Owner
Post by Franko10 ™ on Mar 7, 2006 19:34:00 GMT -5
REGISTRATION OF CMKM DIAMONDS STOCK REVOKED AFTER SEC PROCEEDING
By Stephanie Ayres
31 August 2005
Los Angeles, California
The initial decision of an administrative law judge (ALJ) in an SEC proceeding against Las Vegas-based CMKM Diamonds Inc. resulted in the revocation of the registration of CMKM's securities with the SEC. The decision was announced on July 12.
The proceeding arose over CMKM's failure to file required quarterly and annual financial reports since 2002, the year in which the current control person, Urban Casavant, took over the former Cyber Mark International Corporation, changed its name twice and moved the tiny company from Delaware to Nevada.
The analysis provided in the ALJ decision sheds an interesting insight into a series of peculiar events associated with CMKM. The company's last financial filing with SEC (a Form 10-QSB for the three months ended September 30, 2002) showed assets of only $344 and liabilities of $1,672, but CMKM Diamonds claims to be in the business of mineral exploration with small interests in a mining project in Ecuador and an undeveloped interest in land in Canada, both supposedly contributed by entities associated with Casavant.
Between January 2003 and April 2005 CMKM's stock price was found to have ranged from a low of $0.00013 per share to a high of $0.0135 per share. CMKM barely qualified as a penny stock, but the development that caught the attention of regulations and some journalists was its enormous number of outstanding shares and their curious trading patterns.
According to information in the ALJ decision, CMKM amended its articles of incorporation on March 1, 2004 to increase the number of authorized shares from 200 billion to 500 billion. And as if 500 billion shares weren't enough, the company amended its articles again five months later to increase the authorized shares to 800 billion. Why, observers wondered, would a penny stock with no known business activity need 800 billion shares of stock? At most, trading of CMKM shares soared to volumes of one or two billion per day between 2003 and 2005. The reason for the massive stock creation is still a mystery, but however many shares there are, they are no longer registered for trading in the United States.
Efforts by regulators to examine the company's dealings from the inside revealed an empty shell. CMKM didn't file the required SEC reports apparently because the reports required the inclusion of financial statements, and CMKM Diamonds didn't have any financial statements. Investigators found that the company did not have a general ledger or any other books and few records. CMKM had hired an accounting firm to conduct an audit, but the auditors resigned claiming that their repeated requests to the company for information were ignored.
According to the ALJ decision information, CMKM next turned to its outside counsel, the Las Vegas-based Securities Law Institute, which had an affiliate to perform accounting and bookkeeping services, but CMKM also failed to provide enough information to these accountants to complete a compilation of financial statements. The decision noted that the accountant in charge of the CMKM project was "unsure whether CMKM's purported acquisition of a jade collection, supposedly worth $56 million, has or has not been reversed."
Meanwhile Casavant, who reportedly has taken the Fifth Amendment when questioned by the SEC, tried to lull regulators with promises to complete and file overdue financial reports for CMKM. But in two separate Form 8-K fiings which reported certain changes of stock ownership, CMKM told the SEC that it had moved its offices to a location that investigators found to be occupied by a "hot rod shop." The ALJ did not find this added to the company's credibility.
In an apparent public relations move, CMKM announced in February 2005 that it had hired former Howard Hughes aide Robert Maheu as co-chairman. This got the attention of the Las Vegas media. A February 8 article in the Las Vegas "Review Journal" reported that CMKM had about 100 accounts at one Las Vegas bank alone, where the tiny company which didn't even keep books was suspected of passing some $64 million through its accounts. The newspaper noted that these and other local bank records of CMKM had been subpoenaed by federal authorities apparently in connection with the SEC investigation.
By Stephanie Ayres
31 August 2005
Los Angeles, California
The initial decision of an administrative law judge (ALJ) in an SEC proceeding against Las Vegas-based CMKM Diamonds Inc. resulted in the revocation of the registration of CMKM's securities with the SEC. The decision was announced on July 12.
The proceeding arose over CMKM's failure to file required quarterly and annual financial reports since 2002, the year in which the current control person, Urban Casavant, took over the former Cyber Mark International Corporation, changed its name twice and moved the tiny company from Delaware to Nevada.
The analysis provided in the ALJ decision sheds an interesting insight into a series of peculiar events associated with CMKM. The company's last financial filing with SEC (a Form 10-QSB for the three months ended September 30, 2002) showed assets of only $344 and liabilities of $1,672, but CMKM Diamonds claims to be in the business of mineral exploration with small interests in a mining project in Ecuador and an undeveloped interest in land in Canada, both supposedly contributed by entities associated with Casavant.
Between January 2003 and April 2005 CMKM's stock price was found to have ranged from a low of $0.00013 per share to a high of $0.0135 per share. CMKM barely qualified as a penny stock, but the development that caught the attention of regulations and some journalists was its enormous number of outstanding shares and their curious trading patterns.
According to information in the ALJ decision, CMKM amended its articles of incorporation on March 1, 2004 to increase the number of authorized shares from 200 billion to 500 billion. And as if 500 billion shares weren't enough, the company amended its articles again five months later to increase the authorized shares to 800 billion. Why, observers wondered, would a penny stock with no known business activity need 800 billion shares of stock? At most, trading of CMKM shares soared to volumes of one or two billion per day between 2003 and 2005. The reason for the massive stock creation is still a mystery, but however many shares there are, they are no longer registered for trading in the United States.
Efforts by regulators to examine the company's dealings from the inside revealed an empty shell. CMKM didn't file the required SEC reports apparently because the reports required the inclusion of financial statements, and CMKM Diamonds didn't have any financial statements. Investigators found that the company did not have a general ledger or any other books and few records. CMKM had hired an accounting firm to conduct an audit, but the auditors resigned claiming that their repeated requests to the company for information were ignored.
According to the ALJ decision information, CMKM next turned to its outside counsel, the Las Vegas-based Securities Law Institute, which had an affiliate to perform accounting and bookkeeping services, but CMKM also failed to provide enough information to these accountants to complete a compilation of financial statements. The decision noted that the accountant in charge of the CMKM project was "unsure whether CMKM's purported acquisition of a jade collection, supposedly worth $56 million, has or has not been reversed."
Meanwhile Casavant, who reportedly has taken the Fifth Amendment when questioned by the SEC, tried to lull regulators with promises to complete and file overdue financial reports for CMKM. But in two separate Form 8-K fiings which reported certain changes of stock ownership, CMKM told the SEC that it had moved its offices to a location that investigators found to be occupied by a "hot rod shop." The ALJ did not find this added to the company's credibility.
In an apparent public relations move, CMKM announced in February 2005 that it had hired former Howard Hughes aide Robert Maheu as co-chairman. This got the attention of the Las Vegas media. A February 8 article in the Las Vegas "Review Journal" reported that CMKM had about 100 accounts at one Las Vegas bank alone, where the tiny company which didn't even keep books was suspected of passing some $64 million through its accounts. The newspaper noted that these and other local bank records of CMKM had been subpoenaed by federal authorities apparently in connection with the SEC investigation.
