kanakaris issued a press release.
``Now is the time for everyone to take stock in America,'' Kanakaris said. ``It doesn't matter what the company is, but we should all buy a little stock as a symbol of our support for the American and world financial markets.''
At times the achievements Kanakaris has touted in press releases have proven to be exaggerations.
Kanakaris trumpeted a plan to buy the Los Angeles Film School from two of his top investors, but the deal quietly collapsed. He once claimed to have had 18 million hits on his Web sites in a month, but there is no empirical evidence of that from Nielsen NetRatings, which tracks Internet traffic.
Econnect CEO Hughes Arrested by FBI on Securities Fraud Charge
By David Evans
By: Wildride713 08 Aug 2002, 05:29 PM EDT Msg. 84665 of 84682
The SEC vs.Alex Kanakaris and Tom Hughes of ECNC who is was as of 10/29/01 on KKRW BOD. And how Alliance Equities fits into these 2 CEO’s and companies shenanigans First Alliance posted many times to hype KKRW on raging bull(Posted under the name ALLIANCE) then in PR’s and SEC filings KKRW claimed that Alliance Equities gave KKRW a 7 million line of credit which KKRW has yet to draw a penny from. And Instead have diluted shares by the millions many to Alliance .Then Alliance Equities gave the same promise to ECNC of 7 million line of credit. Now both companies have giving millions of shares to ALLIANCE for “Consulting” fees? And according to the SEC this is securities fraud. Form S-8 is not available for consultants and advisors who directly or indirectly promote or maintain a market for the issuer’s securities; and FROM THE SEC:Since the 1990 revisions, some issuers and promoters have misused Form S-8 as a means to distribute securities to the public without the protections of registration underSection 5 of the Securities Act. For example, the issuer registers on Form S-8 securities nominally offered and sold to employees or, more commonly, to so-called “consultants.„ These persons then resell the securities in the public markets, at the direction of the issuer or a promoter. In some cases, the consultants or employees perform limited or no additional services for the issuer. The consultants or employees then either remit to the issuer the proceeds from these resales, or apply those proceeds to pay expenses of the issuer that are not related to any service provided by the consultants or employees.[11] Form S-8 also has been misused to register securities issued to compensate “consultants„ and “advisors„ for promoting the issuer’s securities.[12] This practice facilitates securities fraud by providing compensation as incentive to persons who hype the issuer’s stock, and may result in these persons conditioning the market for resales of the issuer’s securities. And from a ECNC Investors who is suing ECNC: Both of these CEOs have been in trouble with the SEC before and have been fined and punished and Tom Hughes iwas as of 10/29/01 on KKRWBOD.2 peas in a pod actually 3 with ALLIANCE . You look at there two track record of fraud and misleading PR’s and how a financial institution has never giving a dime to these 2 companies according to the SEC filings but IMO for “Appearance” has shown a line of credit to these 2 companies and has hyped on raging bull and “leak: Inside Info from time to time. But Instead ALLIANCE has been giving shares paid for “Consulting”... fees for what? who knows, and has hype under the name B.Lemick with digging this I believed can be proving. , this is one big fishy fraud story. I don’t even need to go in the all the BS hype misleading PR’s Alex has dump shares into. This is my take on it so far and I know the SEC wheels move slow sometimes but I believe you will be hearing more on this one day. And now this 1:20 reverse split where the shareholders get the shaft while Alex Kanaclueless class A shares actually Increase per SEC filing. What a fricking joke! CAVEAT EMPTOR! Oh yeah just like KKRWEASEL This post release or any other I have ever posted should in no way be construed as a suggestion to purchase and or sell stock in Kanakaris Wireless or any other company. With the exception of historical information and facts, the matters discussed in this post may be forward-looking statements that involve a number of risk and uncertainties. The actual future results of Kanakaris Wireless could differ from those statements. And are the express opinion of the poster and just like Alex and KKRS could be totally different then what will actually happen. But with this disclaimer it doesn't really matter now does it? |
