RE:RE:RE:PreveCeutical Announces Default Judgmentthezoobadooba wrote:
personally, I could not give a craap less. I'm here for their medical advancement.
TheZoo, I fully understand, for you are 'in love' with the stock and the company can do no wrong in your eyes. So let me then speak to those who are interested in performing a full spectrum of due diligence. Please note the 'Street Wire' article below, explaining PREV's civil suit against the Bridgemark Group members.
This PREV awarding of 'consulting contracts' to Bridgemark Group members is extremely disturbing and raises many questions.....
1) why did PREV enter into consulting agreements [investor relations] with such a [proven] shady bunch?
2) If a penny stock junior is going to award a large $2.7 million contract, where was the due diligence?
3) The Bridgemark Group approached numerous CSE Issuers, but only eleven agreed to their [Bridgemark] scheme. Why?
4) Of the eleven Issuers caught up in this scheme, only one felt they could sue for their own stupidity. Why?
5) Of the other ten Issuers caught up in this Bridgemark scheme, the vast majority of those executives responsible for entering into this extremely questionable arrangement.....resigned! Why?
6) The vast majority of the Bridgemark Members never even had a business website at the time of the awarding of consulting contracts. What was so reputable about these members that attracted PREV's interest and money?
7) what on earth does a little penny stock PREV need with $2.7 million worth of investor relations and consulting, which represents 20% of their market cap?
8) why on earth would PREV pay for this $2.7 million consulting service
in full, in advance.....immediately following the placement?
9) Seeing that PREV is now seeking R&D partners, do you think these funds could have been put to better use that will [legitiimately] increase shareholder value, rather than a quick pump by questionable characters?
10) Was this heavy dilution to the share base worth it?
I thought it was cute of Deventer in the latest interview to proclaim 'silence' due to the pending legal suit, but if he is not willing to address the above questions, then this dark cloud will not go away.
Preveceutical sues Mawji, Liu for conspiracy
2018-12-19 10:48 ET - Street Wire
by Mike Caswell
Preveceutical Medical Inc. has filed a lawsuit in the Supreme Court of British Columbia against Vancouver residents Aly Mawji and Justin Liu, accusing them of improperly obtaining and selling tens of millions of the company's shares. The suit claims that the men received the stock through private placements and consulting agreements. They were supposed to provide something akin to investor relations services, but instead they depressed the stock through share sales and provided no services, the suit states.
The allegations from Preveceutical come just weeks after the B.C. Securities Commission cited Mr. Mawji, Mr. Liu and others for a scheme to illegally distribute shares in 11 Canadian Securities Exchange listings. The BCSC claims that the men were part of an abusive operation that involved companies paying fees to consultants, with the consultants then repaying most of the money back to the issuers via private placements. The consultants then sold the shares in the market, usually below cost. The BCSC case is in the preliminary stages, and the regulator has not yet made any findings against anybody.
Preveceutical was one of the issuers that the BCSC mentioned in that case. The company has not filed a formal response in the BCSC matter, but the lawsuit against Mr. Mawji and Mr. Liu provides some new details, at least from Preveceutical's point of view. The company's allegations are set out in a notice of claim that it filed at the Vancouver courthouse on Dec. 17, 2018. The suit targets Mr. Mawji, Mr. Liu and a collection of private entities linked to them. Many operate from Mr. Mawji's office on West Hastings Street, while others have addresses in offshore jurisdictions such as Hong Kong and Switzerland.
The troubles, as described in the suit, stem from consulting agreements that Preveceutical entered into after discussions with Mr. Mawji and Mr. Liu. The company met with the men on June 21, 2018, to discuss an arrangement in which Mr. Mawji and Mr. Liu would provide many of the things that an investor relations firm would. The men were to "promote the long-term development" of Preveceutical and help the company develop "more market friendly" news releases. They would also introduce the company to a potential acquisition opportunity and introduce the company to new revenue-generating projects, the suit claims.
One of the portions of the deal sure to be controversial is the size of the consulting fee, which was $2,775,000. (Preveceutical's entire market capitalization is $15.6-million.) According to the suit, Preveceutical received assurances that the fee was justified given the "increase in market valuation" that would result from the arrangement. The company also received assurances that it would receive much of the money back.
Included in the deal was the expectation that Mr. Mawji and Mr. Liu's companies would subscribe to a private placement in Preveceutical, the suit states. As the company tells it, the arrangement was that the consulting companies would buy the private placement shares and hold them for a period of time. The shares, however, were immediately tradable because they were issued to a consultant, making them exempt from normal hold period requirements.
(The suit sets out the details of the share transactions, from which one can approximate the alleged gains of Mr. Mawji and Mr. Liu. According to the suit, the consultants bought 80 million shares, paying $4-million. Of that money, they received $2,775,000 back immediately for their consulting fee. Then, in the two weeks immediately after the private placement, they sold 50 million shares on the market, the suit states. During the same period, Preveceutical's stock price dropped by half, the company complains. Assuming the consultants sold the 50 million shares at the then-prevailing price of four cents, their total gain from the two transactions would be $775,000. They would also have 30 million shares remaining.)
As Preveceutical explains things, the actions of Mr. Mawji and Mr. Liu amount to a conspiracy against the company. "By August, 2018, it had become apparent to PreveCeutical that the Defendants were not intending to provide any of the Services, and, moreover, that PreveCeutical had been the victim of a conspiracy ... pursuant to which the Defendants had obtained the unlegended Consultant Securities, without the intention of providing any of the Services, so as to be able to quickly sell the Consultant Securities," the suit states. The company says that it has since demanded Mr. Mawji and Mr. Liu reverse the consulting deal.
The suit seeks court orders that would rescind the consulting and private placement agreements or, alternatively, appropriate damages. Vancouver lawyers Jonathan Lotz and Barry Fraser filed the lawsuit on behalf of Preveceutical. The defendants have yet to file a response.
For Mr. Mawji, the lawsuit is not the first time he has been accused of wrongdoing in the markets. He previously spent time in a German jail after prosecutors there said that he was part of the manipulation of a company called De Beira Goldfields Inc. in 2006. The stock was listed in Frankfurt and heavily promoted in Germany, and at one time had a $600-million (U.S.) market capitalization. Authorities in Austria arrested Mr. Mawji for the scheme in 2011, and a judge in Stuttgart later convicted him and two others.
Mr. Liu has no such transgressions in his past. He does, however, share an address with May Joan Liu, a controversial promoter who the Vancouver Stock Exchange effectively banned in the 1990s. Mr. Liu also had links to Bravo Enterprises Ltd., a company that the U.S. Securities and Exchange Commission halted in 2014, citing a need to protect investors. The SEC said that the company was one of several that could be exploiting a then-recent Ebola outbreak.
In the markets, Preveceutical remains an active trader. The stock closed at four cents Wednesday, down a penny.
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