Legal

Ribotsky Rejects AJW Bankruptcy Filing Claims, Fairhills Named in Sham Deal

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The liquidators of several AJW offshore funds once managed by NIR Group have obtained recognition of their proceedings in the U.S. through Chapter 15 bankruptcy proceedings. Former NIR head Corey Ribotsky has filed court papers objecting to claims and tactics of the liquidators. 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. In January, liquidators Ian Stokoe and David Walker of PwC Corporate Finance and Recovery (Cayman) Ltd. said in court documents that it started the bankruptcy process in the U.S. for a
variety of reasons, including the need to obtain records held in the U.S. and assess potential claims against Ribotsky, NIR Group, and several entities of Fairhills Capital Group controlled by Edward Bronson.

Legal

Court Won’t Toss AutoChina Manipulation Case

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AutoChina International (AUTCF) asked a Massachusetts federal court to toss out a complaint brought by the SEC in April 2012 alleging that the company used $60 million in cash to trade up its stock and create the appearance of liquidity, but the court rejected AutoChina’s venue arguments. The suit was filed in Boston’s U.S. District Court. China-based auto leasing and service provider AutoChina obtained $70 million in PIPE financing in March of 2010 according to PlacementTracker data. Rodman & Renshaw and co-agent Chardan Capital Markets placed the deal, which included investors Stratus Capital Management, Millennium Management and GCA Strategic Fund Ltd. Law firm Loeb & Loeb represented the issuer.

Legal
Andreas Badian

Second Badian Brother Fined in Sedona Naked Short Selling Saga

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A naked short selling tale that has endured over a decade closed a chapter when regulators settled with parties accused of illegally selling short stock in Sedona Corp. (SDNA) in the spring of 2001. The Securities and Exchange Commission levied financial and administrative penalties against Andreas Badian, former principal of defunct hedge fund Rhino Advisors, along with two other individuals and Pond Securities Corp., which allegedly played a part in the short selling scheme. The settlement sanctions former Pond president Ezra Birnbaum and former Refco trader Jeffrey Graham, whom the SEC's suit alleges was part of an aggressive plan to beat down the price of Sedona stock. Refco traders Mottes Drillman and Jacob Spinner settled with the commission in 2011.

Legal
SEC

Criminal Charges, $44M in Penalties for Tiger Asia Management

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Funds managed by Tiger Asia Management engaged in illegal short selling of shares in private placements of two Chinese companies, according to a civil suit against Tiger founder Sung Kook "Bill" Hwang and head trader Raymond Park. The pair has agreed to pay $44 million to settle the Securities and Exchange Commission suit, and the U.S. Attorney's Office for the District of New Jersey announced criminal charges against Tiger. The actions were filed in the Newark, N.J., U.S. District Court. The SEC suit alleges that New York-based Tiger manipulated prices and illegally sold short and covered with shares obtained in the placements, which required investors not to engage in short selling. The activity took place around placements of China Bank and China Construction Bank stock, which trade on the Hong Kong stock exchange.