GAW / Josh Garza discussion Paycoin XPY xpy.io ION ionomy. ALWAYS MAKE MONEY :)

[vancefox]

Uncle Stu's big day in court. 

Tuesday, September 27, 2016

43  misc Affidavit  Tue 5:35 PM 

AFFIDAVIT re 42 Memorandum in Support of Motion, 41 MOTION to Dismiss Signed By Sarah L. Cave filed by Stuart A. Fraser.(Cave, Sarah)

 
  Att: 1   Exhibit A, 
  Att: 2   Exhibit B, 
  Att: 3   Exhibit C, 
  Att: 4   Exhibit D 

42  respm Memorandum in Support of Motion  Tue 5:24 PM 

Memorandum in Support re41 MOTION to Dismiss filed by Stuart A. Fraser. (Cave, Sarah)

 
41 motion Dismiss  Tue 5:22 PM
 
MOTION to Dismiss by Stuart A. Fraser. Responses due by 10/18/2016 (Cave, Sarah) 

So what's the outcome?  Dismissed or laughed at?

[suchmoon]

So what's the outcome?  Dismissed or laughed at?

Fraser's lawyers submitted a huge "memorandum" explaining why they think this case should be dismissed. I guess now the other side has to respond by October 18.

Document here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.42.0.pdf

Other case documents here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.docket.html

Edit - some quotes for those who are too lazy to open the PDF:

Plaintiffs accuse Fraser, a minority investor in the Companies, of participating in an
alleged scheme by Garza and the Companies to defraud investors. They lard their accusations of
control person liability with references to Fraser’s occasional requests for information about the
Companies’ performance and business, his business relationship and friendship with Garza, and
conclusory catch-all allegations against Garza and the Companies, into which they conveniently
group Fraser. The correspondence between Garza and Fraser to which Plaintiffs point, however,
demonstrates that Fraser did not have the power to direct the management and policies of Garza
and the Companies. Rather, that correspondence reinforces Fraser’s limited role as a minority
investor who did not control the Companies’ daily operations, set their policies or determine how
their policies would be implemented. Furthermore, Plaintiffs’ Complaint does not plead with the
requisite particularity that Fraser engaged in “culpable participation” in a primary securities
violation, which is also fatal to their Section 20(a) claim. Plaintiffs’ state law claims suffer
similar deficiencies. Accordingly, the claims against Fraser should be dismissed.

The article noted that Fraser
was “backing Mr. Garza” and was “a long-time backer of Mr. Garza’s projects,” but contains
no suggestion that Fraser held any role within the Companies other than that of a financial
investor.

(this is in reference to the WSJ blog shill piece)

The Complaint fails to state a claim against Fraser because Plaintiffs have not alleged,
with sufficient particularity, facts from which it could properly be inferred that Fraser controlled
a primary violator — here, Garza and the Companies — and culpably participated in the alleged
fraud.

Plaintiffs do not allege a single
policy, procedure or method of operation undertaken by Garza or the Companies that Fraser
directed or controlled, as the law requires. See In re Alstom, 406 F. Supp. 2d at 487. Plaintiffs
do not allege that Fraser held any voting rights in the Companies, nor do they allege that a
contract or other agreement exists between Defendants that would grant him any such power.
They do not allege that Fraser asked for — let alone received — any power, rights or position in
exchange for his minority investment in the Companies. See In re BioScrip, 95 F. Supp. 3d at
740 (having “a great deal of sway” did not “rise to the level of actual control”). In short,
Plaintiffs do not allege a single cognizable fact demonstrating that Fraser actually possessed the
ability to direct the actions of Garza or the management and policies of the Companies. See In re
Flag, 352 F. Supp. 2d at 458 (exercising “powers of persuasion” does not establish “actual
control”).

And it goes on like that.

[skinnyboy]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

[suchmoon]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

Yes. But the above memorandum clearly states "Fraser, who lives and works in New York, serves as a Vice Chairman at Cantor
Fitzgerald, L.P. (“Cantor”), a well-known investment bank based in New York City."

[favdesu]

This saga never gets old.

BTW,  for followers of this thread, blatant plug here for BitStashers wallets (find our thread via search). Yes, I know, off topic etc, but I'm trying to get more folk interested in our products.

Back on topic, Fraser still removed from the Cantor website?

Yes. But the above memorandum clearly states "Fraser, who lives and works in New York, serves as a Vice Chairman at Cantor
Fitzgerald, L.P. (“Cantor”), a well-known investment bank based in New York City."

may be a typo, is there something like a vice chair man? some weird naming for a janitor maybe?

[BitBanksy]

So what's the outcome?  Dismissed or laughed at?

Fraser's lawyers submitted a huge "memorandum" explaining why they think this case should be dismissed. I guess now the other side has to respond by October 18.

Document here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.42.0.pdf

Other case documents here:

http://ia601502.us.archive.org/26/items/gov.uscourts.ctd.112576/gov.uscourts.ctd.112576.docket.html

Edit - some quotes for those who are too lazy to open the PDF:

Plaintiffs accuse Fraser, a minority investor in the Companies, of participating in an
alleged scheme by Garza and the Companies to defraud investors. They lard their accusations of
control person liability with references to Fraser’s occasional requests for information about the
Companies’ performance and business, his business relationship and friendship with Garza, and
conclusory catch-all allegations against Garza and the Companies, into which they conveniently
group Fraser. The correspondence between Garza and Fraser to which Plaintiffs point, however,
demonstrates that Fraser did not have the power to direct the management and policies of Garza
and the Companies. Rather, that correspondence reinforces Fraser’s limited role as a minority
investor who did not control the Companies’ daily operations, set their policies or determine how
their policies would be implemented. Furthermore, Plaintiffs’ Complaint does not plead with the
requisite particularity that Fraser engaged in “culpable participation” in a primary securities
violation, which is also fatal to their Section 20(a) claim. Plaintiffs’ state law claims suffer
similar deficiencies. Accordingly, the claims against Fraser should be dismissed.

The article noted that Fraser
was “backing Mr. Garza” and was “a long-time backer of Mr. Garza’s projects,” but contains
no suggestion that Fraser held any role within the Companies other than that of a financial
investor.

(this is in reference to the WSJ blog shill piece)

The Complaint fails to state a claim against Fraser because Plaintiffs have not alleged,
with sufficient particularity, facts from which it could properly be inferred that Fraser controlled
a primary violator — here, Garza and the Companies — and culpably participated in the alleged
fraud.

Plaintiffs do not allege a single
policy, procedure or method of operation undertaken by Garza or the Companies that Fraser
directed or controlled, as the law requires. See In re Alstom, 406 F. Supp. 2d at 487. Plaintiffs
do not allege that Fraser held any voting rights in the Companies, nor do they allege that a
contract or other agreement exists between Defendants that would grant him any such power.
They do not allege that Fraser asked for — let alone received — any power, rights or position in
exchange for his minority investment in the Companies. See In re BioScrip, 95 F. Supp. 3d at
740 (having “a great deal of sway” did not “rise to the level of actual control”). In short,
Plaintiffs do not allege a single cognizable fact demonstrating that Fraser actually possessed the
ability to direct the actions of Garza or the management and policies of the Companies. See In re
Flag, 352 F. Supp. 2d at 458 (exercising “powers of persuasion” does not establish “actual
control”).

And it goes on like that.

Thanks Suchmoon for the summary. So basically Fraser is dissociating himself from this mess...

[owlcatz]

Yes, and from reading that PDF, his lawyers seem to have done a decent job of it, IMO. I mean, they do bring up the fact that the guy was basically clueless as to what was going on. I can only imagine how burned that guy must feel. Maybe it's Homero's way of paying him back for something? It's all just so weird when you really look at the whole picture. Thanks for the links suchmoon!

[suchmoon]

Yes, and from reading that PDF, his lawyers seem to have done a decent job of it, IMO. I mean, they do bring up the fact that the guy was basically clueless as to what was going on. I can only imagine how burned that guy must feel. Maybe it's Homero's way of paying him back for something? It's all just so weird when you really look at the whole picture. Thanks for the links suchmoon!

Well, the lawyers of course had to try this motion to dismiss but it's not a done deal yet. IANAL but I hope the plaintiffs' lawyers can come up with a good enough response for the case to go forward. Would be weird if this gets thrown out. For one, Stu could have ended the whole thing if he just pulled the plug on Garza's finances at any point so he clearly "controlled the primary violator". Was he aware of the fraud or not - not sure if they can determine that without proper discovery, including depositions of Garza and everyone else involved. Unless Garza has been paid off or otherwise coerced to take the fall.

[BitBanksy]

I hope the plaintiffs' lawyers can come up with a good enough response for the case to go forward. Would be weird if this gets thrown out.

Yeah it will move forward. The plaintiffs' lawyer (Susman and Godfrey) toke the case on a "no win no fee" basis and I doubt they would do so without a careful and thorough consideration of all the facts. At the end, if they loose against GARZA/FRASER, they don't just loose a possible compensation but credibility as the No. 1 boutique litigation law firm in the states. Looking forward to the plaintiff's motion now...

[maildir]

Thanks for securing the docs. bit disappointing in my view. Pretty much a whine-fest over and over, "minority share holder"  only "financial backer" over and over gain,  pretty clear their tactic to drill that home into the Judge's mind.

The thing is thought this is of course all after the fact. Before the picture was pretty clearly painted wall street blog, press releases words used "partner" "founder" [his own words], his linkedIN had "gaw miners" under current [cannot find or recall if it indicated a title] Homer's words my "best friend" "my partner" etc etc. All early on when it was used to rope people in. I even posted the blurb here from the email recently discovered Uncle Stu insisted he be called a partner or early founder or some shit like that.

So that is the picture that was painted to the public before it broke. Now whether after the fact suddenly Uncle Stu can throw his arms in the air and say well I had zero involvement whatsoever and was just a "minority shareholder" and only a "financial backer" seems to me to be a bit late.  It may very well be true and it may very well not be provable at all that he had any control over this primary whatever it is they call it. But isn't it too late? Are not the victims of the fraud a result of him the not saying strongly enough BEFORE they were roped in that they had zero control and zero input on the direction? The wsj blogs, the press releases, the others, sure didn't make it crystal clear back then before people invested and lost everything. He can't have his cake and eat it too.

I think that might be what it all hinges on. Yes now today, there is no proof at all that he had any control whatsoever, no but before, the picture sure was painted that he was deeply involved and more than a hands off financial backer. More than likely many people trusted it all thinking that "what could go wrong" with such a prominent experienced respected businessman involved.

I will be interested to see the outcome of this aspect. Technically and legally is it correct that under that specific, we find out only today, well after the fraud has been committed that indeed he had zero control and was indeed nothing more than a financial backer therefore it must be dismissed, or because before the fact, it was painted by himself and Homero that he was much more than that, more important and what really counts in this particular case and in the charge against him by the plaintiffs [actually have to read again what it is they charge him or accuse him of in this respect].

At the same time I am wondering if this too is nothing more than a tactic. Yes, lets accuse Uncle Stu of this outlandish claim that we all know is not true or correct and is definitely not provable, in order to make him vehemently deny it, which then will force Homero to come in and try to point the finger at Uncle Stu in order to share the blame? So they are intentionally pitting him against Homero  in order for Homero to spill the beans for them? Uncle Stu pleads complete ignorance, Homero enters the fray with "some" proof that Uncle Stu knew "somethings" etc. LOL. If so quite crafty.

One thing is for sure and I read them myself as I am sure many others did, its not as cut and dry as this defense makes it seem to be. Uncle Stu most certainly did not cut him 200,000 dollar check, fuck of to Cape Cod and twiddle his thumbs and "on occasion ask a for numbers" or whatever.

There are complicated discussions about shares in all of this, in GAW, in Zenminer, in Great AUK, in the town house he was renting out, all between Uncle Stu and Homero. Share swap talks, loan swap and debt between the business entities, etc. How to payback,  off-set, forgive one from another. Quite complicated and quite a lot more involved than just some silent partner who wrote a check once or twice and sat back and had no further involvement. Lot of information in those emails about all of this.

So on the one hand a lot more financial involvement than the defense makes out, a lot more involvement in creating an impression he was involved in it all vs. that specific law quoted where it must be shown that he was actually in control some way or another.

Overall in my view the defense is seems rather thin. Zero idea legally the importance of harping over and over again that that definition in that specific law of "control" cannot be met because it never was, is the crux of the matter. Again need to read the overall accusation whether plaintiff's claim is that he did have control and should have known better and nothing more. Which I don't think the charge is at all. Maybe a very small part of it.

Very interesting to see how it plays out. Lying Fucker Homero, still needs to appear and we have to see what he says about it all. So they have to respond to this by the 18 October. Cannot see immediately when Homero's time is up [it it is the 28th or 9th] which ever case plaintiffs wil delay in order for Homero to say what he has to say then proceed from there. Here one has to wonder if they are in cahoots.  Where Uncle Stu's lawyers have advised Homero not to say a single word about his involvement [pay off maybe? foot his legal bills?], do not implicate or fortify plaintiff's claims or else. Or if they really are completely disassociated and no longer on any terms and Homero will spill the or some beans, so that Uncle Stu shoulders some of the claimed funds, which for sure no matter what Homero's defence is, he will be liable for.

This aspect will be the drama we seek: what will Homero do?  

edit: no edit - no apologies  atrocious structure going on in that wall of text.

[maildir]

Right here, another clear cut example:

http://blogs.wsj.com/moneybeat/2014/12/01/bitbeat-under-fire-gaw-miners-ceo-garza-takes-on-his-critics/

As for the charge that GAW is a Ponzi scheme, Mr. Garza pointed out that his principal partner, Cantor Fitzgerald Vice Chairman Stuart Fraser, in whose name the patent for one of Wall Street’s most important bond trading programs is listed, has “got more to lose than all of us combined.” He added, “Why would a guy that already has a ton of money, and would get thrown in jail if he was involved in anything sketchy, be involved in a scam?”

Nice words to rope everyone in to the fraud "partner" "principal partner" even, "founder" ... etc. so what was the public supposed to know back then? That was really, it was all white lies, there is and never was proof that Uncle Stu was nothing more than a hands off silent partner?    C'mon Mr. Judge. Got Uncle Stu changing that other press release to make it sound like he was more involved that he was. Which of course we all only find out now, long after the fact?? 


Q:

What is a principal partner?

A:
Quick Answer
A principal partner in a business is the partner that represents the firm. Usually, a principal partner's decisions are representative of the all the partner's interests, and often speaks on behalf on the entire firm.
 


Little White Lies, to lure in more money isn't fraud? 

[suchmoon]

Garza was supposed to respond by September 5 and the request for extension was thrown out. Maybe there is something in that meeting report (doc #40) that allows him more time, not sure.

Re WSJ: it's funny how the defense lawyers referenced the first blog post as proof that Fraser was merely "backing Mr. Garza” but obviously forgot to mention the second one. No doubt most of these "rebuttals" are similarly selective, not to mention that the leaked e-mails and other public sources represent only a tiny part of what a proper discovery could... ummm... discover.

Edit: Garza was not part of the meetings. Not sure why he's silent.

[RoomBot]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?

Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

[owlcatz]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?

Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

Sadly though, it's not up to any of us. Some random judge will decide it. Hooray USA.

[Phildo]

Right here, another clear cut example:

http://blogs.wsj.com/moneybeat/2014/12/01/bitbeat-under-fire-gaw-miners-ceo-garza-takes-on-his-critics/

As for the charge that GAW is a Ponzi scheme, Mr. Garza pointed out that his principal partner, Cantor Fitzgerald Vice Chairman Stuart Fraser, in whose name the patent for one of Wall Street’s most important bond trading programs is listed, has “got more to lose than all of us combined.” He added, “Why would a guy that already has a ton of money, and would get thrown in jail if he was involved in anything sketchy, be involved in a scam?”

Nice words to rope everyone in to the fraud "partner" "principal partner" even, "founder" ... etc. so what was the public supposed to know back then? That was really, it was all white lies, there is and never was proof that Uncle Stu was nothing more than a hands off silent partner?    C'mon Mr. Judge. Got Uncle Stu changing that other press release to make it sound like he was more involved that he was. Which of course we all only find out now, long after the fact?? 


Q:

What is a principal partner?

A:
Quick Answer
A principal partner in a business is the partner that represents the firm. Usually, a principal partner's decisions are representative of the all the partner's interests, and often speaks on behalf on the entire firm.
 


Little White Lies, to lure in more money isn't fraud? 

People can, and will, claim that the line in the wsj blog about Fraser's involvement is just as accurate as the information in those posts about the data center, how many bitcoins they had, and all the other horseshit involved.

There's a huge difference between Fraser being intimately involved, and the guy saying that he had miners that could mine on 2 pools at once saying that they were involved.

I don't remember what the emails said, and who knows what will be turned up in discovery, but pointing to a blog post that we all knew was full of bullshit the second it was posted probably isn't going to get anyone anywhere.

[owlcatz]

Was Stuart Fraser really a MINOR contributor, or contributor to the delinquency of a minor - miner?
Nice try, good delay, but NO WAY can Fraser slime out of this, with those WSJ releases, he is toast.

Sadly though, it's not up to any of us. Some random judge will decide it. Hooray USA.

you are correct in that it is not up to you. you and suchmoon are both stupid bitches if you think stuart or garza will do any jail time. this is an american court case. money equals innocent in america.

Maybe so SKERMY, but then again I'm not too worried about it, no effect on my life at all, just entertainment. As for yourself, you obviously have some sort of other vested interest in it since you are always defending these scumbags. Sucks to be you, have a great life!  

yeah just ask madoff or martha stewart

Yeah, that ^^^ too.

[maildir]

"minority investor"  "just a financial backer"  "no control whatsoever"  "knows nothing about the crypto space" 

Hand crafted with love and care by Stuart A Fraser

http://archive.is/VWRa2 

"Although relatively new, cryptocurrency is shifting the economic paradigm and that is reason enough for traditional financial organizations to start taking this seriously," said co-founder and early investor, Stuart Fraser, Vice Chairman and partner, Cantor Fitzgerald, L.P. "With the marrying of innovation, technology, finance and regulation -- I believe that cryptocurrency can provide a value proposition that has never before been contemplated in global commerce and thus has the real possibility of being a viable mainstream currency accepted by the masses around the globe."

[maildir]

 

Subject: RE: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 16:09:23 -0500
From: STUART FRASER <aukster@msn.com>
To: Josh Garza <josh@btc.com>



maybe I should be "identified" as a founding Investor? ...said Stuart
Fraser, co-founder/early investor and Vice Chairman......

Subject: RE: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 13:56:31 -0500
From: STUART FRASER <aukster@msn.com>
To: Josh Garza <josh@btc.com>



sure

Subject: Fwd: ICO/Paycoin release draft - Please Review
Date: Fri, 21 Nov 2014 13:54:52 -0500
From: Josh Garza <josh@btc.com>
To: Stuart Fraser <aukster@msn.com>



are you cool with this?

It does not say its coming from cantor

*Josh Garza*
*CEO- *GAW Corp

---------- Forwarded message ----------
From: *Harrison Wise* <harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>>
Date: Fri, Nov 21, 2014 at 12:46 PM
Subject: Re: ICO/Paycoin release draft - Please Review
To: Josh Garza <josh@btc.com <mailto:josh@btc.com>>
Cc: Amber Messer <amber@geniusesatwork.com
<mailto:amber@geniusesatwork.com>>, Christina Sarracino
<christina@wisepublicrelations.com
<mailto:christina@wisepublicrelations.com>>, John McCartney
<john@wisepublicrelations.com <mailto:john@wisepublicrelations.com>>


Also, let's not forget that we also need blessing on Stuart's quote as
noted in the latest draft:

“Although relatively new, cryptocurrency is shifting the economic
paradigm and that is reason enough for traditional financial
organizations to start taking this seriously,” said Stuart Fraser, Vice
Chairman and partner, Cantor Fitzgerald L.P. “With the marrying of
innovation, technology, finance and regulation - I believe that
cryptocurrency can provide a value proposition that has never before
been contemplated in global commerce and thus has the real possibility
of being a viable mainstream currency accepted by the masses around the
globe.”


Thanks

H



Harrison Wise
Wise Public Relations, Inc. <http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>


On Fri, Nov 21, 2014 at 12:11 PM, Josh Garza <josh@btc.com
<mailto:josh@btc.com>> wrote:

I think its ok (there is nothing wrong with it) I would just
question the content.

Assuming regular every day people are going to read it, why not
write it that way? Mention that is will work with credit cards, and
hundreds of thousands of merchants?

I just dont think it really says anything (in its current form).
Maybe I dont get it.

Anyways, thats my view


*Josh Garza*
*CEO- *GAW Corp

On Fri, Nov 21, 2014 at 12:03 PM, Harrison Wise
<harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>> wrote:

Josh - need your blessing/input on this release draft asap -
https://docs.google.com/a/wisepublicrelations.com/document/d/1PW_PHrKUjCJPJYQvqZ_KstkXK8DnZSr-YI5lE58V57Q/edit

Please advise.
H

Harrison Wise
Wise Public Relations, Inc. <http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>


On Thu, Nov 20, 2014 at 4:15 PM, Harrison Wise
<harrison@wisepublicrelations.com
<mailto:harrison@wisepublicrelations.com>> wrote:

Josh - need your feedback/blessing on this asap:

https://docs.google.com/a/wisepublicrelations.com/
<http://wisepublicrelations.com/>document/d/1PW_PHrKUjCJPJYQvqZ_KstkXK8DnZSr-YI5lE58V57Q/edit

Our plan is to release widely on Monday and we need to get
this into hands of relevant tech media and those we met with
yesterday by Tomorrow/Friday morning to properly queue it up.

Please feel free to make any edits directly to this shared
doc or let us know what changes need to be made.

Best,
Harrison

Harrison Wise
Wise Public Relations, Inc.
<http://www.wisepublicrelations.com>
P: 212-777-3235 <tel:212-777-3235>
M: 917-805-3213 <tel:917-805-3213>

 


 

 
 
 

[maildir]

[owlcatz]

Oh nice work!  This made me really laugh though, from that draft link in your post above: