Hi Bob. Thanks for the efforts you're putting in on this.
Do you find it strange that Morris Richards managed to "confuse" 3 or 4 shareholders who called him previously into thinking a share distribution was a money distribution? I'm talking about roddy, ooggie, coach and chrisl. None of these guys is a pumper so they would be the last ones to confirm that Morris said money if he didn't say money.
So is it possible that Morris is lying now to protect his job? Also is it possible that at one pont the DTCC was responsible for coordinating the collection of monies but never physically took possession of funds? That would give them wiggle room on denials.
What's worriesome is that we seem to have lost the first hand confirmation of funds being collected with involvement of some sort by the DTCC. Which may give bad guys the opportunity to further "lose" the actual money. We are now relying on shareholder DD. It seems we farther away from possible official confirmation.
Also what further actions are being planned? I think originally the idea was to try to get official confirmation. And if we didn't then we'd take other action. Are other actions still planned? It feels like we're once again waiting some indefinite time period for additional information from Mr Hodges (whose efforts I also appreciate).
What are your thoughts on these issues. And thanks again for your efforts.
Joe
Hello Joebud,
I am receiving many emails and messages with concerns and questions about the confirmation process. I would like to share my response to all of the shareholders.
I was informed in July 2008 that the DTCC has the funds. This would mean at least the record of the funds that were collected in their custodial care until disbursement. I am not sure how the DTCC banks their actual money, but my guess would be through the Treasury Department.
When December came and nothing happened, I spoke with Attorney Bill Frizzell about the funds at the DTCC. Attorney Frizzell wanted an official documentation of the DTCC Funds first before he would take any action because he was busy with lawsuits and working on CMKM Diamonds trading again on the market.
A respected shareholder informed me that his attorneys called Attorney Frizzell and Frizzell finally admitted after being threatened with legal action that funds were collected, but he did not know the details as to how much and when. I concluded, the only way shareholders are going to receive a confirmation of the funds is through an attorney. I asked the shareholder if his attorneys would help the shareholders with securing confirmation of the funds. His attorneys wanted $500 per hour and did not want their firm’s name made public because they have many clients and could not afford to have their staff answering shareholder’s calls and emails. I wanted transparency and access to the information for all the shareholders. I did not want the same thing that happened when the shareholders paid the Owners Group for Attorney Frizzell’s Phase I and Phase II and asked for accountability of the information collected to be told that the attorney was working for one individual and not for the shareholders.
Attorney Al Hodges and I communicated a few times since 2006. I spoke with Mr. Dennis Smith and Attorney Hodges. I explained the situation and asked if they would help the shareholders obtain an official confirmation of the compensation for peace of mind for the shareholders and a legal basis to go on in case the shareholders need it. Attorney Hodges and Mr. Dennis Smith agreed with no preconditions and no fees were ever mentioned in our communications. They agreed that the official confirmation needed to be accomplished as quickly as possible because of the critical situation of the many shareholders who contacted me and asked for help.
Attorney Al Hodges does not provide information until he is finished or he is satisfied the information will not negatively affect what he is working on. The update progress reports reflect this. Attorney Hodges and Mr. Dennis Smith are working the official confirmation plus have gone the extra mile by, verifying other information so the shareholders will have the facts, answering shareholders’ calls and emails, providing timely progress update reports, meeting with shareholders, meeting with a high powered individual who has a great influence and now a better understanding of the CMKX Shareholders’ predicament (Attorney Hodges will provide the details if and when necessary), communicating with other Attorneys….on and on. They are true champions for the shareholders.
These are my thoughts, not Attorney Hodges’s or Mr. Dennis Smith. From what I gathered, the DTCC held the record of the compensation funds for their client. There were some activities with the funds when I was contacted in July 2008. It could be the funds were moved either in July 2008 or during the 10 day request. This would go in line with the other shareholders' contact information. There is enough evidence for Attorney Hodges to continue to pursue the official confirmation of the funds. I believe Chrisl’s and the other shareholders’ account of their calls to the DTCC. Attorney Hodges believes the shareholders’ account, but checked this out to see if he could acquire more information, which Attorney Hodges did as provided in his last update.
No one is stalling. We are progressing in the right direction. The steps we are taking, we are sending out a strong message that we are working with not against any entity that can assist in providing an official confirmation of the compensation funds. The main objective is to ensure those involved will make as their number one priority... the release the compensation funds to the Shareholders.
Besides the contributions and work on this confirmation process from Attorney Al Hodges, Mr. Dennis Smith, and Attorney Hodges’s staff, quite a few shareholders have sent letters and emails to President Obama, Congressman Ackerman, Senator Reed (arranged a meeting with Senator Reed as well), federal authorities and representatives, state authorities and representatives…who ever can influence the confirmation. We will continue to do whatever we can to ensure the Shareholders are compensated.
I have attached some of the letters I sent as a reference for any one who would like to help by also sending a letter. I am focusing on the shareholders’ compensation by communicating to any entity that can help. I am trying to determine the best approach that will expedite the release of the funds to the shareholders. My messages are intended to knock on every door until the funds are released. The list so far, Senator Reed, Congressman Ackerman, Senator Shelby, Attorney Al Hodges, CEO Faulk, Chairman West, Attorney Frizzell, The DTCC, The SEC, Attorney Stoecklein, and President Obama.
My appreciation to all for working on this official confirmation process.
Thank you,
BHollenegg
Letters sent…
President Barack Obama
January 20, 2009
Dear Mr. President,
Congratulations.
Mr. President, in your Inauguration Speech, you expressed your concern about the economic market. You stated, "...the crisis has reminded us that without a watchful eye, the market can spin out of control, and that a nation cannot prosper long when it favors only the prosperous."
Mr. President, in your Inauguration Speech, you expressed your concern about the economic market. You stated, "...the crisis has reminded us that without a watchful eye, the market can spin out of control, and that a nation cannot prosper long when it favors only the prosperous."
Our company, CMKM Diamonds, under the watchful eyes of many, ended up being the Largest Naked Shorted Stock in the History of the Stock Market. We have documented evidence indicating the stock was oversold nine times the total outstanding shares. This equates to more than 6.3 Trillion Naked Shorted Shares... 6.3 Trillion shares that were counterfeited.
CMKM Shareholders fought a long battle to right this monumental wrong. We are 50,000 shareholders of CMKM Diamonds, united in our belief that Justice will prevail. We helped identify and stop the illegal activities of naked shorting shares by participating in the biggest certificate pull in the history of the stock market. We have fought many obstacles since the 2005 certificate pull, only to embrace one delay after another. We have hit a wall of bureaucratic excuses and misinformation. We need your help, Mr. President. Would you please issue a directive to the DTCC to release the compensation funds for the CMKM Diamonds’ Legal Shareholders.
Mr. President, you conveyed that the success of our economy depends "...on the reach of our prosperity on our ability to extend opportunity to every willing heart...because it is the surest route to our common good." CMKM Shareholders have the will. Mr. President, you have the power. Together, our willpower and commitment will greatly contribute to the success of the economy and to the success of “Paying It Forward”, for the common good for many generations. Yes, We Can! And We Will!
Thank you President Obama.
Sincerely,
Robert Hollenegg
One of CMKM Diamonds
50,000 Legal Shareholders
===============================================================
February 09, 2009
Dear Senator Reed,
I, along with over 50,000 shareholders invested in a stock which traded as CMKX. The company, CMKM Diamonds, Inc. and the Shareholders are victims of the largest naked shorted stock in the history of the stock market. CMKX trades were in the billions per day. Numerous times the trades exceeded the total trades in the entire market. The trades were mainly counterfeit shares documented as high as 6.3 Trillion Shares. The SEC tried to “Chill” the company in one of several attempts to cover up this monumental fraud.
I have attached two letters authored by Attorneys Al Hodges and Bill Frizzell addressing illegal naked shorting of CMKX. Attorney Al Hodges is working with no fees on behalf of the CMKX Shareholders in trying to obtain an official confirmation on the compensation for the shareholders. Attorney Bill Frizzell was part of the CMKX Task Force headed by the distinguished Mr. Robert Maheu. The CMKX Task Force assisted the company and shareholders with a stock certificate pull. Though there is concrete evidence of the enormous amount of counterfeiting activities by major traders, the regulatory bodies basically have ignored the victims of illegal naked shorting, the CMKX Shareholders. The SEC and the DTCC are ineffective in releasing the compensation funds for the CMKX Shareholders.
Many shareholders have expressed their disappointment and are questioning whether to invest in the American Stock Market again. You have rekindled the hopes of the investors. The CMKX Shareholders are appreciative of your dedication in correcting the illegal activities sanctioned by those who were appointed to protect the shareholders and the stock market. Senator Reed, please review the facts on CMKX, the largest naked shorted stock in the history of the entire stock market and commit resources to ensure confidence and trust returns to investing in America. Thank you Sir.
Sincerely
Robert Hollenegg
xxxxxxxxxxxxxx
ATTACHMENTS:
Senator Reed
==================================================================
Congressman Ackerman
gary_ackerman@mail.house.gov
February 09, 2009
Dear Congressman Ackerman,
I, along with over 50,000 shareholders invested in a stock which traded as CMKX. The company, CMKM Diamonds, Inc. and the Shareholders are victims of the largest naked shorted stock in the history of the stock market. CMKX trades were in the billions per day. Numerous times the trades exceeded the total trades in the entire market. The trades were mainly counterfeit shares documented as high as 6.3 Trillion Shares. The SEC tried to “Chill” the company in one of several attempts to cover up this monumental fraud.
I have attached two letters authored by Attorneys Al Hodges and Bill Frizzell addressing illegal naked shorting of CMKX. Attorney Al Hodges is working with no fees on behalf of the CMKX Shareholders in trying to obtain an official confirmation on the compensation for the shareholders. Attorney Bill Frizzell was part of the CMKX Task Force headed by the distinguished Mr. Robert Maheu. The CMKX Task Force assisted the company and shareholders with a stock certificate pull. Though there is concrete evidence of the enormous amount of counterfeiting activities by major traders, the regulatory bodies basically have ignored the victims of illegal naked shorting, the CMKX Shareholders. The SEC and the DTCC are ineffective in releasing the compensation funds for the CMKX Shareholders.
Many shareholders have expressed their disappointment and are questioning whether to invest in the American Stock Market again. You have rekindled the hopes of the investors. The CMKX Shareholders are appreciative of your dedication in correcting the illegal activities sanctioned by those who were appointed to protect the shareholders and the stock market. Congressman Ackerman, please review the facts on CMKX, the largest naked shorted stock in the history of the entire stock market and commit resources to ensure confidence and trust returns to investing in America. Thank you Sir.
Sincerely
Robert Hollenegg
xxxxxxxxxxxxxxxxx
CMKM DIAMONDS, INC. suffered THE LARGEST NAKED SHORT IN HISTORY.
Subject: File No. S7-08-08
From: A. Clifton Hodges, Esq.
Affiliation: Attorney March 27, 2008
www.sec.gov/comments/s7-08-08/s70808-151.htmTo The SEC Commission and Financial Industry at Large:
Naked shorts in the United States = "counterfeit shares." The case of CMKX represents the greatest "counterfeit shares" fraud in the UNITED STATES. CMKM DIAMONDS, INC. suffered THE LARGEST NAKED SHORT IN HISTORY. Trillions of stock shares traded and changed hands UNTIL CMKX revoked itself and had every stock holder pull physical stock certificates out of brokerages, and out of street name, to trap those whom had committed fraud. CMKX is also the LARGEST STOCK CERTIFICATE PULL IN THE HISTORY OF THE UNITED STATES"
Naked short selling is a case of short selling the shares without first arranging a borrow. The Securities Exchange Act of 1934 stipulates a settlement period up to three business days before a stock needs to be delivered, generally referred to as "T+3 delivery". The SECs public position as of the Spring of 2005 was that naked shorting did not exist. With enactment of Regulation SHO, the subsequent elimination of the SHO grandfather exemption, and now the promulgation of this rule, the SEC has finally admitted the error of its ways.
The Depository Trust and Clearing Corporation has also been criticized for its approach to naked short selling. DTCC has been sued with regard to its alleged participation in naked short selling, and the issue of DTCC's possible involvement has been taken up by Senator Robert Bennett and discussed by the NASAA and in articles -- disagreed with by DTCC -- in the Wall Street Journal and Euromoney Magazine. Robert J. Shapiro, former undersecretary of commerce for economic affairs, has, however, found that naked short selling has cost investors $100 billion and driven 1,000 companies into the ground.
Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns. It is in fact, institutional fraud further, counterfeiting of securities is a crime of U.S. Constitutional magnitude. This criminal conduct, once asserted by the SEC not to exist, has destroyed many, many companies, lives and opportunities. But now the word is out on naked shorting it must be stopped, and all whom conspired put in jail. This naked shorting fraud rule must be passed - NOW.
Sincerely,
A. Clifton Hodges
TYLER, Texas--(Business Wire)-- In our efforts to continue to try to identify all of the shareholders of CMKM Diamonds, Inc. stock, current management of the Company would like to point investors that have been unable to procure physical stock certificates from their brokers to the UnShareholder.com website.
www.UnShareholder.com is launching today to help identify the magnitude of individual investors unable to obtain stock ownership certificates and who perhaps inadvertently purchased illegal "naked short" or "phantom" electronic "entitlements" instead of actual shares. The scope of settlement failures in general has become a hot debate. Commonly referred to as the "naked short selling" problem, the real damage is caused by stock lending and settlement failures(a). Of course, the end result is the same: an investor makes a payment but has no actual investment. That investor is not a "shareholder" because they don't own shares. Instead, they are an UnShareholder. According to the website: If you requested a stock certificate from your broker and have not received it, you are an UnShareholder. If your brokerage account was changed to delete the shares of a company that you didn't agree is "worthless", you are an UnShareholder. If you received a 1099 with "non-qualifying dividends" when you believed you owned regular shares, you are probably an UnShareholder too. Attorney Al Hodges states, "The UnShareholder site has been developed and established by the Pasadena, California law firm of Hodges and Associates in an attempt to document the nature and depth of the UnShareholder problem as well as to identify individual investors whom have in good faith purchased publicly traded shares of stock but, for all the wrong and illegal reasons, are not entitled to receive them nor to enjoy all the indicia of ownership." (a) Stock lending is closely associated with short selling and settlement failure refers to the problem of sellers not delivering shares on the settlement date. Naked short selling is when stock is sold short and not borrowed for delivery on the settlement date. CMKM Diamonds Inc., Tyler Kevin West 903-262-8397
www.reuters.com/article/pressRelease/idUS211954+09-Jun-2008+BW20080609On May 31, 2006, Bill Frizzell, member of the CMKM Task Force and shareholder attorney, submitted a complaint letter to the NASD Investor Complaint Center in regards to this serious problem. :
May 31, 2006
NASD Investor Complaint Center
1735 K Street, NW
Washington, D.C. 20006-1500
Re: Request for Investigation of Brokerage Conduct Involving CMKM Distribution
Dear Sir or Madam:
On November 5, 2005, a final order was entered by the SEC delisting the securities of CMKM Diamonds, Inc. (hereafter CMKM) Shortly thereafter, CMKM management appointed a “Task Force” to assist the company in determining their bonafide shareholders. I was invited to participate on this Task Force along with Attorney Don Stoecklein and Bob Maheu, a former board member of CMKM. The Task Force had a single job of identifying all bonafide shareholders of CMKM. Prior to delisting, the company had issued and outstanding 703 billion shares. There was evidence of billions of failed deliveries in this stock at the time the trading in this security was halted by the SEC. Trading was halted by the SEC for non reporting violations.
Shortly after delisting, CMKM sold a major company asset consisting of a large number of mineral claims in Canada. The sale of this asset resulted in the company receiving 45,000,000 shares of an OTCBB stock called Entourage Mining Ltd. (ETGMF) The purchase agreement stipulated that such shares shall be distributed to the shareholders of CMKM. Recent press releases state that Entourage has a drilling program in operation and there is expectation of future development of the claims which were once owned by CMKM. The Entourage stock now trades in the .20 to .30 USD range. There is evidence of potential appreciation of this Entourage stock.
Due to the indisputable evidence of large numbers of failed deliveries in this stock, CMKM elected to distribute the 45,000,000 shares of Entourage stock to all bonafide shareholders in what was described at that time as a windup distribution. CMKM has informed shareholders that only shareholders with valid certificates from the official company transfer agent will receive their pro rata distribution of Entourage stock. In November of 2005 CMKM shareholders began requesting certs from their brokers. CMKM is currently a private Nevada corporation in good standing per Nevada state statutes.
Nevada law NRS 78.235 mandates that each shareholder has the right to request and receive certificates of ownership from the company for their stock. Specifically, the statute states “..every stockholder is entitled to have a certificate, signed by officers or agents designated by the corporation for the purpose, certifying the number of shares owned by him in the corporation.”.
I am making this complaint in my capacity as a volunteer on the Task Force appointed by the company to determine its bonafide shareholders. I do not represent the company in any legal capacity other than being a volunteer to assist CMKM in identifying its bonafide shareholders. My law office has been the depository for shareholders to send copies of their certs once they receive the same from their broker. My office has worked closely with the official company transfer agent as we continue to gather evidence of bonafide ownership of CMKM stock. Consequently this office has documented complaints from hundreds of shareholders who have been attempting to obtain certs from their brokers since November of 2005 but have been unable to do so. The litany of excuses being given by various broker dealers for the refusal to honor their customers request for certs continues ad nauseum. At least three deadlines have been established in an effort to obtain cooperation from various brokers and to accommodate shareholders who received late notices of the request by the company.
The DTCC sent information to its participants in November of 2005 informing its participants of the CMKM request that certificates be obtained in the beneficial owner’s names. As the final deadline imposed by CMKM approached, the DTCC, working with the CMKM Task Force, directed all participants to request their certs on deposit at the DTCC or the DTCC would send all remaining certs to the transfer agent for distribution back to the brokers. Many brokers still did not request their certs on deposit at the DTCC and the DTCC emptied their vaults of CMKM securities as they had indicated they would do. As of the date of this letter, the DTCC is not involved in the transfer of CMKM stock between the beneficial owners, the company and any securities intermediaries. All stock transfer problems which exist at this time are between the securities intermediaries (broker/dealers) and the shareholders.
CMKX is no longer a publicly traded company. Its stock has not been publicly traded since October 31, 2005 per order of the SEC. All shares should be held directly by the beneficial owners of the stock and not by any securities intermediaries. This is not a defunct company or a no asset company. It is however clearly not a publicly traded security. As set out above, a number of the claims owned by the company have recently been sold for a value of several million dollars based on the market price of the stock which was obtained for the sale of the assets. Management still exists and is active in its efforts to identify its shareholders. Thus, there is no issue concerning “worthless securities” at this time.
The only custodians of CMKM stock other than those shareholders who possess valid certs are the securities intermediaries. The term “securities intermediaries” is defined in the discussions of the enactment of 17 CFR 240 as amended. The comments and discussions about the ownership rights by securities intermediaries is pertinent to this request for an investigation. The comments by the SEC do not suggest that securities intermediaries (brokers) acquire the rights of beneficial owners or that such rights can be distributed or denied at the whim of the brokers.
The most alarming problems are represented by those shareholders who have been requesting certs from their brokers since the company’s first announcement of a distribution seven months ago. Here is a sampling of excuses being given to shareholders as reasons for their inability to obtain a cert:
“We had your cert, but it is now lost. It will take us another 6 to 8 weeks to obtain another one.”
“This stock purchase was a book entry only and no certificate is available.”
“Your stock was classified as a worthless security and is no longer in your account.”
“Our clearing firm has not been able to deliver these certificates due to a backlog of requests at the transfer agency.”
“I have been instructed we are no longer pulling certs for CMKM and there is nothing I can do. You need to contact the company.”
“CMKM Diamonds has a “K” code next to it, indicating that it is being held in safekeeping for the client. The clearing agent has made the decision not to issue certs but rather fax a copy of the certs it holds to the transfer agent.”
“Attached herewith is evidence of ownership of shares held electronically by XYZ clearing for ABC broker. ABC to confirm receipt of this proof of shares of CMKM and related companies are held with XYZ.”
“In light of the lack of cooperation (by the transfer agent), your May 15th, 2006 deadline must be bogus and must be extended, and Entourage shares could of course still be sent to ABC for the benefit of XYZ.”
“MNO said they had discussed with the Task Force the acceptability of the affidavit as proof of ownership in lieu of the certificate, and that it would be accepted.” No such conversation ever occurred with the Task Force members.
“We ordered your certificate, and it has been lost. You must now fill out a loss certificate.” The transfer agent confirms that no certificate was ever issued.
Each quoted statement above is taken verbatim from a shareholder’s letter or from a broker’s written response to a shareholder’s request for a cert. I could continue with pages and pages of documented incidences of these broker responses to the requests of the shareholders if such is necessary to establish the need for a full investigation.
It is my understanding of various SEC rulings and other regulatory holdings that the true beneficial owners are the only people or entities that own the stock and the rights package associated with stock ownership. Securities intermediaries are simply as their name implies. They are intermediaries. In the case of this Entourage distribution, the brokers have no rights to receive the distribution absent any proprietary holdings. Since CMKM is no longer a publicly traded company, it is my understanding that the brokers have no ownership interest and certainly would have no rights to ownership of the Entourage stock.
The Task Force has now received certs in the name of certain brokerage companies. Our investigation reveals a potentially huge naked short position in at least two of the very companies that have sent us certs. The certs sent to the Task Force by the brokers represent billions of shares of CMKM stock. It is not the intention of the company to distribute Entourage stock to securities intermediaries and clearing houses for them to distribute the stock at their discretion. It is clear from the Regulation SHO records in conjunction with other sources (ADP, the transfer agent and the DTCC) that huge fails to deliver in this stock currently exist. It would be a breach of the fiduciary duty of the company to distribute these assets to a broker in lieu of its true beneficial owner when there is evidence of known fails to deliver occurring at the same brokerage house.
There was a time in the market place when shareholder’s rights at least co-existed with the rights of the broker/dealers. You have now been presented with evidence of shareholders who have demanded that their brokers issue certs for their holdings. Many shareholders have been flatly refused by their broker. This violates Nevada state law and the spirit, if not the letter, of federal regulatory law. I call on you to begin an investigation into this injustice.
Sincerely,
Bill Frizzell
Member CMKM Task Force
Shareholder Attorney
I am receiving many emails and messages with concerns and questions about the confirmation process. I would like to share my response to all of the shareholders.
I was informed in July 2008 that the DTCC has the funds. This would mean at least the record of the funds that were collected in their custodial care until disbursement. I am not sure how the DTCC banks their actual money, but my guess would be through the Treasury Department.
When December came and nothing happened, I spoke with Attorney Bill Frizzell about the funds at the DTCC. Attorney Frizzell wanted an official documentation of the DTCC Funds first before he would take any action because he was busy with lawsuits and working on CMKM Diamonds trading again on the market.
A respected shareholder informed me that his attorneys called Attorney Frizzell and Frizzell finally omitted after being threatened with legal action that funds were collected, but he did not know the details as to how much and when. I concluded, the only way shareholders are going to receive a confirmation of the funds is through an attorney. I asked the shareholder if his attorneys would help the shareholders with securing confirmation of the funds. His attorneys wanted $500 per hour and did not want their firm’s name made public because they have many clients and could not afford to have their staff answering shareholder’s calls and emails. I wanted transparency and access to the information for all the shareholders. I did not want the same thing that happened when the shareholders paid the Owners Group for Attorney Frizzell’s Phase I and Phase II and asked for accountability of the information collected to be told that the attorney was working for one individual and not for the shareholders.
Attorney Al Hodges and I communicated a few times since 2006. I spoke with Mr. Dennis Smith and Attorney Hodges. I explained the situation and asked if they would help the shareholders obtain an official confirmation of the compensation for peace of mind for the shareholders and a legal basis to go on in case the shareholders need it. Attorney Hodges and Mr. Dennis Smith agreed with no preconditions and no fees were ever mentioned in our communications. They agreed that the official confirmation needed to be accomplished as quickly as possible because of the critical situation of the many shareholders who contacted me and asked for help.
Attorney Al Hodges does not provide information until he is finished or he is satisfied the information will not negatively affect what he is working on. The update progress reports reflect this. Attorney Hodges and Mr. Dennis Smith are working the official confirmation plus have gone the extra mile by, verifying other information so the shareholders will have the facts, answering shareholders’ calls and emails, providing timely progress update reports, meeting with shareholders, meeting with a high powered individual who has a great influence and now a better understanding of the CMKX Shareholders’ predicament (Attorney Hodges will provide the details if and when necessary), communicating with other Attorneys….on and on. They are true champions for the shareholders.
These are my thoughts, not Attorney Hodges’s or Mr. Dennis Smith. From what I gathered, the DTCC held the record of the compensation funds for their client. There were some activities with the funds when I was contacted in July 2008. It could be the funds were moved either in July 2008 or during the 10 day request. This would go in line with the other shareholders' contact information. There is enough evidence for Attorney Hodges to continue to pursue the official confirmation of the funds. I believe Chrisl’s and the other shareholders’ account of their calls to the DTCC. Attorney Hodges believes the shareholders’ account, but checked this out to see if he could acquire more information, which Attorney Hodges did as provided in his last update.
No one is stalling. We are progressing in the right direction. The steps we are taking, we are sending out a strong message that we are working with not against any entity that can assist in providing an official confirmation of the compensation funds. The main objective is to ensure those involved will make as their number one priority... the release the compensation funds to the Shareholders.
Besides the contributions and work on this confirmation process from Attorney Al Hodges, Mr. Dennis Smith, and Attorney Hodges’s staff, quite a few shareholders have sent letters and emails to President Obama, Congressman Ackerman, Senator Reed (arranged a meeting with Senator Reed as well), federal authorities and representatives, state authorities and representatives…who ever can influence the confirmation. We will continue to do whatever we can to ensure the Shareholders are compensated.
I have attached some of the letters I sent as a reference for any one who would like to help by also sending a letter. I am focusing on the shareholders’ compensation by communicating to any entity that can help. I am trying to determine the best approach that will expedite the release of the funds to the shareholders. My messages are intended to knock on every door until the funds are released. The list so far, Senator Reed, Congressman Ackerman, Senator Shelby, Attorney Al Hodges, CEO Faulk, Chairman West, Attorney Frizzell, The DTCC, The SEC, Attorney Stoecklein, and President Obama.
My appreciation to all for working on this official confirmation process.
Thank you,
BHollenegg
Letters sent…
President Barack Obama
January 20, 2009
Dear Mr. President,
Congratulations.
Mr. President, in your Inauguration Speech, you expressed your concern about the economic market. You stated, "...the crisis has reminded us that without a watchful eye, the market can spin out of control, and that a nation cannot prosper long when it favors only the prosperous."
Mr. President, in your Inauguration Speech, you expressed your concern about the economic market. You stated, "...the crisis has reminded us that without a watchful eye, the market can spin out of control, and that a nation cannot prosper long when it favors only the prosperous."
Our company, CMKM Diamonds, under the watchful eyes of many, ended up being the Largest Naked Shorted Stock in the History of the Stock Market. We have documented evidence indicating the stock was oversold nine times the total outstanding shares. This equates to more than 6.3 Trillion Naked Shorted Shares... 6.3 Trillion shares that were counterfeited.
CMKM Shareholders fought a long battle to right this monumental wrong. We are 50,000 shareholders of CMKM Diamonds, united in our belief that Justice will prevail. We helped identify and stop the illegal activities of naked shorting shares by participating in the biggest certificate pull in the history of the stock market. We have fought many obstacles since the 2005 certificate pull, only to embrace one delay after another. We have hit a wall of bureaucratic excuses and misinformation. We need your help, Mr. President. Would you please issue a directive to the DTCC to release the compensation funds for the CMKM Diamonds’ Legal Shareholders.
Mr. President, you conveyed that the success of our economy depends "...on the reach of our prosperity on our ability to extend opportunity to every willing heart...because it is the surest route to our common good." CMKM Shareholders have the will. Mr. President, you have the power. Together, our willpower and commitment will greatly contribute to the success of the economy and to the success of “Paying It Forward”, for the common good for many generations. Yes, We Can! And We Will!
Thank you President Obama.
Sincerely,
Robert Hollenegg
One of CMKM Diamonds
50,000 Legal Shareholders
===============================================================
February 09, 2009
Dear Senator Reed,
I, along with over 50,000 shareholders invested in a stock which traded as CMKX. The company, CMKM Diamonds, Inc. and the Shareholders are victims of the largest naked shorted stock in the history of the stock market. CMKX trades were in the billions per day. Numerous times the trades exceeded the total trades in the entire market. The trades were mainly counterfeit shares documented as high as 6.3 Trillion Shares. The SEC tried to “Chill” the company in one of several attempts to cover up this monumental fraud.
I have attached two letters authored by Attorneys Al Hodges and Bill Frizzell addressing illegal naked shorting of CMKX. Attorney Al Hodges is working with no fees on behalf of the CMKX Shareholders in trying to obtain an official confirmation on the compensation for the shareholders. Attorney Bill Frizzell was part of the CMKX Task Force headed by the distinguished Mr. Robert Maheu. The CMKX Task Force assisted the company and shareholders with a stock certificate pull. Though there is concrete evidence of the enormous amount of counterfeiting activities by major traders, the regulatory bodies basically have ignored the victims of illegal naked shorting, the CMKX Shareholders. The SEC and the DTCC are ineffective in releasing the compensation funds for the CMKX Shareholders.
Many shareholders have expressed their disappointment and are questioning whether to invest in the American Stock Market again. You have rekindled the hopes of the investors. The CMKX Shareholders are appreciative of your dedication in correcting the illegal activities sanctioned by those who were appointed to protect the shareholders and the stock market. Senator Reed, please review the facts on CMKX, the largest naked shorted stock in the history of the entire stock market and commit resources to ensure confidence and trust returns to investing in America. Thank you Sir.
Sincerely
Robert Hollenegg
xxxxxxxxxxxxxx
ATTACHMENTS:
Senator Reed
==================================================================
Congressman Ackerman
gary_ackerman@mail.house.gov
February 09, 2009
Dear Congressman Ackerman,
I, along with over 50,000 shareholders invested in a stock which traded as CMKX. The company, CMKM Diamonds, Inc. and the Shareholders are victims of the largest naked shorted stock in the history of the stock market. CMKX trades were in the billions per day. Numerous times the trades exceeded the total trades in the entire market. The trades were mainly counterfeit shares documented as high as 6.3 Trillion Shares. The SEC tried to “Chill” the company in one of several attempts to cover up this monumental fraud.
I have attached two letters authored by Attorneys Al Hodges and Bill Frizzell addressing illegal naked shorting of CMKX. Attorney Al Hodges is working with no fees on behalf of the CMKX Shareholders in trying to obtain an official confirmation on the compensation for the shareholders. Attorney Bill Frizzell was part of the CMKX Task Force headed by the distinguished Mr. Robert Maheu. The CMKX Task Force assisted the company and shareholders with a stock certificate pull. Though there is concrete evidence of the enormous amount of counterfeiting activities by major traders, the regulatory bodies basically have ignored the victims of illegal naked shorting, the CMKX Shareholders. The SEC and the DTCC are ineffective in releasing the compensation funds for the CMKX Shareholders.
Many shareholders have expressed their disappointment and are questioning whether to invest in the American Stock Market again. You have rekindled the hopes of the investors. The CMKX Shareholders are appreciative of your dedication in correcting the illegal activities sanctioned by those who were appointed to protect the shareholders and the stock market. Congressman Ackerman, please review the facts on CMKX, the largest naked shorted stock in the history of the entire stock market and commit resources to ensure confidence and trust returns to investing in America. Thank you Sir.
Sincerely
Robert Hollenegg
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CMKM DIAMONDS, INC. suffered THE LARGEST NAKED SHORT IN HISTORY.
Subject: File No. S7-08-08
From: A. Clifton Hodges, Esq.
Affiliation: Attorney March 27, 2008
www.sec.gov/comments/s7-08-08/s70808-151.htmTo The SEC Commission and Financial Industry at Large:
Naked shorts in the United States = "counterfeit shares." The case of CMKX represents the greatest "counterfeit shares" fraud in the UNITED STATES. CMKM DIAMONDS, INC. suffered THE LARGEST NAKED SHORT IN HISTORY. Trillions of stock shares traded and changed hands UNTIL CMKX revoked itself and had every stock holder pull physical stock certificates out of brokerages, and out of street name, to trap those whom had committed fraud. CMKX is also the LARGEST STOCK CERTIFICATE PULL IN THE HISTORY OF THE UNITED STATES"
Naked short selling is a case of short selling the shares without first arranging a borrow. The Securities Exchange Act of 1934 stipulates a settlement period up to three business days before a stock needs to be delivered, generally referred to as "T+3 delivery". The SECs public position as of the Spring of 2005 was that naked shorting did not exist. With enactment of Regulation SHO, the subsequent elimination of the SHO grandfather exemption, and now the promulgation of this rule, the SEC has finally admitted the error of its ways.
The Depository Trust and Clearing Corporation has also been criticized for its approach to naked short selling. DTCC has been sued with regard to its alleged participation in naked short selling, and the issue of DTCC's possible involvement has been taken up by Senator Robert Bennett and discussed by the NASAA and in articles -- disagreed with by DTCC -- in the Wall Street Journal and Euromoney Magazine. Robert J. Shapiro, former undersecretary of commerce for economic affairs, has, however, found that naked short selling has cost investors $100 billion and driven 1,000 companies into the ground.
Naked shorting is illegal because it allows manipulators a chance to force stock prices down without regard for normal stock supply/demand patterns. It is in fact, institutional fraud further, counterfeiting of securities is a crime of U.S. Constitutional magnitude. This criminal conduct, once asserted by the SEC not to exist, has destroyed many, many companies, lives and opportunities. But now the word is out on naked shorting it must be stopped, and all whom conspired put in jail. This naked shorting fraud rule must be passed - NOW.
Sincerely,
A. Clifton Hodges
TYLER, Texas--(Business Wire)-- In our efforts to continue to try to identify all of the shareholders of CMKM Diamonds, Inc. stock, current management of the Company would like to point investors that have been unable to procure physical stock certificates from their brokers to the UnShareholder.com website.
www.UnShareholder.com is launching today to help identify the magnitude of individual investors unable to obtain stock ownership certificates and who perhaps inadvertently purchased illegal "naked short" or "phantom" electronic "entitlements" instead of actual shares. The scope of settlement failures in general has become a hot debate. Commonly referred to as the "naked short selling" problem, the real damage is caused by stock lending and settlement failures(a). Of course, the end result is the same: an investor makes a payment but has no actual investment. That investor is not a "shareholder" because they don't own shares. Instead, they are an UnShareholder. According to the website: If you requested a stock certificate from your broker and have not received it, you are an UnShareholder. If your brokerage account was changed to delete the shares of a company that you didn't agree is "worthless", you are an UnShareholder. If you received a 1099 with "non-qualifying dividends" when you believed you owned regular shares, you are probably an UnShareholder too. Attorney Al Hodges states, "The UnShareholder site has been developed and established by the Pasadena, California law firm of Hodges and Associates in an attempt to document the nature and depth of the UnShareholder problem as well as to identify individual investors whom have in good faith purchased publicly traded shares of stock but, for all the wrong and illegal reasons, are not entitled to receive them nor to enjoy all the indicia of ownership." (a) Stock lending is closely associated with short selling and settlement failure refers to the problem of sellers not delivering shares on the settlement date. Naked short selling is when stock is sold short and not borrowed for delivery on the settlement date. CMKM Diamonds Inc., Tyler Kevin West 903-262-8397
www.reuters.com/article/pressRelease/idUS211954+09-Jun-2008+BW20080609On May 31, 2006, Bill Frizzell, member of the CMKM Task Force and shareholder attorney, submitted a complaint letter to the NASD Investor Complaint Center in regards to this serious problem. :
May 31, 2006
NASD Investor Complaint Center
1735 K Street, NW
Washington, D.C. 20006-1500
Re: Request for Investigation of Brokerage Conduct Involving CMKM Distribution
Dear Sir or Madam:
On November 5, 2005, a final order was entered by the SEC delisting the securities of CMKM Diamonds, Inc. (hereafter CMKM) Shortly thereafter, CMKM management appointed a “Task Force” to assist the company in determining their bonafide shareholders. I was invited to participate on this Task Force along with Attorney Don Stoecklein and Bob Maheu, a former board member of CMKM. The Task Force had a single job of identifying all bonafide shareholders of CMKM. Prior to delisting, the company had issued and outstanding 703 billion shares. There was evidence of billions of failed deliveries in this stock at the time the trading in this security was halted by the SEC. Trading was halted by the SEC for non reporting violations.
Shortly after delisting, CMKM sold a major company asset consisting of a large number of mineral claims in Canada. The sale of this asset resulted in the company receiving 45,000,000 shares of an OTCBB stock called Entourage Mining Ltd. (ETGMF) The purchase agreement stipulated that such shares shall be distributed to the shareholders of CMKM. Recent press releases state that Entourage has a drilling program in operation and there is expectation of future development of the claims which were once owned by CMKM. The Entourage stock now trades in the .20 to .30 USD range. There is evidence of potential appreciation of this Entourage stock.
Due to the indisputable evidence of large numbers of failed deliveries in this stock, CMKM elected to distribute the 45,000,000 shares of Entourage stock to all bonafide shareholders in what was described at that time as a windup distribution. CMKM has informed shareholders that only shareholders with valid certificates from the official company transfer agent will receive their pro rata distribution of Entourage stock. In November of 2005 CMKM shareholders began requesting certs from their brokers. CMKM is currently a private Nevada corporation in good standing per Nevada state statutes.
Nevada law NRS 78.235 mandates that each shareholder has the right to request and receive certificates of ownership from the company for their stock. Specifically, the statute states “..every stockholder is entitled to have a certificate, signed by officers or agents designated by the corporation for the purpose, certifying the number of shares owned by him in the corporation.”.
I am making this complaint in my capacity as a volunteer on the Task Force appointed by the company to determine its bonafide shareholders. I do not represent the company in any legal capacity other than being a volunteer to assist CMKM in identifying its bonafide shareholders. My law office has been the depository for shareholders to send copies of their certs once they receive the same from their broker. My office has worked closely with the official company transfer agent as we continue to gather evidence of bonafide ownership of CMKM stock. Consequently this office has documented complaints from hundreds of shareholders who have been attempting to obtain certs from their brokers since November of 2005 but have been unable to do so. The litany of excuses being given by various broker dealers for the refusal to honor their customers request for certs continues ad nauseum. At least three deadlines have been established in an effort to obtain cooperation from various brokers and to accommodate shareholders who received late notices of the request by the company.
The DTCC sent information to its participants in November of 2005 informing its participants of the CMKM request that certificates be obtained in the beneficial owner’s names. As the final deadline imposed by CMKM approached, the DTCC, working with the CMKM Task Force, directed all participants to request their certs on deposit at the DTCC or the DTCC would send all remaining certs to the transfer agent for distribution back to the brokers. Many brokers still did not request their certs on deposit at the DTCC and the DTCC emptied their vaults of CMKM securities as they had indicated they would do. As of the date of this letter, the DTCC is not involved in the transfer of CMKM stock between the beneficial owners, the company and any securities intermediaries. All stock transfer problems which exist at this time are between the securities intermediaries (broker/dealers) and the shareholders.
CMKX is no longer a publicly traded company. Its stock has not been publicly traded since October 31, 2005 per order of the SEC. All shares should be held directly by the beneficial owners of the stock and not by any securities intermediaries. This is not a defunct company or a no asset company. It is however clearly not a publicly traded security. As set out above, a number of the claims owned by the company have recently been sold for a value of several million dollars based on the market price of the stock which was obtained for the sale of the assets. Management still exists and is active in its efforts to identify its shareholders. Thus, there is no issue concerning “worthless securities” at this time.
The only custodians of CMKM stock other than those shareholders who possess valid certs are the securities intermediaries. The term “securities intermediaries” is defined in the discussions of the enactment of 17 CFR 240 as amended. The comments and discussions about the ownership rights by securities intermediaries is pertinent to this request for an investigation. The comments by the SEC do not suggest that securities intermediaries (brokers) acquire the rights of beneficial owners or that such rights can be distributed or denied at the whim of the brokers.
The most alarming problems are represented by those shareholders who have been requesting certs from their brokers since the company’s first announcement of a distribution seven months ago. Here is a sampling of excuses being given to shareholders as reasons for their inability to obtain a cert:
“We had your cert, but it is now lost. It will take us another 6 to 8 weeks to obtain another one.”
“This stock purchase was a book entry only and no certificate is available.”
“Your stock was classified as a worthless security and is no longer in your account.”
“Our clearing firm has not been able to deliver these certificates due to a backlog of requests at the transfer agency.”
“I have been instructed we are no longer pulling certs for CMKM and there is nothing I can do. You need to contact the company.”
“CMKM Diamonds has a “K” code next to it, indicating that it is being held in safekeeping for the client. The clearing agent has made the decision not to issue certs but rather fax a copy of the certs it holds to the transfer agent.”
“Attached herewith is evidence of ownership of shares held electronically by XYZ clearing for ABC broker. ABC to confirm receipt of this proof of shares of CMKM and related companies are held with XYZ.”
“In light of the lack of cooperation (by the transfer agent), your May 15th, 2006 deadline must be bogus and must be extended, and Entourage shares could of course still be sent to ABC for the benefit of XYZ.”
“MNO said they had discussed with the Task Force the acceptability of the affidavit as proof of ownership in lieu of the certificate, and that it would be accepted.” No such conversation ever occurred with the Task Force members.
“We ordered your certificate, and it has been lost. You must now fill out a loss certificate.” The transfer agent confirms that no certificate was ever issued.
Each quoted statement above is taken verbatim from a shareholder’s letter or from a broker’s written response to a shareholder’s request for a cert. I could continue with pages and pages of documented incidences of these broker responses to the requests of the shareholders if such is necessary to establish the need for a full investigation.
It is my understanding of various SEC rulings and other regulatory holdings that the true beneficial owners are the only people or entities that own the stock and the rights package associated with stock ownership. Securities intermediaries are simply as their name implies. They are intermediaries. In the case of this Entourage distribution, the brokers have no rights to receive the distribution absent any proprietary holdings. Since CMKM is no longer a publicly traded company, it is my understanding that the brokers have no ownership interest and certainly would have no rights to ownership of the Entourage stock.
The Task Force has now received certs in the name of certain brokerage companies. Our investigation reveals a potentially huge naked short position in at least two of the very companies that have sent us certs. The certs sent to the Task Force by the brokers represent billions of shares of CMKM stock. It is not the intention of the company to distribute Entourage stock to securities intermediaries and clearing houses for them to distribute the stock at their discretion. It is clear from the Regulation SHO records in conjunction with other sources (ADP, the transfer agent and the DTCC) that huge fails to deliver in this stock currently exist. It would be a breach of the fiduciary duty of the company to distribute these assets to a broker in lieu of its true beneficial owner when there is evidence of known fails to deliver occurring at the same brokerage house.
There was a time in the market place when shareholder’s rights at least co-existed with the rights of the broker/dealers. You have now been presented with evidence of shareholders who have demanded that their brokers issue certs for their holdings. Many shareholders have been flatly refused by their broker. This violates Nevada state law and the spirit, if not the letter, of federal regulatory law. I call on you to begin an investigation into this injustice.
Sincerely,
Bill Frizzell
Member CMKM Task Force
Shareholder Attorney
