Owner
Post by Franko10 ™ on Nov 5, 2006 15:24:26 GMT -5
GROUP PROMOTES FRAUD FREE INVESTMENTS
By GREG JUNEK, Business Editor
11/04/2006
Email to a friendPost a CommentPrinter-friendly
BUILDING ‘OASIS’: John Martin, left, and Bill Frizzell stand outside the offices of The Owners Group, 602 S. Broadway Ave.(Staff Photo By Amy Peterson)
John Martin and Bill Frizzell just wanted assurance that they and others could invest money without fear of fraud or scam.
So Martin and Frizzell established The Owners Group Inc., 602 S. Broadway Ave., after they, along with tens of thousands of other shareholders, saw their money disappear in a penny stock company that could not provide investors proof of stock ownership.
Martin said TOGI was begun based on the principles of honesty and transparency.
"We had these feelings for these shareholders and we wanted to do something for them," Martin said. "So we formed a company, The Owners Group, which is almost like an oasis out there for people to be involved in without worry and fear of scam."
In early 2004, Martin, a former wholesale business owner, and Frizzell, a Tyler attorney, purchased shares of CMKM Diamonds, which traded under the symbol "CMKX," had mining leases in Saskatchewan and traded on Pink Sheets. The allure of finding diamonds caused a buying frenzy, and more than 70,000 people purchased about 700 billion shares of stock in the company.
"You could buy a million shares for a hundred bucks," Martin said. "It was alluring to be able to own a million shares of anything in the stock market. And if they hit, that .0001 stock could possibly run to a quarter or a dime, and you'd make a lot of money. So the allure was rather large, and the people involved in the company itself were promoting it in such a way where they had their own top fuel race cars, they were advertising on the raceways out in Las Vegas, and before they knew it, it spun out of control."
SUSPICIONS
But CMKM was not filing its scheduled reports with the Security and Exchange Commission. Martin became suspicious and he asked Frizzell, who had a 28-year law practice, to look for a way to get information from the company.
Frizzell and Martin suspected the market was "naked shorting" the company, or selling stock without backing it with actual stock certificates.
"A broker will sell you electronically a stock - you give them the money and they put a marker in your account - but they don't have the actual certificate to back that stock up," Martin said. "A large number of penny stock companies that have sold billions and billions and billions of shares out there eventually get delisted. When they're delisted, they go away, and the brokers don't ever have to find the stock to match the money that they got. It's a very complicated process and a lot of people don't believe it happens. They think it's a conspiracy type thing, but it's very prevalent, not just in the small markets but also in the larger markets."
In May 2004, Frizzell intervened as a third-party representative for the CMKM shareholders in an SEC administrative hearing on whether to revoke the company's license that allowed it to trade on the stock market. The company's license was revoked in October 2005.
"I don't really have a securities law background," Frizzell said. "My background is in litigation, and early in my practice I tried a lot of criminal cases, federal and state cases. But when I got to looking into things that were happening to this stock and to these shareholders, it was my thought that this was the most obvious and blatant crime that you could ever see and the regulators were not doing anything about it."
Frizzell's representation of third-party interests in the SEC hearing was the beginning of he and Martin building "the largest shareholder advocacy base in the history of the stock market," Martin said.
"(Frizzell) intervened in the administrative hearing and we started getting information from the SEC, which is very unusual," Martin said. "The SEC doesn't share information with anybody, but the judge ordered that they turn over their investigative work on CMKM to Bill because Bill had gotten into this administrative hearing."
TOGI's effort is ongoing to get at least some return to the shareholders on their investment. Frizzell said CMKM sold "a very significant asset" to another publicly traded company, and the shareholders received 45 million shares for the asset. But the company said stock certificates would be required to assure the shareholders' identity and the group has been working since November 2005 to identify the shareholders.
The company wanted proof of ownership, which required a shareholder to have a certificate for his or her shares. Shareholders called their brokers to request the certificates and faxed them to the group's office.
Martin said 40,000 people have faxed in their certificates, and one year later thousands of people cannot get their brokers to send them their certificates.
"According to our records, there are still some 50 billion shares unaccounted for in the legitimate share count," he said. "My question is, why can't the shareholders get their certificates when they own them? It's their property. The answer to that is once the brokers pass out all of the shares, then they can't claim that there is no naked short. As long as they have some certificates, they can always claim that there is no naked short."
Martin said that CMKM has announced it would file an interpleader action with the federal court in Las Vegas.
If the action is approved, a federal judge would decide who the shareholders are and the mode of payment of the company's shares, he said. The judge could also give attorneys for the company subpoena power to open the brokers' books to determine the identities of the legitimate shareholders.
SHAREHOLDER PLIGHT
A small number of CMKM shareholders and Martin met one Saturday morning and called Frizzell, and The Owners Group grew out of those discussions.
Martin said he, along with many other shareholders, had become addicted to tracking the stock, and would stay on the computer for hours. After the SEC administrative hearing started, he and Frizzell were the shareholders' point of contact.
"They looked to me and Bill, because we were the only voice for the shareholders," he said. "We were the only people they knew to contact."
Martin said there were times he left his office in tears after reading correspondence from some of the shareholders. Some were addicted to watching the charts and reading the chat boards, and they wrote Martin about how they lost their families because the money the just knew they would make with CMKM never materialized.
Some wrote suicide notes. Some, in frustration over losing their money, lashed out at Martin and Frizzell.
"The people have no idea how many lives are ruined in the penny stock market because of scams on a daily basis," Martin said.
The CMKM debacle was not one-sided, he said. Both the brokers and some insiders at the company scammed the shareholders.
"If we had known this about this stock before we invested, we never would have invested in it," Frizzell said, referring to shareholders' comments. "Wouldn't it have been nice if we had a company that could check these things out before we invest? So they said, 'You guys know how to do a lot of good due diligence. ... Let's start a company that does that.'"
Word spread about the group's work in investigating the CMKM issue, and people "with some really good technology and some really good projects" began inquiring if the group could help them get their companies on the public and private markets.
Now, TOGI consists of several entities.
Its Due Diligence entity is building ActivReport, an online search engine that performs linear searches of individuals and allows people to find out about other people before they invest their money. Such information most often does not exist in the small cap arena, Martin said.
"It searches for involvement with other companies and other people, and it brings everything together in one easily read report," he said. "If a person is bad and he has hurt shareholders before - 10 years ago or five years ago - and nobody knows about it and now he shows up here, then shareholders need to know this guy has done it before. What's going to stop him from doing it again?"
Another entity, The Owners Group Entertainment Co. will publish three books, Martin said.
Author Mark Faulk is writing the CMKM story, "The Naked Truth." Martin said the book is about 95 percent complete.
Also, Peggy Sue Gerron of Lubbock, the person about whom Buddy Holly wrote the song "Peggy Sue," approached the group about publishing a book about her life surrounding Buddy Holly and The Crickets in the 1950s. Martin said Ms. Gerron for years has wanted to clear up inaccuracies contained in the movie "The Buddy Holly Story," and the book seeks to do that.
Another book project is an autobiography of Bryan Abrams of the group Color Me Badd.
Faulk is assisting Ms. Gerron and Adams in writing their stories.
TOGI Strategic Alliances entity is working with Data Flow Technologies, which is promising a new way to send data at a much higher speed. Martin said scientists who built the technology have called it "evolutionary."
Its Public Company Promotions entity has a contract with American Security Resource Corp., which is developing high efficiency hydrogen fuel cells that can be mass produced. It is also involved with Diamond I Inc., which develops wireless gaming products.
TOGI also has a Prospective Strategic Alliances entity, which includes Petrosonics, a company that is developing technology for low-cost reduction of sulfur, nitrogen and trace materials in crude oil and other petroleum products. Prospective Strategic Alliances also includes StemSell, a startup company that aims to collect, analyze, process, register and store umbilical cord blood stem cells from donors.
"Ultimately The Owners Group's idea is to make a difference in the small cap marketplace by helping one company at a time," Martin said.
Greg Junek is Business editor. He can be reached at 903.596.6280. e-mail: business@tylerpaper.com
©Tyler Morning Telegraph 2006
By GREG JUNEK, Business Editor
11/04/2006
Email to a friendPost a CommentPrinter-friendly
BUILDING ‘OASIS’: John Martin, left, and Bill Frizzell stand outside the offices of The Owners Group, 602 S. Broadway Ave.(Staff Photo By Amy Peterson)
John Martin and Bill Frizzell just wanted assurance that they and others could invest money without fear of fraud or scam.
So Martin and Frizzell established The Owners Group Inc., 602 S. Broadway Ave., after they, along with tens of thousands of other shareholders, saw their money disappear in a penny stock company that could not provide investors proof of stock ownership.
Martin said TOGI was begun based on the principles of honesty and transparency.
"We had these feelings for these shareholders and we wanted to do something for them," Martin said. "So we formed a company, The Owners Group, which is almost like an oasis out there for people to be involved in without worry and fear of scam."
In early 2004, Martin, a former wholesale business owner, and Frizzell, a Tyler attorney, purchased shares of CMKM Diamonds, which traded under the symbol "CMKX," had mining leases in Saskatchewan and traded on Pink Sheets. The allure of finding diamonds caused a buying frenzy, and more than 70,000 people purchased about 700 billion shares of stock in the company.
"You could buy a million shares for a hundred bucks," Martin said. "It was alluring to be able to own a million shares of anything in the stock market. And if they hit, that .0001 stock could possibly run to a quarter or a dime, and you'd make a lot of money. So the allure was rather large, and the people involved in the company itself were promoting it in such a way where they had their own top fuel race cars, they were advertising on the raceways out in Las Vegas, and before they knew it, it spun out of control."
SUSPICIONS
But CMKM was not filing its scheduled reports with the Security and Exchange Commission. Martin became suspicious and he asked Frizzell, who had a 28-year law practice, to look for a way to get information from the company.
Frizzell and Martin suspected the market was "naked shorting" the company, or selling stock without backing it with actual stock certificates.
"A broker will sell you electronically a stock - you give them the money and they put a marker in your account - but they don't have the actual certificate to back that stock up," Martin said. "A large number of penny stock companies that have sold billions and billions and billions of shares out there eventually get delisted. When they're delisted, they go away, and the brokers don't ever have to find the stock to match the money that they got. It's a very complicated process and a lot of people don't believe it happens. They think it's a conspiracy type thing, but it's very prevalent, not just in the small markets but also in the larger markets."
In May 2004, Frizzell intervened as a third-party representative for the CMKM shareholders in an SEC administrative hearing on whether to revoke the company's license that allowed it to trade on the stock market. The company's license was revoked in October 2005.
"I don't really have a securities law background," Frizzell said. "My background is in litigation, and early in my practice I tried a lot of criminal cases, federal and state cases. But when I got to looking into things that were happening to this stock and to these shareholders, it was my thought that this was the most obvious and blatant crime that you could ever see and the regulators were not doing anything about it."
Frizzell's representation of third-party interests in the SEC hearing was the beginning of he and Martin building "the largest shareholder advocacy base in the history of the stock market," Martin said.
"(Frizzell) intervened in the administrative hearing and we started getting information from the SEC, which is very unusual," Martin said. "The SEC doesn't share information with anybody, but the judge ordered that they turn over their investigative work on CMKM to Bill because Bill had gotten into this administrative hearing."
TOGI's effort is ongoing to get at least some return to the shareholders on their investment. Frizzell said CMKM sold "a very significant asset" to another publicly traded company, and the shareholders received 45 million shares for the asset. But the company said stock certificates would be required to assure the shareholders' identity and the group has been working since November 2005 to identify the shareholders.
The company wanted proof of ownership, which required a shareholder to have a certificate for his or her shares. Shareholders called their brokers to request the certificates and faxed them to the group's office.
Martin said 40,000 people have faxed in their certificates, and one year later thousands of people cannot get their brokers to send them their certificates.
"According to our records, there are still some 50 billion shares unaccounted for in the legitimate share count," he said. "My question is, why can't the shareholders get their certificates when they own them? It's their property. The answer to that is once the brokers pass out all of the shares, then they can't claim that there is no naked short. As long as they have some certificates, they can always claim that there is no naked short."
Martin said that CMKM has announced it would file an interpleader action with the federal court in Las Vegas.
If the action is approved, a federal judge would decide who the shareholders are and the mode of payment of the company's shares, he said. The judge could also give attorneys for the company subpoena power to open the brokers' books to determine the identities of the legitimate shareholders.
SHAREHOLDER PLIGHT
A small number of CMKM shareholders and Martin met one Saturday morning and called Frizzell, and The Owners Group grew out of those discussions.
Martin said he, along with many other shareholders, had become addicted to tracking the stock, and would stay on the computer for hours. After the SEC administrative hearing started, he and Frizzell were the shareholders' point of contact.
"They looked to me and Bill, because we were the only voice for the shareholders," he said. "We were the only people they knew to contact."
Martin said there were times he left his office in tears after reading correspondence from some of the shareholders. Some were addicted to watching the charts and reading the chat boards, and they wrote Martin about how they lost their families because the money the just knew they would make with CMKM never materialized.
Some wrote suicide notes. Some, in frustration over losing their money, lashed out at Martin and Frizzell.
"The people have no idea how many lives are ruined in the penny stock market because of scams on a daily basis," Martin said.
The CMKM debacle was not one-sided, he said. Both the brokers and some insiders at the company scammed the shareholders.
"If we had known this about this stock before we invested, we never would have invested in it," Frizzell said, referring to shareholders' comments. "Wouldn't it have been nice if we had a company that could check these things out before we invest? So they said, 'You guys know how to do a lot of good due diligence. ... Let's start a company that does that.'"
Word spread about the group's work in investigating the CMKM issue, and people "with some really good technology and some really good projects" began inquiring if the group could help them get their companies on the public and private markets.
Now, TOGI consists of several entities.
Its Due Diligence entity is building ActivReport, an online search engine that performs linear searches of individuals and allows people to find out about other people before they invest their money. Such information most often does not exist in the small cap arena, Martin said.
"It searches for involvement with other companies and other people, and it brings everything together in one easily read report," he said. "If a person is bad and he has hurt shareholders before - 10 years ago or five years ago - and nobody knows about it and now he shows up here, then shareholders need to know this guy has done it before. What's going to stop him from doing it again?"
Another entity, The Owners Group Entertainment Co. will publish three books, Martin said.
Author Mark Faulk is writing the CMKM story, "The Naked Truth." Martin said the book is about 95 percent complete.
Also, Peggy Sue Gerron of Lubbock, the person about whom Buddy Holly wrote the song "Peggy Sue," approached the group about publishing a book about her life surrounding Buddy Holly and The Crickets in the 1950s. Martin said Ms. Gerron for years has wanted to clear up inaccuracies contained in the movie "The Buddy Holly Story," and the book seeks to do that.
Another book project is an autobiography of Bryan Abrams of the group Color Me Badd.
Faulk is assisting Ms. Gerron and Adams in writing their stories.
TOGI Strategic Alliances entity is working with Data Flow Technologies, which is promising a new way to send data at a much higher speed. Martin said scientists who built the technology have called it "evolutionary."
Its Public Company Promotions entity has a contract with American Security Resource Corp., which is developing high efficiency hydrogen fuel cells that can be mass produced. It is also involved with Diamond I Inc., which develops wireless gaming products.
TOGI also has a Prospective Strategic Alliances entity, which includes Petrosonics, a company that is developing technology for low-cost reduction of sulfur, nitrogen and trace materials in crude oil and other petroleum products. Prospective Strategic Alliances also includes StemSell, a startup company that aims to collect, analyze, process, register and store umbilical cord blood stem cells from donors.
"Ultimately The Owners Group's idea is to make a difference in the small cap marketplace by helping one company at a time," Martin said.
Greg Junek is Business editor. He can be reached at 903.596.6280. e-mail: business@tylerpaper.com
©Tyler Morning Telegraph 2006
