TJ was the auditor to several to numerous companies that KBM had loans with when i was looking through. unfortunately, i wasnt documenting at the time but if someone has that readily available, i would be interested in reviewing further. i do not believe it is a coincidence. if there are any back channel payments/arrangements between TJ and KBM that have or come to the surface throughout, then tortious interference gains a lot more legs.
need to start with SEC complaint statement and work backwards (again):
https://www.sec.gov/litigation/admin/2015/33-9915.pdf
8 companies listed in complaint. Need to go back and look at their 10Ks and see ifKBM is tied to all of them. if they are (which I know they were to several that I lookedat previously), then there is a good chance the SEC is already well into their DD on the ties. further, since they have TJ up for securities fraud (see violations below 13) and other heavy charges, he may start singing.
ADM, Boreal Water, Monster, Primco, Puissant, UMED, Valley High and Legendary
13.
Johnson wasfirst registered with the PCA OB on December 17, 2013. With in
two months of becoming registered, Johnson acquired eighteen new issuer audit clients. The vast majority of these audit clients were previously audited by an auditor who was censured and barred from being an associated person of a registered public accounting firm by the PCAOB in March 2014. Once the predecessor auditor’s registration was revoked by the PCAOB, Johnson, who
had previously worked for the predecessor auditor, became the new auditor for
audit clients of the predecessor auditor. Out of the eighteen audit clients, at least two were previously audited 5 by a second predecessor auditor, who was also previously sanctioned by the PCAOB in November 2013. Johnson had no prior experience in serving as an engagement partner for Commission registrants prior to the numerous engagements that he picked up after the predecessor auditors were barred by the PCAOB.
E. VIOLATIONS
1. Johnson’s Deficient Audits Amounted to Securities Fraud and Violations of Rule 2 -02 of Regulation S-X65. An auditor violates Section 10(b) and Rule 10b-5 thereunder by preparing or certifying a false audit report that he knew would be included in a Form 10-K. McGann v. Ernst & Young, 102 F.3d 390, 397 (9th
Cir. 1996). Johnson violated the antifraud provisions by issuing audit reports that falsely stated that his audit were conducted in accordance with PCAOB
standards. In fact, Johnson’s auditing practices were so deficient that the audits amounted to no audits at all.
2. Johnson Willfully Aided and Abetted and Caused Violations of Exchange Act Section 13(a) and Rule 13a-1
now - this is conjecture on my part - but if he was glossing over some of these shells to provide trading opps to others- it isnt a stretch to think he was understating/overstating (or deliberately NOT filing) for HJOE to allow KBM and others to short the stock/induce panic by making it appear HJOE was NOT legit. again, conjecture but based on prior bad actsof KBM and the assault on the iLie message board which has its own prior bad acts - not a big stretch.
need to start with SEC complaint statement and work backwards (again):
https://www.sec.gov/litigation/admin/2015/33-9915.pdf
8 companies listed in complaint. Need to go back and look at their 10Ks and see ifKBM is tied to all of them. if they are (which I know they were to several that I lookedat previously), then there is a good chance the SEC is already well into their DD on the ties. further, since they have TJ up for securities fraud (see violations below 13) and other heavy charges, he may start singing.
ADM, Boreal Water, Monster, Primco, Puissant, UMED, Valley High and Legendary
13.
Johnson wasfirst registered with the PCA OB on December 17, 2013. With in
two months of becoming registered, Johnson acquired eighteen new issuer audit clients. The vast majority of these audit clients were previously audited by an auditor who was censured and barred from being an associated person of a registered public accounting firm by the PCAOB in March 2014. Once the predecessor auditor’s registration was revoked by the PCAOB, Johnson, who
had previously worked for the predecessor auditor, became the new auditor for
audit clients of the predecessor auditor. Out of the eighteen audit clients, at least two were previously audited 5 by a second predecessor auditor, who was also previously sanctioned by the PCAOB in November 2013. Johnson had no prior experience in serving as an engagement partner for Commission registrants prior to the numerous engagements that he picked up after the predecessor auditors were barred by the PCAOB.
E. VIOLATIONS
1. Johnson’s Deficient Audits Amounted to Securities Fraud and Violations of Rule 2 -02 of Regulation S-X65. An auditor violates Section 10(b) and Rule 10b-5 thereunder by preparing or certifying a false audit report that he knew would be included in a Form 10-K. McGann v. Ernst & Young, 102 F.3d 390, 397 (9th
Cir. 1996). Johnson violated the antifraud provisions by issuing audit reports that falsely stated that his audit were conducted in accordance with PCAOB
standards. In fact, Johnson’s auditing practices were so deficient that the audits amounted to no audits at all.
2. Johnson Willfully Aided and Abetted and Caused Violations of Exchange Act Section 13(a) and Rule 13a-1
now - this is conjecture on my part - but if he was glossing over some of these shells to provide trading opps to others- it isnt a stretch to think he was understating/overstating (or deliberately NOT filing) for HJOE to allow KBM and others to short the stock/induce panic by making it appear HJOE was NOT legit. again, conjecture but based on prior bad actsof KBM and the assault on the iLie message board which has its own prior bad acts - not a big stretch.
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