Bout of the century.Penny King Takes on SEC.
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IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEVADA
____________________________________
Gabor S. Acs
Penny King Holdings Corporation
CV-N-03-0463-ECR-VPC
Defendants.
ANSWER TO COMPLAINT
COUNTER COMPLAINTS
COUNTER CLAIMS
v.
Securities and Exchange Commission
Plaintiffs.
ANSWER TO COMPLAINT
COUNTER COMPLAINTS
COUNTER CLAIMS
Defendants Penny King Holdings Corporation and Gabor S. Acs (“Acs”), for its’ answer to Plaintiffs complaint alleges as follows:
Penny King Holdings Corporation is a wholly owned subsidiary of The Free and Clear Foundations of America, Inc. a Washington D.C. not for profit organization. Gabor Sandor Acs is the Senior Trustee with his principal place of residence in Reno, Nevada. Penny King Holdings Corporation is not the alter ego of Acs. Acs is not a promoter or a publicist of stocks.
Acs is an independent economic analyst and author who exercises his rights to free speech through the Bill of Rights under the United States Constitution under the First Amendment whereby Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press; or the right of the people peaceably to assemble, and to petition the government for a redress of grievances.
Acs has written various articles and posted messages on public bulletin boards, which the author believed to be accurate at the time such material was published. Acs was not paid to publish such materials in advance by any party about which such materials were published. Acs has not realized any “profits” from the sales of stock related to articles published by Acs.
Plaintiff has engaged in spreading, disseminating and perpetuating false and misleading information concerning the Defendant and is using sections of the Securities Act to censor Defendant, as well as to materially damage defendant in its business dealings, writings and publishing activities in violation of the First Amendment of the Constitution of the United States.
2) Plaintiff has in connection with the transactions, acts, practices, and courses of action described in this Answer, Counter Complaints and Counter Claims directly and indirectly, has made use of the means or instrumentalities of interstate commerce, of the mails, and/or of the means and instruments of transportation or communication in interstate commerce and seeks to unfairly and unjustly use its powers as an agency of the United States Government to destroy the reputation and business of Defendant because Plaintiff believes that Defendant is a threat to certain vested interests which are able to afford the use of this Agency of Government to suppress, harm and destroy differing opinions in the matters of economics, financial policy, and the fair and equitable allocation of wealth in America.
3) Defendant Acs, an individual, seeks to deny the Securities and Exchange Commission any permanent injunction, disgorgement of non-existent profits, including alleged prejudgment interest, third tier civil money penalties, and a penny stock bar for non-existent violations of certain Sections of the Securities Act.
4) Defendants acknowledge that venue lies in this Court pursuant to Section 22(a) of the Securities Act and Section 27 of the Exchange Act because the Defendant currently resides in this judicial district, the Defendants have hereby filed a civil counter complaint and counter claim against the Plaintiff, and Plaintiff has chosen to file its complaint in this Court.
5) Defendant for its Counter Claim and Counter Complaint alleges as follows:
a) Between May 27, 1933 and September 21, 2003, Plaintiff in press releases and messages posted on Internet websites, and through various public media and government publications, publicized the Securities Act of 1933, often referred to as the "truth in securities" law. The Securities Act of 1933 has two basic objectives: requires that investors receive financial and other significant information concerning securities being offered for public sale; and prohibits deceit, misrepresentations, and other fraud in the sale of securities. Plaintiff in carrying out the mandate of Congress under the Securities Act has on numerous occasions been negligent, careless, reckless, and selectively overzealous to a fault in executing its fiduciary duties. Plaintiff on numerous occasions has made false representations to Congress concerning its budget and has on numerous occasions made selective unfair settlements with violators of the Exchange Act to the financial and economic detriment of the investing public.
b) Plaintiff has on numerous occasions used certain knowledge and information gained through the process of investigations and the powers conferred upon them as agents of the United States of America to personally benefit from such knowledge and information either financially, or in the pursuit of power and the advancement of their personal careers at the expense of the Defendants and the American Public. Plaintiff has on numerous occasions failed to enforce the Securities Act as it relates to the naked shorting of publicly traded stocks by foreign investors and hedge funds.
c) Plaintiff has on numerous occasions violated the Freedom of Information Act and the Privacy Act.
d) Between May 27, 1933 and September 21, 2003, press releases published by newspapers, journals, and law books, and messages posted on Internet websites, and distributed by Plaintiff contained false and misleading statements, primarily concerning material facts of cases relating to civil complaints, ongoing investigations of various public and private companies and individuals, and the fair and equitable enforcement of the Securities Act of 1933, and the Exchange Act of 1934.
e) Plaintiff knew, or was reckless in not knowing, that certain of the statements disseminated concerning such cases were false and misleading and in some instances deliberately and intentionally leaked confidential information gained through investigations to the media.
f) In several of the press releases, and on the websites the Plaintiff also failed to disclose compensation it received from certain law firms, individuals, and corporations in carrying out its fiduciary duties for and on behalf of the American investing public, and or failed to honor certain confidentiality agreements between parties which contained proprietary information.
g) Plaintiff through its actions and negligence has cost the United States economy over $5 trillion in added costs, increased real and nominal interest rates, increased usurious costs of capital to small businesses and individuals, and allowed certain international corporations and private individuals to gain realized profits of $5 trillion, by failing to enforce the mandates of the United States Congress to maintain a set standard of weights and measures, and to fairly regulate the value of our monetary system.
h) Plaintiff has manipulated the stock market by selling certain stocks, either directly, or indirectly by word of mouth, private correspondence, and or telephone conversations, shortly before or after the issuance of certain of the false and misleading releases, through the sharing of information concerning investigations amongst a network of highly organized attorneys, assistant attorneys, and law firms who maintain a veil of secrecy under the false auspices of “attorney client privilege”. Such network falls under the auspices of the Racketeering and Corrupt Organizations Act otherwise known as RICO.
i) Plaintiff has engaged in selective settlements with members of the bar when improprieties related to securities transactions conducted by such members were in question. Such settlements included lower civil and monetary penalties, lower disgorgement amounts, and burial of material information withheld from the general public and withheld from the general media in violation of the Freedom of Information Act.
j) Between May 27, 1933 and September 21, 2003, Plaintiff engaged in what is known as “selective civil litigation”, taking civil actions against certain persons, organizations, and investor groups, which actions were designed to harm, destroy, discredit, or economically disable said persons, organizations and groups under the guise and the cover of “enforcement”, which actions were based on false information, and further denied such defendants equal access to information provided by their accusers, and failed to publicly provide information under the Freedom of Information Act, and violated the Privacy Act by obtaining information which was privileged and confidential on individual U.S. Citizens and Residents without proper search warrants, in direct violation of the Fourth Amendment which states: The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated, and no warrants shall issue, but upon probable cause, supported by oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.
k) Between May 27, 1933 and September 21, 2003, Plaintiff engaged in racial discrimination against certain economic minorities by selectively enforcing the Securities Laws, denying employment applications to certain classes of persons not of Caucasian descent, and by issuing false and misleading public statements against such persons so as to discredit them, when such persons obviously lacked a certain amount of education, and therefore, in direct contravention of the laws relating to the education of the general public regarding the securities laws under the Act, Defendants painted such persons to the media and the general public as criminals when in fact such persons were attempting to follow and abide by the rules and to increase their economic position in life.
l) Between May 27, 1933 and September 21, 2003 Plaintiff deliberately failed to accept certain filings for the sale of securities by certain companies which would have been beneficial to the economy, and instead engaged in a form of repetitive harassment, delay, and false enforcement of the Securities Laws, costing taxpayers and businesses unnecessary legal and accounting fees, and in some instances the failure and collapse of certain businesses.
m) Between May 27, 1933 and September 21, 2003 Plaintiff has failed to timely, ethically, honestly, and morally enforce the Securities and Exchange Act of 1933, The Securities Exchange Act of 1934, The Public Utility Holding Company Act of 1935, The Trust Indenture Act of 1939, The Investment Company Act of 1940, The Investment Advisers Act of 1940, The Sarbanes-Oxley Act of 2002 and the federal Racketeer Influenced and Corrupt Organizations Act and its numerous state law counterparts because Plaintiff is or has engaged in some degree in the past in a form of racketeering known as “selective civil litigation” which is intended solely as a means of harassing certain economic groups seeking to advance beyond their current means.
n) Between May 27, 1933 and September 21, 2003 Plaintiff has been negligent and malfeasant in enforcing the Securities and Exchange Act of 1933, The Securities Exchange Act of 1934, The Public Utility Holding Company Act of 1935, The Trust Indenture Act of 1939, The Investment Company Act of 1940, The Investment Advisers Act of 1940, The Sarbanes-Oxley Act of 2002 and the federal Racketeer Influenced and Corrupt Organizations Act and its numerous state law counterparts, which negligence and malfeasance has caused severe and irreparable emotional, economic, and spiritual damage, and in some instances driven certain members of the American investing and working public to physical violence, suicide, unemployment, drug addiction, and dependence on State and Federal assistance programs designed to keep certain members of the public ignorant, underprivileged, and not privy to the secrets of the group within Plaintiff organizations’ and their corrupt secret practices.
o) Between May 27, 1933 and September 21, 2003 Plaintiff has engaged in unfair and deceptive acts and practices which shall be brought to light in the course of further investigation, subpoena of records, and information to be brought before the Court and a Jury Trial through the process of discovery and by the exercise of Defendant’s rights under the Seventh Amendment which states: In suits at common law, where the value in controversy shall exceed twenty dollars, the right of trial by jury shall be preserved, and no fact tried by a jury, shall be otherwise reexamined in any court of the United States, than according to the rules of the common law.
6. Gabor S. Acs is a Hungarian born Canadian citizen currently residing in Reno, Nevada. Mr. Acs has, through Penny King Holdings, acquired certain equity interests in various public and private companies, and will demonstrate in Court, provided a Jury Trial is granted, that he is in fact a trillionaire under generally accepted accounting principals currently used by the Securities and Exchange Commission and other publicly held companies, and that all allegations made by the Securities and Exchange Commission are false and misleading and have damaged the business interests of Mr. Acs, and further that the investigations into Mr. Acs have caused severe and irreparable loss to Defendants and their business interests. Mr. Acs will prove to the Jury in the Trial that he never claimed at any time to operate any offshore bank in any jurisdiction and such claims made by the Plaintiff are materially false, publicly damaging and further were made intentionally to harm or destroy Defendant and its public reputation.
7. Penny King Holdings is a Delaware Corporation, wholly owned by the Free and Clear Foundations of America, Inc., a not for profit organization, and holds the investments made by the Foundations for the public benefit programs managed by it. Penny King Holdings Corporation is not subject to the rules and regulations of the Investment Holding Company Act, and will prove in a Jury Trial, under current generally accepted accounting principles that it holds over $400 trillion in assets.
8. EKnowledge Group, Inc. does not trade in the .40 ranges. In fact, eKnowledge trades below .10 after a 100 for 1 reverse split and Plaintiff caused the resignation of Mr. Gary Saunders, who resigned his position as Chairman of the Board and CEO and all other positions within the Company on June 30, 2003, through false and misleading questions and allegations which Mr. Saunders could not afford to defend, resulting in a form of extortion conducted by Plaintiff.
9. Plaintiff caused Quintek Technologies, Inc. stock to plummet from .45 to less than .10 as a result of information leaks to certain individuals within three days of launching its investigation, and further caused the resignation of Mr. Tom Sims, who resigned his position as Chairman of the Board and CEO through false and misleading questions and allegations which Mr. Sims could not afford to defend, resulting in a form of extortion conducted by Plaintiff. Further, Quintek could not provide information required to complete the financing proposed with potential foreign buyers of its products due to the fact that SEC lawyers hampered then President and CEO, Chairman Tom Sims from conducting its business affairs in the normal course of business due to hundreds of harassing and intimidating phone calls, requests for documents and mountains of additional paperwork stemming from the SEC investigation.
10. Had plaintiff not interfered in the business operations of Quintek, financing as announced in the press release could have been completed and Defendant not lost $5 million through Plaintiff’s erroneous, negligent and malfeasant actions.
11. Plaintiff has relied on false information provided to it by a former SEC convicted felon, and a barred Securities attorney in New York, in making its determinations to investigate Defendant and Quintek Technologies, Inc. Plaintiff further relied on information provided by hired “plants” and “spies” who provided hearsay evidence and who monitor bulletin boards on the internet in direct violation of the Privacy Act and Domestic Intelligence Gathering Laws.
12. The Free and Clear Foundations of America, Inc., (FCFA) is managed by Gabor Sandor Acs, as Senior Trustee for the public benefit and will prove in Jury Trial that it has been buying pennies from homeless people for a nickel each, and has been acting in an economic educational capacity for the public good, encouraging saving, and has published accurate and timely information related to the corruption of the global financial markets by vested interests, including the Plaintiff. Mr. Acs does not own the Free and Clear Foundations, but manages it for the benefit of the greatest possible good for the greatest possible number. FCFA owns 100% of the stock of Penny King Holdings Corporation. Under generally accepted accounting principles, Penny King Holdings Corporation owns or controls over $400 trillion in assets, which shall be proven in a Jury Trial.
13. At all material times, the Plaintiff was in a fiduciary relationship with Defendant and owed fiduciary duties and obligations to Defendant and its constituents, including the following:
a) To at all times act honestly with loyalty and utmost good faith;
b) To at all times act in the best interests of Defendant and to place the interests of Defendant ahead of their own self-interest and that of others;
c) To refrain from acting against the best interests of Defendant and, in particular, from being in a position of conflict of interest;
d) To diligently and properly perform their obligations in their capacity as an agent of the United States of America and to protect the public interest;
e) To keep technology, business plans and other business information gathered as part of ongoing investigations of Defendant confidential;
f) To refrain from using for its own benefit or for the benefit of others the technology and business information of Plaintiffs;
g) To refrain from interfering with or conspiring against the best interests of Defendant and its constituents; and
h) To devote the necessary time, attention and skill in the best interest of Defendant’s rights in the carrying out of its fiduciary public duties.
14. Defendant will prove in a Jury Trial that it had the ability to provide the financing stated in the press releases, however, that Defendant was hindered by Plaintiff in completing said financing through a campaign of false and malicious harassment and emotional damage caused by threatening and coercive tactics employed by Plaintiff in carrying out its “enforcement” actions, and that such actions were not limited to Defendant, but to others as well.
15. Defendant will prove in a Jury Trial that statements made in all press releases were accurate to the best of the Defendant’s knowledge at the time such press releases were made and that when changes occurred as to the accuracy of such statements every effort was made by Defendant to cause the companies issuing such statements to be correct in the future going forward. Defendant shall prove in Jury Trial that the Securities and Exchange Commission cannot allege or prove any intentional fraud in this case, and that in fact the SEC has committed fraud on the general investing public through its own negligence and malfeasance.
16. Defendant will prove in a Jury Trial that the press release issued on May 14th 2002, by Penny King Holdings was accurate at the time and that including contact information for the companies involved did not imply that the companies which were mentioned endorsed a merger, but that both heads of companies had verbally discussed such a prospect, but instead chose to establish an alternative business relationship after the press release was issued, contrary to the understanding of Defendant. Defendant will prove in a jury trial that Plaintiff used coercive and harassment tactics in order to obtain testimony under oath, which was false and used in the settlement of certain cases, related to this case and made public after the fact. Defendant will prove in Court that witnesses who were deposed perjured themselves while under oath and that such perjury was caused by the Plaintiff by its own methods of questioning and obfuscation of the facts.
17. Acs did not create, and/or disseminate six releases. Acs created one release and all other releases were created, approved, reviewed, and endorsed at the time by the companies involved, and said companies did not pay Acs to promote their companies, but in fact certain documents presented by said companies were forged instruments after the investigation by the Plaintiff began. Penny King at all times had certain assets which could have been sold at any time and can to date still be sold, thereby making all claims of Plaintiff false and misleading, and which in fact have damaged Defendants reputation in the financial markets.
18. Acs did not know and was not reckless in not knowing that statements in certain press releases, which he did not approve or disseminate, were false and misleading.
19. Neither Quintek or Eknowledge paid Penny King or Acs for promotion or marketing of the shares of either company, but rather such expenses were paid to offset the expenses of devoting time to developing contracts and legal documents related to the business of both companies, and such payments were made with the full understanding of the principals involved in each business. Plaintiff is relying on forged and after the fact documents in making its case and such discovery shall become self evident during the Jury Trial.
20. Plaintiff has deliberately or negligently caused certain public securities filings to occur without questioning their accuracy when they knew or ought to have known that the filings did not accurately reflect the filing companies true financial information, contained misleading, missing information and false statements, and which ultimately impacted the entire United States economy. As a result, Defendant and its constituents have suffered and continue to suffer damages in relation to the impact of the negligence of Plaintiff. Defendants will continue to suffer such damages and other damages and losses arising from a failure to correct, and continued efforts to correct the improper public filings, pursuing proper legal recourse and obtaining correct and accurate information.
21. The Plaintiff breached their fiduciary duties and their obligations pursuant to the False Claims Act of 1986. Exact particulars of Plaintiffs breaches within their knowledge include:
a) Disclosing certain information gained while doing investigations and business plans and other business information to unauthorized persons who took advantage of such information and profited thereby;
b) Conspiring with others to cause harm to Defendant’s business plans and rights to certain Technology, contracts and agreements;
c) Using for their own personal benefit Defendant’s business plans, other business information and certain technology and knowledge in an attempt to pre-empt Defendant and its constituents from filing a registration statement with the Securities and Exchange Commission;
d) Deliberately interfering with Defendants business plans;
e) Deliberately interfering with Defendants business relationships with other parties, including potential investors;
f) Deliberately providing false information to the United States Congress
regarding Plaintiff’s budgetary needs and ongoing investigations;
g) Failing to publicly disclose sources of financing and other internal, and external financial arrangements when settling cases which Plaintiff entered into settlement agreements with, as Plaintiff was obligated to do pursuant to the Laws of the Uniform Commercial Code, the Public Disclosure Act, the False Claims Act, the Truth in Lending Act, and the Freedom of Information Act;
h) Disclosing confidential information to the media and parties not authorized to receive such information, in contravention of their fiduciary duties;
i) Failing to assist Defendants and its constituents in the filing, prosecution and maintenance of orderly financial markets as mandated by Congress, some particulars of which are set forth above, in contravention of Plaintiffs fiduciary duties;
j) Failing and acting negligently in the regulation of salaries of certain executives of the New York Stock Exchange, the NASD, and other quasi regulatory, private and public bodies engaged in the sale, marketing, distribution, analysis and promotion of registered and unregistered securities in the United States and other foreign jurisdictions;
k) Failing and acting negligently in the regulation and control of money laundering by publicly traded FDIC insured banks in the United States;
l) Failing and acting negligently in the regulation and control of naked short selling of stocks and bonds by foreign corrupt organizations and governments resulting in the loss of billions of dollars to Defendant and its constituents;
m) Failing to uniformly apply the securities laws particularly the reporting requirements for such publicly traded companies as conduct a monopoly in the United States in the mortgage finance industry, and making false representations as to the financial health and welfare of said industry to Congress, failure to investigate and disclose overages and over charges to the general public, failure to enforce the securities laws against mortgage bankers and brokers who market and sell such securities to institutional and private investors, and falsely causing interest rates to be unusually and disproportionately high for all consumers through Plaintiffs own acts of negligence in that industry.
22. At all material times the Plaintiff knew or ought to have known of the corruption and fraud being engaged in and conducted by certain publicly traded corporations in America. At all material times the Plaintiff knew or ought to have known of the false information being filed by numerous publicly traded corporations. Further, Plaintiff knew or ought to have known Defendant could be prejudiced and economically harmed by Plaintiffs interference with Defendants rights to implement its business plans.
23. The Plaintiff intentionally and wrongfully, or in the alternative negligently, interfered with Defendant’s fiduciary and contractual relationship with its Stockholders. Exact particulars are within Plaintiff’s knowledge and include:
a) Inducing Congress to breach its fiduciary duties and its obligations to the general public pursuant to the United States Constitution and the laws of the United States;
b) Making misrepresentations about Defendant’s rights, financial condition, and business plans;
c) Making misrepresentations about Defendant’s knowledge and ability without seeking to clarify certain statements or obtaining a full copy of Defendants prospectus, which shall be delivered to the Jury and the Court as evidence.
24. Acs did not sell any Quintek shares for any profit of $40,168. Acs has never owned any shares of Quintek. Penny King Holdings Corporation owes $480,000 for the Quintek shares it did buy from the former owners of the stock.
25. Neither Acs and/or Penny King described any certain securities but rather described companies and their management in any publicly posted articles or news releases. At no time did Acs and/or Penny King promote, recommend, offer for sale, solicit the buying or selling of any securities in any public or private statements made or purported to be made by the Plaintiff.
26. Neither Acs and/or Penny King, directly or indirectly, received or were to receive consideration for such activities as promotion of stocks from the issuers, but rather such compensation was to offset legal, travel, and other expenses related to contract negotiations on behalf of each company. The fact of any published statement by Acs and/or Penny King was incidental to any formal agreements between the companies engaging the services of Acs and/or Penny King or its affiliates, and therefore there is no violation of any of Section 17(b) of the Securities Act or any other law, rule, or regulation under the Securities Act or the Exchange Act. Acs has never been retained by any firm to conduct any business of any kind or nature. Acs is employed by the Free and Clear Foundations of America, Inc. to implement the Free and Clear America campaign.
27. By reason of the foregoing, Acs and Penny King have not in any way violated, nor do they need to be enjoined from violating any portion of the Securities Act, however, the Securities and Exchange Commission, and its employees, agents and other direct or indirect agencies, should be enjoined from continued negligence and malfeasance under the laws stated herein and heretofore.
28. Paragraphs 1 through 27 above are hereby restated, realleged, reclaimed and re-counter complained and incorporated by reference in addition to all claims, counter claims, and complaints for legal action to be filed in the United States Court of Federal Claims, if such counter claims and counter complaints are disallowed to be heard before this Court by a fair and equitable jury trial.
29. Defendants Acs and Penny King have not violated any portion of the Securities Act or the Exchange Act with scienter and by reason of the foregoing will not violate and therefore do not need to be restrained or enjoined from violating any section of the Securities and Exchange Act or the Securities Act now or in the foreseeable future. |
