Using Veritas to Construct the "Per…

29-04-2017 Hits:87211 BoomBustBlog Reggie Middleton

Using Veritas to Construct the "Perfect" Digital Investment Portfolio" & How to Value "Hard to Value" tokens, Pt 1

The golden grail of investing is to find that investable asset that provides the greatest reward with the least risk. Alas, despite how commonsensical that precept seems to be, many...

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The Veritas 2017 Token Offering Summary …

15-04-2017 Hits:81129 BoomBustBlog Reggie Middleton

The Veritas 2017 Token Offering Summary Available For Download and Sharing

The Veritas Offering Summary is now available for download, which packs all the information about Veritas in a single page. A step by step guide to purchasing Veritas can be downloaded here.

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What Happens When the Fund Fee Fight Hit…

10-04-2017 Hits:80971 BoomBustBlog Reggie Middleton

What Happens When the Fund Fee Fight Hits the Blockchain

A hedge fund recently made news by securitizing its LP units as Ethereum-based tokens and selling them as tradeable (thereby liquid) assets. This brings technology to the VC industry that...

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Veritaseum: The ICO That's Ushering in t…

07-04-2017 Hits:85445 BoomBustBlog Reggie Middleton

Veritaseum: The ICO That's Ushering in the Era of P2P Capital Markets

Veritaseum is in the process of building peer-to-peer capital markets that enable financial and value market participants to deal directly with each other on a counterparty risk-free basis in lieu...

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This Is Ground Zero for the 2017 Veritas…

03-04-2017 Hits:81943 BoomBustBlog Reggie Middleton

This Is Ground Zero for the 2017 Veritas Offering. Are You Ready to Get Your Key to the P2P Capital Markets?

This is the link to the Veritas Crowdsale landing page. Here is where you will be able to buy the Veritas ICO when it is launched in mid-April. Below, please...

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What is the Value Proposition For Verita…

01-04-2017 Hits:84131 BoomBustBlog Reggie Middleton

What is the Value Proposition For Veritas, Veritaseum's Software Token?

 A YouTube commenter asked a very good question that we will like to take some time to answer. The question was, verbatim: I've watched your video and gone through the slides. The exchange...

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This Real Estate Bubble, Like Some Relat…

28-03-2017 Hits:55194 BoomBustBlog Reggie Middleton

This Real Estate Bubble, Like Some Relationships, Is Complicated...

CNBC reports US home prices rise 5.9 percent to 31-month high in January according to S&P CoreLogic Case-Shiller. This puts the 20 city index close to an all time high, including...

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Bloomberg Chimes In With My Warnings As …

28-03-2017 Hits:83389 BoomBustBlog Reggie Middleton

Bloomberg Chimes In With My Warnings As Landlords Offer First Time Ever Concessions to Retail Renters

Over the last quarter I've been warning about the significant weakness in retailers and the retail real estate that most occupy (links supplied below). Now, Bloomberg reports: Manhattan Landlords Are Offering...

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Our Apple Analysis This Week - This Comp…

27-03-2017 Hits:83130 BoomBustBlog Reggie Middleton

Our Apple Analysis This Week - This Company Is Not What Most Think It IS

We will releasing our Apple forensic analysis and valuation this week for subscribers (click here to subscribe - lowest tier is the same as a Netflix subscription). As can be...

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The Country's First Newly Elected Lame D…

27-03-2017 Hits:83019 BoomBustBlog Reggie Middleton

The Country's First Newly Elected Lame Duck President Will Cause Massive Reversal Of Speculative Gains

Note: Subscribers should reference  the paywall material here for stocks that should give a good risk/reward scenario for bearish trades. The Trump administration's legislative outlook is effectively a political desert, with...

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Sears Finally Throws In The Towel Exactl…

22-03-2017 Hits:89278 BoomBustBlog Reggie Middleton

Sears Finally Throws In The Towel Exactly When I Predicted "has ‘substantial doubt’ about its future"

My prediction of Sears collapsing once interest rates started ticking upwards was absolutely on point.

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The Transformation of Television in Amer…

21-03-2017 Hits:86993 BoomBustBlog Reggie Middleton

The Transformation of Television in America and Worldwide

TV has changed more in the past 10 years than it has since it's inception nearly 100 years ago This change is profound, and the primary benefactors look and act...

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Looking at how the share price of this company went up in a downward/sidewards trending market after mediocre (and worse than that if you parse through the numbers) earnings and their outright saying that the the company will buy back shares although management consistently sells shares, I did some Googling.

Well the company has been in trouble many times before, but is quite lucky. There are some regulators that frequent my site, and I urge you to take a look at this company. It is really appears to be getting away with murder.

From the Street.com:

In a regulatory filing on Tuesday, Pre-Paid disclosed that its independent auditor, Grant Thornton, has found itself unable to sign off on the company's 2004 financial statements due to "material weaknesses" with the company's internal controls. More specifically, Pre-Paid said that Thornton has raised questions about the company's processing of commissions -- which have led to material restatements in the past.

 

...

And it has happened before - In 2001, the SEC forced Pre-Paid to start treating commissions paid to its sales associates as expenses rather than assets. The change cut the company's reported earnings by more than half. Moreover, it marked the second time the company found itself adjusting its treatment of commissions and slashing its reported profits as a result.

For now, however, the company has escaped a so-called qualified opinion from its auditor and the need for additional restatements. Instead, Thornton has simply offered no opinion at all until the company addresses problems with its internal controls.

...

Guilty Verdict

News of the reporting problems came just days after Pre-Paid weathered a legal setback. A Mississippi jury last week found both the company and its founding CEO, Harland Stonecipher, guilty of fraud and deceptive advertising, according to plaintiffs' attorney Doug Minor.

Still, the company did escape without paying any punitive damages in a state known for its runaway jury awards.

"I think Pre-Paid was lucky," Russell said. "But a finding of fraud is not exactly the greatest news as far as goodwill and reputation are concerned."

Pre-Paid has been accused of overstating the coverage provided by its legal policies. In an earlier trial, the company prevailed. Pre-Paid expects that pattern to continue.

"We are very pleased with the jury's verdict and the impact this verdict may have on other pending litigation," Stonecipher said after the favorable ruling in October. "We hope this verdict, our first jury verdict in Mississippi, sets the tone for future legal developments in Mississippi."

...

Pre-Paid has been accused of overstating the coverage provided by its legal policies. In an earlier trial, the company prevailed. Pre-Paid expects that pattern to continue.

"We are very pleased with the jury's verdict and the impact this verdict may have on other pending litigation," Stonecipher said after the favorable ruling in October. "We hope this verdict, our first jury verdict in Mississippi, sets the tone for future legal developments in Mississippi."

Instead, a second jury has saddled the company with a guilty verdict and ordered that some -- albeit small -- damages be paid to four individual plaintiffs. For its part, the company has insisted that the damages, totaling $45,000, "were not based on the evidence" and has vowed to "seek post-trial relief, as necessary."

"We still have more litigation in front of us," Pre-Paid Chief Operating Officer Randy Harp acknowledged during a conference call in October. "It has been very expensive for us to defend ourselves, but we continue to believe that we have very meritorious defenses."

Still, Pre-Paid has limited resources. Minor said that the company's net worth dropped from $41.5 million last summer to $22.5 million when the first trial started in October. In contrast, he said, Stonecipher saw his own net worth jump -- to nearly twice the company's own -- during that period.

Moreover, the company could still face big damage awards in the future. Minor said that his firm will continue to fight for punitive damages in a number of pending cases involving hundreds of Mississippi plaintiffs "because we believe the conduct the jury found fraudulent is also conduct that should be punished." The company will next defend itself three months from now in Holmes County, a Mississippi region notorious for its "jackpot justice."

Pre-Paid has set aside $3 million to cover any major damages that may result from the lawsuits. The company -- which markets its product as essential -- carries no legal insurance itself.

From the PPD 2002 annual report:

Beginning in the second quarter of 2001 and through December 31, 2002, multiple lawsuits were filed

against the Company, certain officers, employees, sales associates and other defendants in various Alabama and

Mississippi state courts by current or former members seeking actual and punitive damages for alleged breach of

contract, fraud and various other claims in connection with the sale of memberships. As of December 31, 2002, the

Company was aware of 28 separate lawsuits involving approximately 298 plaintiffs that have been filed in multiple

counties in Alabama. One suit involving two plaintiffs which was filed as a class action has been dismissed with

prejudice as to the class allegations and without prejudice as to the individual claims. As of December 31, 2002, the

Company was aware of 14 separate lawsuits involving approximately 428 plaintiffs in multiple counties in

Mississippi. Certain of the Mississippi lawsuits also name the Company's provider attorney in Mississippi as a

defendant. Proceedings in the eleven cases which name the Company's provider attorney as a defendant have been

stayed for at least 90 days as to the provider attorney due to the rehabilitation proceeding involving the provider law

firm's insurer. At least two complaints have been filed on behalf of certain of the Mississippi plaintiffs and others

with the Attorney General of Mississippi in March 2002 and December 2002. The Company has responded to the

Attorney General's requests for information with respect to both complaints, and as of February 28, 2003, the

Company was not aware of any further actions being taken by the Attorney General. In Mississippi, the Company

has filed lawsuits in the United States District Court for the Southern and Northern Districts of Mississippi in which

the Company seeks to compel arbitration of the various Mississippi claims under the Federal Arbitration Act and the

terms of the Company's membership agreements, and has appealed the state court rulings in favor of certain of the

plaintiffs on the arbitration issue to the Mississippi Supreme Court. These cases are all in various stages of

litigation, including trial settings beginning in Alabama in May, 2003, and seek varying amounts of actual and

punitive damages. While the amount of membership fees paid by the plaintiffs in the Mississippi cases is $500,000

or less, certain of the cases seek damages of $90 million. Additional suits of a similar nature have been threatened.

The ultimate outcome of any particular case is not determinable.

On April 19, 2002, counsel in certain of the above-referenced Alabama suits also filed a similar suit against

the Company and certain of its officers in the District Court of Creek County, Oklahoma on behalf of Jeff and Jana

Weller individually and doing business as Hi-Tech Auto making similar allegations relating to the Company's

memberships and seeking unspecified damages on behalf of a "nationwide" class. The Company's preliminary

motions in this case have been denied, and, as of February 28, 2003, the Company's appeal of the denial of its

motion to compel arbitration is pending before the Oklahoma Supreme Court. The ultimate outcome of this case is

not determinable.

On June 29, 2001, an action was filed against the Company in the District Court of Canadian County,

Oklahoma. In 2002, the petition was amended to add five additional named plaintiffs and to add and drop certain

claims. This action is a putative class action brought by Gina Kotwitz, George Kotwitz, Rick Coker, Richard

Starke, Jeff Turnipseed and Aaron Bouren on behalf of all sales associates of the Company. The amended petition

seeks injunctive and declaratory relief, with such other damages as the court deems appropriate, for alleged

violations of the Oklahoma Uniform Consumer Credit Code in connection with the Company's commission

advances, and seeks injunctive and declaratory relief regarding the enforcement of certain contract provisions with

sales associates. The impact of the claims alleged under the Consumer Credit Code and the assertion of entitlement

to injunctive relief could exceed $315 million if plaintiffs are successful both in their request for class certification

and on the merits. The plaintiffs' request for class certification is set for hearing on July 22, 2003. The ultimate

outcome of this case is not determinable.

On March 1, 2002, an action was filed in the United States District Court for the Western District of

Oklahoma by Caroline Sandler, Robert Schweikert, Sal Corrente, Richard Jarvis and Vincent Jefferson against the

Company and certain executive officers. This action is a putative class action seeking unspecified damages filed on

behalf of all sales associates of the Company and alleges that the marketing plan offered by the Company

constitutes a security under the Securities Act of 1933 and seeks remedies for failure to register the marketing plan

as a security and for violations of the anti-fraud provisions of the Securities Act of 1933 and the Securities

Exchange Act of 1934 in connection with representations alleged to have been made in connection with the

marketing plan. The complaint also alleges violations of the Oklahoma Securities Act, the Oklahoma Business

Opportunities Sales Act, breach of contract, breach of duty of good faith and fair dealing and unjust enrichment and

violation of the Oklahoma Consumer Protection Act and negligent supervision. This case is subject to the Private

Litigation Securities Reform Act. Pursuant to the Act, the Court has approved the named plaintiffs and counsel and

an amended complaint was filed in August 2002. The Company filed motions to dismiss the complaint and to strike

the class action allegations on September 19, 2002. All discovery in the action is stayed pending a ruling on the

motion to dismiss. As of February 28, 2003, all briefs had been filed by the parties on the motion to dismiss and a

decision on the motion will be made by the Court. The Company is unable to predict when a decision will be made.

The ultimate outcome of this case is not determinable.

In December 2002, the West Virginia Supreme Court reversed a summary judgment which had been

granted by the Circuit Court of Monangalia County, West Virginia in favor of the Company in connection with the

claims of a former member, Georgia Poling and her daughters against the Company and a referral lawyer with

respect to a 1995 referral. That action was originally filed in March 2000, and alleges breach of contract and fraud

against the Company in connection with the referral. The case is now scheduled for trial in August 2003, and

plaintiffs seek actual and punitive damages in unspecified amounts. The ultimate outcome of this case is not

determinable.

On January 30, 2003, the Company announced that it had received a subpoena from the office of the

United States Attorney for the Southern District of New York requesting information relating to trading activities in

the Company's stock in advance of the January 2003 announcement of recruiting and membership production results

for the fourth quarter of 2002. The Company also received notice from the Securities and Exchange Commission

that it is conducting an informal inquiry into the same subject. The Company is cooperating fully in responding to

these requests. The ultimate outcome of these matters is not determinable.

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