Legal
Peter Siris

PIPE, Reverse Merger Cases Featured in SEC Whistleblower Eligibility List

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PIPE issuers and reverse merger companies are among parties named in a list of Securities and Exchange Commission enforcement actions that could earn cash rewards for whistleblowers. The list also includes an action against parties who allegedly reaped millions of dollars of illegal profits through improper sales of shares in a micro-cap company with negligible prospects. The Securities and Exchange Commission's Office of the Whistleblower published the list, which tracks enforcements where monetary sanctions exceed $1 million. "Subject to the Final Rules, individuals who voluntarily provided the Commission with original information after July 21, 2010 that led to the successful enforcement of a covered action listed below are eligible to apply for a whistleblower award," the commission's website says. It remains to be seen whether individuals will come forward to seek rewards.

Legal

SEC Says Laidlaw Energy Dumped Shares, Hid Problems

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Laidlaw Energy Group (LLEG) and its CEO Michael Bartoszek duped investors into believing Laidlaw was a viable business, even as they profited from illegal backdoor sales of over two billion shares of the company's stock, according to a Securities and Exchange Commission lawsuit. The suit was filed against New York-based Laidlaw on June 5 in a Manhattan U.S. District Court. Bartoszek allegedly orchestrated the "illegal fire sale of more 80 percent of Laidlaw's stock" from 2006 to January of 2010, according to a commission news release. The company formed through a reverse merger with Poly-Eko Systems in 2002. The SEC's Microcap Fraud Working Group assisted in the investigation.

Legal
Ingen

Ingen Troubles Continue in NIR Fund Liquidation

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Money owed from a 2006 convertible PIPE issued by Ingen Technologies (IGNT) is still an issue for liquidators of NIR Group's AJW funds and New Millennium Capital Partners. AJW liquidators Ian Stokoe and David Walker filed suit against Ingen on May 10, and they are seeking relief related to a $2.6 million judgment from an earlier legal contest between AJW and Ingen.

The suit was filed in the New York State Supreme Court. The liquidators of several AJW offshore funds once managed by NIR Group obtained recognition of their proceedings in the U.S. through Chapter 15 bankruptcy proceedings earlier this year. Former NIR head Corey Ribotsky has filed court papers objecting to claims and tactics of the liquidators. A suit by filed by regulators alleging accounting fraud against Ribotsky is pending.

Legal
Corey Ribotsky

AJW Liquidators Sue NIR, Ribotsky in New York State Court

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PwC Corporate Finance and Recovery, Cayman Islands liquidators of several AJW funds managed by Corey Ribotsky and NIR Group, has sued Ribotsky and NIR for damages in the New York State Supreme Court. The move follows the liquidators’ successful attempt to obtain Chapter 15 recognition from a U.S. Bankruptcy Court in February. Funds managed by NIR, which include four AJW entities and New Millennium Capital Partners II, committed $225 million to 144 PIPEs from 1999 through 2010, according to PlacementTracker data. Ribotsky and NIR have not yet answered or responded to the New York state suit. Ribotsky has previously lodged extensive and detailed objections to allegations made by the SEC and by the liquidators in their bankruptcy case.