While I wish I were referring to myself, I refer to Andrew Left of Citron Research (see my other articles referencing him). Once again today his bold assertions of fraud were vindicated when a court ruled that Conversion Solutions Holding Company & Rufus Harris did bad things. The SEC’s press release on the matter is hilarious. Here is an excerpt:
On the basis of the evidence presented at the hearing, the Court found that Conversion never had any business-related revenue, and that its only source of funds was an ongoing offering of convertible notes and/or stock that began before the time period charged in the Complaint. The Court also found that Conversion had not paid any money for any of the purported assets carried on its books, which consisted of various series of bonds, uncollected interest due on the purported bonds, and a document called the UCC-1 Note. The Court found that the UCC-1 Note is not a standard piece of commercial paper, but an eight-page document signed by an individual named David Hawkins, which purports to be an “Affidavit of Obligation” in favor of Mad Dog Builders, Inc. and Mr. Hawkins, and which contains references to purported legal concepts including the “individual energy protection maxim,” the “social cooperation protection maxim,” and the “Hebrew/Jewish Commercial Code.”
This leaves me to say but one thing: Evidently Rufus Harris was not quite as cool as THE Rufus from Bill & Ted’s Excellent Adventure:
I should also point out that as always, the penalty exacted upon Rufus Harris is utterly inadequate to deter future penny stock hucksters. Again according to the SEC press release: “The Court did not find a basis for disgorgement of any ill-gotten gains by Harris or Conversion.”
Disclosure: I have no connection to anyone mentioned above. I am not Andrew Left. I am not Rufus Harris. I cannot play the guitar. I have yet to meet a securities regulator who is neither stupid nor evil.