The story of the transfer request

It is my understanding that at the beginning those inside Onteco Corporation working for this hedge fund guy wanted to resist the dilution path to which he led them later. So after seeing the way I was able to buy the amount of shares I bought with millions of shares easily thrown to me when I place an order I had my doubts and wanted to check to see if I was really receiving those shares in my account. The account in which my buying of this stock was concentrated at that time was my account with Fidelity . The test I wanted to do was to transfer those shares from that account to another account of mine.While that may not sufficiently prove that those shares were really delivered to my account it would at least provide a better sign for that.

I tried two or three brokerage firms with which I have or had accounts. I don't remember exactly how many but I remember that I became confident that they did not want to do it because they were cooperating and covering for Fidelity and that I most probably can easily show a similar response from other brokers to anyone seeking more samples.All the transfer requests started with the brokerage firm accepting my application without any problem like a very routine procedure. Then it was very obvious that after they make contact with Fidelity they come with various excuses. The difference between the way they were accepting to do the transfer at the beginning ,without stating any of those objection even days after receiving the application, and the way they acted later was very clear. They were all clearly excuses intended to avoid doing the transfer because most probably ,as I suspected,Fidelity was cooperating with the hedge fund guy by enabling him to sell a big amount of shares without requiring him to really deliver those shares. Scottrade went far enough to later even fabricating a new specially designed rule that they do not accept transfer of penny stocks as the reason for not transferring the shares. 

Notice that I am aware that the above might be seen as conflicting with what I said in the story of Viking Systems (VKNG) that the hedge fund guy sent SEC officials to pretend (although very poorly) that they were interested in investigating my complaint while their real intention was to find out for the hedge fund guy if it was me who made the big buying on 10/22/2009 or some other hedge fund guy. Now one might say: if he has the power to do what you described above why would he need the SEC to find out your position of a stock?

The answer to that is, yes, if the same thing happens today he probably wouldn't choose the SEC to find out my position at Scottrade or any other broker but at that time he did. Why? Probably because at that time he did not know with which broker I had my account and /or did not dig sufficient connections to find out about my account or have the special services he wanted from the brokerage firm so he used the SEC path for being the ready easy one. In any case I clearly stand by what I said in there and here without any hesitation.    

 

Probably just for fun

One of the games this hedge fund guy played and could be just for fun is this. I once lost access to my bank account (the same bank I think he wanted to attack because they did not as easily provide him access to my account as did other financial institutions so he made a cyber attack and spread it to also include other banks then blamed it on china to throw away suspicion). Every time I contact the phone number related to that matter I hear the name of the bank followed immediately by "Good by" and the phone call ends. My email to the customer service did not lead to anything special except the suggestion of going to a branch office .It was not only that number  but I also tried and heard the same thing most or all of the other main phone numbers related to individual banking and I kept wondering how could they be OK with their system not functioning to this level. I kept receiving the same message from that phone number every time I call for about a week or more according to what I remember until I decided to go the branch near me to resolve the issue. When I went there they told me that they also need to contact that same number to solve the problem just like me. To my surprise that same number worked fine when called from that branch so I stopped the process and went back to my home to restart and complete that same process. But when I called I again received the same machine response announcing the name of the bank followed by "good by" ending the call. Because of the different response between the branch and my home I thought that I need to also try my cell phone and when I did that everything worked fine just like calling from the branch office.

As you can see it was a game targeting only me through my land line . I told the customer service when I reached them from my cell phone about what happened but who would believe such a story.

Of course I am aware that he might have played that game entirely through the internet phone company I am with without any involvement from inside the bank. But there also times when my access was temporarily disabled because of what is hard to be seen as other than through internal game. 

 

The process servers I contacted

Almost all the process serving companies I contacted , and I contacted a lot, were clearly contacted by this hedge fund and conspired with him against me. You would think that having a job where they may serve eviction papers on the poor they may at least try to balance that by also serving things on the bad rich and powerful. But no, they appear to be far from feeling such a thing. One of them (Steve Carlyle from Florida Service Of Process) not only accepted the job then did not really try to serve after being contacted by the hedge fund guy but actually he himself actively sought to take my case in order to prevent me from serving the papers using other process servers. Then as an additional service to the hedge fund guy he added additional charges for things we agreed I shouldn't pay any more after the relatively big charge I already paid him. And guess what? The hedge fund guy made that Discover Card company repeatedly declares the charges as valid despite that I disputed them three times and I have email proof that I shouldn't be charged.

Anyway, I have things that could show what I am saying here are not baseless accusations in case someone wants to prosecute the like of those not to betray the trust of the people.

Like I mentioned in the story of Viking Systems stock (vkng )

(The Earlier VKNG Encounter , The Earlier VKNG Encounter -2),

I let most of a gain of more than $2 millions on its way for more, evaporates because of the illegal actions of this guy while I was trying to give him time to correct his mistake to a safer path for him. He then followed that by messing the rest of my investments in other stocks where I recognized his  games, from the inside of these companies before they start climbing higher values and something of the kind to what happened with vkng repeats itself.

[ (Added 12/15/2013) It is amazing how much readiness there is in many public companies insiders to conspire against their own shareholders with the like of this guy. But why wouldn't they? What would make them avoid joining someone who had his way with the court system the way this guy did here and can make the USPS take your Brief to the court after 10:30 in the night? Who would prosecute them? The SEC? The SEC may prosecute  them if they DONT]   
 

NSA? What NSA?

 

I got this guy watching everything I do on all my computers and tablets using what seems to be viruses written by a professional entity working  for him like an organized crime and still nobody cares? 

Frivolous Motion

The same party that submitted the time enlargement motion that was the subject of this post

Deeper Corruption at the US 11th ...

 

yesterday submitted a motion asking for my appeal against their defendant to be dismissed because it was not filed within the 30 days of the judgment dismissing the case against that defendant although it was an interlocutory order not final. It is clearly not a significant probability that they submit such a thing to the court without counting on support from inside allowing them to do that.

 

Frivolous Motion 

Docket forgery or backdating ?

The link below shows how the docket entry for 11/15/2013 suddenly appeared starting 11/25/2013 and was not there on dockets of dates like the 16, 19, 20 , 21, 22, 24 of November 2013. These links show print screen images of the docket entries for those dates saved which I saved to my computer and that is why there is a local address in the address bar of the browser.

Docket forgery or backdating?

(Tip: to see the image at its actual size continue to double click on it until it reaches the maximum size then double click on and adjust the position of the white rectangle inside the smaller picture on the left side)

[(Added 12/3/2013) I still cant understand how a court serious in conducting its business without a mess would allow docket entries without entry dates]

Deeper Corruption at the US 11th Circuit Court of Appeal

Look at this. On 11/18/2013 I suddenly received a phone call from the lawyer firm of one of the defendants (Action Stock Transfer Corporation) requesting that I agree on an extension for them to file their response brief with the Appellate Court. They did not appear to the court until two days from the due date for them to file their appeal as if they were asleep and their alarm clock just rang. They also were not asking for a day or two but the whole 30 days given to them to respond, again. I agreed which probably was a mistake. Nevertheless, my intention was to make my agreement contingent on the existence of good cause that is far from what the joke of their actions and what they submitted satisfies. In other words I was counting on the court to act reasonably and my agreement was intended not to stand against a court's decision for a good cause but look at what they did:

1-They appeared only two days before the due date.

2-They failed to comply with 11th Circuit Local Rule 26.1-2 (c) which required them to file within 14 days from the CIP certificate (FRAP 26.1) I filed on the 9/24/2013 a notice with the court indicating their agreement or changes to that certificate.

3-They failed to comply with the 11th Circuit Local Rule 31- 2 (c) which states that "If a party’s first request for an extension of time to file a brief or record excerpts requests an extension of more than seven calendar days, the motion must be filed at least seven calendar days in advance of the due date". Their due date was on the 20 of November and they filed their motion on the 18th.

4- They also failed to satisfy the particularity requirement stated in 11th Circuit Local Rule 31- 2 (a) which states that "A first request for an extension of more than seven calendar days must be made by written motion setting forth with particularity the facts demonstrating good cause".

Here is what they mentioned as "grounds" for their request (They used "ASTC" to stand for Action Stock Transfer Corporation):

"1. Appellee, ASTC’s answer to the Appellant’s Initial Brief is due on November 20, 2013.
2. Appellee is in need of additional time in which to finalize its answer to the Appellant’s Initial Brief.
3. The undersigned has in good faith consulted with Appellant regarding this matter. Appellant has agreed to an enlargement of time of thirty days (30) for ASTC to serve its Answer Brief up to and including December 20, 2013.
4. This is the first request for an extension and it is not being made for any improper purposes or for delay"

Do you see any "particularity" here as stated by Local Rule 31- 2 (a)? Do you even find it stating any cause worthy of noticing, not to mention the "good cause" mentioned in that same rule ?

Assuming there was a good cause, although clearly there isn't, where is that other good cause that prevented them from filing that request at least seven days before the due date as required by Local Rule 31- 2 (c)? They did not appear until the last two days before the due date and did not even bother themselves to file their required note of agreement or change with the CIP certificate I filed with the court much earlier.

In fact, that same Local Rule 31- 2 (c) which stated the requirement of seven days in advance for such request also went on to say about a motion that fails to satisfy that condition:

" Such a motion received by the clerk less than seven calendar days in advance of the due date for filing the brief or record excerpts will generally be denied by the court, unless the motion demonstrates that the good cause on which the motion is based did not exist earlier or was not and with due diligence could not have been known earlier or communicated to the court earlier"

Like I said above they failed to satisfy the initial good cause condition, let alone another good cause condition for not filing their motion based on that first good cause earlier.

Remember, this is not the same as when someone unexpectedly receives a complaint and request an extension of time to respond. This is an appeal process with the notice of appeal served on them much earlier so receiving my brief was expected and the issues are not new.

Notice also, that this is not a party representing itself. It is a lawyer and not just a lawyer from anywhere. It is a lawyer from a state belonging to the same Eleventh US Circuit of Appeal. Compare that to my position here as a layman representing himself who is not even from the same appeal circuit . Nevertheless, I only missed on recognizing the CIP form requirement which caused a late filing of only one day (actually only couple of hours) and filed the appendix for the brief one day late. That later thing happened during a time when my brief itself was not delivered properly to the court because of an intentional action by the US mail and I did not even know when ,or even if , it will be received. Yet despite all that confusion and uncertainty and the US mail conspiring with the defendant's side I was only late only one day and I am one person working by myself. So what happened with that lawyer firm couldn't he request his secretary to file this motion seven days before the due date if he was taking things with any level of seriousness?

As for my brief, it was filed on time despite that I did not recognize how for my case the requirement of receiving the record from the district court is considered satisfied with the docketing of the appeal notice and as a result of that I got only the 30 days remaining of the 40 days time period which I was under the impression that it hadn't started yet. I also had to deal with a set of issues of which the issue related to this brief related to Defendant Action is only one item.

Even in the first letter I received which set the time for filing my brief I was told that requests for extension of time will be "frowned upon" by the court, not to mention a request like this.

As you can see, this was far from being a good cause request and one cannot see why would it be satisfying to any judge acting in good faith. It is a request that was the result of extreme recklessness or playing games. It asks for no reason for a repetition of the entire period given for it to respond like a child asking for a "do over" in a game he is playing just because he likes to have another chance.

Despite all that, the request was granted.

By the way, I even sent my brief and appendix to the defendants through priority mail.

Request For Time Extension

Order Granting That Request

Like I mentioned earlier in the story of VKNG before this,this hedge fund guy sold and kept fake shares in the system with those helping him making the strangest and unusual SEC filings and the SEC did not care except to conspire and serve him in making sure if it was me or another hedge fund who suddenly interfered to buy the amount of shares I bought on 10/22/2009. So as you see, if you are one of the like of this guy you can, not only forge shares, but also clearly declare that in your filings with the same institution that was established for the purpose of protecting against such things and nobody cares. You can also follow that by agreement to purchase shares based on market prices while you yourself keep those market prices under pressure and nobody cares.You can then assign fake board members to help you acquire the corporation cheaply later and no body cares. You can even manipulate trading volume beyond what can be on a Bugs Bunny Cartoon and no body would care even if you bring that to their attention.

No body digs after the like of this guy, certainly not the SEC which is nothing more than a protection cover for his kind. After all,think about the audacity of what happened in that district court and things like the 10:30 at night US mail delivery to the Appellate court and you would get an idea about the above the law and freedom to do whatever he wants status to which this guy is accustomed and expects to find.

My record keeping system

Unless I worry about some moral wrong, I try to restrict myself with this record keeping system when I post. When I make a post I give myself  the freedom to change it how I want and as much as I want including deleting it completely as long as that happen within up to 24 hours after I post. After that period I can only add things clearly marked with the date of that addition. 

Late Entries

This unexplainable late entry for filings of this case by the clerk office of this court is more damaging to someone who have to file by mail not electronically like me and could benefit from early access to filings through PACER in order to compensate for the time it take mail to reach the court (assuming it is not taken to it at 10:30 in the night) than the other side who can file electronically.   

 After all this is it any wonder that we have been eaten alive in the market and the SEC is a phantasy that exists only in the minds of those who think this is still the thirties? Actually, the SEC does really exist but it is to help protect and benefit hedge funds like this.

Accessibility and Transparency

Look at the advantage and empowerment a basic level of transparency through the PACER system gave. God knows if there were equivalent accessibility and transparency on things like judges and jury selection what could have been revealed about the reality of the work process inside courts here.   

The wider view to the game

Like I said earlier I think the game is a three parties game that started with the hedge fund guy and the clerk office of that court then joined by the USPS mail. There is a form called "CERTIFICATE OF INTERESTED PERSONS AND CORPORATE DISCLOSURE STATEMENT" (CIP) that was required to be filed within 14 days after filing the appeal but I noticed that late. I sent it overnight but it still arrived the day after the deadline in the morning. Couple of days after it was received I checked on it in the PACER system and could not find it so I contacted the number for the "Case Handler" of my case. The one who responded to the phone kept me waiting for minutes as if she was arranging things with somebody else and wanted to play a game she wasn't sure how to proceed with it. Anyway, I started saying "hello..hello" and she apparently decided to come back and told me that everything is OK. However, I kept checking the PACER system and it was not listed for some time despite the current listing showing it filed on 9/24/2013. The link below shows that up to 10/6/2013 it was not listed there.That form is important enough to that court that the clerk is not allowed to submit the brief without it. That was their first attempt to mess things. But apparently that game was impeded by my frequent checking on the PACER system. That leads us to what seems to  be the second plan.

The second plan was to prevent me from seeing what is going on through the PACER system. The link below shows how searching for my case returned "no record found". Notice that even when the system becomes busy or data being being updated it may become inaccessible but I don't remember it returning any incorrect result. In addition, I was able to search for and find another record but I neglected to save a proof. Anyway I don't remember this plan continuing more than couple of days before it was also abandoned.

You can see here how the plan of making the USPS take my appellate brief to the court at 10:30 in the night represent an extension and completes the above picture.

 

The court receiving the CIP Form on 9/24/2013  

 
Court's docket showing the date of 9/24/2013 beside he CIP Form

 
But as you can see here, at least up to 10/6/2013 the CIP Form was not listed

 

Searching for my case returning "No record found"

[(Added 11/7/2013) The above is strengthened even more with how that the USPS probably did not need to take my brief to the court as late as 10:30 in the night to find the court closed and avoid delivering it and could have achieved the same result hours earlier (The intention seems to have been to keep the situation hanging as much as possible so I wont be able to correct it by re mailing the brief and that is why a relatively better excusable plan like, for example, losing the package was not implemented) . But it seems as if that stretch was motivated by an exaggerated attempt to avoid any part of the responsibility on the clerk office for not receiving the package.

 

That  in turn is strengthened by what could be seen as an attempt by the clerk office to counteract the blame and protect the USPS by listing the date when the 10:30 night note was listed beside the brief entry in the docket sheet. It was like a statement saying: Look that late attempted delivery did not affect things and things are still the same as if it was delivered in time on that date.

 

Clearly, the clerk office most probably was not in direct connection with the USPS regarding this matter and the hedge fund guy is the one at the center of the communication and regulating things.

 

Now the question is if the group will be expanded through biased assignments of judges to the case]   

 

Self Magnifying Evidences

How much more should the things I show be clearer to warrant actions here? From what happened in that "district court" to this mail story these are all clear corruption and conspiracies that happened in day light in front of everybody. In fact, like I said earlier , I never expected that things such as these would be given away this easy and had only arguments on the corruption of the SEC and financial system in my reservoir to support or augment potential credibility and related worthiness for my side. The easiness with which these clear corruption evidences were provided magnify these evidences even  more with respect to how corrupt the system here.        

Even if we assume there would be a prosecution there would also be ample opportunity to stop that at various stages during the process. It is all a joke to the like of this hedge fund guy.

This is corruption not capitalism

While others converted socialism to dictatorships capitalism was converted in this country to extreme corruption. While not the same, both involve controlling and abusing people although it is through less direct means in the later.     

Immune from prosecution.

What happened in this usps mail story shows to what level hedge funds like this are immune from prosecution and control things.   

This is how things are showing now

The court's docket is listing my brief while the USPS tracking is still showing that it is in transit.

The court docket is also showing the date 10/23/2013 beside it. Unlike the filing system for the district court which lists both filing date and entry date, here they list only one date which I take as the filing date (except that for the brief and its appendix the mailing date not the arrival date is the filing date). But here on that date only a note was left for them at 10:30 in the night so it means that they counted receiving the note same as receiving the package. Nevertheless, any attempt to correct the situation by the court will not in any way justify what happened or undo the very clearly unavoidable conclusion that there was a conspiracy here with USPS mail of that area. Why would the court care about protecting the USPS mail? Because apparently the clerk office of that court wanted to take the pressure of a partner in the game. It is a three partners game played by the hedge fund guy, the USPS mail and the clerk office of that court and they may try to shift the related responsibility or provide protection among themselves for the best possible arrangement. Although I was busy talking about only a part of that picture, that was my understanding for the situation and is not something I just reached and I intend to post what supports that.     

 

Court of Appeals docket on 11/1/2013

 

USPS tracking on 11/1/2013

  

"Land of the free"

I wonder how does land of the corrupt look like?

In case not enough

In addition ,in case the SEC and corruption in courts and every thing else is not enough for the poor hedge fund guys like this guy here, you now have an fbi director who wanted to correct the market by prosecuting Martha Stewart and he himself may have relationships and connections to the like of this hedge fund guy because he himself worked for a hedge fund. It is not like the previous one's obsession with trapping some idiots by selling them some Nerf weapons then claiming a victory in the fight over "terrorism" was doing anything to correct the extreme corruption here but at least one would have less reason to believe that he is intentionally tilted to the other side.

Imagine what is inside

Again like I said about the outrageous things that came from that district court, if this is what hedge funds like this can do outside in front of everybody imagine what is going on inside where no one outside can see and you have to depend on the oversight of the government over them, LOL.

A Theoretical Conversation

Imagine this theoretical conversation between me and another person before I mailed that brief of mine:

-I am mailing my papers to the court of appeals and I am afraid some game will be played and they won't receive it?

-Why would they not receive it?

-I don't know the hedge fund guy play some kind of a game to prevent my mail from reaching its target.

- Are you using private shippers like UPS or FedEx?

-No just the regular mail.

-So in your paranoid mind you think that someone will be able to conspire with the federal mail system that on which courts and every one had depended for over two hundreds years just against your mail to that court? And how would your delusion make you think that would happen? Losing your package? Delivering it very late? Who knows? Maybe the mail office there will even give your package the special treatment of working late very far from their normal hours in order to take your package late in the night to the court after it is closed so it miss receiving it, LOL.

And that was exactly what happened.

What is astonishing in this recent thing

 

Delivering my package to that court at 10:30 in the night was not the kind of events like, for example, losing the package or delivering it days later that one may be able to provide an excuse for it. This action on the other hand is very far from being fit for even any argument that is  just reasonable on its face and helps in seeing that action as anything other than an intentional action that is not a consequence of any difficulties or serves any legitimate purpose. There were very clear and under sun light two opposite sides the law side and the very unjustifiably against the law hedge fund guy's side and the one who did that action chose the hedge fund's side.



 

It is clearly not very hard to see disregard to the consequences made by those with ,for example, suicidal intentions or those who intend to flee. But for someone living like everybody else to choose, publicly and under the sun, that hedge fund guy's side despite how clearly unjustifiably it is against the law side is what astonishes the mind here. In other words, despite the direct contradiction between the law side and the hedge fund guy's side here, that person ,while still not counting himself as external to the system, publicly chose to bet on the hedge fund's side. That shows you what power hedge funds like this have over the government and the system here.

My appellate brief

This is my appellate brief

BEYOND OUTRAGEOUS AND SHAMEFUL

For the hedge fund guy to stop even the federal mail system I used from delivering my papers to the court is beyond outrageous and shameful. Anything left ?????????? 

But why would he hesitate to take the audacity of his actions to this level. It is not like that district court was anything other than a joke in its outrageous rulings in serving him. The whole thing was very clearly ridiculously out of the usual way things should be fairly done to begin with and it  passed like nothing happened. 

USPS took my brief to the court at 10:30 in the night

Want more things showing the outrageous corruption for and control by hedge funds like this guy in this country? Here is one more: I sent my appellate brief to the eleventh US circuit court of appeals on Monday using USPS Priority.When do you expect it was attempted to be delivered ? Wednesday? Thursday? Friday? None of that. It was not delivered on any of these days during normal business hours. It was attempted to be delivered to the court after 10:30 PM Wednesday. How about that? Anyone seen this happen before? Then in their tracking they mention "Business Closed".Of course the business was closed. What court is open for regular mail delivery at 10 PM?

I ,in fact, anticipated that the hedge fund guy might be playing games through the mail delivery this time. Nevertheless for a mail man to attempt delivery of my mail to that court at 10 PM in the night was never expected and I just noticed it this day evening.

Why would a mail man deliver what I sent to that court at 10 PM? It was "out for delivery" before 9 am on the same day so what took that long? Assuming there was a reason for failing to deliver it during normal business hours on the same day, why not deliver it in the normal business hours of the next day? But it is very clear that the intention was to deliver my package to that court when it is closed. How can corruption be any more audacious?

What is the purpose behind this game? One possibility is avoiding receiving my brief until it gets returned back to me. The other possibility is control of timing to make my case fall to specific judges whom the hedge fund wants. By not receiving my brief when it came the clerk's office may later choose the best timing to bring it based on the work load on the hedge fund's preferred judges and make it assigned to those judges. In addition about third of the judges in that court of appeals are selected by other judges and not a real appellate judges.[(Added 10/29/2013) That last statement was about the number of judges who actually handle cases and was based on simple sampling I did showing cases being handled by two appeal court judges with one other judge from outside]  

 

USPS delivery attempt to the court after 10:30 PM

Top of above page showing tracking number

The tracking number is: 9114901159818640372360

 

 

The Next In Line

Actually, what is generally called  "freedom" here is only freedom from being oppressed by the government. But unless sufficient intentional efforts were put to protect from other forces trying to fill that gap, people would be oppressed by the next in line force which happened to be the financial power in this case.

You won't be left alone. And having the tool of a government you can choose is a big step that can empower the path to freedom but it is not in itself the final destination.

From Freedom To Corruption

Congratulations, freedom has been converted here to a very deep corruption. Moreover,like a person with neurosis who requires even more intensive level of treatment because his spoiled ego sees his neurosis as good thing, not much can be seen in concern about the problem.

" Justice For All"

That is the slogan here and these are the corrupted government agencies and the courts and how they work for this hedge fund guy and the like of him. So what could have happened had that not been the slogan here? Congress and the president would have had gladly allowed the hedge fund guy to use a Drone to attack me?  

The Earlier VKNG Encounter -2

Here are some links related to that story

My buying for Viking System's (VKNG) stock on 10/22/2009 (which also represent all my buying of that stock in my account there)

Snapshot of my account on 11/17/2009

Midsummer's  filed selling of Viking System's (VKNG) stock:

 Midsummer's filed selling of Viking System's (VKNG) stock -01

Midsummer's filed selling of Viking System's (VKNG) stock - 02

Midsummer's filed selling of Viking System's (VKNG) stock - 03

Midsummer's filed selling of Viking System's (VKNG) stock - 04

Midsummer's filed selling of Viking System's (VKNG) stock - 05

Midsummer's filed selling of Viking System's (VKNG) stock -06

Midsummer's filed selling of Viking System's (VKNG) stock -07

Midsummer's filed selling of Viking System's (VKNG) stock -08

Midsummer's filed selling of Viking System's (VKNG) stock -09

Midsummer's filed selling of Viking System's (VKNG) stock -10

Midsummer's filed selling of Viking System's (VKNG) stock -11

Midsummer's filed selling of Viking System's (VKNG) stock - 12


Midsummer's  unseen before in the market and very hard to be believed claim of buying back for all the shares it sold according to the fillings above. Read the green text under "Explanation of Responses":  :

Midsummer's buyback claim filed on 12/14/2009 for 420500 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/15/2009 for 451000 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/17/2009 for 906500 shares it reported as sold in its filings above

Midsummer's buyback claim filing of 12/18/2009 for 650000 shares it reported as sold in its filings above


Although it is not needed to prove that my buying on 10/22/2009 was from a hedge fund, here are links showing an entity filing that support it sold an amount of shares that can include those I bought on 10/22/2009 :

First, here the entity filing an ownership of 1977394  shares on 10/26/2009 four days after my buying on 10/22/2009. Note also the "October 22, 2009" mentioned at the first page as an answer for "(Date of Event which Requires Filing of this Statement)".

Filing entity ownership on 10/26/2009

Now, here is the February 13, 2009  for that same entity which is the most recent ownership filing
before the filing above and it shows an ownership of 4227394.

Filing entity ownership on 02/13/2009

Subtract the first number (1977394) from the second (4227394) and you will reach 2250000 shares which clearly can include the shares I bought on  10/22/2009 (2159247).

 [(Added 9/20/2013)
The stock stayed on the SHO List not only for 13 days continuously but from 11/14/2009 to 1/4/2010 continuously. Here is link where the reader can click on all the dates in the range mentioned above and see the "VKNG"  in the list of all those dates.

 ftp://ftp.nasdaqtrader.com/SymbolDirectory/regsho/

 ]



 

I don't want to dwell too long on the topic of the preceding post except to add that encouragement of entrepreneurship ,if not being used as an excuse to favor some group over other ,may require a scope of view that is wider and more comprehensive than it seems to be implemented in this country. There should be a balance between encouraging entrepreneurship for a specific line of business in contrast to that of the entire market. That balance seems to be missing here. Maintaining that balance may require the government to enter as a competitor in one line of business so that it can support entrepreneurship for the rest of the market.      

I just want to know why governments (states and federal) is not allowed to enter into the car insurance business? Or is this also one of the things that gives unfair privilege in this country to those with big wealth? I think that governments, especially the federal government because it has better means to do that, should be allowed to enter and compete in any business. Having the government enter as a competitor can help in to two directions. First,clearly, it can provide a significant help in filling the gaps between product pricing and the paying capabilities of potential buyers and in turn help in keeping the wheel of the economy turning. Second, it may provide a way to prevent monopoly and price fixing among those who are supposed to be competitors in away that even antitrust laws cannot reach.

 

Imagine how this idea can improve the economy:Those who are running businesses should always keep in mind that the government may enter any business if they do not compete in a way sufficient to close the gap that provide an opportunity for such entrance. One of the most obvious and direct implementation for that seems to be in that of car insurance business. What is an insurance business? It is nothing more than some entity saying: Hey I got too much money in case something happen. Who is better equipped to say that than the federal government? An insurance business is just an accumulation of financial power because of which further accumulation is allowed. There is no science or any special capabilities needed.So what prevents the federal government from entering such business other than being on the side of the most wealthy instead of all the people? Look at the prices for car insurances then think if you can even make a claim that there is a serious competition there. Car insurance companies can probably charge less than one forth what they charge and still make big profit. Is there any question that the federal government can compete successfully there?

Also, if I am going to pay more money then why not at least make that goes to where it can help others in the like of food or medicine for those in need rather than making the most wealthy even wealthier through such a business. This is how you improve the economy for any one really interested in that more than he is in serving the most wealthy over everybody else. 

Shortcomings Of The Executive Branch

The shortcomings of  congress in implementing a real and fair justice system that works on everybody including those with the financial and connections power are very substantial because courts provide last resort to seek justice. Otherwise, the failure starts with the top of the executive branch. For example, when it comes to the SEC, those who has been coming to the top of the executive branch in this country apparently think that all what they have to do is just assign a head to that entity and, in their walking over the rainbow world, they think that everything will be OK for an entity that ,if wanted to continue, would need extreme cleaning from its most basic level and roots.

If I was the one with the authority

 I cannot imagine myself not turning the world upside down if  I was the one with the authority like those in congress and someone showed me the brazen things I showed here in the federal court system . Those things showed that the system is far from being fit to be trusted especially when things come to those with the connections and financial power. The reaction I saw, instead, was that of people who lack the will to fight corruption and correct things as if they live in a dictatorship.

Courts here and standing in dilution cases-4

Like I said earlier, I am back to this topic. I intend to make this argument short and clear. Here is one current reasoning of mine in dealing with the technical level.

 

Even if we consider "Authorized Shares" in the article of incorporation to mean that the generated shares will be owned by the corporation then the reasonable way to understand that would be in  it is being a conditional ownership. In other words, ownership  by the corporation for the generated shares won't start unless those shares were generated for the best interest of shareholders. What calls for this understanding is that ,unlike the initial capital for example, Authorized Shares can be used in a way that is for the best interest of the corporation but not necessarily for the best interest of shareholders. [(Added 9/12/2013) Notice that the preceding statement also imply that even in cases where there is also an injury to the corporation a sufficient path to recovery for shareholders through the corporation equivalent  to that through direct standing may not exist].Since it is reasonable to assume that , from the start, owners of corporations do not want to give away their ownership unless it is for their best interest, it follows from that that conditional ownership by the corporation for any shares generated as part from the Authorized Shares.[(Added 9/12/2013)  Let me state that in another way. Since it does not make sense that owners of a corporation would choose to authorize a power that can be used to take away their ownership in the corporation for other than their best interest with no right for them to demand legal recovery while there is a better alternative, then the ownership by the corporation for shares issued as part of the Authorized Shares needs to be understood as being contingent on that issuance being for the best interest of shareholders].That means unless shares were generated (issued) for the best interest of shareholders then ownership by the corporation for those shares did not happen and therefore shareholders still have their direct standing to bring  lawsuits in dilution cases.        

The Earlier VKNG Encounter

Flashback to the preceding post:

I started trading stocks from August 2004. Two years after that ,in 2006, while watching the trading of a small/micro cap stock I was holding I started paying attention to how the selling of shares there seemed to be part of an attempt to pressure the price of the stock rather than trying to get the best price possible. I complained to the SEC and as a result of that my name was revealed to the hedge fund guy who was the same guy here. Anyway, later I started to pay attention and recognize the same thing everywhere I go in the world of small/micro cap stock. For years and years, I also wrote about it in the message boards of these stocks and my writings sounded weird and drew very little ,if any, expressed agreement. That did not affect my believe in what I thought was very clear and I became more interested in making a lemonade from these kind of lemon. In October 2009 I noticed what seemed to me as one opportunity to apply that understanding of mine on a stock that seemed to be played in that same way on the stock of a public corporation (at that time) called Viking Systems which was trading under the ticker VKNG. I noticed that the stock was being pushed down to an extremely low prices.On 10/22/2009 I jumped in and bought over 2 million shares for less than $13000. The guy playing the stock was this same hedge fund guy here and he did not care about selling me all these shares. In fact, if I wanted I probably could have bought much more from him in the next days at also extremely cheap prices but I had to stop buying because of the filing requirement on 5 percent owners of individual investors (According to 17 CFR 240.13d-1 (b) (2) it seems that a hedge fund,on the other hand,can acquire and dispose of ownership less than 10 percent as much as it like and wouldn't have to file unless it has that ownership on the last day of the year). A few days after that the stock started to move higher and reached over $1 a share before the middle of November 2009. Along the way,this hedge fund guy continued his pressure on the stock ignoring the reality that he himself chose. He did not have enough shares to do that and as a result the stock entered the Regulation SHO Threshold Security List (SHO list) three times. The SHO regulation is related to the selling of shares without really delivering those shares to the buyers account. If these shares reach a specific percentage and remain at that percentage for a specific period of time then the seller of those shares (or his broker) will need to buy and deliver those shares .Yes, I know,it is absurd. It is like saying you can steal but don't exaggerate too much. However this the best individual investors can get from the legislators and regulators. If that was not enough, consider when was this regulation enacted? 1934?No. 1950?No.1965?No.1980?No.1990?No .It was not until 2005 that apparently they reached the recognition that selling nothing as shares is not acceptable. Anyway, returning back to the main story here, the hedge fund guy sold enough fake non existent shares to make the stock goes to that SHO list three times. At least in one of these three times it stayed long enough there to satisfy the buying back requirement of the SHO Regulation while in the other two it came very close.[(Added 9/20/2013) Checking back the record shows that actually the stock stayed on the SHO List from  11/14/2009 to 1/4/2010 continuously]. Nevertheless there was not any noticeable buying back and the pressure on the stock at low prices continued. It was not unreasonable to expect that buying back of these shares could have resulted in the stock reaching a price higher than $5 a share because of how squeezed this guy was.In fact that could be an understatement.Yet, there was not anything to indicate that even a part of that required buying of shares to be delivered to those who bought shares that were not delivered to them. Instead of that there was something that even on its own and without any of the above should have aroused a great suspicion to investigate what was going on. That thing was a sears of SEC fillings the like of which I had not and still have not seen. These SEC filings were filed on 12/14/2009, 12/15/2009, 12/17/2009,12/18/2009 by a company called Midsummer Investment Limited. This company initially filed that it sold millions of shares after the stock started moving higher starting from 11/03/2009 and filed on 11/16/2009. The newer filings on the dates mentioned above all contained this very unusual paragraph with variations only in the number of shares mentioned which I wrote in italics here

"On November 16, 2009, the Reporting Person filed 12 Form 4s reporting the disposition of shares of Common Stock of the Issuer (Accession Numbers 0001144204-09-059660 through 0001144204-09-059664, 0001144204-09-059666 through 0001144204-09-059670, 0001144204-09-059672 and 0001144204-09-059663, collectively, the "November Filings"). Subsequent to the disposition of the sales, on account of the failure to obtain legal transfer of the sold shares through the issuer, the Reporting Person's broker involuntarily elected to buy 451,000 shares previously reported as sold by the Reporting Person to cover the sales disclosed in the November Filings. The Reporting Person does not consent to nor has it exercised any discretion or control over the buy-in. Accordingly, this filing reverses the previously reported sale of 451,000 shares of common stock pursuant to the November Filings"

There were 2428000 shares in total reported in these filings which probably represented all the shares initially filed as sold. [(Added 9/15/2013) There was no need to say "probably" in the preceding sentence since I did count them and they are exactly the same number]. So, there were supposedly a buying back that ,again supposedly, reversed the initial selling of all these shares. There was not any indication that this buying of shares really happened. How this buying happened?From whom? People were talking about the stock in messages boards and none of them spoke about a buying back happened to him/her. Again,there were absolutely nothing supporting that claimed buying back really took place.This made the suspicion that 2428000 fake shares sold and kept in the system unavoidable.

Less than a month later I started telling this hedge fund guy through a message board on which he posts frequently that the game he was playing with that claimed buyback should be corrected or he will be reported. I had over $2 millions of gain and a potential of a much higher price because this guy was squeezed which all were taken down and stayed down because of the support of that fake buyback claim but I still wanted to give this guy time to realize the danger of the game of he played.

I waited for more than a 100 days trying to give this hedge fund guy time to deal with reality and manage himself in a fair way. What he did instead was to go to the company and offer them financing they were looking for at terms that sounded very tempting in exchange of shares. He sent a company called Dutchess Opportunity Fund, II, LP and made that deal through it. [(Added 9/10/2013) To be fair, the agreement was signed two days before I started writing about that buy back trick] .That financing deal gives the company the right to sell Dutchess shares anytime time they want based on a price that is only discounted by 4 percent from the market price. Initially I complemented those inside Viking Systems for getting such a deal. I based that complement on what is in the deal on its face while depending on the judgment of those inside with regard to how real it was and what was behind it. After a while I realized that the Dutchess was only a face and this guy was behind it. Who would accept to put himself under obligation to buy shares based on market price chosen any time by the seller without any restrictions? I don't think Goldman Sachs would accept such a risk not to mention a small fund. Moreover, who would want to take such a risk with a stock that jumped from under a penny a to over a dollar a share within less than a month? One thing that would make taking such risk reasonable is if Dutchess was counting on someone to keep the pressure on the stock inside the market. The financing agreement with Dutchess was also contingent on registering with the SEC for resale in the market 15 million shares.The company (specifically those who get this financing the CFO and/or the CEO) couldn't get financing anywhere before that not to mention one with such terms .All these and other factors and the timing of the deal made the conclusion that Dutchess was only a face and extension to this hedge fund guy unavoidable.

After realizing this I started writing to the SEC about that earlier strange filing and the rest of the story here. But that was after over a hundred days and millions of shares were already added through this financing agreement which may at least cover the original problem at the surface level. That doesn't mean that the initial game became untraceable. But one try as much as possible not to give any excuse to that fake entity called the SEC.What really changed by the passing of time ,however, is that the hedge fund guy had already dragged with him some of those on his side who were not inclined to take the unnecessary risk he was taking but lacked the will power to refuse continuing with him. Had I started fighting back early I probably could have strengthened that side of them.

But if you think the role of the SEC with the like of this hedge fund guy is only to stay away from investigating and prosecuting them then you are mistaken. It is also there to protect and serve. It may act to protect them from justice and also to serve their unjust actions. For after sending my complaints ,to my surprise,this time I received a response. That response came from the office of the SEC in New York which claimed that they want to make a teleconference with me regarding my complaint. Although at the beginning I tried to be more optimistic, by the end of the day I could no longer keep even a modest amount of hope that their interest in my case was real. It was very clear that they did not care about my complaint. Although I would still have seen it clearly without knowing what was their real intention, I had a very strong suspicion about what they really wanted and that suspicion became firmly established after attending that conference call they wanted. What they were really interested in was serving the hedge fund guy. Although he had his suspicions because of my posting and big interest in the stock, it appears that the hedge fund guy wanted to make sure I was the one who jumped in and made that big buy of the stock and not another hedge fund and for that purpose he used the SEC to extract that information.Here is some of what I wrote about that. At that time I was still not revealing my early entry and the position I made.

http://unallowedthoughts.blogspot.com/2010/07/corruption-beyond-belief-inside-sec.html

For this hedge fund guy, with the help of the shares he was acquiring through his Dutchess face were able to keep the price continuously under pressure inside the market on the stock. Then, taking advantage of the low price in the market which he himself was causing,in May 5, 2011 the hedge fund guy came again through a third face to buy shares in private placement.Of course, it can be much cheaper to buy shares through a private placement after the stock was kept at low price all that time than at the beginning.The new face he came through was a company called Clinton Group,Inc. (the investment manager of Clinton Magnolia Master Fund,Ltd.) and acquired 12 million shares and 9 million warrants exercisable at 25 cents a share for a total of $3 millions. In addition, although he had already acquired over 10.97 million shares through Dutchess financing agreement, he also made the deal contingent on registering for resale with the SEC those 12 million shares acquired in the private placement and it was declared effective with the SEC without any problem.

Midsummer Investment (the company who made the strange filings talked about earlier), "sold" all its holding of the stock (7,223,457 shares and 5,551,034 warrants) to the Clinton Group at the same time when that financing agreement was made. That shows even more how much these actions really belong to parties who are acting as separate entities or in fact parties acting as one entity with these games.

That claimed transfer of ownership also helped avoiding a restriction on the conversion of those warrants held by Midsummer not to lead to Midsummer's ownership exceeding 4.99 percent of the total outstanding shares.

The next step after that for the hedge fund guy was to use the ownership he made in the corporation to have his directors added to the board and three of them were added.

Now that he has his directors inside ,and certainly is  even in a much better position to keep the pressure on the stock price inside the market, he came through a company called Conmed to take the company through a merger. The offer price of 27 cents a share was empowered by how it sounded relative to the market prices which he himself had been keeping down under pressure.The merger agreement was agreed on by the three added directors and only one of the original directors with the rest of the original board abstaining from voting.

After all that, he did not wait long to play the kind of manipulation he played in this case and repeat the arrogant response in the manner I described in the preceding post.

This was only a summery and more could be added and elaborated on.

Not a slip and fall case

I am not here ,with this case,  going after someone for the like of a slip and fall case or other  unintentional injury or even  an intentional injury occurred once or twice or even  an intentional injury occurred several times. No, for months and months I kept buying shares and this hedge fund guy could have stopped selling me shares any time he wanted but he did not care. The basic reality of either to sell something and abandon its ownership or not to sell and keep it imposed on mere mortals was not sufficient for him or those whom he was using inside. He  sells then he fraudulently take back what he sold. People make onetime intentional action, or even unintentional, and have to live the consequences of that decision. This guy on the other hand continuously made the decisions to sell me shares for  ,again, months and months where he could have stopped any time he wants.  Not only that, but after I stop buying at each price stage he takes the price down to a lower stage not caring about the consequences of his decision in giving away that ownership to me. But why would he care? He can do whatever he wants and that SEC is more in his pocket than the change he may carry in it. Furthermore, he did all that for not a really worthy game. Even more, even if that worthless game  of taking a stock down to extreme levels was some kind of a necessity for him to play, he reached very low prices to achieve his aim and could have stopped from continuing to sell me ownership in the corporation before I acquired much of the percentage I acquired. But no, it was the arrogance of that who think he is in control of everything. After all that, is it any wonder when one put considerable effort to fight back such unjust arrogance?             

Not even close to sufficiency

The  court's  justice I am seeking ,which is until now is a joke, while necessary , even if found it is still far from being sufficient for making things work fairly and properly. The court system can only work with situations where the injustice and its proof can be seen and pointed out directly which are only the tip of the iceberg. The showing and proving of other law violations is dependent on  honest investigations by the authorities and the moon is probably closer than making that happen on the like of this hedge fund guy. Unless there is a real watch and willingness to prosecute the like of this hedge fund guy like anybody else then things are not running  properly and the whole justice system is only a fantasy. What I have seen yet is a ridiculously huge inequality in applying justice on the ordinary person and the like of this guy. Even if things are not stopped from the top it is only a dream that the investigation would proceed smoothly without being affected by a million things along its progression path inside. Look at what happened at this district court with my case. If this what can the like of this hedge fund guy cause to happen outside in front of everybody, imagine the probability that an investigation in the darkness of the inside, where no body can see what is going on, can be a real thing. In fact, if any thing, the investigation can help support what is being investigated like ,for example, with how the SEC investigation of Madoff ,instead of revealing what was really going on,became instead a device to support the legitimacy claim of what he was doing to those who were counting on the honesty of the SEC (which the poor people probably did not know is like counting on the human rights support from the like of Hitler or Saddam).  

 

Actions intended to appear outrageous

What intensifies the guilt of this court siding unjustly with the other side is that a big part of what the defendants did was made and intended to be shown as an outrageous thing to shareholders. Those inside were playing a game for the hedge fund guy to scare shareholders . The hedge fund guy doesn't need to be worried about SEC reaction to anything he does and that is why he did not care about how clearly  outrageous the actions he was making those inside do. So, when a judge look at these actions and the calling of justice dose not make him feel agitated and ask what the hell going on and resist a temptation to run after the defendants with a stick then he is probably in the wrong profession. 

An illustrating example

What happened in this court is also an example for an important distinction I wanted to make.

It is very probable that one may not find any discriminating personal opinion this judge has against my belonging to whatever I belong to, yet his actions were far from applying justice . I would rather have a judge with a discriminating personal view or expectations toward any kind of group I belong who apply justice and return my rights than a judge who is only good with his personal opinion.

Of course it is even better to have both qualities but I see here that concentration on secondary things eclipses seeing the importance of the question of justice although it is what empowers the significance of these secondary things.

It is probably for similar reasons that some black people were laughing about that fake show with the butter lady. It is as if they were saying: Oh, yes we see no injustice anywhere around us and that is why someone who once used a word we don't like should be a huge problem for us, LOL.   

The audacity of this corruption

It is astonishing that the hedge fund guy was still able to pull strings and make that court do the clearly outrageous things it did despite how it is well known that I brought the matter to the attention and watch of the highest institution in the land, the congress. The audacity of this corruption shows how deeply troubled this justice system when matters come to the like of this hedge fund and the power and control they have over that system.       

This district court was a joke

Time to go to the appeal court and see if it is a circuit court or also a circus court for this hedge fund guy to play his acrobatic games defying justice and the law.

Case closed

Last Monday the district court closed my case (13-20190-CIV-GRAHAM/GOODMAN) by dismissing the rest of  my case against two remaining defendants .But here is the thing. The dismissal order did not state that it was without prejudice and according to FRCP 41 generally dismissals without stating it is without prejudice means it is with prejudice. Nevertheless, although the dismissal stated not following court orders as the reason, these orders were related to serving the complaint and therefore just something that masked a dismissal according to FRCP Rule 4(m) for failure to serve the complaint within the 120 days time period which specify dismissal without prejudice. 

 

After all the earlier dismissals this court did, it suddenly issued orders giving me time to serve (and re-serve after it quashed my earlier service) the two remaining defendants as if that matter any more (one of those defendants, Dror Svorai ,  even limited himself to  mentioning only the county part of the address of where he alleges to reside in his affidavit asking to quash the service). 

 

Unlike motions from other defendants, the motion by defendant Dror Svorai did not ask for a dismissal and asked only for quashing the service so one can certainly put a theory that this was planned.

Court Order Closing The Case 

Court's order quashing service of process

On July 22 2013 the court issued an order granting defendant's Dror Svorai motion to quash service.
Here are links to the defendant's motion, my answer, and the court's order. 

Defendant Dror's motion to quash service

Answer to the defendant's motion

Court's order granting the motion to quash

Court's third dismissal

The third dismissal by this district court was related to Defendant Onteco Corporation, the main defendant, and was based on FRCP Rule 12(b)(6) and FRCP 9(b) and that I lack standing to bring the suit directly.Here are links to the complaint, my response to the defendants motion, and the court order. My original response also has exhibits I am not including them here because they were in response to something on which that dismissal decision was not based. Notice also that if the defendant hadn't emailed me his motion then I may not care about adding a link to that motion.

Complaint

Answer to defendant's Onteco motion to dismiss

Court's third dismissal order

Another justice system corruption sample?

Although not exactly in your face corruption like the one going on in that federal court for the hedge fund guy against my case, take a look at this.

Garst, et al v. Lockheed Integrated, et al

The man spent four years but he still couldn't provide a claim sufficient for the court? It even appears that he was represented by lawyers and was not filing pro se. It is not just that failure but how that failure happened, as the appeal court's opinion claims, is what make this suspicion unavoidable. The conduct of the plaintiff seems more of that who is trying to reach the end of something than that of someone trying to achieve it.

Based on the little knowledge I have and very short history in law related matters, something is needed to counteract the strong suspicion that lawsuit appears to be actually an attempt to protect the corporation instead of holding it responsible. It seems as if there had been things that corporation had done which could harm it  legally and in order to protect that corporation this plan was implemented. The plan appears to be to file a lawsuit mentioning these claims, or a lawsuit where these claims should have been mentioned, in an insufficient, messed up complaint to have it dismissed in a way enough to prevent the claims the corporation wanted to avoid from being brought again because of res judicata and collateral estoppel (the inability to bring again claims that were brought or should have been brought in a previous case that reached judgment on the merits). In other words the plaintiff was plaintiff only by name while actually working for the defendant. That of course assuming the complaint was really insufficient as described by the court otherwise the corruption is directly from the courts.         

Did anyone investigate this? Am I missing something or is it just another sample of the magnitude in government corruption when things come to the powerful and connected protecting themselves through illegitimate means? Why didn't the courts signal some kind of a suspicion or make a judgment based on that suspicion in order to foul such possible plan?

It is also strange that the district court judge waited that long then dismissed the case with prejudice. Why would one prefer such path over a little patience then dismissal without prejudice? I cant find it easy to believe that district court was not involved.

I went to the PACER website but couldn't read the documents related to this case. I also found that the first judge was changed after about one and a half year. I also found that the plaintiff himself was requesting to put the complaint under seal.  

How could this pass without suspicion  and investigation? Moreover, it is mentioned that this  court opinion was cited 173 times.

If I am justified in my suspicion about this case which I found despite the low number of cases I looked at and despite that I was not looking to find this kind of things, imagine what targeted extensive real search can show about the justice system in this regard.

By the way, the opinion of the circuit court was less than assuring of its honesty as it appears to me.

Courts here and standing in dilution cases-3

It seems that I applied the derivative test I suggested for dilution cases in the preceding post  more closely on cases similar to mine where there is a continuous authorization and issuing  of shares than on cases where there is issuing of shares in a limited authorized shares. I may return later to correct other things I said and write more about the mean subject here.

Courts here and standing in dilution cases-2

In my preceding post it seems that I made a mistake by stating that a corporation do not own itself which seems to conflict with the reasoning that allow ,for example,  public corporations to buyback their own shares in the market. Nevertheless, a corporation is owned by its shareholders and it is upon the opposing side to prove that issued  "authorized shares" are issued from the direct ownership of the corporation not shareholders who "authorize" the use of these shares for the corporation. 

 

Beside showing how the derivative standing seems to be very weak in comparison with the direct one for dilution cases, here is a test that emphasize that weakness. It seems that there is a condition that is necessary  for the existence of derivative injury (which imply injury to the corporation). That condition or test is achieved by simply imagining the corporation being sold to a new owner. If with that transformation of ownership the injury to the corporation would persist then this necessary condition (but may not be always sufficient) for the existence of a derivative standing is satisfied. That makes sense since if an injury was truly done to the corporation then it should stay with that corporation.  

 

If we apply this test to the dilution cases we can see that what was perceived as an injury to the corporation would seize to exist with the transfer of ownership of the corporation. First, whether the buyer buys the corporation from one or one thousand owners or acquire a hundred shares or a million shares to achieve the buying process that buyer will end owning the same corporation. Second, it also wouldn't matter to the buyer how many of the authorized shares remain since the buying entity can change that to whatever  it wants. 

 

While this doesn't seem to be even close to what the reasoning of all these courts may miss, I emphasize again that I have seen how corporations and those with the financial power may get preferred treatment here.       

Courts here and standing in dilution cases

I was writing  about the court's third dismissal when I found that  I see it as questionable thing and cannot understand  how courts deal with shareholder plaintiff standing in dilution cases.

 

Here is what one court states:

 

[Delaware case law states that "if a board of directors authorizes the issuance of stock for no or grossly inadequate consideration, the corporation is directly injured and shareholders are injured derivatively"] (In re J.P. MORGAN CHASE & CO. SHAREHOLDER LITIGATION 906 A.2d 808 (2005))

 

I don't see how that could be the best understanding for such situations?

 

Shareholders are the owners of the corporation and modifying the percentage of their ownership affect them directly.

 

My understanding is that a corporation is a legal entity that own assets but it does not own itself, at least when there exist owner(s) for it. When a corporation is sold the selling price would go to its owner(s) and not to the corporation itself. Dilution can be seen as selling of the corporation with the proceeds reinvested back in the corporation.

 

What about authorized shares in the article of incorporation? I think that understanding these shares as being owned by the corporation, if there exist such understanding, is a weak thing if not totally wrong. Instead, authorized shares can be understood as shares the board of directors is authorized to use for the benefit of  the corporation. While the corporation is the pre-assigned owner for the proceeds from selling or any benefit from these authorized shares, that still wouldn't mean only a derivative standing for cases challenging dilution by insiders. That is because the issuance of any authorized shares should not be fraudulent to shareholders and/or should not violate the fiduciary duty of the board to shareholders in order to be correctly done to be used for the benefit  of the corporation. Since dilution cases are usually based on challenging or questioning one or both of the two factors just mentioned, that means there is a direct standing to bring these lawsuits.  

 

I don't see anything indicating that authorized shares are authorized for issuance for the benefit of the corporation regardless or in exclusion of  the general requirement of  fiduciary duty or avoiding fraud to shareholders.

 

I understand the mentioning of  authorized shares with the assets of a corporation not as being  directly part of the assets but as a vehicle that is pre assigned to be used for the benefit of the corporation.

 

In addition, the derivative standing doesn't even make comparable sense in comparison to the direct shareholder standing when it comes to the injury suffered as a result of the dilution. First, shares could be issued at the best price possible and increase the assets of a corporation considerably but still injure shareholders if they were better before the issuance of those shares than after that or if the issuance of shares serve no purpose other than making the current shareholders share ownership with some other people.    

 

Second, even when shares are sold at low prices the dilution resulted from these low prices would still injure shareholders directly through dilution much more than it injures the corporation through the use of the authorized shares for these low prices. As long as authorized shares can be increased it wouldn't make much of a difference for a corporation whether it raise the same amount of money through the issuance of  hundred shares or million shares. Why continuous increase of authorizing and issuing of shares is not taken into account? Because it injures shareholders. So, as seen here, we took a full circle turn and ended back again to the direct injury to shareholders.     

 

About a year ago I was lacking the most basic understanding and knowledge for law related matters, so I don't know how failing to see that could be that common in courts and there could be an answer to what I wrote here. Nevertheless the current path work better for corporations and I have seen how things get adjusted here for the better benefit of those with the financial power and that is why I am questioning this.  

 

It also seems to me that incorrectly taking away the direct right to bring a lawsuit is a violation of the constitutional due process.