cmkx apr11/05

[GEORGE BUSH]

www.cmkxownersgroup.com/CMKXAnswertoOIP.pdf

[Designer]

plead the 5th what a good move lmao

[GEORGE BUSH]

hexges said:

plead the 5th what a good move lmao

WILL DO LOL I WILL BE OVER IN MIN...

[Franko10 ™]

I.
The Securities and Exchange Commission (“Commission”) deems it appropriate and in the public interest that a public administrative proceeding be, and hereby is, instituted pursuant to Section 12(j) of the Securities Exchange Act of 1934 (“Exchange Act”) against CMKM Diamonds, Inc. (“CMKM Diamonds” or “Respondent”).

Reply….WITH RESPECT TO SECTION I
1. Respondent CMKM Diamonds admits, upon information and belief, that the commission’s public official files disclose the matters set forth in paragraph 1, and refers to said files for their contents.

II.

After an investigation, the Division of Enforcement alleges that:

A.RESPONDENT

1. CMKM Diamonds, Inc. (File No. 0-26919) is a Nevada corporation based in Las Vegas, Nevada. CMKM Diamonds’ common stock is registered under Section 12(g) of the Exchange Act. CMKM Diamonds is required to file reports pursuant to Section 13(a) of the Exchange Act.

Reply#1… With respect to paragraph 1 of Section II, Respondent CMKM Diamonds admits that Respondent is a Nevada corporation based in Las Vegas, Nevada; admits that Respondent CMKM Diamonds’ common stock is registered under Section l2(g) of the Exchange Act; however, Respondent CMKM Diamonds alleges that it does not have and cannot obtain information sufficient to admit or deny any other allegations contained in such paragraph, and on that basis denies such allegations.

B. CMKM DIAMONDS IS DELINQUENT IN ITS PERIODIC FILINGS

2. Section 13(a) of the Exchange Act and the rules promulgated thereunder require issuers of securities registered pursuant to Section 12 of the Exchange Act to file with the Commission current and accurate information in periodic reports, even if the registration is voluntary under Section 12(g). Specifically, Rule 13a-1 requires issuers to file annual reports (Forms 10-K or 10-KSB), and Rule 13a-13 requires issuers to file quarterly reports (Forms 10-Q or 10-QSB).

Reply #2… With respect to paragraph 2 of Section a Respondent CMKM Diamonds admits, upon information and belief, that the Commission’s Section 13(a) of the Exchange Act rules disclose the matter set forth in paragraph 2 and refer to said files for their contents

3. CMKM Diamonds has not filed an Annual Report on either Form 10-K or Form 10KSB since May 9, 2002, or quarterly reports on either Form 10-Q or Form 10-QSB since November 18, 2002.

Reply#3… With respect to paragraph 3 of Section II, Respondent CMKM Diamonds admits the allegations contain in such paragraph.

4. On July 23, 2003, CMKM Diamonds filed a Form 15 (“Original Form 15”), signed by CMKM Diamonds’ president, indicating that it had approximately 300 holders of record and that it was terminating its registration, and hence its reporting obligations, pursuant to Rule 12g-4(a)(1)(i) under the Exchange Act. Rule 12g-4(a)(1)(i) provides that an issuer with less than 300 holders of record may terminate the registration of its securities

Reply#4…. With respect to paragraph 4 of Section II, Respondent CMKM Diamonds does not have and cannot obtain information sufficient to admit or deny the allegations contained in paragraph 4, except admits that a Form 15 was filed und the name of Casavant Mining Kimberlite International, Inc. on July 22, 2003.


5. On February 17, 2005, CMKM Diamonds filed an Amended Form 15, also signed by CMKM Diamonds’ president. In the Amended Form 15, CMKM Diamonds stated that it had 698 holders of record when it filed the Original Form 15, that the Original Form 15 was revoked, that Rule 12g-4(a)(1)(i) was inapplicable, and that CMKM Diamonds had reporting obligations under Section 12(g) of the Exchange Act.

Reply#5… With respect to paragraph 5 of Section II Respondent CMKM Diamonds admits the allegations contained in such paragraph.
6.As a result of the foregoing, CMKM Diamonds has failed to comply with Section 13(a) of the Exchange Act and Rules 13a-1 and 13a-13 thereunder
Reply#6….With respect to paragraph 6 of Section II, Respondent CMKM Diamonds denies the allegations contained in such paragraph.


III.

In view of the allegations made by the Division of Enforcement, the Commission deems it necessary and appropriate for the protection of investors that a public administrative proceeding be instituted pursuant to Section 12(j) of the Exchange Act to determine:

A. Whether the allegations in Section II are true and, in connection therewith, to afford the Respondent an opportunity to establish any defenses to such allegations; and Whether the registration of each class of CMKM Diamonds’ securities, pursuant to Section 12 of the Exchange Act, should be suspended for a period not exceeding twelve months, or revoked.

WITH RESPECT TO SECTION III

8. With respect to Section III, Respondent CMKM Diamonds does not have and cannot obtain information sufficient to admit or deny the statements contained in said paragraph, however, denies that a public administrative proceeding instituted pursuant to Section 12(j) of the Exchange Act is appropriate for the protection of investors

IV.

IT IS ORDERED that a public hearing for the purpose of taking evidence on the questions set forth in Section III hereof shall be convened at a time and place to be fixed, as provided by Rule 200 of the Commission’s Rules of Practice [17 C.F.R. § 201.200], and before an Administrative Law Judge to be designated by further order as provided by Rule 110 of the Commission’s Rules of Practice [17 C.F.R. § 201.110].

IT IS FURTHER ORDERED

that the Respondent shall file an Answer to the allegations contained in this Order Instituting Proceedings within twenty (20) days after service of this Order, as provided by Rule 220 of the Commission’s Rules of Practice [17 C.F.R. § 201.220].

If the Respondent fails to file the directed Answer, or fails to appear at a hearing after being duly notified, the Respondent may be deemed in default and the proceedings may be determined against the Respondent upon consideration of this Order, the allegations of which may be deemed to be true as provided by Rules 155(a), 220(f), 221(f), and 310 of the Commission’s Rules of Practice [17 C.F.R. §§ 201.155(a), 201.220(f), 201.221(f) and 201.310].

This Order shall be served forthwith upon the Respondent pursuant to Rule 141(a) of the Commission’s Rules of Practice [17 C.F.R. § 201.141(a)].
IT IS FURTHER ORDERED that the Administrative Law Judge shall issue an initial decision no later than 120 days from the date of service of this Order, pursuant to Rule 360(a)(2) of the Commission’s Rules of Practice [17 C.F.R. § 201.360(a)(2)].

In the absence of an appropriate waiver, no officer or employee of the Commission engaged in the performance of investigative or prosecuting functions in this or any factually related proceeding will be permitted to participate or advise in the decision of this matter, except as witness or counsel in proceedings held pursuant to notice. Since this proceeding is not “rule making” within the meaning of Section 551 of the Administrative Procedure Act, it is not deemed subject to the provisions of Section 553 delaying the effective date of any final Commission action

WITH RESPECT TO SECTION IV

9. With respect to Section IV, Respondent CMKM Diamonds admits upon information and belief that the Commission’s public official files disclose the matters set forth in said Section, and refers to said files for their content, and the Orders stated therein.

This Respondent, CMXM Diamonds denies each and every allegation of the Division of Enforcement not herein admitted, qualified, or denied.

[Franko10 ™]

George Burns from pb 32

cmkxdiamond.proboards32.com/index.cgi?board=general&action=display&thread=1113292142


I had posted above in the pinned thread that I was optimistic about the hearing. I didn’t want to respond my thoughts fully until I had done my due diligence and understood everything more clearly.

Most 12(j) decisions are guided by precedence. The standard used here is Steadman v. SEC, 603 F.2d 1126, 1140 (5th Cir. 1979)

Under Steadman, the following issues are considered.



(1) the egregiousness of the respondent's actions;

(2) the isolated or recurrent nature of the infraction;

(3) the degree of scienter involved;

(scienter n. Latin for "having knowledge." In criminal law, it refers to knowledge by a defendant that his/her acts were illegal or his/her statements were lies and thus fraudulent.)

(4) the sincerity of the respondent's assurances against future violations;

(5) the respondent's recognition of the wrongful nature of its conduct; and

(6) the likelihood of future violations.

No one factor is controlling.



I have broken down the above by inserting the defenses presented in the CMKM response below.


(1) the egregiousness of the respondent's actions;

Respondent, pursuant to Rule 12g-4(b), had 60 days after the filing of the amended Form 15 on February 17, 2005, which would be on or about April 17, 2005, to file its reports. Respondent’s actions lack egregiousness, in that its obligations did not occur until after the filing by the Commission of the Order at hand.

(2) the isolated or recurrent nature of the infraction;


Respondent’s actions were isolated and not recurrent in that once the respondent learned of the requirement for filing the amended Form 15 on February 13, 2005, the Respondent immediately commenced setting into motion the preparation of financial statements, setting meetings with the Company’s auditors, and counsel for the Company in anticipation of the preparation of the periodic reports.


(3) the degree of scienter involved;


Respondent lacked the scienter required for willful misconduct, in that Respondent relied on the advice of counsel indicating that no reports were required after the filing of the Form 15 on July 22, 2003.


(4) the sincerity of the respondent's assurances against future violations;


Respondent has demonstrated the sincerity of Respondent’s assurances against future violations by nominating an additional board member for purposes of conducting an internal investigation of the Respondent’s corporate matters, setting up procedural internal controls, and setting into motion the coordination of bringing current the outstanding periodic reports. As a result, significant dollars have been spent by Respondent to assure its corporate compliance with the reporting requirements of the Act.


(5) the respondent's recognition of the wrongful nature of its conduct; and


Respondent recognizes that it was of the mistaken belief that Respondent was not required to file periodic reports as of July 22, 2003, and has recognized the wrongful nature of its failure, and has taken corrective action.


(6) the likelihood of future violations.

f. Respondent has established significant reporting controls to provide assurances that Respondent will not either mistakenly, or intentionally violate the reporting requirements, once such reports are brought up to date and current.
g. Respondent’s financial position is such that Respondent is able to incur the coats associated with its reporting obligation.
h. Respondent has retained professionals specializing in federal securities and public company reporting requirements and is sincere in its desire to continue with its reporting requirements under the Act.





(I just hope it is Willy’ed down enough for the SEC to understand it.)


I would also like to say that I believe they included more than enough defenses than that were required ensuring more can be involved and brought to light.

The Risk/Reward ratio has been thrown off balance out of favor of the SEC. I think looking at this... the SECs best choice in the matter is to either dismiss the hearing, or be very lenient and perhaps come up with a schedule for CMKX to follow as opposed to pressing the action.

Everyone wants to avoid headaches especially when they acted inappropriately to cause their own headache.

Stoecklein did a great job IMO.

« Last Edit: 04/12/05 at 04:19am by georgeburns »