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ALBERTA SECURITIES COMMISSION

DECISION

Citation: Casavant, Re, 2010 ABASC 162
Date: 20100408
Urban Casavant
Panel:
Glenda Campbell, QC
Stephen Murison
Representation:
Tyler Hynnes
for Commission Staff
Date of Decision:
8 April 2010
#3488013 v1
I.
INTRODUCTION

[1]
In a 22 February 2010 notice of hearing, staff ("Staff") of the Alberta Securities
Commission (the "Commission") applied for an order under section 198(1.1) of the Securities
Act, R.S.A. 2000, c. S-4 (the "Act") reciprocating securities-related sanctions imposed on Urban
Casavant ("Casavant") by the United States District Court, District of Nevada (the "Nevada
Court") in a 2 September 2009 Final Judgment of Permanent Injunction and Other Relief (the
"Nevada Judgment").

[2]
Staff tendered affidavit evidence but made no submissions. That evidence satisfies us
that Casavant had adequate notice of Staff's application and was given an opportunity to be
heard. Casavant provided no evidence or submissions.
II.
BACKGROUND

[3]
The Nevada Judgment is a default judgment entered in response to allegations made
against Casavant by the United States ("US") Securities and Exchange Commission. Among
those allegations were that, from January 2003 through May 2005, Casavant – a Canadian citizen
serving as chief executive officer of CMKM Diamonds, Inc. ("CMKM") until his resignation in
March 2007 – contravened US federal securities laws and participated in a fraud in connection
with the sale of CMKM securities. In the Nevada Judgment, the Nevada Court adjudged
Casavant liable for disgorgement of $31.5 million – "representing profits gained as a result of the
conduct alleged" – and ordered, among other things, that Casavant:
•
is prohibited from acting as an officer or director of any issuer that has securities
registered under US federal securities laws or that is required to file reports under
such laws; and
is permanently barred from participating in an offering of penny stock, including
engaging in activities with a broker, dealer or issuer for purposes of issuing,
trading, or inducing or attempting to induce the purchase or sale of any penny
stock.
•
III.
ANALYSIS AND FINDINGS
A.
Statutory Preconditions

[4]
The statutory preconditions to the application of section 198(1.1)(b) of the Act are met in
this case. First, as noted, we are satisfied that Casavant had adequate notice of Staff's application
and was given an opportunity to be heard. Second, Casavant has been found by the Nevada
Court to have contravened laws respecting trading in securities.
B.
Protection of Alberta Investors and Alberta Capital Market

[5]
Reciprocal orders under section 198(1.1) of the Act will be made by the Commission
when it is satisfied not only that the statutory preconditions have been met but also that such
orders will serve the public interest (Re Leemhuis, 2008 ABASC 585 at para. 12).

[6]
In this case, the Nevada Judgment responded to allegations that Casavant engaged in
serious capital market misconduct involving CMKM securities from January 2003 through May
2005. The evidence before us indicates that, as of 30 September 2004, there were Albertans
among the CMKM shareholders. In the circumstances, we are persuaded that the public interest
in protecting Alberta investors and the Alberta capital market warrants reciprocal orders against
Casavant. Further, we believe that orders under sections 198(1)(b), (c), (d) and (e) will
substantially parallel the trading and director-and-officer bans imposed by the Nevada Court
against Casavant and provide appropriate public protection. We note that this will also buttress
the protective effect of a 13 May 2008 Commission decision (Re CMKM Diamonds, Inc., 2008
ABASC 297) which, in reciprocating orders against CMKM, indefinitely bars all trading in or
purchasing of CMKM securities and denies CMKM the use of all exemptions under Alberta
securities laws.
IV.
ORDERS

[7]
For the reasons given, pursuant to section 198(1.1)(b) of the Act we order in the public
interest that:
•
under sections 198(1)(b) and (c), Casavant cease trading in securities, and all of
the exemptions contained in Alberta securities laws do not apply to him,
permanently; and
under sections 198(1)(d) and (e), Casavant resign all positions he holds as a
director or officer of any issuer, and he is prohibited from becoming or acting as a
director or officer (or both) of any issuer, permanently.
•
8 April 2010
For the Commission:
"original signed by"
Glenda Campbell, QC
"original signed by"
Stephen Murison

SECURITIES AND EXCHANGE COMMISSION v. CMKM DIAMONDS, INC.
SECURITIES AND EXCHANGE COMMISSION, Plaintiff,
v.
CMKM DIAMONDS, INC., et al., Defendants.
No. 2:08-cv-0437-LRH-RJJ.
United States District Court, D. Nevada.

July 25, 2011.




ORDER
LARRY R. HICKS, District Judge.
Before the court is plaintiff Securities and Exchange Commission's ("SEC") motion for summary judgment against remaining defendants Global Stock Transfer, LLC ("Global Stock"); Helen Bagley ("Bagley"); Sergey Rumyantsev ("Rumyantsev"); and Brian Dvorak ("Dvorak"). Doc. #161.1

I. Facts and Background

This action involves the sale of unregistered securities. Defendant CMKM Diamonds, Inc. ("CMKM"), a Nevada corporation, concocted and carried out a complex scheme to illegally issue and sell billions of shares of its stock in several unregistered distributions between December 2002, and September 2004.
On April 7, 2008, the SEC initiated the present civil action against defendants for violation of the Securities Act of 1933 ("the Securities Act"), 15 U.S.C. § 77(e). Doc. #1. Thereafter, the SEC filed the present motion for summary judgment against defendants Dvorak, Rumyantsev, Global Stock, and Bagley.2 Doc. #161.

II. Legal Standard

A. Summary Judgment
Summary judgment is appropriate only when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c). In assessing a motion for summary judgment, the evidence, together with all inferences that can reasonably be drawn therefrom, must be read in the light most favorable to the party opposing the motion. Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986); County of Tuolumne v. Sonora Cmty. Hosp., 236 F.3d 1148, 1154 (9th Cir. 2001).
The moving party bears the burden of informing the court of the basis for its motion, along with evidence showing the absence of any genuine issue of material fact. Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986). On those issues for which it bears the burden of proof, the moving party must make a showing that is "sufficient for the court to hold that no reasonable trier of fact could find other than for the moving party." Calderone v. United States, 799 F.2d 254, 259 (6th Cir. 1986); see also Idema v. Dreamworks, Inc., 162 F.Supp.2d 1129, 1141 (C.D. Cal. 2001).
To successfully rebut a motion for summary judgment, the non-moving party must point to facts supported by the record which demonstrate a genuine issue of material fact. Reese v. Jefferson Sch. Dist. No. 14J, 208 F.3d 736 (9th Cir. 2000). A "material fact" is a fact "that might affect the outcome of the suit under the governing law." Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). Where reasonable minds could differ on the material facts at issue, summary judgment is not appropriate. See v. Durang, 711 F.2d 141, 143 (9th Cir. 1983). A dispute regarding a material fact is considered genuine "if the evidence is such that a reasonable jury could return a verdict for the nonmoving party." Liberty Lobby, 477 U.S. at 248. The mere existence of a scintilla of evidence in support of the plaintiff's position will be insufficient to establish a genuine dispute; there must be evidence on which the jury could reasonably find for the plaintiff. See id. at 252.

B. Section 5 of the Securities Act
Sections 5(a) and (c) of the Securities Act make it unlawful to offer or sell a security in interstate commerce if a registration statement3 has not been filed as to that security, unless the transaction qualifies as exempt from registration. 15 U.S.C. §§ 77c(a) and (c); SEC v. Platforms Wireless Int'l Corp., 617 F.3d 1072, 1085 (9th Cir. 2010). The definition of a security under the act includes a company's stock. 15 U.S.C. § 77b(a)(1).
To establish a violation of Section 5 of the Securities Act, the SEC must establish that: (1) there was not a registration statement in effect as to the underlying securities; (2) the defendants directly or indirectly sold or offered to sell the securities; and (3) the sale or offer was made through interstate commerce or the mails. SEC v. Phan, 500 F.3d 895, 902 (9th Cir. 2007) (citing Berckeley Inv. Group, Ltd. v. Colkitt, 455 F.3d 195, 212 (3d. Cir. 2006). "Once the SEC introduces evidence that a defendant has violated the registration provisions, the defendant then has the burden of proof in showing entitlement to an exemption." Platforms Wireless Int'l Corp., 617 F.3d at 1086.
Despite the term "sell," liability under Section 5 is not confined to the person who passes title of the security; a participant in the distribution of unregistered securities may also be liable under Section 5. SEC v. Murphy, 626 F.2d 633, 649 (9th Cir. 1980). For a defendant to be liable for "indirectly" offering to sell securities in violation of Section 5, their role in the transaction must be a significant one. Phan, 500 F.3d at 906. A significant role includes a defendant who was both a "necessary participant" and a "substantial factor" in the transaction. Id. (citing Murhpy, 626 F.2d at 648, 652); SEC v. Rogers, 790 F.2d 1450, 1456 (9th Cir. 1986).

A defendant is a necessary participant if "but for" his participation in the distribution of unregistered securities, there would not have not been any sale. Murphy, 626 F.2d at 650-51. Further, a defendant is a substantial factor in the distribution of unregistered securities if his overall conduct and participation is not "de minimis." Rogers, 790 F.2d at 1456 (citing Murphy, 626 F.2d at 650-52).

III. Discussion
In its motion for summary judgment, the SEC argues that the remaining defendants were both necessary participants and a substantial factor in the unregistered distribution of CMKM stock, and therefore, are liable for violating Sections 5(a) and (c) of the Securities Act.4 Doc. #161. The court shall address the SEC's arguments as to each remaining defendant below.

A. Brian Dvorak
Defendant Dovrak, an attorney retained by defendant CMKM, wrote approximately 440 opinion letters to stock transfer agents justifying the issuance of unrestricted CMKM stock by falsely claiming that the stocks were subject to a statutory exemption.
The court has reviewed the documents and pleadings on file in this matter and finds that Dvorak was both a necessary participant and a substantial factor in the sale of unrestricted CMKM stock in violation of Section 5 of the Securities Act. First, but for Dvorak's participation with CMKM, there would not have been a sale of unregistered securities. His letters enabled the removal of the restrictive legends which allowed them to be sold by defendant broker NevWest Securities, Inc. ("NevWest"). Second, the writing of opinion letters justifying the removal of the restrictive legends is not a de minimis act: Dvorak's participation was a crucial and integral role in the overall scheme to sell unregistered securities. See e.g., Geiger v. SEC, 363 F.3d 481, 487 (D.C. Cir. 2004) (holding that an attorney who writes unfounded opinion letters about registration exemptions which allow for the sale of unregistered securities is both a necessary participant and a substantial factor in any unlawful sale). Therefore, the court finds that the SEC is entitled to summary judgment against defendant Dvorak.

B. Global Stock and Helen Bagley
Defendant Global Stock is a Nevada corporation that operated as a transfer agent for CMKM's stock transactions. Defendant Bagley is the principal of Global Stock and was the individual who removed the restrictive legends from CMKM's stock certificates for at least 270 billion shares of CMKM stock.

The court has reviewed the documents and pleadings on file in this matter and finds that Global Stock and Bagley were both necessary participants and substantial factors in the sale of unrestricted CMKM stock in violation Section 5 of the Securities Act. First, but for their participation in removing the restrictive legends, there would not have been a sale of unregistered securities because the CMKM stock would still have the restrictive legend on each certificate. Second, defendants participation was not de minimis. Global Stock and Bagley issued billions of shares of CMKM stock without the restrictive legend and then transferred those unrestricted certificates to defendant NevWest for the purpose of sale to the general public.

In their opposition, Global Stock and Bagley argue that there is a disputed issue of material fact as to whether they had known or had a reason to know that an illegal distribution of the stock would occur, thereby precluding summary judgment. However, Section 5 of the Securities Act is a strict liability statute. See e.g., SEC v. Ramoil Mgmt., Ltd., 2007 U.S. Dist. LEXIS 79581, *27-30 (S.D. N.Y. 2007); SEC v. Levine, 2010 U.S. Dist. LEXIS 77937, *3 (D. Nev. 2010) ("The plain language of the statute has no scienter requirement.") (citing SEC v. Alpha Telecom, Inc., 187 F.Supp.2d 1250, 1258 (D. Or. 2002) ("There is no scienter requirement under Section 5.")). As such, the SEC is not required to establish scienter on the part of a defendant in connection with the sale of unregistered securities. Phan, 500 F.3d at 906.

Additionally, Global Stock and Bagley argue that they relied on the representations of counsel, namely defendant Dvorak, in removing the restrictive legends from the CMKM stock, and therefore, they cannot be liable for any violation of the Securities Act. To establish the defense for good faith reliance on the advice of counsel, a defendant must show that they: "(1) made a complete disclosure to counsel; (2) requested counsel's advice as to the legality of the contemplated action; (3) received advice that it was legal; and (4) relied in good faith on that advice." SEC v. Savoy Industries, Inc., 665 F.2d 1310, 1314 n.28 (D.C. Cir. 1981). Further, the defendant has the burden of establishing each element of a reliance on counsel defense. SEC v. Goldfield Mines Co. of Nevada, 758 F.2d 459, 467 (9th Cir. 1985).

Here, the court finds that defendants Global Stock and Bagley have failed to meet their burden establishing a good faith reliance on the advice of counsel. Although defendants claim that they did not remove a single restrictive legend from CMKM stock without receiving a supporting opinion letter from counsel, the evidence before the court establishes that defendants believed that Dvorak's opinion letters were not supported by the law and requested CMKM to find another attorney to the write opinion letters supporting removal of the restrictive legends. Further, after requesting a different attorney, defendants continued to remove restrictive legends from CMKM stock based on Dvorak's unsupported opinion letters. Therefore, the court finds that the SEC is entitled to summary judgment against defendants Global Stock and Bagley.

C. Sergey Rumyantsev
Defendant Rumyantsev was the CEO and head trader at defendant NevWest, the company that caused the billions of unregistered shares to be sold to the public. While CEO, Rumyantsev allowed NevWest to acquire and distribute the newly issued unregistered CMKM stock certificates. Further, Rumyantsev allowed an individual associated with CMKM to open more than thirty (30) different brokerage accounts with NewWest in more than thirty (30) different names, while using the same social security number for most accounts, for the sole purpose of trading the unrestricted shares of CMKM stock.

The court has reviewed the documents and pleadings on file in this matter and finds that Dvorak was both a necessary participant and a substantial factor in the sale of unrestricted CMKM stock in violation of Section 5 of the Securities Act. First, but for Rumyantsev's involvement in allowing the thirty (30) brokerage accounts to be opened by a single individual under different names, the unrestricted shares of CMKM stock would not have be offered and sold to the public. Second, the uncontroverted evidence shows that Rumyantsev's actions, or failure to act, far from being unwitting or de minimis, intimately involved him in the sale of unregistered CMKM stock in violation of Section 5 of the Securities Act. As CEO of NevWest, and the individual responsible for company compliance with SEC regulations, he allowed a single individual to open thirty brokerage accounts in different names solely for the purpose of selling the unrestricted shares of CMKM stock.

In opposition, Rumyantsev argues that he was not an active participant in the sale of the unregistered CMKM stock and did not personally open any brokerage accounts or make any active trades of CMKM stock, and thus, he was not indirectly involved in the sale of the unregistered securities. However, it is not determinative of Rumyantsev's liability whether he personally accepted delivery of the securities, or personally offered them for sale. Rather, the issue is whether he was both a necessary participant and a substantial factor in the overall scheme. Phan, 500 F.3d at 906. Based on the record before the court, the court finds that Rumyantsev was both a necessary participant and a substantial factor in the sale of unregistered securities in violation of Section 5 of the Securities Act. Therefore, the court finds that the SEC is entitled to summary judgment as to defendant Rumyantsev.
IT IS THEREFORE ORDERED that plaintiff's motion for summary judgment (Doc. #161) is GRANTED. The clerk of court shall enter judgment accordingly.
IT IS FURTHER ORDERED that plaintiff Securities and Exchange Commission shall have ten (10) days from entry of this order to file an appropriate permanent injunction and order of disgorgement against defendants and submit the same for signature.

IT IS SO ORDERED.

Wall Street Fails To Deliver

The real Weapons of Mass Destruction
FTD’s = WMD’s

It is July 25th, 2011 and the President of the United States, Barack Obama has just signed into Law an Emergency Executive Order–Blocking Property of Transnational Criminal Organizations. President Obama states in this order “ such organizations are becoming increasingly sophisticated and dangerous to the United States; they are increasingly entrenched in the operations of foreign governments and the international financial system.† The President then goes on to say “ I therefore determine that significant transnational criminal organizations constitute an unusual and extraordinary threat to the national security, foreign policy and the economy of the United States, and hereby declare a national emergency to deal with this threat. “

The threat, well here is the link to the Emergency Executive Order www.whitehouse.gov/the-press-office/2011/07/25/executive-order-blocking-property-transnational-criminal-organization s Read for yourself and see who the criminal organizations are listed in the annex on page 3 and the 4 Entities. The threat lies within the Wall Street financial system and the manipulation of the stock market via counterfeiting in all aspects of the stock market. Wall Street has Failed To Deliver the stocks and this is what has caused the financial meltdown, not to mention the Flash Crash on May 6th, 2010 along with the destruction of Bears (March 2008) and Lehman Brothers (Sept 2008), resulting in the bankrupting of thousands of companies, hence the Destruction of the American Economy and the job growth in the United States. The Hole in the System is the Stock Borrow Program at the (DTCC) the Depository Trust Clearing Corporation that clears all the trades at the DTCC. The Stock Borrow Program allows the trades to get thru electronically at super speeds even though these criminal brokerage houses and hedge funds Fail to Deliver the stocks. It is called Naked Short Selling, in other words COUNTERFEITING. Phantom Shares sold by these criminal organizations, including the top banks in the United States along with all these growing hedge funds from all over the world. There is $30 trillion dollars a month going thru the DTCC and each and every day there is up to $6 Billion dollars a day of counterfeiting going on and increasing each day, because the system is full of counterfeit phantom shares, that have been manipulated by these criminal organizations mentioned in that Emergency Executive Order. These Fails To Deliver ( FTD’s ) are the real Weapons of Mass Destruction ( WMD’s ) yet, the news media still remains silent even though the Government admitted that NSS is a real threat to the U.S in 2008 by SEC Commissioner Christopher Cox and now the White House.

Listed below is a sequence of events to connect the dots to how we have gotten to the point of the threat to our National Security and the Economy of the United States and the Russian connection and other criminal organizations. To bring out the truth and make this real, all you have to do is read the words of the President in his Executive order. Here is and MP3 from a radio show on June 4th, 2010 with a leading a securities lawyer and a former FBI agent as they discuss these threats. Please listen to the caller at the 20 minute mark. It brings to light just how widespread this corruption is within the United States financial system. here is the MP3 from that radio show

http://www.winningstrategies.net/6-4-Hr2.mp3

The sequence to the Russian connection and the Criminal Organizations of the World on Wall Street

May 2007, Goldman Sachs hires Sergey Aleynikov, a Russian math whiz, computer programmer

July 6th, 2007 The uptick rule is eliminated on Wall Street, it increases massive counterfeiting by these hedge funds and brokerage houses from all over the world. Hedge Funds growing rapidly to manipulate the Fails to Deliver in Stocks

March 2008 Bears Sterns goes down via this counterfeiting. SEC commissioner admits Naked Short Selling is real and protects 19 of the top banks from counterfeiting stocks in these top 19 banks.

June 2008, Hank Paulson secretly meets with Goldman Sachs directors in Russia.

Sept 15th, 2008 Lehman Brothers goes down because of the massive NSS of counterfeit shares. The Government again steps in and protects 799 financial stocks from Naked Short Selling ( NSS ).

Sept 29th, 2008 Dow Falls 777 Points ( Casino Jackpot ) after the Senate Bill Fails on the Bailout. Was the 777 points another message. Wall ST Casino. Then Bailout is passed.

Dec 2008, Bernie Madoff is arrested. Looks like they are trying to spin Bernie Madoff as the reason for the meltdown due to his giant Ponzi Scheme

March 9th, 2009. The Stock market bottoms out just as word leaks of a movie coming out about Naked Short Selling and the elimination of the uptick rule.

June 2010, 2009 The movie Stock Shock- The Short Selling of the American Dream comes out. No media covers it.

July 3rd, 2009 Sergey Aleynikov the Russian math whiz steals and sends over 1000 Goldman Sachs secret codes and files to a German web site that was owned by someone in London. FBI arrests him July 3rd 2009

October 2009 Galleon insider trading scandal 5 arrested. in November 2009 14 more arrested.

January 2010 CMKX Lawsuit Filed. The Worlds largest lawsuit in history and it involves Wall Street Counterfeiting of Stocks. 2.25 Trillion shares were counterfeited on Wall Street.

April 5th, 2010 RT TV Russian TV out of the Washington Bureau reporter Alyona Minkovski † The Alyona Show talks about CMKX story http://www.youtube.com/watch?v=8Bh_7NPlOF8&feature=player_embedded

April 14th, 2010 RT TV CMKX follow up on Alyona Show with CMKX shareholder David Nelson http://www.youtube.com/watch?v=_GH5VCvZEYk&feature=player_embedded or http://www.cmkxsting.com

April 15th, 2010 Goldman Sachs board of Directer tied to the Galleon insider trading scandal

April 16th, 2010 Goldman Sachs Civil fraud charges is finally all over the TV news

April 20th, 2010 Goldman Sachs all over TV for for mortgage fraud and housing scandal at senate hearings. 5 GS Workers all over TV at hearings.

May 4th, 2010 Goldman Sachs pays fine ( $450K ) for NSS 385 separate times in two month period of Dec 2008/Jan 2009. No media report

May 4th, 2010 Car bomb found in NY city. That same day Goldman Sachs settles for their 385 fails to deliver (NSS ) with a laughable $450K fine and not one word about it on TV news. amazing.

May 6th, 2010 did they ( Criminals ) send a message? …†back off NSS story and Goldman Sachs † or we destroy the stock market, Then the FLASH Crash happens around 2:30pm drops from 300 points to 970 in 2 1/2 minutes

May 18th, 2010 Germany unannounced to the world bans NSS (what did they know about those GS secret codes/files)

May 28th, 2010 I made the video about Sergey Aleynikov on you tube called Wall Street Dirty Secrets.
Youtube Dirty Secrets part 2 came out May 30th 2010 www.youtube.com/watch?v=tNiTANt8m4Y
You tube Dirty Secrets part 1 came out May 2010 www.youtube.com/watch?v=HGAXCmg-_Vc

June 4th, 2010 I called into the radio show with Wes Christian http://www.csj-law.com/press/index.html and the FBI agent Don Clark Winning strategies and I discuss the Russian math whiz/computer programmer at Goldman Sergey Aleynikov being arrested by the FBI July 3rd 2009 and that he sent over 1000 secret codes and files of Goldman Sachs and sent to a German web site, which was owned by someone in London. All in an FBI reported document that came out on internet, yet no TV coverage again.
This was all discussed on the radio and I also asked about Germany banning NSS on May 18th, 2010 and said WHAT DID THEY KNOW? from those secrets codes and files send on July 3rd 2009 from Russian Sergey Aleynikov. Who was the Web site? What does Germany now know? It appears the same with President Obama in the Executive Order dated July 25th, 2011.

June 7th, 2010 Newsweek magazine does a two page story on Wall Street Casino. Writer mentions the Sergey Aleynikov arrest in one of the paragraphs, but no in depth details. I called the writer same day and talked to him over the phone. The following week the reporter was shipped out on 2 year assignment. Why? He was about to uncover the biggest story ever told.

June 27th, 2010 Anna Chapman and 9 other Russian spies arrested and all over TV for two weeks and ends up being 12 spies total. The news media says she was a Red Headed bomb shell and was only sipping coffee at starbucks using her lap top.

July 8th, 2010 They trade the 12 Russian spies and ship to Russia - in return we get back 4 spies. Why???

July 15th, 2010 Goldman Sachs fined for the housing scandal from the April 16th civil charges $550 million
It is my believe that all this came about and somehow the FBI tracked down the Russian spies linked to the Flash Crash because each of the spies were working for the hedge funds and specializing in the Naked Shorting and the selling of Phantom Shares ( COUNTERFEIT ) stocks. Did any of those Goldman Sachs secret codes and files link the Russian spies? This is proven in deep capture as the writer explains who Anna Chapman and the other 11 spies and who they worked for listed later on in this article, which was Hedge funds naked short selling stocks. Great U.S news media reporting, pretty sad.
now fast forward to 2011 and the Presidents Emergency Executive Order dated July 25th, 2011
The movie Wall Street Conspiracy movie here is link. http://i360m.com/industries/music-entertainment/wall-street-conspiracy.php soon to come out.
The movie Radio Wars will be out Sept 2011 here is the link http://www.RadioWars.com will media finally report on TV, the NSS story.

April 22nd, 2011 Watch this 19 minute video. A meeting with the Florida (OFR) Office of Financial Regulations Director and Chief. http://www.cmkxshareholder.com/CMKX/Enough_is_Enough.html

June 2011 The awesome in depth investigative reporting by Mark Mitchell of Deep Capture. He has reported 20 chapters so far. here is the link http://www.deepcapture.com/ How is his truly amazing investigative reporting not all over TV.

It is all starting to make sense. The dots are being connected by real investigative reporting. The Weapons of Mass Destruction = FTD’s / Fails To Deliver. The HOLE in the system, is at the DTCC and the Stock Borrow Program which is allowing the phantom shares to flood the stock markets. Listed below is a case in which it was just settled on ( June 20th, 2011 ) http://csj-law.com/press/media/Law360_TaserSettlement062011.pdf and that the 8 biggest banks in the United States, including Goldman Sachs. The settlement was for the plaintiffs allegation that these top 8 brokerage houses were selling phantom shares of Taser Stock. ( Counterfeit shares means = NSS, Naked Short Selling, FTD’s, Fails To Deliver, Phantom Shares ) these are all words that mean the same, the brokerage houses and these criminal hedge funds were selling nothing, thin air, counterfeit shares and that my friends are the real WEAPONS of MASS DESTRUCTION ( WMD’s ) They didn’t find these WMD’s in Iraq, they are flooded all within the financial systems on Wall Street and at the DTCC, created by the Stock Borrow Program.

I can only pray that the founding father of the NSS Fails To Deliver fight, Mr Patrick Byrne the CEO of OverStock, can finally shed some light on this on the National Stage ( all over TV ) Overstock vs Goldman Sachs as he goes to Trial on December 5th, 2011 Will the news media cover this trial like they have the Casey Anthony Trial? This story affects the entire World, will they remain silent? if so Why? Is there a United States Government Gag order on Wall Street Fails To Deliver story? It will go down in History as the biggest story and cover up ever reported, if told. I want to point out that there is the Largest Lawsuit in the history of the World in a California court right now and the Lawyer for the Plaintiffs, Al Clifton Hodges has stated in a affidavit dated July 21st, 2011, that there are settlement talks now ( the largest Naked Shorted Stock in Wall Street History ) the CMKM Diamonds story, see the movie on CNN I-report web site. here it is the most shared video ALL time, http://ireport.cnn.com/docs/DOC-484171 yet still the TV news media refuses to cover this Wall Street counterfeiting story. Why?
Here is the link to the Lawyer’s Affidavit http://cmkxshareholder.com/CMKX/Blog/Ent....missioners.html signed July 21st, 2011 just 4 days before the President signs into law the Emergency Executive Order. Hope the media follows up on the negotiations, if no settlement, the CMKM Diamonds Lawyer’s opening brief is due August 24th, 2011.

I hope I connected the dots for you. The $3.87 trillion dollar question now is, will the news media start to cover these Trials and Court actions? If so, we will finally expose the real truth about the real Weapons of Mass Destruction, these Wall Street – Fails To Deliver that caused the Destruction of the United States Economy.

Richard

www.SiriusNews.com

ENTERED TO THE LOS ANGELES DOJ AND LAS VEGAS DOJ/FBI

Staub@usdoj.gov, john.nordin@usdoj.gov, Lasvegas@ic.fbi.gov, debra.waite@usdoj.gov

I am Richard Wilkinson, a bona fide shareholder of CMKM Diamonds Inc. I am on the victim notification list presented to the DOJ and FBI by Mark Faulk, ceo of CMKM Diamonds Inc, along with thousands of other victims in this case. We are all being further victimized by the very authorities who are suppose to protect us as the DOJ is not releasing the funds placed in a frozen trust account for all bona fide shareholders of CMKM Diamonds as required by law.

Al Hodges has said under oath that there are talks taking place right now to possibly release the restitution illegally held from all victims in this case. I want to know who represents me and the other victims in this case who are not listed as plaintiffs in Al Hodges bivens case. I would like to know why our own company is being excluded from these talks. I would like to know why the victim’s rights officials from the DOJ are not representing the victims in this case, as almost all the victims rights listed on their website have been repeatedly violated by the DOJ, SEC, and FBI. Why do shareholders have to retain a lawyer to try and force the release of these funds when that is the legal duty of the DOJ?

I ask for an immediate investigation into the crimes alleged by Al Hodges which are preventing the conclusion of his bivens case. In a bizarre conflict of interest, the DOJ is the defending attorneys in this case, and refuse to investigate these allegations. The DOJ and FBI have been made fully aware of the allegations made by Al Hodges that President Obama himself is committing extortion and other crimes which is preventing the release of the victim’s restitution in this case, but those crimes continue to this day and are covered up by the DOJ and FBI.

Our restitution has been included in the World Global Settlements per Al Hodges, who as direct knowledge of such. That in itself is a violation of our victim’s rights, as it has prevented the timely release of our restitution as required by law. It is the duty of the DOJ to investigate this.

Here is evidence of the systematic violation of the rights of all victims in this case by the DOJ. I ask for immediate representation in this case and that our company be informed immediately of these negotiations that are ongoing to release the restitution held for its bona fide shareholders:

CIRCA FEB 2009: Ceo of CMKM Diamonds Inc presents the FBI with an official list of victims in the CMKX case, victims it later turns out to be were also unwitting victims in a government sting operation that they are stuck in at this moment:

CMKM DIAMONDS, INC.
615 S. Broadway
Tyler, Texas 75701
www.cmkmdiamondsinc.com
TO: FBI FIELD OFFICE – LAS VEGAS, NV
1787 W. LAKE MEAD BLVD.
LAS VEGAS, NV 89106
ATTN: CHIEF: CMKM TASK FORCE
FROM: MARK FAULK, CEO
February 7, 2009
We are aware of a multi-year investigation by a joint task force of the FBI, DOJ, and IRS
into fraud committed against CMKM Diamonds, Inc. and its shareholders.
We understand that the Victim Notification System (VNS) was established as part of the
FBI’s commitment to ensure that victims of federal crime are treated fairly as their case
moves through the criminal justice system.
We also understand that once identified as victims, we have the following rights (among
others) as specified in the “Help for Victims of Crime† brochure as published by the
Department of Justice:
The right to confer with the attorney for the Government in the case;
The right to full and timely restitution as provided in law;
The right to proceedings free from unreasonable delay.
I direct your attention to the enclosed CD, labeled "CMKM Shareholders' List 4-09-08".
Please read the cover letter carefully, and please expedite adding the entire shareholder list
to your “victims list† for CMKX.
If there is any reason why the above request CANNOT be completed, or if you have
questions regarding the list, please call me at your earliest opportunity to discuss. CMKM
Diamonds, Inc. has 50,000 shareholders who have been waiting for 4 years for justice. We
believe that this issue should be resolved immediately.
Thank you.
Sincerely yours,
Mark Faulk, CEO
CMKM Diamonds, Inc.
615 S. Broadway
Tyler, TX 75701
Ph: (903) 262-8397

CIRCA JAN 2010: Al Hodges says in his bivens case that government employees have repeatedly said release of this restitution was imminent from 2009 and earlier:

37. "Demand for release of said moneys has been repeatedly presented to the Securities and Exchange Commission without result. Agents and employees of the Securities and Exchange Commission and the Department of Justice have represented repeatedly that the release of moneys for distribution was imminent, and/or would occur within several weeks, and/or would occur within less than a month. Each of said representations have been made knowing them
to be false, and at the specific direction of the named Defendants. These actions of withholding distribution of said moneys, without compensation and without due process of law, amount to a taking of the property of the individual Plaintiffs and of all similarly situated."
PRESENT: Al Hodges says there is a pending imminent settlement in his case, which asks for the release of all shareholders money set aside in a trust fund by the DoJ as a result of a sting operation they ran using CMKM Diamonds Inc and all its shareholders as pawns. From Al Hodges latest court filing:

This is an appeal from an Order of the United States District Court, Central
District of California, Southern Division (Selna, J.), granting
Defendants’ FRCP 12(b) Motion to Dismiss (Minute Order dated June 6, 2010)
and dismissing Plaintiffs First Amended Complaint with prejudice, by Order
of Dismissal dated December 29, 2010.
The present Bivens action arises out of the sale of stock from CMKM
Diamonds, Inc. (“CMKM†), to Plaintiffs, the corporation’s subsequent
implementation of its resolution to self-liquidate, and the involvement of
the Securities and Exchange Commission (“SEC†) in that process. Plaintiffs
brought this action against a number of former and present SEC Chairpersons
and Commissioners, who refuse to authorize release of the compensation funds
under their custody and/or control, which monies result and accrue directly
from a clandestine government “sting† operation.
In the present appeal, Appellants contend, that: (i) the shareholders of the
winding-up CMKM corporation have a constitutionally protected property
interest; and (ii) a meritorious and compensable claim for relief was
properly plead and stated by Plaintiffs in their Complaint.
Plaintiffs have asserted claims for declaratory judgment and deprivation of
their Fifth Amendment Rights under the Takings Clause and the Due Process
Clause of the U.S. Constitution.
In this current motion before the Court, Appellants now request an
additional time extension of thirty (30) days to file its opening brief, for
a number of important, material and relevant reasons, including, without
limitation:
(i) Appellants’ substantial need;
(ii) The likely event that the instant appeal will soon become moot;
(iii) The judicial economy and administrative convenience of the
Court,
(iv) To avoid the considerable, continuing expense and hardship to
both Appellants and Appellees in continuing to prosecute and defend this
appeal pending the expected, imminent resolution of the underlying claims,
thereby rendering this appeal moot; and
(v) The prior joinder in this Motion by the Appellees/Government
by stipulation and consent hereto.
In support of the above, Appellants attach to this Motion the Affidavit of
counsel, A. Clifton Hodges, Esq., incorporated herein and made a part
hereof.
AFFIDAVIT OF A. CLIFTON HODGES IN SUPPORT OF MOTION FOR EXTENSION OF TIME TO
FILE OPENING BRIEF
On Appeal from the United States District Court For the Central District of
California
The Honorable James V. Selna
A. Clifton Hodges, State Bar #046803
Hodges and Associates
4 East Holly Street, Suite 202
Pasadena, California 91103-3900
Telephone: (626) 564-9797
Facsimile: (626)564-9111
Email: al@hodgesandassociates.com
(i) Appellants have good cause and substantial need for this thirty (30) day
extension of time, since within just the past hours, I have learned that
there is a substantial and serious likelihood that sustained and
comprehensive official efforts to settle and conclude this matter are now
underway, and the substantive elements thereof would provide to
Appellants-Plaintiffs the compensation and relief requested in their
Complaint.
Given the very recent and unanticipated appearance of this
information, it would be impossible for Appellants to have exercised a more
timely due diligence by moving this Court for an extension of time seven (7)
days before July 25, 2011
(ii) Accordingly, the information described above, gathered by or
through me, or presented to me by persons within the scope of protected,
professional privilege, and work product confidentiality, my resulting
conclusions, taken to their logical and legal conclusion, strongly indicate
and make it much more likely than not, that the instant appeal will soon become
moot.
(iv) Appellants’ motion would likewise serve to lessen the
unnecessary, yet considerable expense and hardship attendant to all parties
if required to continue this appeal even though there is now pending an
expected, imminent settlement of this case
I declare under penalty of perjury that the foregoing is true and correct.
Executed this 21st day of July, 2011, at Pasadena, California,
/s/ A. Clifton Hodges A. Clifton Hodges

IN BETWEEN AL HODGES FILING HIS BIVENS CASE AND HIS LATEST COURT FILING MR. HODGES HAS UPDATED ALL SHAREHOLDERS OF CMKX VIA THE INTERNET (NOT JUST HIS PLAINTIFFS) THAT THERE WAS AN IMMINENT SETTLEMENT IN HIS CASE APPROXIMATELY THIRTY DIFFERENT TIMES. THE DOJ IS FULLY AWARE OF THOSE UPDATES. ALSO MR. HODGES HAS FILED A COMPLAINT WITH THE ATTORNEY GENERAL OF NEW YORK IN EARLY 2010, ANDREW CUOMO, WHICH ALLEGED SERIOUS CRIMES WERE OCCURING THAT WERE PREVENTING THE RELEASE OF THE CMKX FUNDS. THESE ALLEGATIONS CONTINUED RIGHT UP UNTIL JUNE 17TH 2011, WHERE MR. HODGES ALLEGED THAT PRESIDENT OBAMA WAS COMMITTING EXTORTION WHICH WAS PREVENTING THE RELEASE OF CMKX FUNDS TO THE VICTIMS IN THIS CASE. THE COMPLAINT SENT TO ATTORNEY GENERAL ANDREW CUOMO AND JUNE 17TH 2011 AL HODGES LETTER ALLEGING EXTORTION IS TAKEN PLACE ARE HERE:

http://cmkxunofficial.proboards.com/index.cgi?board=mofo&action=display&thread=4700

http://www.scribd.com/doc/58123701/Al-Hodges-6-17-2011


Questions for the DOJ Victims' Rights Officials in Las Vegas and Los Angeles:

1. Given I am a shareholder on the Victims list entered to the FBI and DOJ, and there has been ongoing negotiations to release the funds set aside for all victims from a government sting operation, who has represented me and all other victims not listed in the Al Hodges bivens case but on that Victim Notification List entered to the DOJ.

2. Who are the government employees from the SEC and DOJ that have negotiated to release my restitution and who have they made promises to in regards to releasing my restitution, then not followed through with those promises.

3. Given this restitution is for all bona fide shareholders of CMKM Diamonds Inc, why is the company excluded from all negotiations taking place that affect their company and all its shareholders.

4. Why are the DOJ and SEC not protecting the victims in this case when it is their duty to ensure that the restitution held for the victims in this case is released as required by law.

5. Why did the DOJ/FBI not investigate the allegations made in early 2010 by Al Hodges that serious crimes were occurring preventing the release of the restitution held for all bona fide shareholders of CMKM Diamonds Inc.? Is the DOJ/FBI currently investigating the public allegations made by Mr. Hodges that President Obama is committing extortion which prevented the release of the funds set aside for all victims in this case.

Thank you,

Richard Wilkinson

johnnyic I found this at another site.

#1    Diamond4me 

Senior Member

Group: Members Posts: 231 Joined: 09-April 11 Posted Today, 11:23 PM

Just my opinion.FWIW: According to Motion for extension filed in the Unitied States Court of Appeals for the Ninth Circuit, CMKX Share Holder case will be settled on or before August 24,2011. In other words they will get paid.
Why will they get paid?
For Fine and Penalty.
F & P for what?
This will need pages to explain, so google for 3.87 Trillion law suit against SEC.
Who will pay them?
UST
UST is broke, how will they pay 50,000 plus share holder.
UST will be able to afford to pay CMKX share holder after RV(Speculation, not mine most share holders speculates that
they will get paid $0.80/share F&P).

In conclusion RV has to occure before August 24, 2011.

See link below...

http://www.411-room....equest72111.pdf

http://cmkxunofficia...ead=8913&page=1

This post has been edited by Diamond4me: Today, 11:24 PM



Read more: http://dinarvets.com/forums/index.php?/topic/79758-we-should-see-rv-before-august-24-2011/#ixzz1UyN5RMNl

BMFL<OD

next week(s) is here

STATE OF THE INVESTIGATION
Eric Fryar, Avniel Adler

When the Fryar Law Firm began investigating the existence of a CMKX trust fund there were a myriad of issues to address. Initially, there was the extensive administrative effort of setting up representation and communication of a shareholder group in excess of 200—sending out attorney engagement letters to over 200 clients, answering clients’ questions, and collecting the funds necessary to sustain the investigation. The firm created a website as a mainframe for client feedback and to organize our work product and evidence. Finally, the Firm reviewed company history, researched the legal and factual issues of the case and read and organized the litigation pleadings of the several lawsuits that CMKX has been a party to. All of these start-up costs were performed at a considerable discount to give our clients the best opportunity at a meaningful investigation into their claims.

The investigation has had a specific focus throughout, namely: how can we determine whether a CMKX trust fund exists at a minimal expense? The Firm created an Investigation Schedule in an attempt to set-forth what the shortest path to unequivocal evidence of a trust fund would be. Naturally, the course of our investigation has informed us what the next most cost-effective step should be and our investigation plan has evolved accordingly.

Over the past few months we have spoken to a number of players in the CMKX saga. We contacted Bill Frizzell repeatedly to see what connection there exists between CMKM’s efforts at securing assets stolen by corporate insiders (Casavant, Edwards, etc.) and a possible CMKX trust fund. Frizzell disclaimed any connection between the two and explained that the funds stolen by Casavant and co. were easily traceable and that has been the focus of CMKX’s litigation efforts. We asked Frizzell about whether the company has any evidence of naked short selling. Frizzell has guarded this information as extremely private and claims that the company is not allowed to release this information. In other words, to obtain this information we would have to litigate with the company (a simple inspection request will not do). [Please be aware: The Fryar Law Firm has no connection with or prior knowledge
of Mr. Frizzell. Our approach to date has been to deal with him and the company in a polite and professional manner in order to obtain whatever information and assistance might be forthcoming. We have always understood that the company is not our primary target and that any time and money spent in needless wrangling on that front would likely be wasted. If necessary, however, we will not hesitate to deal with Mr. Frizzell in a more aggressive manner.]

In a similar vein, we have spoken to other attorneys that have favorably settled naked short selling cases. They too have confirmed that obtaining evidence of naked short selling from government entities is an uphill battle and likely a waste of time. Moreover, litigating against brokerage houses or other entities involved in the naked short selling of a company’s stock costs millions of dollars to finance. Thus, the Firm determined that litigating with Frizzell and CMKX would not be worthwhile at the moment or within the scope of our investigation. Likewise, sending Freedom of Information Acts to government entities would probably not yield any helpful information in the short term.

We have contacted a host of people who are allegedly connected to the missing trust account. Peter Maheu told us that he has no knowledge of any CMKX trust fund and that he would not return any more phone calls or letters. Keith Staub, the U.S. attorney who represented the SEC in the Bivens action said he had no knowledge whatsoever of any government trust, and in fact, that he was only put on the case to argue it out of court. Any real information would be in the SEC’s possession. Michael Phillips confirmed his story about seeing 3 CMKM trust accounts totaling trillions of dollars (more on him below). Lindell Bonney hung up on the Firm after we inquired what it means to be a “Paymaster†. Al Hodges never returned any of our letters or phone calls.

Following these efforts it occurred to us that deposing the parties who allegedly have personal knowledge of a CMKX trust fund would be the best plan of attack. Those parties are Al Hodges, Michael Phillips and Morris Richards. Consequently, we filed an extensive Rule 202 Petition seeking the depositions of Hodges, Phillips and Richards without filing a lawsuit.

One might wonder, what does it mean to depose a party without filing a lawsuit? That is an excellent question and one that required considerable legal research. Ordinarily, in order to issue subpoenas to compel testimony under oath and the production of documents requires the filing of a lawsuit. However, filing a lawsuit without an adequate factual basis can result dismissal without the opportunity to conduct discovery (this is what happened in the Hodges lawsuit), and more significantly can subject attorneys and their clients to monetary sanctions. Moreover, the persons who claim to have the information necessary for a lawsuit (Hodges, Phillips and Richards) would not be the target of the lawsuit, but only witnesses. Therefore, we are utilizing a little-known and little-used procedural tactic provided by Rule 202 of the Texas Rules of Civil Procedure. This is an innovative approach
and is not guaranteed success, but we feel very optimistic that we have put together a compelling and valid legal position.

What we are doing is representing to a court in Texas that we wish to secure deposition testimony from 3 out-of-state witnesses for use in an anticipated lawsuit. Thus, no one is being sued here. We are telling a Judge that, in the interest of justice, the CMKX shareholders need to depose Hodges, Phillips and Richards, so that their testimony is preserved for use in an anticipated lawsuit. In essence, a lawsuit could not be filed until we have a responsible party to sue. We need to depose Hodges, Phillips and Richards to determine who we could sue to reclaim CMKX trust funds.

It is worth noting that a Rule 202 Petition is an extremely rare procedure. This is particularly true in light our request to depose out-of-state residents. The Petition seeks a deposition of Hodges in California and a deposition of Phillips and Richards in Florida. Thus, the Texas Court must issue what are termed “Letters Rogatory† to request courts in California and Florida to issue subpoenas to our witnesses.

Our petition is also a persuasive document. We must persuade a judge that our deposition of Hodges does not seek to discover privileged “attorney work product†. Rather, we are only interested in hard evidence of a CMKX trust fund within Hodges’ possession, custody or control. We may not discover material that Hodges prepared for use in the Bivens action, his mental impressions developed in anticipation of the Bivens action, or the communications between any of the parties to the Bivens action or their representatives, employees or agents.

The schedule of events is as follows: a hearing will be held on whether the petition will be granted (likely at the end of August or beginning of September). We will notify Hodges, Richards, and Phillips that the hearing will take place. If the judge grants our petition, Mr. Fryar and Mr. Adler will depose Hodges in California, and Richards and Phillips in Florida. We have requested that the witnesses produce documents at the deposition, e.g., a screen shot of the computer screen Phillips allegedly viewed, or a document verifying that Maheu met with the DTCC (in the case of Richards). These documents will be inspected and copied, and posted on the PBWorks website. The depositions will probably take place some time in October, depending on how long it takes to process the Letters Rogatory and set deposition dates in California and Florida. It will be necessary to retain the services of
local attorneys in California and Florida to assist in the necessary filings in those states.

We would like to remind the shareholders the scope of our engagement. We have been retained to investigate the existence of a CMKX trust fund. We have not been retained to file a lawsuit. There is no magic bullet to remedy the wrongs perpetrated on the CMKX shareholders. Our best weapon is reliable evidence. If our investigation yields reliable evidence the shareholders will have something of value for use in an anticipated lawsuit. For now, the shareholders must understand that the Firm is doing our best to secure the information you have retained us to uncover. Additionally, any such lawsuit would also face hurdles of statutes of limitations, jurisdictional issues, and other potential obstacles. The best way to determine the viability of any such a litigation effort must start is valid evidence.

In closing, we would like to assure you that we believe we are breaking serious ground in this investigation and hope to have real answers for you shortly. We have no interest in fraternizing with any of the parties connected with the controversy. Our only goal is to get reliable information for the shareholders. We intend on securing depositions before suit, because we feel it is the fastest way to verify the existence of a CMKX trust fund at a minimal expense. Thank you again for your patience and support.

This message was sent to xxxxxxx from:
Eric Fryar | 1001 Texas Ave, Ste 140 - #111 | Houston, TX 77002-3194

DEFENDANTS-APPELLEES’ MOTION FOR SUMMARY AFFIRMANCE

AND STAY OF BRIEFING SCHEDULE


courtesy of nufced

http://www.scribd.com/doc/62864746/11-55169-Documents

No. 11-55169

IN THE UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT

DAVID ANDERSON et al.,
Plaintiffs-Appellants

v.

CHRISTOPHER COX, et al.,
Defendants-Appellees.

DEFENDANTS-APPELLEES’ MOTION FOR SUMMARY AFFIRMANCE
AND STAY OF BRIEFING SCHEDULE

APPEAL FROM
THE UNITED STATES DISTRICT COURT
FOR THE CENTRAL DISTRICT OF CALIFORNIA
Case No. SACV 10-00031 JVS (MLGx)

ANDRÉ BIROTTE JR.
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division
KEITH M. STAUB [SBN: 137909]
Assistant United States Attorney
Federal Building, Room
7516300 North Los Angeles Street
Los Angeles, California 90012
Telephone: (213) 894-7423
Facsimile: (213) 894-7819
Attorneys for Defendants-Appellees

DEFENDANTS-APPELLEES’ MOTION FOR SUMMARY AFFIRMANCE
AND STAY OF BRIEFING SCHEDULE

I.INTRODUCTION

Pursuant to Circuit Rule 3-6, Defendants-Appellees CHRISTOPHER COX, MARY L. SCHAPIRO, CYNTHIA A. GLASSMAN, PAUL S. ATKINS, ROELC. CAMPOS, ANNETTE L. NAZARETH, TROY A. PAREDES, LUIS A.AGUILAR, ELISSE B. WALTER, and KATHLEEN L. CASEY, all of whom are current and former Chairmen and/or Commissioners of the Securities and Exchange Commission (hereinafter referred to as “SEC†), hereby move the Court to summarily affirm the district court’s dismissal of Plaintiffs-Appellants David Anderson, Nelson L. Reynolds, Sheila Morris, Patrick Cluney, Robert Hollenegg, Allan Treffry and Reece Hamilton’s (hereinafter referred to as “Appellants†) First Amended Complaint and to stay the briefing schedule until the motion for summary affirmance is resolved.

Appellants are shareholders in CMKM Diamonds, Inc. (“CMKM†). The action arises out of the sale of stock from CMKM to Appellants, the corporation’s subsequent resolution to self-liquidate, and the involvement of the SEC in that process. Appellants contend that during the liquidation of CMKM’s assets, the SEC repeatedly delayed distribution of money recovered and held in trust for Appellants. Appellants’ First Amended Complaint asserts claims for declaratory judgment and deprivation of their Fifth Amendment rights under the Takings Clause and Due Process Clause.

This Court should summarily affirm the district court’s dismissal of the action for the following reasons: (1) Appellants’ takings claim is not cognizable because they do not have a proprietary interest in the funds sought; Broad v.Sealaska Corp., 85 F.3d 422, 430 (9th Cir. 1996); (2) Appellants’ due process claimfails because they have no legitimate claim of entitlement to the funds; Board of Regents of State Coll. v. Roth, 408 U.S. 564, 577 (1972); (3) Appellants’ dueprocess claim fails because they do not have a property interest in the funds whenthe SEC retains discretion to disburse those funds; Erickson v. United States, 67F.3d 858, 862 (9th Cir. 1995); and (4) Appellants’ claims against the SECCommissioners in their official capacities are barred by sovereign immunity;Hodge v. Dalton, 107 F.3d 705, 707 (9th Cir. 1997).

Because this appeal is clearly controlled by precedent, this Court should summarily affirm the district court’s dismissal. See United States v. Hooton, 693F.2d 857, 858 (9thCir. 1982)(per curiam).

II.

STATEMENT OF FACTS AND CASE

A.Appellants’ Factual Allegations

Appellants owned shares of CMKM stock. (Exhibit A, First Amended Complaint (“FAC†) at ¶ 6.) In 2005, the SEC allegedly imposed a temporary suspension of trading of CMKM stock based on concerns over the adequacy of publicly available information, and then brought an administrative proceeding alleging CMKM had failed to file required reports. (Id. at ¶¶ 28-29.)

In July 2005, an SEC administrative law judge found the facts to be as
alleged by the SEC in the administrative proceeding. (Id. at ¶¶ 33-35.) The SEC de-registered the CMKM stock in October 2005. (Id. at ¶ 35.) CMKM then started to wind up its affairs by selling its assets. (Id. at ¶ 35.)Appellants allege that Appellees Glassman, Atkins, Campos and the United States Department of Justice (with alleged assistance from the Department of Homeland Security) operated a “sting operation† and used CMKM to “trap[] a number of widely-disbursed persons who were believed to be engaged in naked short selling of CMKM Diamonds Inc. stock.†1 (Id. at 45.) In a settlement between CMKM and the short sellers, the short sellers allegedly “promised to pay negotiated amounts to a frozen trust for disbursal at a later time† in return for apromise that the United States government would not prosecute them. (Id. at ¶ 48.)

Appellants further allege that money was “collected for the benefit of the shareholders of CMKM... [and] have been placed in a trust, or are otherwise now held in trust, by the Depository Trust & Clearing Corporation [“DTCC†], a privately-owned clearing house for all secured financial transactions which take place in the United States, and the United States Treasury, pursuant to a Trust Agreement on behalf of the shareholders.† (Emphasis added) (Id. at ¶¶ 50-51.)

Appellants further allege that Appellees “held and hold the sole and absolute discretion to determine when moneys collected pursuant to the scheme set forth above would and could be released for distribution.† (Id. at ¶ 52.) Appellants allege that “[d]emand for release of said moneys has been repeatedly presented to [Appellees], and each of them, without result.† (Id. at ¶ 54.)

Appellants contend that the SEC’s repeated failure to distribute money collected in the trust constitutes a taking of property under the Fifth Amendment to the United States Constitution. (Id. at ¶ 73.) Based on these alleged events, Appellants assert claims for deprivation of their civil rights against current and former Chairmen and/or SEC Commissioners, in their individual and official capacities, under Bivens v. Six Unknown Agents of Fed. Bur. of Narc., 403 U.S. 388, 297 (1971).

B.Procedural Background

On August 2, 2010, the district court dismissed the original complaint, with leave to amend, because Appellants failed to identify a viable property interest,which is a necessary predicate to claims under the takings clause and due process clause.2 (Clerk’s Record 15.)

On September 21, 2010, Appellants filed a First Amended Complaint(“FAC†) for declaratory judgment and deprivation of their Fifth Amendment Rights under the Takings Clause and the Due Process Clause. (Exhibit A) Pursuant to the SEC’s motion to dismiss, on December 6, 2010, the district court dismissed the FAC, with prejudice. (Exhibit B, December 6, 2010 order [Clerk’s Record 30].)3

III.

ARGUMENT

A.The Court Should Grant Summary Affirmance

Summary affirmance of the district court’s dismissal is appropriate when “it is clear from the face of the appellant’s pleadings that . . . the appeal is patently insubstantial or clearly controlled by precedent . . . .† In re Keith, 508 F.3d 1225,1227 (9th Cir. 2007); See also United States v. Hooton, 693 F.2d 857, 858 (9th Cir.1982) (per curiam).

1. The district court properly dismissed Appellants’ Takings Claim

As the district court noted, Appellants’ takings claim fails because such a claim is not cognizable under the present facts. Broad, 85 F.3d at 430. In Broad,this Court considered the takings claim of a number of shareholders who challenged the creation of a trust that favored one group of shareholders over another. Id. at 425-426. In rejecting the takings claim, this Court noted that,“almost universally,† takings claims involve rights to real property, and plaintiffs cited no cases suggesting that the Takings Clause applied to their personal property. Id. at 430. This Court further noted that shareholders did not “directly own any part of a corporation’s property or assets,† and that shareholders merely held a “proportionate interest in the corporate equity remaining after a corporation meets all its other debts and obligations.† Id. Accordingly, this Court concluded that “the plaintiff shareholders have no proprietary interest that could have been taken.† Id.

Here, Appellants claim they are entitled to recover their interest in CMKM stock that was placed in a trust. As in Broad, Appellants do not have a proprietary interest in the funds that could have been taken under the Takings Clause. Thus,the district court properly held that Appellants’ takings claim fails to state a claim,and this Court should summarily affirm dismissal of that claim.

2. The district court properly dismissed Appellant’s Due Process Claim

The district court properly dismissed Appellants’ due process claim as well.In asserting a procedural due process claim, Appellants must establish: (1) the deprivation of a constitutionally protected liberty or property interest; and (2) a denial of adequate procedural protection. Brewster v. Bd. of Educ. of the Lynwood Unified School Dist., 149 F.3d at 982. Property rights are not created by the Constitution, but are defined by independent sources such as state law, statutes, ordinances, regulations or express and implied contracts. Board of Regents of State Coll. v. Roth, 408 U.S. at 577 (“To have a property interest in a benefit, a person clearly must have more than an abstract need or desire for it. He must have more than a unilateral expectation of it. He must, instead, have a legitimate claim of entitlement to it.†).

As the district court stated, Appellants have asserted nothing more than a “unilateral expectation† of receiving funds but have not demonstrated a “legitimate claim of entitlement† to such funds. (Exhibit B). Moreover, to the extent Appellants’ claim that the SEC, in its discretion, wrongfully denied release of the alleged trust funds, such a claim does not lie. An individual has no property interest in a particular benefit where a government agency retains discretion to grant or deny the benefit. See, e.g., Erickson v. United States, 67 F.3d 858, 862 (9th Cir. 1995); Greenwood v. FAA, 28 F.3d 971, 976 (9th Cir. 1994); Swanson v.Babbit, 3 F.3d 1348, 1353-54 (9th Cir. 1993).

Therefore, this Court should summarily affirm the district court’s decision to dismiss Appellants’ due process claim because they have failed to establish a legitimate claim of entitlement to, or a property interest in, the funds at issue.

3. The district court lacked subject matter jurisdiction for other reasons Appellants improperly asserted claims against the SEC Commissioners in their official capacities, which are barred by sovereign immunity. Hodge v. Dalton, 107 F.3d at 707.

B.This Court Should Grant A Stay

Appellees seek a stay in the briefing schedule until this motion is decided. Appellants’ brief is due August 24, 2011 and Appellees’ brief is due September 23,2011.

Dated: August 22, 2011

Respectfully submitted,

ANDRÉ BIROTTE JR.
United States Attorney
LEON W. WEIDMAN
Assistant United States Attorney
Chief, Civil Division

/s/
KEITH M. STAUB
Assistant United States Attorney
Attorneys for Defendants-Appellees


[footnotes]

1 The FAC does not define or explain naked short selling, and resolution of this motion does not require definition of that practice. However, some general information on naked short selling is available at http://www.sec.gov/ spotlight/ keyregshoissues.htm

2 See, e.g., Broad v. Sealaska Corp., 85 F.3d 422, 430 (9th Cir. 1996)(Takings Clause); Brewster v. Bd. of Educ. of the Lynwood Unified Sch. Dist., 149 F.3d971, 982 (9th Cir. 1998)(Due Process Clause).

3 In light of the district court’s disposition of the Takings Clause and DueProcess Clause claims, the court did not consider Appellees’ argument that theirconduct was protected by qualified immunity. Saucier v. Katz, 533 U.S. 194, 200(2001). (Exhibit B)

Letter to the judge forwarded to stoeklein and frizzell

The Honorable Brenda P. Murray Chief Administrative Law Judge 450 5th Street, N.W. Mail Stop 1106 Washington, D.C. 20549-1106

Your Honor:

This letter is written in the hopes that the information I provide will help in your decision regarding CMKM Diamonds. I have been a shareholder in this company for over 18 months only after doing extensive due dilligence. My partners and I have gone to great lengths spending hundreds of dollars and manhours in order to follow the paper trails associated with the claims held by CMKX. I have researched miles of paper in documents, laws, contracts, deeds and have come to one conclusion, CMKX is a viable company.

I have watched CMKX trade shares in the billions on a daily basis. I have seen the company raise their authorized shares to a staggering 800 billion shares. I have watched the company state that the outstanding shares is 703,518,875,000. Many things on the surface seemed out of the ordinary until further researched. The definitive 14c filed by CMKX in Feb 2003 states some interesting things. I hope you have reviewed it for what it truly is, a contract. In that contract there are a group of people listed as "the sellers". These people hold not more than 4.9% of CMKX individually and a total of 85.8% of CMKX collectively. What I find interesting is that these shares are deemed "unaccessable" according to the contract until registered with the SEC. That means to me that 85.8% or 603,619,194,750 of this companies 703,518,875,000 shares cannot even trade, that leaves 99,899,680,250. I'm sure it has struck you as strange that the DTCC claims to have 404 billion shares under CEDE and Co. control. Another thing I find a little strange, which has probably piqued your interest as well, is that under contract, Mr. Casavant cannot divulge this information unless he is court ordered to do so. I'm sure you figured that out when he pleaded the fifth amendment in your court.

I also find it interesting that Ameritrade has halted the ability for its clients to buy CMKX as a corporate decision due to this investigation. Were you aware that Ameritrade holds 7.9 % of Knight Trading Group? If you knew that, I'm sure you knew that Knight Trading group stated in Feb 2004 they traded 3.6 billion CMKX shares a day, which accounted for 44% of their average trading volume. 19 trading days in Feb 2004 at 3.6 billion shares is a total of 68,480,000,000 shares At that time the o/s was 100 billion. Thats a whole lot more than 4.2%. Wouldn't you agree?

CMKX is now in court facing the SEC who is adamant about deregistration of its securities; and in their first response after the hearing, the SEC has called the form 15 filed by CMKX fraudulant. I'm sure you are thinking "why would the SEC wait 2 years to enforce this?" Well, me too. According to Reg 12g, if a company has less than 300 shareholders of record or more than 300 but less than 500 shareholders of record and less that 10 million dollars in assetts on the last day of the 3 most recent fiscal years, the company then may file for deregistration under the rule by filing a form 15. OK, in court it was stated that 360 people became shareholders of record in Feb of 2003, and it was also stated that there were 692 shareholders of record in July 2003. How many were there on Dec 31, 2002, 2001, and 2000 respectively. Those numbers and those dates are the ones that matter according to the SEC regulation 12g. I also ask, if CMKX was wrong in filing their form 15, are they not also covered under the exemption 13a-13 which states, and I quote:

CMKX Trade Volume

« Thread Started on Today at 4:28pm » The excerpt below from “Stocks, Futures, and Options Magazine puts into perspective the volume of CMKX trades.

In one day, CMKX’s total trades, 4.3 Billion Shares, were more than the combined total trades, 3.4 Billion Shares, of the New York Stock Exchange and the NASDAQ. This happened 9 times over 11 months.

CMKX’s average daily trades were over 2 Billion Shares, which is more than the New York Stock Exchange’s total trades in one day and more than the NASDAQ’s total trades in one day.

CMKX was an Exchange in itself.

“On July 27, 2004, nearly 4.3 billion shares of a small company from Saskatchewan, Canada, called CMKM Diamonds Inc. were traded. That compared to 1.6 billion shares on the New York Stock Exchange and slightly less than 1.8 billion on the NASDAQ on the same day. It was not a highly unusual day for CMKM, ticker symbol CMKX on the Pink Sheets. In fact, volume exceeded four billion shares nine times in the first 11 months of 2004.â€

This is for public consumption...our info re payments should follow as early as this afternoon. Later,
Catdaddy

http://www.sec.gov/divisions/enforce/claims/cmkmopinion062309.htm

PRESS RELEASE FOR CMKM INVESTORS

3:05am pst, 09052011:



INFORMATION FOR CMKM DIAMONDS INVESTORS:

http://www.sec.gov/divisions/enforce/claims/cmkmopinion062309.htm

On August 1, 2011, the federal district court in the District of Nevada entered a Final Judgment of Permanent Injunction and Other Relief Against Defendants 1st Global Stock Transfer, LLC, Helen Bagley, Sergey Rumyantsev, and Brian Dvorak. The court ordered:

Dvorak to pay disgorgement and prejudgment interest of $409,638.11;
Bagley and 1st Global, jointly and severally, to pay disgorgement and prejudgment interest of $448,047.87; and
Rumyantsev to pay disgorgement and prejudgment interest of $48,254.63.


In addition, the court ordered that Dvorak, Bagley and Rumyantsev be permanently barred from participating in any offering of penny stock. Dvorak, Bagley and 1st Global have filed notices of appeal from the judgment to the Ninth Circuit Court of Appeals.



INFORMATION FOR CMKM DIAMONDS INVESTORS

CIVIL ACTION AGAINST CMKM DIAMONDS, INC., URBAN CASAVANT, et al.

INTRODUCTORY NOTE

This alert provides information relating to the SEC’s civil injunctive action against CMKM Diamonds, Urban Casavant et al. The complaint, filed in April 2008, seeks various remedies, including civil penalties and disgorgement of ill-gotten gains. In cases where the SEC obtains a judgment to recover money from the defendants, and the defendants do not comply with the judgment by paying the money, the SEC will seek to enforce the judgment.

It is not yet known how much money will be recovered in this case. If the assets ultimately collected are sufficient for a practical and economically feasible distribution of funds to investors, the SEC may by motion to the court propose a plan to distribute the funds. No funds can be distributed to investors unless and until the court approves a distribution plan. We will post information about any proposed or final distribution plan on this page when it becomes available. We also post information about distribution plans on the Investor Claims Fund section of our website.

The judgments entered in this case direct that disgorgement, prejudgment interest and civil penalty amounts be paid to the Clerk of the Court for the District of Nevada for deposit into an interest bearing account with the Court Registry Investment System. For information about any payments that may be made to the Clerk, please access the Court’s website.

RECENT DEVELOPMENTS

On August 1, 2011, the federal district court in the District of Nevada entered a Final Judgment of Permanent Injunction and Other Relief Against Defendants 1st Global Stock Transfer, LLC, Helen Bagley, Sergey Rumyantsev, and Brian Dvorak. The court ordered:

Dvorak to pay disgorgement and prejudgment interest of $409,638.11;
Bagley and 1st Global, jointly and severally, to pay disgorgement and prejudgment interest of $448,047.87; and
Rumyantsev to pay disgorgement and prejudgment interest of $48,254.63.
In addition, the court ordered that Dvorak, Bagley and Rumyantsev be permanently barred from participating in any offering of penny stock. Dvorak, Bagley and 1st Global have filed notices of appeal from the judgment to the Ninth Circuit Court of Appeals.
Final Judgment of Permanent Injunction and Other Relief Against Defendants 1st Global Stock Transfer, LLC, Helen Bagley, Sergey Rumyantsev, and Brian Dvorak
On February 9, 2010, the federal district court in the District of Nevada entered a Final Judgment of Permanent Injunction and Other Relief Against Defendant Anthony Santos. The court ordered Santos to pay disgorgement and prejudgment interest of $5,356.35 and a civil penalty of $45,000. In addition, the court ordered that Santos be barred from participating in any offering of penny stock for five years from the date of the judgment.

Final Judgment of Permanent Injunction and Other Relief Against Defendant Anthony Santos (February 9, 2010)
On February 25, 2010, the SEC instituted administrative proceedings against Santos and, based on the permanent injunction entered by the court, ordered that Santos be barred from association with any broker or dealer, with the right to reapply for association after five years to the appropriate self-regulatory organization, or if there is none, to the Commission.

Administrative Proceedings against Santos (February 25, 2010)
On December 4, 2009, the federal district court in the District of Nevada granted the SEC’s motions for default judgment against defendants NevWest Securities Corporation, Ginger Gutierrez, and James Kinney. The court ordered:

NevWest to pay $299,459.70 in disgorgement plus prejudgment interest and a civil penalty of $275,000;
Gutierrez individually to pay $2,177,888.67 in disgorgement plus prejudgment interest and a $2,000,000 civil penalty;
Kinney individually to pay $3,593,516.32 in disgorgement plus prejudgment interest and a $3,300,000 civil penalty; and
Gutierrez and Kinney jointly and severally to pay $762,261.02 in disgorgement plus prejudgment interest.
The court ordered the defendants to pay these amounts to the Clerk of the Court for the District of Nevada within ten business days. Any amounts paid to the Clerk will be deposited into an interest-bearing account with the Court Registry Investment System.

Order Granting Default Judgment Against Defendant Nev West Securities Corporation (December 4, 2009);
Order Granting Default Judgment Against Defendants Ginger Gutierrez and James Kinney (December 4, 2009).
On September 17, 2009, the U.S. Attorney’s Office in Las Vegas, Nevada unsealed a criminal indictment charging six defendants – John Edwards, Urban Casavant, Helen Bagley, Brian Dvorak, James Kinney, and Ginger Gutierrez – with securities fraud and related charges for their conduct in the CMKM Diamonds matter. For more information, please see the press release dated September 21, 2009. On April 28, 2010, the U.S. Attorney’s Office in Las Vegas unsealed a superseding indictment that named additional defendants. For more information, please see the indictment.

BACKGROUND

On April 7, 2008, the SEC filed a civil injunctive action against CMKM Diamonds, Inc., its former Chairman and CEO, Urban Casavant, and 12 other defendants involved in the alleged illegal issuance and sale of unregistered stock of CMKM Diamonds, Inc., purportedly a diamond and gold mining company located in Las Vegas, Nevada. The SEC charged all of the defendants with violating the registration provisions of the federal securities laws. In addition, the Commission charged CMKM and Casavant with violating the antifraud and various reporting, record keeping, and internal controls provisions.

Litigation Release No. 20519: Securities and Exchange Commission v. CMKM Diamonds, Inc., et al, United States District Court for the District of Nevada, Civil Action No. 08- CV 0437 (April 7, 2008)
Complaint
SELECTED COURT ORDERS

Final Judgment of Permanent Injunction Against Defendant CMKM Diamonds, Inc. (April 21, 2008)

On April 21, 2008, the court entered a final judgment against CMKM Diamonds, Inc. enjoining it from future violations of the federal securities laws.
Order Granting SEC’s Motion for Summary Judgment Against Defendants John Edwards, Daryl Anderson, and Kathleen and Anthony Tomasso (June 23, 2009)
Final Judgment of Permanent Junction and Other Relief Against Defendant Urban Casavant (September 2, 2009)
OTHER SEC ACTIONS CONCERNING CMKM DIAMONDS

Litigation Release No. 20855: Securities and Exchange Commission v. Marco Glisson, Civil Action No. 2:09-cv-00104 (D. Nevada) (January 15, 2009)
Complaint
In the Matter of Daryl Anderson, Admin. Proc. File No. 3-13156 (September 2, 2008) (Order Instituting Administrative Proceedings Pursuant to Section 15(b) of the Securities Exchange Act of 1934 and Notice of Hearing)
Securities Exchange Act Release No. 58958 (November 14, 2008) (Order Making Findings and Imposing Remedial Sanctions Pursuant to Section 15(b) of the Securities Exchange Act of 1934)
In the Matter of CMKM Diamonds, Inc, Initial Decision Release No. 291, Administrative Proceeding File No. 3-11858 (July 12, 2005)
Securities Exchange Act of 1934 Release No. 52694 (October 28, 2005) (Order Dismissing Review Proceedings and Notice of Finality)
Release No. 34-51305 (March 3, 2005) (Trading Suspension: CMKM Diamonds, Inc., aka Casavant Mining Kimberlite International, Inc.)
http://www.sec.gov/divisions/enforce/claims/cmkmopinion062309.htm

I understand that it is not usual to have to answer questions regarding a
case which the SEC is a defendant, but this case has special circumstances.
In this case, as a victim in this crime, I have certain rights, and one is
the release of my restitution in a timely manner as required by law. In the
case you mention above, Al Hodges is trying to not only release the
restitution set aside for his plaintiffs in that case, but there are also
tens of thousands of known victims of that exact same crime who have no
representation in this matter. In fact, the authorities have concealed
massive crimes against the victims in this case by cutting a deal with the
brokers who counterfeited CMKX stock, they paid into a frozen trust fund to
avoid criminal prosecution for counterfeiting CMKX stock into the hundreds
of billions. Again that fund has restitution for tens of thousands of
victims not in the bivens case, I am one of those victims, and I have
rights.
The SEC needs to address all the victims who have no representation in this
matter, and to ensure their restitution is released as required by law. I
should not have to have a lawyer to force the SEC and DoJ to do what is
their public obligation, why is the SEC not performing that obligation
without having litigation against them to force them to. It is absurd at
this point to pretend this isn't happening when Al Hodges has sworn under
oath that there is talks to release the restitution held for all victims in
this case,and has an eye witness to the deals cut by the SEC and DoJ.

In Mr. Hodges latest filing he asked for a thirty day extension in his case
against the SEC as there was a pending imminent settlement that would see
him granted the relief he sought. He stated this in an affidavit under
threat of perjury. That relief was in fact money for all victims in this
case, not just his plaintiffs. The fact that those talks are even happening,
unless Mr. Hodges perjured himself, mean that all victims in this case are
having their rights violated at this moment by the DoJ and SEC by not being
included in them. The SEC should make all victims aware of what is
transpiring with their restitution.

I would like immediate representation at these talks, and have the right as
a victim to know why my restitution is being illegally withheld from me. If
the SEC refuses to do their obligation and protect all the victims in CMKX
I will attempt to foia or subpoena the CMKX trading records and Cert Pull
Work Product, which will show the SEC allowed hundreds of billions of shares
to trade after they were fully aware of the fraud, after they subpoenaed the
fraud records used in the SEC's civil actions, and after shareholders lawyer
Bill Frizzell presented Leslie Hakala with indisputable proof of massive
naked shorting in CMKX. Hakala allowed the fraud to continue for months on
end, allowed hundreds of billions of shares to be sold, and allowed 250
million dollars to be stolen from the victims in this case. She could have
stopped it easily, but didn't. The only reasonable explanation for that to
happen is this was the sting operation outlined in Al Hodges bivens case,
one in which he has an eye witness to the deals cut by the SEC and DoJ to
allow the brokers to avoid criminal prosecution. One in which he now swears
had talks happening that would grant him the relief he sought and an
imminent settlement in this case. I have the right as a victim to know of
these talks, and who was in them from the government and who represented me.
I have the right as a victim to know why they fell apart, and what is being
done to remedy the situation. I have a right to know if Al Hodges committed
perjury.

Thank you,

coalition asks the sec to answer each question listed here


Additional evidence implicating the Authorities in directly aiding the corrupt insiders of CMKX and others who defrauded shareholders is included in a letter by Mark Faulk, CEO of CMKX. He outlines the fraud that was allowed to occur by the SEC and other Authorities; all of whom stood by silently as the fraud happened after they had subpoenaed the records that were used in the indictments:

http://www.cmkmdiamondsinc.com/letter-m_index.html.




In the CMKM Diamonds Inc. case, specific evidence was given to Mr. Burkin which clearly showed the SEC, FBI, DOJ, and IRS were complicit in the crimes which took place and the cover up of the fraud by all of the Wall Street firms involved, a mirror image of Operation Uptick and Operation Vulgar Betrayal. Here is a list of the crimes alleged to have been committed by the SEC, FBI, DOJ, and IRS, further known as The Authorities in the CMKM Diamonds Inc. case. This list either shows the Authorities allowed this crime to take place and aided and abetted the fraud committed against CMKX shareholders, or they allowed this fraud to take place to run a sting operation as outlined in Al Hodges bivens case and have harmed all victims by withholding illegally their restitution for over five years. There clearly there needs to be an independent investigation into these points:

1. The Authorities investigation (into CMKX) was well under way by May 2004, before hundreds of billions of shares were sold to investors in a publicly traded company and the money laundered. Corporate insiders were aided and abetted in their crimes by high-powered attorneys, accountants, transfer agents, major banking institutions, brokerage houses, and clearing firms. It occurred right under the noses of the SEC and NASD (now FINRA); both agencies ignoring dozens of blatant warning signs, allowing the scam to go on for years. The Coalition asks for an investigation into why the Authorities just allowed these crimes to happen and the money laundered over years when it was their duty to stop these crimes when they detected them in 2004, costing the company and its shareholders hundreds of millions of dollars.

2. The Coalition alleges and has provided evidence that Leslie Hakala conspired with ex-SEC attorney D. Roger Glenn (who wrote opinion letters allowing over 300 billion shares of stock to be dumped into the market) to facilitate the sale of hundreds of billions of shares of CMKX stock, all proceeds from those sales were apparently stolen right under the nose of The Authorities while they watched. D. Roger Glenn escape and indictment by the DOJ for his role in this fraud. PR person for CMKX, Andrew Hill, has publicly stated Leslie Hakala was fully aware of what was happening inside CMKX and had been in contact with D. Roger Glenn in 2004. Furthermore, the FBI never questioned Andrew Hill, even though he had pertinent, incriminating first-hand information in this case. The Coalition asks for Andrew Hill to be deposed and Leslie Hakala and other SEC enforcement attorneys investigated for their role in this fraud and its cover up.

3. When Leslie Hakala met with CMKX management and shareholders lawyer Bill Frizzell on May 11th 2005, she was fully aware of the fraud inside CMKX at this time. Bill Frizzell presented her with indisputable evidence of massive counterfeiting of CMKX stock, a fact that later proved to be true as 622 billion unregistered shares were sold in CMKX stock out of 703 issued and outstanding shares in total. Mr. Frizzell had direct evidence of hundreds of billions of unregistered share sales by brokers such as Etrade, Ameritrade, TD Waterhouse, and others. None of those brokers were ever indicted and no civil action has ever taken place despite the indisputable evidence of their crimes. Not only did Leslie Hakala not stop these crimes from happening, and saving shareholders hundreds of millions of dollars, but she allowed the fraud to continue. These corrupt brokers were allowed to sell hundreds of billions of additional counterfeit shares, steal the illegal proceeds, and then have their crimes completely covered up. Hakala allowed corrupt management to launder their proceeds from their crimes for years. The Coalition asks for an immediate investigation into the evidence presented at that meeting and to the SEC actions and inactions after that meeting.

4. Co-conspirators John Edward Dohnau, Michael Williams, and Rendal Williams, plus a cast of numerous other associates have not been charged for their part in this massive fraud. Why?

5. The phone records from NevWest, which show that they contacted the SEC each time Edwards came in with CMKX certs to sell, many of which were clearly forged and fraudulent, some even “signed† by an individual who had been deceased for months. Instead of taking action to halt the obvious fraud against innocent shareholders, the SEC and NASD (FINRA) ignored the evidence and dozens of other red flags, allowing the scheme to continue unabated, costing unsuspecting buyers of CMKX stock hundreds of millions of dollars. The Coalition wants access to those phone records and an investigation into why the SEC allowed those certs to be sold after they had already subpoenaed the fraud records used in the indictments and SEC civil action.

6. Clearing firm Computer Clearing Services (now owned by Penson Worldwide, Inc.) helped John Edwards trade over 250 billion shares of CMKX stock totaling over $53 million. Clearing firms and brokers weren’t the only ones who ignored red flags that should have triggered the filing of Suspicious Activity Reports. Several Nevada banks, most prominently Silver State Bank and Wells Fargo Bank, allowed CMKM Diamonds and related fraudulent companies to run hundreds of millions of dollars through dozens of accounts. Penson is mentioned in the article, which documents the counterfeiting of the stock market by Wall Street, organized crime and terrorists; a crime which all Authorities were fully aware of before the year 2000 and did nothing to stop although trillions of counterfeit shares were sold into the market and trillions of dollars stolen from the general public: http://www.marketrap.com/article/view_article/91158/penson-worldwide-inc-pnsn-rolling-stone-the-mafia-and-naked-short-selling. The Coalition asks for an investigation into Penson Worldwide’s history of covering up the crimes of Wall Street, organized crime, and terrorist naked short sales, and those of John Edwards in particular.

7. The Authorities subpoenaed the Silver State Bank regarding suspicious activities on September 5th 2004 (the Silver State Bank had no action taken against it for its role in this fraud) BEFORE hundreds of billions of shares were sold in CMKX stock. The evidence gathered from that subpoena showed 64 million dollars went through the Silver State Bank. Among the transactions executed by Silver State Bank after those subpoenas include:

• Wire transfers totaling hundreds of thousands of dollars were executed with only the notation “transferring to Personal Acct. per cust. Transfer via phone†.

• Checks from various accounts set up as shell companies and controlled by Casavant and Edwards written out only to “CASH†…including one for $350,000.

• Multi-million dollar wire transfers between Edwards and Casavant run through dozens of accounts they controlled there.

• Millions of dollars written out of company accounts to Casavant, his wife Carolyn, and several family members; often on temporary checks.

The Coalition asks for an investigation into why the Silver State Bank continued to allow money laundering into the millions of dollars when the Authorities had already subpoenaed the fraud records used in the indictments and civil actions. We also ask for an investigation into why the DOJ and SEC allowed these crimes to continue unabated when they already had the evidence of the crimes.

8. The Authorities allowed Robert Maheu, Urban Casavant, and other management to continue to promote the sale of CMKX stock through various means, including a drag racing team, after they were fully aware of the fraud inside CMKM Diamonds Inc. Robert Maheu, Roger Glenn and Don Stoecklein were not indicted for his role in this fraud although six hundred billion shares were sold while they ran CMKX. The Coalition wants an investigation into why these individuals were not indicted; why the DOJ and SEC continued to allow them to promote this fraud after they had subpoenaed the fraud records; and why they allowed these masterminds the time to launder their proceeds from their crimes.

9. In letters to other brokers in mid-2005, shareholders lawyer Bill Frizzell not only identified the brokers who sold over 300 billion shares of CMKX stock, but those brokers continued to sell unregistered shares for months while The Authorities watched. The money from the sale of hundreds of billions of shares (approximately 190 million dollars) was stolen by these brokers, with none of those known brokers being indicted, and none of that money recovered. Why were these brokers not indicted, and why were their crimes covered up? Why did the Authorities continue to allow them to sell unregistered securities in CMKX stock when the fraud was clearly detected?

10. In Bill Frizzell's letter to TD Waterhouse in Canada, he explains that none of the shares sold by them were even on the NOBO list, meaning they were sold unregistered. TD Waterhouse continued to sell unregistered shares of CMKX stock for months, as did all other Canadian brokers. In his letters, Mr. Frizzell also stated that the SEC was watching this very closely. Mr. Frizzell stated in his deposition to the SEC that none of the Canadian brokers had shares on the NOBO list, indicating all shares sold in Canada were sold unregistered. There has been no action against any Canadian brokers from The Authorities and since all illegal shares sold by Canadian brokers were grandfathered, they would not have to cover their fraud. The Coalition asks that there be a public inquiry (by an outside agency) into the grandfathering of trillions of counterfeit shares by Wall Street, organized crime, and by terrorists. The crimes could have been stopped well over a decade ago, but were allowed to happen, and then the fraud covered up. Why?

11. According to Bill Frizzell, Andrew Petillion (Branch Chief of Enforcement at the Pacific Regional Office for the SEC) issued this warning with regards to his evidence of the naked short in CMKX stock:

"By the way, if this is an orchestrated short squeeze against the brokerage houses to make the stock price go up, we will come after those who are responsible. We would not look kindly on a cert pull because it would cause market manipulation."

The Authorities allowed CMKX stock to be manipulated down, but would not allow the natural correction for this: a short squeeze. This mirrors what the SEC said to David Patch regarding the Grandfather Clause: it was supposed to stop runs in stocks which had been manipulated by Wall Street firms, which in-turn counterfeited trillions of shares of stock in hundreds if not thousands of publicly traded companies. An example of this is Eagle Tech Communications. Authorities knew Eagle Tech was the victim of counterfeiting by Wall Street firms and crime families, but grandfathered those counterfeit shares so they would never have to be covered, while protecting the criminal firms at the same time. The Coalition wants to know why the DOJ and SEC allowed Wall Street firms to create the Grandfather Clause (with the help of the SEC) as this allowed felonies to be covered up; felonies committed by terrorists and organized crime families.

12. The Authorities and alleged corrupt Judge, Brenda Murray (see the modus operandi of Brenda Murray in evidence presented regarding the Gary Aguirre cover up), would not allow evidence of massive naked shorting in CMKX stock in the administrative hearing (October 5, 2005) that eventually ended up in the revocation of CMKX stock. Financial expert Jim DeCosta analyzed the naked short in CMKX stock and found it to be 14-1. No evidence of any other broker’s fraud or the fraud already detected by The Authorities was entered into the hearing, and billions of shares of CMKX stock traded afterwards; all monies stolen from shareholders. The Coalition asks for an investigation into the cover up of the largest naked short in history by Judge Brenda Murray and the SEC enforcement attorneys. The Coalition asks for an investigation into why the Authorities allowed this crime to continue when clearly they were aware of it, and why did they allow all of the money to be stolen from the victims in this case when they could have stopped it in 2004?

13. In Civil Action No. 2:08-cv-0437, 4-7-08, United States District Court for the District of Nevada, Leslie Hakala alleges that "To divert attention from their own dumping of CMK shares, Casavant persuaded CMKM's investors that the reported high trading volume in CMKM stock reflected extensive "naked short selling" rather than ordinary stock dilution."

coalition complaint filed against leslie hakala


This complaint is against the SEC and their handling of the cmkx case in general, including possible criminal activity by several members of the SEC staff. The SEC has clearly committed crimes in the CMKX case if this was not a sting operation as outlined in the Al Hodges bivens case. The evidence below clearly indicates this was a sting operation run by the DoJ and SEC, but if that case the DoJ and SEC are violating every shareholders rights by illegally withholding their restitution, and lying to every victim in this case to cover up that fact.
The Coalition of shareholders who are tired of being lied to request and immediate investigation into Leslie Hakala and every SEC staff member who worked the CMKX case.

The Coalition asks for immediate release on the SEC website of concealed CMKX documents which prove that wall street brokers sold hundreds of billions of counterfeit shares in CMKX stock. The records will show that the SEC had full knowledge of the massive naked short in CMKX and that insiders were committing fraud, and then allowed it to continue, and allowed all the money to be stolen which ruined our company, or this was a sting operation we were used in.

We request immediate release of the following records which will prove the facts, withholding these records is covering up crimes:

1. Jim DeCosta's naked short analysis of CMKX stock which proves CMKX stock was counterfeited by wall street brokers. We also request to know if the DoJ and SEC were given that report.

2. All work done by Susanne Trimbath as it shows the SEC lied in the civil action and covered up massive fraud by the brokers who naked shorted CMKX.

3. All phone records between Roger Glenn and Leslie Hakala. All phone records between NevWest Securities and the SEC.
4. Exact totals of shares sold by each broker when the SEC subpoenaed the fraud records at the Silver State Bank, Sept. 5th 2004. The trading records of the Period following until CMKX was deregistered.

5. Transaction records of each broker which bought certificates to cover their unregistered or counterfeit share sales during the cert pull.

6. Exact accounting of every claim held by CMKX when the SEC subpoenaed the fraud records by insiders, Sept. 5th 2004. Each claim lost after that is as a result of the SEC's actions or inactions and the SEC should be held accountable.

7. A detailed list of exactly what records were in the SEC file given to Bill Frizzell and other CMKX management and lawyers in June 2005. Exactly what confidential banking records were given to Bill Frizzell from the SEC, which he mentions in his derivative letter to the company in Sept 2005, and when.

8. The cert pull work product that went into the interpleader. It contains exact totals of each broker who shorted CMKX stock. The SEC has these exact totals as well and exact totals of where 190 million dollars went that was stolen by brokers outside of corrupt CMKX management.

9. Exact date of the first grand jury that sat in 2004. Exact dates of all subpoenas in the CMKX case, ie Silver State Bank and Wells Fargo bank.