IN THE UNITED STATES DISTRICT COURTFOR THE MIDDLE DISTRICT OF NORTH CAROLINA CIVIL ACTION NO. l:17-cv-184 BARRY HONIG, an individual, ) ) Plaintiff, ) ) v. ) COMPLAINT ) ROBERT LADD, an individual; MGT ) CAPITAL INVESTMENTS, INC., ) a Delaware corporation; TERI BUHL, ) an individual; and DOES 1-20, ) ) Defendants. ) Plaintiff alleges: SUMMARY OF THE CASE 1. Plaintiff is a private investor who is the victim of a conspiracy between defendants Robert Ladd ("Ladd"), MGT Capital Investments, Inc. ("MGT") and Teri Buhl ("Buhl") (collectively, "Defendants") to publish a series of false and highly defamatory articles about Plaintiff, beginning in September 2016 and continuing into February 2017. Ladd is the President and Chief Executive Officer of MGT, a publicly- traded company in which Plaintiff is a shareholder, and Buhl is a self-styled "investigative journalist." 2. The articles, which were conceived by Ladd and MGT, authored by Buhl and published on Buhl's website, contain assertions that Plaintiff, among other things, is violating securities laws, is the "target" of a Securities and Exchange Commission {00078520;!} Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 1 1 of of 19 19 ("SEC") investigation arising out of those, violations, and that "90%" of a SEC subpoena served on MOT (the "Subpoena") is about Plaintiff. These statements, and many others, are unequivocally false. 3. Ladd and MOT concocted the scheme to defame Plaintiff in order to divert attention away from MGT as the target of the very SEC scrutiny that the articles falsely allege is directed at Plaintiff. By placing the blame on Plaintiff, Ladd and MGT sought to deceive the public into believing there were no problems at MGT and that it was safe to purchase MGT's stock. Ladd and MGT engaged in this market manipulation in an attempt to boost the share price of MGT, which had substantially declined after MGT's disclosure of the Subpoena and oilier negative events. 4. In order to carry out their scheme, Ladd and MGT enlisted Buhl to write and publish false and defamatory articles regarding Plaintiff through Buhl's website. Ladd and MGT knew they could turn to Buhl for assistance because she had participated in a similar scheme with respect to another shareholder of MGT in the past. Specifically, in 2014, Defendants' conspired to publish an article on Buhl's website that accused Iroquois Capital and its principal of securities violations similar to those allegedly committed by Plaintiff. As was the case here, Ladd and MGT caused Buhl to publish the article in order to manipulate the market for MGT's stock, maintain their control and also to deflect Iroquois Capital's criticism of MGT's management, and Ladd in particular. 5, The conspiracy amongst Defendants to defame Plaintiff also furthered Buhl's interests. Several months earlier, in May 2016, Buhl published another false and defamatory article accusing Plaintiff of similar activities in relation to a separate {00078520;!} 2 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 2 of 19 investment. The publication of additional articles, using Ladd and MOT as purported sources, further extended Buhl's fanciful narrative demonizing Plaintiff, based solely on Buhl's ill-informed conjecture, and efforts to drive traffic and associated revenue to her website. 6, Defendants' conduct has injured Plaintiff in his trade and profession and is continuing to cause him substantial harm. Accordingly, Plaintiff hereby asserts claims against Defendants for defamation, civil conspiracy, intentional interference with prospective business advantage and unfair and deceptive trade practices. PARTIES 7. Plaintiff Bariy Honig is a private investor who resides in, and is a citizen and domiciliary of Palm Beach County, Florida. 8. Defendant Robert Ladd resides in and is a citizen and domiciliary of Chapel Hill, North Carolina. Ladd is, and at all relevant times was, the President, Chief Executi ve Office]' and a Director of MOT. 9. Defendant MOT' Capital Investments, Inc. is a Delaware corporation with its principal place of business in Durham, North Carolina. 10. Defendant Teri Buhl resides in and is a citizen and domiciliary of New York, New York. Buhl owns and operates the weblog at www.teribuhl.com 11, Plaintiff is presently unaware of the identity of the defendants sued herein as DOES 1-20, and will amend this complaint to identify them once Plaintiff learns of {00078520;!} 3 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 3 of 19 their identities. Defendant Ladd, MGT, Buhl and DOES 1-20 are collectively referred to herein as "Defendants." 12. On information and belief, Defendants, and each of them, were and are the agents, licensees, employees, partners, joint- venturers, co-conspirators, owners, principals, and employers of the remaining Defendants and each of them are, and at all times mentioned herein were, acting within the course and scope of that agency, license, partnership, employment, conspiracy, ownership, or joint venture. On further information and belief, the acts and conduct herein alleged of each of the Defendants were known to, authorized by and/or ratified by the other Defendants, and each of them. 13. Whenever in this complaint reference is made to any act of a defendant, such allegation shall be deemed to mean the acts of the defendants named in the particular cause of action, and each of them, acting indi vidually, jointly and severally. JURISDICTION & VENUE 14. This Court has personal jurisdiction over Defendants because they have minimum contacts with the State of North Carolina and/or are domiciliaries of the State of North Carolina. 15. The Court has subject matter jurisdiction pursuant to 28 ll.S.C. § 1332(a) because there is complete diversity of the parties to this action and the amount in controversy exceeds $75,000, exclusive of interest and costs. 16. Venue is proper in this district pursuant to 28 U.S.C. Section 1391(b), in that Ladd and MGT reside here and a substantial part of the events or omissions giving rise to this complaint occurred here. {00078520;!} 4 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 4 of 19 FACTS RELEVANT TO ALL CAUSES OF ACTIONS 17. On or about May 26, 2016, Buhl published an article on teribuhl.com entitled "Micro cap Attorney Jaclin 's Co-Conspirator Turned DOJ Witness in Shell Factory Scheme" (the "May 26, 2016 article"). A true copy of the May 26, 2016 article is attached hereto as Exhibit A. 18. The May 26, 2016 article discusses SEC charges against a securities lawyer and a 2014 plea deal by an executive who admitted to illegal trading in his own company's securities, and contains the statement: "But it's possible more players in the microcap space will be arrested by the DOJ or charged with an enforcement action by the SEC. One name that comes to mind is microcap financer Barry Honig." This statement is false and defamatory. Plaintiff is not the target of any such investigation or enforcement action, and there is no basis to believe an arrest will be made by the DOJ or that Barry Honig will be charged in an enforcement action by the SEC. 19. Thereafter, on or about September 15, 2016, MOT was served with a non- public subpoena by the SEC ("Subpoena"), which on February 9, 2017 was leaked publicly by Buhl on her website after it was provided to her by Ladd and MGT. The Subpoena was accompanied by a cover letter, which stated, in pertinent part: This investigation is a non-public, fact-finding inquiry. We are trying to determine whether there have been any violations of federal securities laws. The investigation and the subpoena do not mean that we have concluded that you or anyone else has broken the law. Also, the investigation does {00078520;!) 5 Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 5 5 of of 19 19 not mean that we have a negative opinion of any person, entity or security. A true copy of the cover letter and Subpoena are attached hereto as Exhibit B. 20. On or about September 19, 2016, MGT issued a press release disclosing its receipt of the Subpoena, stating: MGT Capital Investments, Inc. (NYSE MKT: MGT) announced today that on September 15, 2016, it received a subpoena from the Securities and Exchange Commission requesting certain information from the Company. MGT has no indication or reason to believe that the Company is or will be the subject of any enforcement proceedings. The Company is fully cooperating to comply with the SEC's request. 21. Subsequent to MGT's public disclosure of the Subpoena, MGT's stock price suffered a substantial decline in value. 22. Between the time of MGT's receipt of the Subpoena on September 15, 2016, and September 23, 2016, Defendants knowingly, willfully and intentionally conspired, agreed and coordinated amongst themselves to defame Plaintiff in articles published on teribuhl.com. As part of this conspiracy, and during the aforementioned time period, Ladd, acting on his own behalf and on behalf of MGT, stated to Buhl that the Subpoena was targeted at Plaintiff, that 90% of the SEC's questions were about Plaintiff and that Plaintiff was the target of an SEC investigation into his trading and investing in MGT stock (the "Ladd Defamatory Statements"). The Ladd Defamatory Statements {00078520;!} 6 Case ase 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 6 6 of of 19 19 were made by Ladd with the intention that they be reduced to writing and published by Buhl. 23. The Ladd Defamatory Statements were in fact written and published by Buhl on teribuhl.com. Specifically, and in furtherance of Defendants' conspiracy, on or about September 23, 2016, Buhl published a second article on teribuhl.com entitled "Investor Barry Honig Target ofSEC MGT Capital Subpoena''' (the "September 2.3, 2016 article"). A true copy of the original version of the September 23, 2016 article is attached hereto as Exhibit C. 24. The original version of the September 23, 2016 article contains the following false and defamatory statements: a. "Investor Barry Honig Target of SEC MGT Capital Subpoena" b. "Microcap investor Barry C. Honig is the target of an SEC investigation for his role in trading and investing in shares of MGT Capital ($MGT)." c. "90% of the regulator's questions are about Honig." d. "Honig has been calling SEC enforcement defense lawyers this week looking for representation." e. "Barry uses other people to run a company he is secretly controlling and pays stock pumpers to tout the company without disclosure." f. Plaintiff "runs things behind the scene." g- Plaintiff allegedly engages in "tons of questionable pump and dump deals" h. Plaintiff's counsel allegedly "has been able to keep the SEC at bay". i. Plaintiff "acted as an affiliate in trading MGT stock". {0007857.0; 1} 7 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 7 of 19 J- "Market participants sit on the side line to see if the SEC can get the goods to finally charge Barry Honig". 25. The statements in the original September 23, 2016 article are highly defamatory. They accuse Plaintiff of committing serious violations of securities law by, among other things, engaging in "pump and dump" schemes, secretly controlling publicly traded companies, paying stock promoters without proper disclosures and secretly teaming up with others to illegally trade MGT's stock as an affiliate. The original September 23, 2016 article attempts to legitimize these false accusations by making additional false statements, including that Plaintiff is under investigation by the SEC for securities violations, that the SEC may charge Plaintiff for the violations, and that Plaintiff is in the process of hiring counsel because he fears the SEC investigation. 26. In truth, the Subpoena mentions Plaintiff's name only once in the twenty categories of documents to be produced by MGT, as part of a list that included shareholders of MGT. Plaintiff is not the target of the Subpoena or an SEC investigation, or the subject of 90 percent of a regulator's questions to MGT, as falsely stated by Defendants. Plaintiff has not been looking for an SEC enforcement defense lawyer. Plaintiff is a passive investor and does not run things behind the scenes and is not involved in "pump and dump" schemes. Plaintiff has never paid a stock promoter to tout the company. He also has no affiliation with anyone in MGT's management or Board of Directors. 27. On or about September 23, 2016, a written communication was delivered to Buhl identifying the foregoing false and defamatory statements about Plaintiff and {00078520;!} 8 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 8 8 of of 19 19 demanding a retraction and apology. Buhl refused to comply with the retraction and apology. Instead, Buhl changed the title of the September 23, 2016 article to "Investor Barry Honig Subject ofSEC MOT Capital Subpoena", an equally false statement misleading readers into the belief Plaintiff is the sole the focus of the Subpoena, and published an amended version of the article. A true copy of the amended September 23, 2016 article is attached hereto as Exhibit D. 28. The amended September 23, 20 1 6 article repeated many of the defamatory statements about Plaintiff and added two new defamatory statements: a. "Barry Honig is pulling out the big legal guns apparently worried about what's inside that SEC subpoena." b. "Additionally, Honig had two days to respond to questions about the subpoena and refused to return a call and email for comment." 29. The two new statements, added to the amended September 23, 201 6 article, are false. Plaintiff is not worried about what is inside the Subpoena, and engaged a well- known libel lawyer for the specific purpose of putting Buhl on notice of her false and defamatory statements about Plaintiff, and demanding a retraction and apology of same. Further, Plaintiff did not have two days to respond to Buhl's reporting. Buhl did not send any written, request for comment to Plaintiff himself, but rather sent a very cryptic statement to Plaintiff's representative that provided no information at all about what Buhl intended to report, or what specifically she was asking Plaintiff to comment on. The statements identified in Paragraph 15, above, certainly were not contained or referenced in any way in Buhl's email to Plaintiff's representative for comment. {00078520;!} 9 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 9 of 19 30. On September 23, 2016, Plaintiff's libel counsel sent Buhl a second written communication setting forth additional defamatory statements by Buhl against Plaintiff, namely, the two defamatory statements in the amended September 23, 2016 article, and the defamatory statement in the May 26, 2016. Plaintiff counsel requested a retraction and apology regarding same, as well as made a second request for a retraction and apology of the defamatory statements listed above in Paragraph 16 herein. Ms. Buhl did not retract any of the defamatory statements and did not apologize, and instead responded by email that she would not do so. 31. In furtherance of Defendants' conspiracy, on or about November 8, 2016, and then again on or about February 9, 2017, Buhl published a third article on teribuhl.com entitled " California DOJ investigating Honig and The Frost Group''' (the "November 8, 2016 article") to further discredit Plaintiff by reciting unsubstantiated claims made by a disgruntled executive in a lawsuit settled in 2013. A true copy of the article is attached hereto as Exhibit E. 32. The November 8, 2016 article contains the following defamatory statements: a. "California DOJ investigating Honig and The Frost Group". b. "The Northern California DOJ has been sniffing around asking tough question (sic) about the investing and trading activities of a billionaire Phillip Frost, a former boxer turned penny stock investor Barry Honig, and a man Honig has done investing deals with Michael Brauser." {00078520;!} 10 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 10 10 of of 19 19 33. These statements are false. Plaintiff is not aware of any investigation of him by the California DOJ, or of any tough questions that have been asked by the Northern California DOJ about his investing and trading activities. 34. In furtherance of Defendants' conspiracy, on or about February 9, 2017, Buhl published a fourth article on teribuhl.com entitled "Here it is: that MGT Capital SEC Subpoena" (the "February 9, 201 7 article"). In connection with Buhl's publication of the February 9, 2017 article, Ladd and MGT leaked a copy of the Subpoena to Buhl, which she then posted along with the article. A true copy of the article is attached hereto as Exhibit F. 35. The February 9, 2017 article republished several of the false and defamatory statements in the September 23, 2016 article and contains the following defamatory statement: "the regulator is looking for evidence that these people [including Barry Honig] traded as a group and therefore became beneficial owners of the stock." (Exhibits A and C through F are collectively referred to herein as the "Defamatory Articles." The defamatory statements identified in paragraphs 18, 24, 28, 32 and 35 are collectively referred to herein as the "Buhl Defamatory Statements.") 36. This statement is false and defamatory for the reasons set forth paragraphs 25 and 26 above. 37. On February 20, 2017, Plaintiff, through his counsel, delivered a written communication to Buhl specifying the Defamatory Articles and Buhl Defamatory Statements, and demanding a retraction and apology. Buhl failed to comply with the demand for a retraction and apology prior to the filing of this action. {00078520;!} 11 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 11 11 of of 19 19 38. The conspiracy described hereinabove was not the first conspiracy by Defendants against a shareholder of MGT. On June 1 1, 2014, Buhl published an article on teribuhl.com, based upon statements by Ladd and MGT, accusing Iroquois Capital of engaging in similar securities violations as those falsely attributed to Plaintiff in this case. In that instance, the article was published in an attempt by Ladd and MGT to gain the upper hand in their dispute with Iroquois Capital and its principal, Josh Silverman, and by Buhl to drive traffic and associated revenue to her website. A true and correct copy of the article, entitled "Iroquois Capital's Josh Silverman Threatens Portfolio Stock CEO", is attached hereto as Exhibit G. FIRST CAUSE OF ACTION (Libel And Slander Against Ladd, MGT And Does 1-20) 39. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 38 of this Complaint as if fully set forth herein. 40. Ladd, acting on his own behalf and on behalf of MGT, published the Ladd Defamatory Statements to Buhl. The Ladd Defamatory Statements were authorized and ratified by MGT, and made within the course and scope of Ladd's employment with MGT. 41. The Ladd Defamatory Statements are false and defamatory statements of and concerning Plaintiff as more fully stated above. 42. The Ladd Defamatory Statements are defamatory because they wrongly state that 90% of the SEC's questions in the Subpoena were about Plaintiff and accuse Plaintiff of being the target of the Subpoena and SEC investigation. These false {00078520;!} 12 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 12 12 of of 19 19 statements tend to subject Plaintiff to hatred, distrust, contempt, aversion, ridicule and disgrace in the minds of a substantial number in the community, and were calculated to harm Plaintiff's social and business relationships, and did harm his social and business relationships. 43. The Ladd Defamatory Statements constitute slander and libel because they were made with the intention that they be reduced to writing by Buhl, and they were in fact written and published by Buhl on teribuhl.com in the September 23, 2016 article. 44. The Ladd Defamatory Statements constitute libel and slander per se because they disparage and discredit Plaintiff in the way of his profession and trade as an investor. 45. The Ladd Defamatory Statements were false and no applicable privilege or authorization protecting the statements can attach to them. 46. As a direct and proximate cause of the falsity of the Ladd Defamatory Statements, Plaintiff has suffered substantial damages, including to his reputation, personal and professional relationships and prospective economic opportunities, in an amount to be determined at trial. The false statements attribute conduct, characteristics and conditions incompatible with the proper exercise of Plaintiff's business as an investor. 47. Publication of the Ladd Defamatory Statements is egregious conduct constituting moral turpitude, particularly inasmuch as Ladd and MGT knew that the Ladd Defamatory Statements were false at the time they were made. As such, in addition to compensatory damages and/or presumed damages, Plaintiff demands punitive damages {00078520;!} 13 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 13 13 of of 19 19 relating to publication of the Ladd Defamatory Statements, in an amount to be determined at trial. SECOND ( !AUSE OF ACTION (Libel Against Buhl And Does 1-20) 48. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 47 of this Complaint as if fully set forth herein. 49. The Buhl Defamatory Statements are false and defamatory statements of and concerning Plaintiff as more fully stated above. 50. The Buhl Defamatory Statements are libelous because they wrongly accuse Plaintiff of committing serious violations of securities law and seek to legitimize these false accusations by falsely stating that Plaintiff is under investigation by the SEC for securities violations, that the SEC may charge Plaintiff with a crime for the violations, and that Plaintiff is in the process of hiring counsel because he fears the SEC investigation. 51. The Buhl Defamatory Statements tend to subject Plaintiff to hatred, distrust, contempt, aversion, ridicule and disgrace in the minds of a substantial number in the community, and were calculated to harm Plaintiff's social and business relationships, and did harm his social and business relationships. 52. The Buhl Defamatory Statements also constitute libel per se because they disparage and discredit Plaintiff in the way of his profession and trade as an investor. 53. The Buhl Defamatory Statements are false and no applicable privilege or authorization protecting the statements can attach to them. {01)078520;!} 14 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 14 of 19 54. As a direct and proximate cause of the falsity of the Buhl Defamatory Statements, Plaintiff has suffered substantial damages, including to his reputation, personal and professional relationships and prospective economic opportunities, in an amount to be determined at trial. The false statements attribute conduct, characteristics and conditions incompatible with the proper exercise of Plaintiff's business as an investor. 55. The Defamatory Articles were widely disseminated on the Internet, in part because Buhl distributed the May 16, 201 6 article and September 23, 2016 article via her Twitter account, and in part because other individuals and companies, including news organizations, come to teribuhl.com for financial news, and republish her stories for their readers to read. The Defamatory Articles were re- published by others, and Buhl was aware of this process and that republications of the Defamatory Articles would occur once she published them. 56. Buhl's actions were intended to hold Plaintiff up to ridicule and to damage his personal and professional relationships. 57. Publication of the Buhl Defamatory Statements is egregious conduct constituting moral turpitude. As such, in addition to compensatory damages and/or presumed damages, Plaintiff demands punitive damages relating to publication of the Buhl Defamatory Statements, in an amount to be determined at trial. 58. Plaintiff has complied with the notice requirements set forth in of N.C. Gen. Stat. Ann. § 99-1 prior to filing this action by informing Buhl of her defamatory statements, and requesting a retraction and apology, as least five days prior to filing this {00078520;!} 15 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 15 of 19 action. Buhl has failed to comply with the demand for a retraction and apology of the Buhl Defamatory Statements. THIRD CAUSE OF ACTION (Civil Conspiracy Against All Defendants) 59. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 58 of this Complaint as if fully set forth herein. 60. Defendants knowingly, willfully and intentionally conspired, agreed and coordinated amongst themselves to defame Plaintiff, interfere with his prospective economic advantages and to engage in unfair and deceptive trade practices, by causing false and disparaging statements about Plaintiff to be published in the September 23, 2016 article, November 8, 2016 article and February 9, 2016 article. 61. As a direct and proximate cause of Defendants' conspiracy, Plaintiff has suffered substantial damages, including to his reputation, personal and professional relationships and prospective economic, opportunities, in an amount to be determined at trial. 62. The above-described conduct is egregious and constitutes moral turpitude. As such, in addition to compensatory damages, Plaintiff demands punitive damages in an amount to be determined at trial. FOURTH CAUSE OF ACTION (Intentional Interference With Prospective Economic Advantage Against All Defendants) 63. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 62 of this Complaint as if fully set forth herein. {00078520;!} 16 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 16 of 19 64. Defendants knew that Plaintiff, being an investor, had a reasonable expectation of entering into contracts related thereto, which would have been completed had it not been for Defendants' unlawfill acts. 65. On information and belief, Defendants' unlawful acts have induced third parties not to enter into contracts with Plaintiff. 66. Defendants acted solely out of malice, and/or used dishonest, unfair or improper means to interfere with Plaintiff's prospective business relationships. 67. Defendants, tlirough the misconduct alleged herein, intended to harm Plaintiff by intentionally and unjustifiably interfering with his prospective business relationships. 68. Defendants have seriously damaged Plaintiff's prospective business relationships as a direct and proximate cause of the aforementioned acts. 69. The above-described conduct is egregious and constitutes moral turpitude. As such, in addition to compensatory damages, Plaintiff demands punitive damages in an amount to be determined at trial. FIFTH CAUSE OF ACTIO?! (Unfair And Deceptive Trade Practices Against All Defendants) 70. Plaintiff hereby incorporates by this reference each allegation set forth in paragraphs 1 through 69 of this Complaint as if fully set forth herein. 71 . Defendants' defamatory statements set forth hereinabove constitute slander and/or liable per se of a type impeaching Plaintiff''s business activities as an investor. {00078520;!} 17 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 17 of 19 Thus, Defendants' have engaged in unfair and deceptive acts in or affecting commerce in violation ofN.C. Gen. Stat. Ann. § 75-1.1. 72. As a direct and proximate result of Defendants' unfair and deceptive trade practices, Plaintiff has been damaged in an amount to be determined at trial. 73. Pursuant to N.C. Gen. Stat. Ann. § 75-16, plaintiff also seeks treble damages for Defendants' unfair and deceptive trade practices. 74. Pursuant to N.C. Gen. Stat. Ann. § 75-16-1, plaintiff also seeks recovery of his reasonable attorneys' fees due to Defendants' willful engagement in the aforementioned unfair and deceptive trade practices. DEMAND FOR JURY TRIAL Plaintiff demands a trial by jury. PRAYER FOR RELIEF WHEREFORE, Plaintiff respectfully requests: (a) An award of damages in an amount to be determined at trial; (b) An award of treble damages in an amount to be determined at trial; (c) An award of punitive damages in an amount to be determined at trial; (d) An award of reasonable attorneys' fees in an amount to be determined at trial; (e) An order requiring Ladd and MGT to make a retraction of the Ladd Defamatory Statements; (f) An order granting preliminary and permanent injunctive relief to prevent Ladd and MGT from continuing to publish or disseminate the Ladd {00078520;!} 18 Case Case 1:17-cv-00184 1:17-cv-00184 Document Document 1 1 Filed Filed 03/03/17 03/03/17 Page Paae 18 18 of of 19 19 Defamatory Statements; (g) An order requiring Buhl to make a public retraction of the Defamatory Articles and Buhl Defamatory Statements; (h) An order granting preliminary and permanent injunctive relief to prevent Buhl from continuing to publish or disseminate the Defamatory Articles and the Buhl Defamatory Statements; and (j) Such other and further relief as the Court may deem just and proper. Dated: March 3, 2017 Respectfully submitted, MOORE & VAN ALLEN PLLC By: /s/ David E. Fox David E. Fox, Esq. N.C. State Bar No. 10332 Moore & Van Allen PLLC 3015 Carrington Mill Blvd., Suite 400 Morrisvjlle, North Carolina 28202-4003 Tel: (704)331-1000 Fax: (704) 331-1159 Email:
[email protected] Charles J. Harder, Esq. {special appearance pursuant to L.R.83.1(d) to follow) Ryan J. Stonerock, Esq. ( special appearance pursuant to L.R.83.1(d) to follow) HARDER MIRELL & ABRAMS LLP 132 S. Rodeo Drive, Fourth Floor Beverly Hills, California 90212 Tel: (424)203-1600 Fax: (424) 203-1601 Counsel for Plaintiff {00078520;!} 19 Case 1:17-cv-00184 Document 1 Filed 03/03/17 Page 19 of 19 EXHIBIT A Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 1 of 10 A / TERI BUHL I J Smashmouti i Investigative & k Journalism ' A I Home Abuul Contact Microcap Attorney May Donate with Bitcoin Jaclin's Co-Conspirator Turned DOJ Witness in Shell 10 USD Factory Scheme bitcoin Donate Now This story hm been updated Donate with PayPal A 20-year veteran of Microcap financing deals, attorney Donate j Gregg Evan Jaelin, has been charged with running a shell- factory shop and securities fraud for nearly a decade. Yesterday I reported at Growth Capitalist the government Your Voice has been building their case against Jaelin and his co conspirator Imran Husain for years. Jaelin is accused of NDA on filing false opinion letters that allowed stock, which U.S. Investor Barry Honig securities law says should he restricted, to freely trade Subject of SEC MUX Capital Subpoena within months of a private company going public through buying one of the Jaclin/Husain shells. Andrea on Document title. Microcap Attorney Jaclin's Cu-Conspirator Tut nod DOJ Witness In Shell Factory Schema Capture I IRL hltp:/AwwJeribuhl.com/201 6/05/2B/mlcroi-ap-attnrriey iacllns-cct-nonsplrator-lurnerl-doj-wilness-ln-sheli-fantory schornu/ Cnpturu tiiuBStamp (UTO): Men, 26 Sep 2016 14'48:04 CM I Page 1 of 13 Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 2 of 10 TUUI VVJILC has been building their case against jaclin and his co conspirator Imran Husain for years, jaclin is accused of NDAon filing false opinion letters that allowed stock, which U.S. Investor Barry Honig securities law says should be restricted, to freely trade Subject of SEC MGT Capital Subpoena within months of a private company going public through buying one of the Jaclin/Husain shells. Andrea on Microcap Attorney Jaclin fights SEC fraud Jaclin, who denies the SEC charges, is currently working case by Blaming in the industry as the chairman of the corporate securities Everyone Else group at New Jersey-based Szafcrman Lakind LLP. He lives in a million dollar home in West Windsor, NJ with his wife. Kris on Microcap Attorney Jill Gartenberg Jaclin, and their two kids. Jaclin fights SEC fraud case by Blaming Everyone Else *V John on & Microcap Attorney Jaclin fights SEC fraud case by Blaming Everyone Else I Microcap Attorney Jaclin fights SEC fraud Cregg And |tll pclut case by Blaming Everyone Else - The Fraud Site on Jaclin previously co-owned a law firm. Anslovv & Jaclin, Microcap Attorney Jaclin's Co-Conspirator where he allegedly issued false SEC filings for the public Turned DOJ Witness in shell companies named in the government's complaint. Shell Factory Scheme Jaclin's former partner Richard Anslow joined another top microcap financing law firm, Ellenoff Grossman & Scholc LP, in October 2013. Anslow acknowledged he was interviewed in the SEC investigation of the shell factor)' State v. Buhl scheme, according to his managing partner Doug Ellenoff. Learn How Ellenoff also told this reporter Richard Anslow doesn't Connecticut Wants to believe he is still part of the SEC investigation. I was able Jail Me For Protecting to ask Anslovv face to face, at the Marcum Microcap Sources and Squash Conference in NYC on June 1st, if the SEC had directly tit* Speech i* » I I • Document title: Microcap Attorney Jaclin's Co-Conspirator Turned DOJ Witness In Shell Factory Schema Capture URL: hUp://www.teribuhl.cam/2016/05/26/microcap-aUarney-jacllns-co-consplratar-tiirned-doj-wltness-In-shell-factory-schomK/ Capture timestamp (UTC): Mori, 26 Sep 2016 1448:04 GMT Page 2 of 13 Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 3 of 10 biate v. Bum interviewed in the SEC investigation of the shell factory scheme, according to his managing partner Doug Ellen off. Learn How Ellenoff also told this reporter Richard Anslovv doesn't Connecticut Wants to believe he is still part of the SEC investigation. I was able Jail Me For Protecting to ask Anslovv face to lace, at the Marcum Microcap Sources and Squasii Conference in NYC on June 1st. it the SEC had directly Speech told hirn he is no longer part of the investigation, which centers on false tilings and opinion letters written by a Read More » firm (Anslovv+Jacliu) he co-owned. Anslovv shook his head when 1 posed the question and started to walk away from me really fast. I followed him asking the question again along with asking "are you running away from a News I'm Reading reporter's questions". Anslovv escaped and 1 never got my answer. Anslovv has not been charged by the government American Banker: in this case. Fed:, Wrongly Demonize Privacy in digital Currency Case The Securities and Exchange Commission complaint Reiser Report. against Jaclin was filed by the regulator's L.A. office in the Stripped To teeth - district of Central California federal court on May 12. 2016. Ted Buhl. talks JP Morgan Legal Woe? The SEC thanked the DOJ team in Northern California tor assisting them in building their case but I found it odd they didn't mention parts of Husain's sworn plea agreement that talked about Jaclin's role in coaching Terl Buhl in the News Husain. in 2012, to get some of the puppet CEO's of the r- < shell companies to lie to the SEC v\ hen the regulator began investigating who actually had control of the companies. If makes me wonder if these details are being saved for a DOJ criminal complaint against Jeclin. When ! - reached one of Husain's lawyers, Victor Sherman, he told Reiser Report: me he thought criminal charges were coming against Stripped To Teeth jaclin. (EW2) Nine shell companies were listed in the SEC complaint as Mort* Videos being fraudulently built to look like real companies hut in my investigation of the alleged scheme I found there were i InV mnm rfniir i I, •> r fit- fl,o r ,m,» n-iHcrn *,r . I., r i I . , .U K, ' O Document title: Mlcrooap Attorney Janlin's Co-Conspirator Turned DOJ Witness in Shell l-aotnry Scheme Capture URL: http://www.tnrlbuhl.norn/20lfi/n5/26/microcap attorney-luclins-co-conspirator iumed doj-wlinuss-ln-shell-tafilory-schenw/ Capture timeslamp (UTC): Mon, 26 Sep 2016 14:48:04 CM ! Pageil of 13 Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 4 of 10 me nc tnougnt criminal cnargcs were coming against Stripped To Teeth Jaclin. (L* m) Nine shell companies were listed in the SEC complaint as More Videos being fraudulently built to look like real companies but in my investigation of the alleged scheme I found there were a lot more deals that fit the same pattern as described by Trusted News regulators. Such as the case against Gary Lee Peterson who bought a shell from Jaclin and reverse merged a Christopher Fountain: company called RVPlus. Although Peterson was arrested Best Source of in March Paul Fishman, the head of the DO] in New Jersey, Greenwich, CT News didn't get a jury to indict Peterson until May 10th- 2 days Ian Fraser: before the SEC filed their complaint against Jaclin. In the Investigative UK Peterson case the government quotes emails between Financial Journalist Peterson and the "lawyer on the deal" negotiating the On the Case: Alison price of the shell. SEC records show that lawyer is Gregg Frankel Jaclin. Peterson is quoted saying 'I'm not paying that price' RT Kesier Report if the restriction on the legend for the shares isn't removed so I can trade these shares within the first few months. Jaclin and Husain charged between $215k-$425k, which is high, per shell company they sold. Private companies will pay more for a shell if it's considered a 'clean shell'. This means the public company has reported to the SEC tor a year and it has a real business plan with at least 40 different shareholders. The scheme laid out in the SEC complaint says nominee shareholders were made up and Husain hired puppet CEOs to pretend to run the companies when it was really him pulling the strings. It's those actions that are a BIG no-no. according to the SEC. The New Jersey L)OJ confirmed the RVPlus CEO, Cary Lee Peterson, was unable to post bail last week and had to get a public defender, which makes me wonder if the DOJ will also uress him to turn Government witness aeainst laclin Documen! litle: Microcap Attorney Jaclin's Co-Conspirator Turned DOJ Witness in Shell Factory Scheme Capture URL: http://wivw.teribuhl.com/2016/a5/26/microcap-attorney-jaclins-eo-conspiratar-h.irned-doJ-wltness-ln-shell-factory-scheme/ Capture timestamp (UTC): Mon, 26 Sep 20 16 14:48:04 GMT Page 4 of 13 Case Case 1:17-cv-00184 1:17-cv-00 Document 1-1 Filed 03/03/17 Page 5 of 10 I 111 il ^.yvntn il iv- Ji.i it sfV3» 1 * »' t l luji. uv. it v.» I i.j u iu). ui w u uivj no-no, according to the SEC. The New Jersey DO) confirmed the RVPlus CEO, Cary Lee Peterson, was unable to post bail last week and had to get a public defender, which makes me wonder if the DO) will also press him to turn government witness against Jaclin and others in the scheme. So far there are no public criminal charges against Jaclin but the pressman for the DO) in Northern Cat reminded me there could be a sealed indictment against Jaclin that no one knows about. Allegedly lying in SEC financials for public companies and writing false opinion letters isn't the only thing Jaclin is culpable of. In 201 1, Jaclin and his former law partner Richard Anslovv made a press announcement that they were going to merge with a New York-based top-billing microcap law firm named Schcnzia Ross Eriedman Fcrence LLP. Yesterday, 1 reported at Growth Capitalist the merger quickly fell apart because the partners at Schenzia Ross were uncomfortable with some the deals Anslovv+Jaclin worked on. Even though no merger docs were ever signed to form the new firm. I found Jaclin was signing opinion letters for S-l filings with the firm name: Schcnzia Ross Friedman Fcrence Anslovv LLP in 2011 and 2012. One such filing was for Health Direct, an issuer listed in the SEC complaint against Jaclin. Harvey Kcsner, a partner at Schcnzia Ross, told me after reviewing the SEC filing of Health Direct with other partners of Schenzia Ross, "the filing was not on behalf of SRFF and the use of any portion of the firm name is unauthorized". Signing the wrong law firm name could make an issuer's S-l filing considered a false opinion in the eyes of the SEC. If the statements Husain made in his plea deal arc true then Jaclin would have known the SEC investigation O Document title: Microcap Attorney Jaclln's Co-Conspirator Turned DOJ Witness in Shell Facloiy Scheme Capture URL: http://www.teribuhl.com/2016/05/26/microcap-attorney-jacllns.co-conspirator-tumed-doj-witness-in-shell-factory-scheme/ Capture timestamp (UTC): Mon, 26 Sep 2016 14:48:04 GMT Page 5 of 13 Case Case 1:17-cv-00184 1:17-cv-00 Document 1-1 Filed 03/03/17 Page 6 of 10 any portion of the firm name is unauthorized". Signing the wrong law firm name could make an issuer's S-l filing considered a false opinion in the eyes of the SEC. If the statements Husain made in his plea deal are true then Jaclin would have known the SEC investigation started as far back as at least August 2012 when one of their puppet CEO's was called in for questioning. From that point on when the SEC started asking jaclin questions he had a legal obligation to tell the issuers trading exchange, OTC Markets, that he was under investigation. OTC's contract with attorneys who represent Issuers with opinion letters published on their trading platform clearly states under rule 12 in the Attorneys Agreement: The letter must shite to the best knowledge of counsel, after inquiry ofmanagement and the directors of the Issuer, whether or not the issuer ofthe Securities, any 5% holder, or counsel is currently under investigation by any federal or state regulatory authority lor any violation ol federal or states securities laws, and ifso, the i fetalis ofsuch investigation must be provided in such letter. Imran Husain is the only co-conspirator of Jaclin's named in the SEC complaint. But it's possible more players in the microcap space will be arrested by the DOJ or charged with an enforcement action by the SEC. One name that comes to mind is microcap financer Barry Honig. I reported for Growth Capitalistic CEO of YcsDTC. one of the issuers in the jaclin complaint, was also arrested and Document title: Microcap Attorney Jaclin's Co-Conspirator Turned DOJ Witness In Shell Factory Schema Capture URL: http://www.terlbuhl.com/2016/05/26/rnicrocap-aUorney-iaclins-co-conspirator-tumed-doj-witness-ln-shell-factory-scheme/ Capture tlrnestamp (LJTC): Mon, 26 Sep 2016 14:48:04 GMT Page 6 of 13 Case 1:17-cv-00184 1:17 Document 1-1 Filed 03/03/17 Page 7 of 10 in the SEC complaint. But it's possible more players in the microcap space will be arrested by the L)OJ or charged with an enforcement action by the SEC. One name that comes to mind is microcap fmancer Barry Honig. I reported for Growth Capitalistic CEO of YesDTC, one of the issuers in the jaclin complaint, was also arrested and made a plea deal with the DOJ in 2014. His name is joe Noel. Noel and Husain both said in sworn testimony it was Barry Honig who bought the shell (created by Jaclin/Husain) that YesDTC merged into. The SEC successfully charged YesDTC for being a pump and dump. Noel then went on to say that Barry Honig 'made him' hire a stock promoter to aid in the pump and dump of YesDTC and alluded to the notion that Honig was also a control person in YesDTC. This matters because it affects Honig's 9.99% investment in the company and his timing of when he can sell his shares. Honig has gone on the record through his attorney, Harvey Kesner, that he was not a control person of YesDTC, that he was cheated by joe Noel, and Noel is lying in his DOJ plea statement. Honig has never been arrested or charged by the SEC for his role in investing in microcap stocks. Editors Note: May 26 2016 When jaclin learned I was repotting on him he called my cell phone late Friday night, which was the day after his SEC charges were announced, and left a voice mail he wanted to talk. It was past 9pm and I didn 't call him back that night. At 7am Saturday he then tried to write a somewhat threatening letter to an editor. Shelly Kraft. who he thought / was reporting for. jaclin tried use the fact his firm had spent money sponsoring conferences of Kraft's in the past and as a result he should be able to control the line ofquestioning I was doing researching his background. When I saw the emails Saturday I reminded / 'I /~* / 1' »*» nni'ti/ I '»»,"» 'i /rnn/'i n.v. im irn'i/irf H 'nn if /• ' . , V o Document title: Microcap Attorney Jactin's Co-Conspirator Turned DOJ Witness in Shell Factory Scheme Capture URL: http://www.terlbuhl.com/201 6/G5/26/mlcrooap-attorney-jaclins-ca-conspirator-tumed-doj-witness-in-shell-faclory-scheme/ Capture timestamp (UTC): Mon, 26 Sep 2016 14:48:04 GMT Page 7 ot 13 Case 1:17-cv-00184 1:17-cv-0 Document 1-1 Filed 03/03/17 Page 8 of 10 somewhat threatening letter tu an editor. Shelly Kraft, who he thought I was reporting for. faelin tried use the fact his firm had spent money sponsoring conferences of Kraft's in the past and as a restlit he should he able to control the line of questioning / was doing researching his background. When I saw the emails Saturday I reminded Jaclin, via email, lam a freelance journalist who is isn't controlled as a staffwriter by an) publication and ifhe had complaints they should come directly to me. I had also pointed out Shelly Kraft doesn 't own the publication 1 1 vas planning r >n sellii ig his story to. After that he refused to return my calls and asked tor questions in email. Once he saw I had the DOf secret plea deal from his co conspirator I got an email late Saturday night that he's hired an ex-SEC lawyer out ofColorado who instructed him not to comment on the case. ButJaclin couldn't help himselfand still tried to reach out to influence reporting on his case, this time to the correct editor ofthe publicat ion I sell stories too; his goal appeared to he to muzzle me. Luckily I have an ethical and amazing editor at www.growthcapitalist.com who politely listened to /aclin 's fear that repairing on his SEC fraud suit and other possible crimes is 'embarrassing his kids ' but my editor didn t try to stop me tram looking into other deals Jaclin might have done that arc not legal and gather more evidence at his alleged crimes. The level ofrepotting and ripe ofcoverage f am allowed to do at www.growthcafuralist.com is unique, impactful, and hill ofdetails to help inform and warn the market As a result die coverage is behind a paywall and you have to pay for it. I encourage anyone who invests in small cap stocks or cares about tree markets to try subscribing. It's woith it! Sharif this: R Share l[ ^ Tweet | jn Sliare 23 I G*' 0 Document title Microcap Attorney .laclin's Co-Conspirator 1 urned uOJ Witness In Sltull Factory .Schema Capture URL: http:yAww.ter1buhl.com/2016/05/26/mlcrocep-attorrwy-jecliris-co-consplratDr-turried-dol-witnss8-iri-slnll-fBctory-schante/ Capture limestamp (UTC): Mort, 2G Sep 20 Hi 14:48:04 3MT Page 8 of 13 Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 9 of 10 - -n" "----- --r-~ -- —--~ --'--- - -- r-~ i t; I encourage anyone tvhoinvests in small cap stocks or caresaboutfreemarkets to trysubscribing. It's ivorthit! share this: ryi) ~ /~anal Related Mt& fthm F.co rt)uai) Atttu1)ey la&'ltf) llitl'Its .)L'L I I do&i ca)tv ~ sts~aIi~ 23 'g+I ll)cost))f Barry I it)tlil& s»l)ju('t t)t'sI)c klutT Caf)tlul St)I)jtt)ella 0 I')lrIBcr N ) 4) iors Atl)ttr)) Tt)tlllliur s bra)tI)or ituiicNnl t» ~ I))'laol I I hl'l)tu!))ltut &1 &itlti Mire(N:ai) I'r'ttnl I&'ist It) "I),tt)I.~tt t~ I)ut tt)lit t &/, 't)I') 4t, I)it'ttlii( t', &t tin I)t.i).irt t)I; lt,ti li) iti It*)I)I)st)'t~ ilt I.ht .Ital'it'%'Ni Itt. I) tvtttt', It,ttii) ' Coll) tt'I0llis Enter your email address to subscribe to Teri8uhl.corn and receive notifications of new articles by email. I » t;tIi /)trit lt v,~ s::I Comments Document title: Mlcrocap Attorney Jaclln's Co-Conspirator Tumed DOJ Witness ln Shell Factory Scheme Capture URL: http:/Nt&ttttw,terlbuht.corn/201 6/06/26/mtcrocap-attorney-iacttns-co~nsplrator-turned-doj-witness-In-shell-factory-scheme/ Captute Umestamp (UTC): Mon, 26 Sep 2016 14)48:04 GMT Page 9 of 13 Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 10 of 10 P 'l I I Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 1 of 15 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Veer York Rcgionnl Office 200 Vescy Slreek Suite 400 Nen York. Nciv York li)281-1022 DIVISION OF ENFORCEMENT Katherine S. Brombcrg Senior Counsel (212) 336.0170 September 14, 2016 Via UPS MGT Capital Invcstmcnts, inc. 500 Mamaroneck Avenue, Suite 204 Harrison, NY 10528 Rc: NY-09507 Dear Custodian of Records, The staff of the New York Regional Office of the United States Securities and Exchange Commission is conducting an investigation in the matter identified above. Thc enclosed subpoena has been issued to MGT Capital Investments, Inc. ("MGT") as part of this investigation. The subpoena requires MGT to provide us documents. Please read the subpoena and this letter carefully. This lcttcr answers some questions you may have about the subpoena. You should also read the enclosed SEC Foim 1662. You must comply with the subpoena. You may be subject to a fine and/or imprisonment if you do not. Producinu Documents 8'7&at materials do I have to pi oduee? The subpoena requires you to provide us the documents described in the attachment to the subpoena. You must provide these documents by September 28, 2016. The attachment to the subpoena defines some terms (such as "document") before listing what you must provide. You should produce each and every document in your possession, custody, or control, including any documents that are not in your immediate possession but that you have the ability to obtain. All responsive documents shall be produced as they are kept in the usual course of business, and shall be organized and labeled to correspond with the numbered paragraphs in the subpoena attachment. In that regard, documents should be produced in a unitized manner, i.e., delineated with staples or paper clips to identify the document boundaries. Documents responsive to this subpoena may be in electronic or paper form. Electronic documents such as email should be produced in accordance with the attached document entitled SEC Data Delivery Standards (the "Standards" ). If you have any questions concerning thc production of documents in an electronic format, please contact mc as soon as possible but in Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 2 of 15 any event before producing documents. All electronic documents responsive to the document subpoena, including all metadata, must also be secured and retained in their native software format and stored in a safe place. The staff may later request or require that you produce the native format. For documents in paper format, you may send the originals, or, if you prefer, you may send copies of the originals. The Commission cannot reimburse you for the copying costs. If you are sending copies, the staff requests that you scan (rather than photocopy) hard copy documents and produce them in an electronic format consistent with the Standards. Alternatively, you may send us photocopies of the documents in paper format. If you choose to send copies, you must secure and retain the originals and store them in a safe place. The staff may later request or require that you produce the originals. Whether you scan or photocopy documents, thc copies must be identical to the originals, including even faint marks or print. Also, please note that if copies of a document differ in any way, they are considered separate documents and you must send each one. For example, if you have two copies of the same letter, but only one of them has handwritten notes on it, you must send both the clean copy and the one with notes. If you do send us scanned or photocopicd documents, please put an identifying notation on each page of each document to indicate that you produced it, and number the pages of all the docuincnts submitted. (For example, if Jane Doc sends documents to the staff, she may number the pages JD-1, JD-2, JD-3, etc., in a blank corner of the documents.) Please make sure the notation and number do not conceal any writing or marking on the document. If you send us originals, please do not add any identifying notations. In producing a photocopy of an original document that contains post-it(s), notation flag(s), or other removable markings or attachments which may conceal all or a portion of the markings contained in the original document, photocopies of the original document both with and without thc rclcvant post-it(s), notation flag(s), or removable markings or attachments should be produced. Do I need to send anyrhin g else! You should enclose a list briefly describing each item you send. The list should state to which numbered paragraph(s) in the subpoena attachment each item responds. A copy of the subpoena should be included with the documents that are produced. Passwords for documents, files, compressed archives, and encrypted media should be provided scparatcly either via email addressed to FNF-CPUCa)sec.nov, or in a letter mailed separately from thc data. Please include a cover letter stating whether you believe you have mct your obligations under the subpoena by searching carefully and thoroughly for everything called for by thc subpoena, and sending it all to us. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 3 of 15 Please also provide a narrative description describing what you did to identify and collect documents responsive to thc subpoena. For cxamplc: ~ who searched for documents; ~ who reviewed documents found to determine whether they were responsive; ~ what sources were searched (e.g., computer files, CDs, DVDs, thumb drives, flash drives, online storage media, hard copy files, diaries, datebooks, planners, tiling cabinets, home office, work office, voice mails, home email, webmail, work email, backup tapes or other media); ~ if any, were contacted to obtain responsive documents (e.g., phone what third parties, companies for phone records, brokerage firms for brokerage records); and ~ where the original electronic and hardcopy documents are maintained and by whom. I have attached a Declaration Ceitifying Records; execution of the declaration may allow the Commission to introduce documents provided by MGT in a judicial proceeding, without requiring the testimony of your custodian of records should the documents be required at trial lFhat if'o not send eve&ydiing described in the attaclinient to the subpoena7 The subpoena requires you to send all the materials described in it. If, for any reason— including a claim of attorney-client privilege —you do not produce something called for by the subpoena, you should submit a list of what you are not producing, The list should describe each item separately, noting: ~ its author(s); ~ its date; ~ its 'subject rnatter; ~ the name of the person who has the item now, or the last person known to have it; ~ the names of everyone who ever had the item or a copy of it, and the names of everyone who was told the item's contents; the reason you did not produce the item; and ~ the specific request in the subpoena to which the document relates. If you withhold anything on the basis of a claim of attorney-client privilege or attorney work product protection, you should identify thc attorney and client involved. If you withhold anything on the basis of the work product doctrine, you should also identify the litigation in anticipation of which the document was prepared. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 4 of 15 If documents responsive to this subpoena no longer exist because they have been lost, discarded, or otherwise destroyed, please identify such documents and give the date on which they were lost, discarded or destroyed. Il'here should I send the materia(s7 Please send the materials to: ENF-CPU V.S. Securities and Exchange Commission 100 F St., N.E., Mailstop 5973 Washington, DC 20549-5973 For smaller electronic productions under I 0MB in size, the materials may be emailcd to the following email address: ENF-CPUT'i&sec.~&ov. Other Important Information May I /tave a lawyer Itelp me respond to tlie sitbpoenaP Yes. You have the right to consult with and be represented by your own lawyer in this matter. We cannot give you legal advice. 5'hat will the Commission do willt the &naterials I sends The enclosed SEC Forin 1662 includes a List of Routine Uses of information provided to the Commission. This form has other important information for you. Please read it carefully. IIas the Commission determined that anyone has done anything ivrongv This investigation is a non-public, fact-finding inquiry. We are trying to determine whcthcr there have bccn any violations of the federal securities laws. 1 he investigation and the . subpoena do not mean that we have concluded that you or anyone else has broken the law. Also, the investigation does not mean that we have a negative opinion of any person, entity or security. Important Policy Concerning Settlements Please note that, in any matter in which enforcement action is ultimately deemed to bc warranted, the Division of Enforcement will not recommend any settlement to the Commission unless the party wishing to settle certifies, under penalty of perjury, that all documents responsive to Conunission subpoenas and formal and informal document requests in this matter have been produced. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 5 of 15 f have read this letter, the subpoena, and the SEC f'orm f 662, but f still have questions. What should f do? If you have any questions or would like to discuss this matter, you may call me at (212) 336-0170 or Assistant Regional Director Michael Paley at (212) 336-0145. If you are rcprcscntcd by a lawyer, you should have your lawyer contact me. Sincerely, Katherine S. Bromberg Senior Counsel Division of Enforcement Enclosures: Subpoena and Attaclunent SEC Data Delivery Standards SEC Form 1662 Business Records Certification Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 6 of 15 SUBPOENA UNITED STATES OF AMERICA SECURITIES AND EXCHANGE COMMISSION NY-09507 To: MGT Capital Investments, Inc. 500 Mamaroncck Avenue, Suite 204 Hamson, NY 10528 YOU MUST PRODUCE everything specified in the Attachment to t)us subpoena to officers of the Securities and Exchange Commission, at the place, date and time specified below: ENF-CPU, U.S. Securities and Exchange Commission, 100 F St., N.E., Mailstop 5973, DC 20549-5973, no later than September 28, 2016 at 5:00 p.m. Washington, YOU MUST TESTIFY belbrc officers of the Securities and Exchange Commission, at the place, date and time specified below: FEDERAL LAW REQUIRES YOU TO COMPLY WITH THIS SUBPOENA., Failure to comply may subject you to a fine and/or imprisonment. By: Date: Sentember 14.~201 Katherine S. Bromberg Senior Counsel Division of Enforcement New York Regional Office Brookfteld Place 200 Vesey Street, Suite 400 New York, New York 10281-1022 1am an officer of thc U.S. Securities and Exchange Conunission authorized to issue subpoenas in this matter. The Securities and Exchange Commission has issued a forrnal order authorizing this investigation under Section 20(a) of the Securities Act of 1933, Section 21(a) of the Securities Exchange Act of 1934, Section 209(a) of thc Investment Advisers Act of 1940, and Section 42(a) of the Investment Company Act of 1940. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 7 of 15 SUBPOENA ATTACHMENT FOR MGT Capital Investments, Ine. September 14, 2016 NY-09507 A, Definitions As used in this subpoena, the entities listed below shall have the following meanings: l. Alpha Capital Anstalt ("Alpha" ) means the entity doing business under thc name "Alpha Capital Anstalt" including parents, subsidiaries, affiiliatcs, predecessors, successors, officers, directors, employees, agents, gcncral partners, limited partners, partnerships and aliases, code names, or trade or business names. used by any of the foregoing. 2. ATG Capital, LLC ("ATG") means the entity doing business under thc name "ATG Capital, LLC" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. D-Vasive, Inc. ("D-Vasivc") means the entity doing business under the name "D-Vasivc, Inc." including parents, subsidiaries, aAiiiates, predecessors, successors, officers, directors, einployees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. Demonsaw LLC ("Demonsaw") means the entity doing business under thc name "Demonsaw LLC" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. Graiider Holdings, Inc. ("Grander" ) means the entity doing business under tile name "Grander Holdings, Inc." including parents, subsidiaries, affiliates, predecessors, successors, offiiccrs, directors, employees, agents, general partners, limited partners, parlnerships and aliases, code names, or trade or business names used by any of the foregoing. GRQ Consultants, Inc. means the entity doing business under the name "GRQ Consultants" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 8 of 15 I IS Contrarian Investments LLC ("HS Contrarian") means the entity doing business under the name "HS Contrarian Investments LLC" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, hmited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing, Iroquois Capital Managcmcnt LLC ("iroquois" ) means the entity doing business under the name "iroquois Capital Management LLC" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. "LFR Trust" ("LFR")means the entity doing business under the name "LFR "I'rust" including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. 10. "Melechdavid, Inc." ("Melechdavid") means the entity doing business under the name "Melechdavid, Inc." including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. "MGT Capital Investments, Inc." ("MGT") means the entity doing business under thc name "MGT Capital Investmcnts, Inc," including parents, subsidiaries, affiliates, predecessors, successors, officers, dircc(ors, employees, agents, general partners, limited partners, partnerships and aliases, code narncs, or trade or business names used by any of the foregoing. Stetson Capital Investments„ lnc. ("Stetson'Capital") means the entity doing business under the name "Stetson Capital Investments, Inc." including parents, subsidiaries, affiliates, predecessors, successors, officers, directors, employees, agents, general partners, limited partners, partnerships and aliases, code names, or trade or business names used by any of the foregoing. As used in this subpoena, the words and phrases listed below shall have thc following meanings: 13. "Person" means a natural person, firm, association, organization, partnership, business, trust, corporation, bank or any other private or public entity. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 9 of 15 A "Representative" of a Person means any present or former family members, officers, executives, partners, joint-venturers, directors, trustees, employees, consultants, accountants, attorneys, agents, or any other representative acting or purporting to act on behalf of the Person. "Document" shall include, but is not limited to, any written, printed, or typed matter including, but not limited to all drafls and copies bearing notations or marks not found in the original, letters and correspondence, interoffice Communications, slips, tickets, records, worksheets, financial records, accounting documents, bookkeeping documents, memoranda, reports, manuals, telephone logs, telegrams, facsimiles, messages of any type, telephone messages, voice mails, tape recordings, notices, instructions, minutes, summaries, notes of meetings, file folder markings, and any other organizational indicia, purchase orders, information recorded by photographic process, including microfilm and microli«he, computer printouts, spreadsheets, and other electronically stored information, including but not limited to writings, drawings, graphs, charts, photographs, sound recordings, images, and other data or data compilations that are stored in any medium from which information can be retrieved, obtained, manipulated, or translated. '"Communication" means any correspondence, contact, discussion, e-mail, instant message, or any other kind of oral or written exchange or transmission of information (in the form of facts, ideas, inquiries, or otherwise) and any response thereto between two or more Persons or entitics, including, without liinitation, all telephone conversations, face-to- face meetings or conversations, internal or external discussions, or exchanges of a Document or Documents, "Concerning" ineans directly or indirectly, in whole or in part, describing, constituting, evidencing, recording, evaluating, substantiating, conccming, referring to, alluding to, in connection with, commenting on, relating to, regarding, discussing, showing, describing, analyzing or reflectin. Thc term "you" and "your" means the Person or entity to whom this subpoena was issued, To the extent necessary to bring within thc scope of this subpoena any information or Documents that might otherwise be construed to be outside its scope: the word "or" means "and/or"'; the word "and" means "and/or"; the functional words "each," "every" "any" and "all" shall each be deemed to include each of the other lunctional words; Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 10 of 15 d. the masculine gender includes the female gender and the female gender includes the masculine gender; and e. thc singular includes the plural and the plural includes the singular. Instructions Unless otherwise specified, the subpoena calls for production of the original Documents and all copies and drafls of same. Documents responsive to this subpoena may be in electronic or paper form. Electronic Documents such as email should be produced in accordance with the attached Document entitled SEC Data Delivery Standards. All electronic Documents responsive to the Document subpoena, including all metadata, should also be produced in their native soflware format. For Documenis in paper format, you may send the originals, or, if you prefer, you may send copies of the originals. The Comnussion cannot reimburse you for the copying costs. If you are sending copies, the staff requests that you scan (rather than photocopy) hard copy Documents and produce them in an electronic format consistent with the SEC Data Delivery Standards. Alternatively, you may send us photocopies of the Documents in paper format. If you choose tn send copies, you must secure and retain the originals and store them in a safe place. The staff may later request or require that you produce the originals. Whether you scan or photocopy Documents, the copies must be identical to thc originals, including even faint marks or print. Also, please note thai if copies of a Document differ in any way, they arc considered separate Documents and you must send each one. For example, if you have two copies of the same letter, but only one of them has handwritten notes on it, you must send both the clean copy and the one with notes. In producing a photocopy of an original Document that contains post-it(s), notation flag(s), or other removable markings or attachments which may conceal all or a portion of the markings contained in the original Document, photocopies of thc original Document both with and without the relevant post-it(s), notation flag(s), or removable markings or attachments should be produced. Documents should bc produced as they are kept in the ordinary course of business or be organized and labeled to correspond with the categories in this request. In that regard, Documents should be produced in a unitized manner, i.e., delineated with staples or paper clips to identify the Document boundaries. Documents should be labeled with sequential numbering (bates-stamped). Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 11 of 15 7. You are not required to produce exact duplicates of any Documents that have bccn previously produced to the Securities and Exchange Commission staff in connection with this matter. If you are not producing Documents based upon a prior production, please identify the responsive Documents that were previously produced.'. For any Documents that qualify as records of regularly conducted activities under Federal Rulc of Evidence 902(1 I), please complete a business records certification (a sample of which is enclosed) and return it with the Document production. This subpoena covers all Documents in or subject to your possession, custody or control, including all Documents that are not in your immediate possession but that you have the effective ability to obtain, that are responsive, in whole or in part, to any of the individual requests set forth below. If, for any reason —including a claim of attorney-client privilege- you do not produce something called for by the request, you should submit a list of what it is not producing. The list should describe each item separately, noting: its author(s); b. its date; c its subject matter; d. the name of the Person who has the item now, or the last Person known to have it; thc names of everyone who ever had thc item or a copy of it, and thc names of everyone who'was told the item's contents; thc basis upon which you are not producing the responsive Document; the specific request in the subpoena to which the Document relates; thc attorney(s) and the client(s) involved; and in thc case of thc work product doctrine, the litigation for which the Document was prepared in anticipation. 10. If Documents responsive to this subpoena no longer exist because they have been lost, discarded, or otherwise destroyed, you should identify such Documents and give the date on which they were lost, discarded or destroyed. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 12 of 15 C. Documents to be Produced Documents sufficient to identify all principals, officers, directors, shareholders and other persons with a direct or indirect beneficial ownership interest in, or who have exercised direct or indirect control over, MGT. All MGT press releases during the Relevant Time Period. All organizational charts or other Documents sufficient to identify the names, titles, responsibilities, and last known home addresses and telephone numbers of the management of MGT. All Documents and Communications Concerning MGT quarterly and annual reports and financial statements from the time period of 2013- present, including but not limited to Forms 10-K and 10-Q and any other filings with the SEC or disseminated to shareholders or potential purchasers of MGT stock, and draAs thereof. Documents sufficient to identify by last known home address and telephone number, all members of MGT's Board of Directors. Documents Concerning MGT's Board of Directors'eetings, including but not limited to meeting minutes (including drafts), notes, agendas, and lists of attendees. All Documents Concerning any relationship or Communications between MGT and any individual or entity engaged in the marketing, offering, promotion and/or sales of MGT's common stock during the Relevant Time Period. All Documents and Communications Concerning the issuance of MGT stock, including without limitation documents rcflecting the dates and amounts of stock issued, including, but not limited to, all Communications with any transfer agent Concerning the issuance of MGT stock. All Documents and Communications with broker-dealers Concerning MGT. 10. All Documents and Communications Concerning MGT's acquisition of ceitain technology and assets of D-Vasive, as stated in MGT's Form 8-K filed on May 9, 2016. All Documents and Communications Concerning the drafting, editing, review and approval of MGT's Form 8-K filed on May 9, 2016. All Documents and Communications Concerning the paid promotion made by MGT for $ 125,000 for a two-month contract May 6, 2016 —July 5, 2016 as disclosed by Stock Beast on May 9, 2016. 13. Copies of all statements for all bank accounts in the name ol'MGT or over which MGT had any control at any time during the Relevant Period. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 13 of 15 14. Copies of all offering documentation, subscription agreemcnts, investment contracts, purchase agreements and promissory notes relating to all investment transactions Concerning MGT, including but not limited to, any fundraising activities, private securities transactions, investment banking deals, unregistered offerings, private placements, bridge loans, debentures, partnership interest, funds, equity and/or debt financing. 15. All Documents Concerning strategic business plans, business models or planning documents created by or on behalf of or Concerning MGT during the Relevant Period. 16. All Documents and Communications Concerning any complaints (formal or informal) from clients, investors or others received during the period from January 1, 2014 through the present. 17. Documents sufficient to identify the entity or individuals responsible for creating or maintaining the MGT website found at http: //www.mgtci.corn/. 18. Documents sufficient to identify the entity or individuals who draAed any portion of text on MGT's websitc or reviewed the content before it was posted. All Documents and Communications between MGT and the following entities: a. Alpha; b. ATG; c. D-Uasive; d. Deinonsaw; e. Grander; f. HS Contrarian; g. Hudson Bay; h. iroquois; i, LFR; j. Melechdavid; and k. Stetson Capital. 70. All Docuinents and Communications between iVJGT and the following individuals: a. Michael Brauser; b. Jolm H. Ford; c. Barry Honig; d. Mark Groussman; Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 14 of 15 e. John Sandor Lemak; f. John R. O'ourke III", g. Josh Silverman; h, John Stetson; and i. Jill Strauss. Case 1:17-cv-00184 Document 1-2 Filed 03/03/17 Page 15 of 15 EXHIBIT C Case 1:17-cv-00184 Document 1-3 Filed 03/03/17 Page 1 of 5 This is Google's cache of htlp://www.teribuhl com/201 6/09/23/investor-barry-honlg-target-of-sec-mgt-capital- subpoerta/ If is a snapshol of the page as if appeared on Sep 23. 2016 19:11:24 GMT. The current page could have changed in the meantime. Learn more Full version Text-only version View source Tip- To quickly find your search term on this page, press Ctrl+F or 3§-F (Mac) and use the find bar. TERI BUHL J4 k •/ Smashmouth Investigative Journalism Menu Investor Barry Honig Target of 23 Sep SEC MGT Capital Subpoena Mierocap investor Barry C. 1 lonig is the target of an SEC investigation for his role in trading and investing in shares of MGT Capital ($MGT). MGT Capital is trying to complete a reverse merger with famed tech entrepreneur John McAfee. 1 am reporting exclusive news today for Growth Capitalist on what's inside the Securities and Exchange Commission subpoena MGT Capital announced was served on them late last wpok Document title: Investor Barry Honig Target of SEC MGT Capital Subpoena Capture URL' hltp://webcache.googleuserc;ontent.com/search?q=cache:sYmEubfKACEJ:www.t9ribuhl.com/2016/09/23/investor-barry-hanig-larget-of-sec-... Capture llmeslamp (UTC): Fri, 23 Sep 2016 21:44:58 GMT Page 1 of 1 1 Case Case 1:17-cv-00184 1:17-cv-001 Document 1-3 Filed 03/03/17 Page 2 of 5 Microcap investor tsarry l. i lonig is tne target or an investigation ror his role in trading and investing in shares of MGT Capital ($MGT). MGT Capital is trying to complete a reverse merger with famed tech entrepreneur John McAfee. I am reporting exclusive news today for Growth Capitalist on what's inside the Securities and Exchange Commission subpoena MGT Capital announced was served on them late last week. News of the SEC formal demand for answers from the company delighted short sellers to the tune of a 40% drop in MGT's stock this week. The company, currently run by CEO Robert Ladd, says it does not believe the SEC is targeting any of the company executives. But shareholders have expressed doubt this week given the lack of details the company was allowed to disclose about the regulatory investigation. On top that the NYSE, where MGT trades, announced it wouldn't accept the new shares that are set to be issued in the reverse merger with John McAfee's cyber security companies. The national stock exchange was kind ofjerk about it because they didn't offer up a reason for the share issuance halt. Unfortunately, it's a big clusterf-k of unknowns for the company and shareholders right now. But one tiling that my reporting makes very clear is the SEC wants to make sure Barry I lonig isn't' doing anything shady (or out right illegal) with this company. According to insiders who saw the SEC subpoena, 90% of the regulator's questions are about 1 lonig. I can also confirm I lonig lias been calling SEC enforcement defense lawyers this week looking for representation. 1 first reported on 1 ionig's alleged illegal actions in my "Attorney Gregg Jaclin blew up his life and got busted for creating a shell factory scheme" story. The central theme of bad behavior is Barry uses other people to run a company he is secretly controlling and Document title: Investor Barry Honig Target of SEC MGT Capital Subpoena Capture URL: http:/Avebcache.googleusercontent.com/search?q=cache:sYniEubfKACEJ:www,terlbuhl.com/2016/09/23/investar-barry-honig-target-of-sec-.,. Capture tlmeslamp (UTC): Frl, 23 Sep 2016 21:44:58 GMT Page 2 of 1 1 Case Case 1:17-cv-00184 1:17 Document 1-3 Filed 03/03/17 Page 3 of 5 90% of the regulator's questions are about 1 Ionig. 1 can also confirm 1 Ionig has been calling SEC enforcement defense lawyers this week looking for representation. 1 first reported on I lonig's alleged illegal actions in my "Attorney Gregg Jaclin blew up his life and got busted for creating a shell factory scheme" story. The central theme of bad behavior is Barry uses other people to run a company he is secretly controlling and pays stock pumpers to tout the company without disclosure. You can see here in a DOJ plea deal made by one of 1 lonig's puppet CEO's how 1 Ionig allegedly runs things behind the scene. This plea deal was first reported and unearthed by me in a story for Growth Capitalist m May. The SEC has never been able to pin anything on I ionig. We do see a FINRA action settled against him as a young trader in 2000 when he was working for a questionable PIPE financing firm called Ramius Capital (or Ramius Securities). On June 14 2000 FINRA said I Ionig had acted as an affiliate trading with others and hid it by running the trade through two people instead of one. Barry Charles 1 Ionig (CRD #2262713, Registered Representath e. New ) oi k, New York) submitted a better of Acceptance, Waiver, and Consent in w hich he was fined $25,000 and suspended from association with any NASD member in any capacity for 10 business days. Without admitting or denying the allegations, I Ionig consented to the described sanctions and to the entry of imdings that he sought to inappropriately coordinate a trade report to ACT with another market participant as two separate trades instead ofone. Document title. Investor Barry Honig Target of SEC MGT Capital Subpoena Capture URL: http://webcache.googleuserconle!nt.c:om/search?q=cache:sYmEubfKACEJ:www.teribuhl.com/2016/09/23/lnveslor-barTy-honig-target-of-sec-... Capture tlmeslamp (UTC): Fri, 23 Sep 2016 21:44:58 GMT Page 3 of 1 1 Case Case 1:17-cv-00184 1:17-cv-0 Document 1-3 Filed 03/03/17 Page 4 of 5 capacity for 10 business days. 11 it bout admit ling or denying the allegations, Ifonig consented to the described sanctions and to the entry offindings that he sought to inappropriately coordinate a trade report to ACT with another market participant as two separate trades instead ofone. i lonig lias a SEC deal lawyer, 1 larvey Kesner at www.siff.com . who lias been able to keep the SEC at bay in tons of questionable pump and dump deals 1 lonig invested in. I know from interviewing MGT's executives and reviewing I lonig's financing transactions that he wasn't a control person at MGT. CEO Rob Ladd, who use to run a hedge fund, put blockers in Barry's finance deal that don't allow him to own a certain percent of the company. What we don't know is whether Barry teamed up with his favorite investing partner Michael Brauser and acted as an affiliate in trading MGT stock, which blew up to a 700% gain when news of a John McAfee merger was announced in May. Affiliate trading without disclosure is a big SEC no-no, which 1 explain my story today at www.growthcapitlist.com For now it's a wait and see as MGT scrambles to get the SEC to clarify to stock exchanges that the reverse merger deal is clean. And market participants sit on the side line to see if the SEC can get the goods to finally charge Barry I lonig. Share this: II Share 3 ¦ tweel Ijn Share 1 G+1 0 No Comments O Document title: Investor Barry Honlg Target ot SEC MGT Capital Subpoena Capture URL: htlp:/Avebcache.gaogleusercontent.comfeearch?q=cache:sYrnEiibtKACEJ:www.terlhuhl.eom/2016/09/23/investor-barty-honig4arget-of-sec-... Capture tlmestamp (UTC): Frt, 23 Sep 2016 21:44:58 GMT Page 4 of 1 1 Case Case 1:17-cv-00184 1:17-cv-0018 Document 1-3 Filed 03/03/17 Page 5 of 5 EXHIBIT D Case 1:17-cv-00184 Document 1-4 Filed 03/03/17 Page 1 of 6 r ' TERI BUHL ——— Smasj imouti i Investigative Journalism Mure Search tins website ... Investor Barry Honig Subject of 23 Sep Donate with PayPal SEC MOT Capital Subpoena Donate This story Ius been updated Youi Voice Microcap investor Barry C. Honig is a lead subject of an SEC investigation for his rote in trading and investing in shares of MOT Capital ($MGT). California DOJ Investigating MQff Capital is trying to complete a reverse merger With tamed teeh Homg and The Frost Group entrepreneur John McAfee I am reporting exclusive news today tor on Investor Barry Honig Subject of Growth Capitalist on what's inside t he Securities and Exc hange SEC MGT Capital Subpoena Commission subpoena MOT Capital announced was lobbed against them late last week (tipped of Investor on investor Barry Honiq Subject of SEC MOT.Capital Subpoena News of the SEC formal demand for answers from the company delighted short sellers to t he tunc of a 40% drop in MGT's stock. The Fellow Researcher on company, currently run by CEO Robert Ladd, says it does not believe the SEC knew Collecting SUIT; met Hedgie Ribotsky fine Would Fail SEC is targeting any of the company executives. But shareholders have expressed doubt this week given the kick of details the company was johu Miller on allowed to disclose about the regulatory investigation. On top that the Hacked By XwoLfTn NYSE, where MGT trades, announced it wouldn't accept the new shares that are set to he issued in the reverse merger with Johi i McAfee's cyber John Miller on Hacked By XwoLfTn security companies. The national stock exchange was kind of a jerk about it because they didn't offer up a reason for the share issuance halt. Unfortunately, it's a big clusterf-k of unknowns for the company and shareholders right now. State v Buhi But one tl hug that my reporting makes very clear is the SEC wants to Learn How Connecticut make sure Barry Honig isn't' doing anything shady (or out right illegal) Wants to Jail Me For with this company. According to insiders who saw the St'C subpoena, a Protection Sources and Document title* Investor Barry Honig Subject of SEC. MGT Capital Subpoena Capture URL: hUpyA«wtv.lerlbuhLcoin/201C/00/23/investor-bariy-honiy-tarrjet-of-SGc-nigt-i:npital"SUbpofm3/ Capture tlmestainp {UTCji Frl, 2.4 Feb 2(117 1 7:1 2:42 GMT Page 1 of 9 Case 1:17-cv-00184 Document 1-4 Filed 03/03/17 Page 2 of 6 •> I 1^1 It- • »u State v. Buhl But one thing thdt my reporting makes very clear is the SEC wants to Learn How Connecticut make sure Barry Honig isn't' doing anything shady (or out right illegal) Wants to Jail Me Lor with this company. According to insiders who saw the SEC subpoena, a Protecting Sources and large portion of the regulator's questions are about Honig, his company Squash Speech GRQ Consultants, and people who invest with him. I can also confirm Honig has been calling SEC enforcement defense lawyers this week Read More » looking for representation. I first reported on Honig's alleged illegal actions in my "Attorney Gregg Jaclin blew up his life and got busted for creating a shell factory scheme" story this Spring. The central theme of alleged bad behavior is Barry uses other people to run a company he is Teri Buhl in the News secretly controlling and indirectly pays stock pumpers to tout the company without disclosure. W You can see here in a DOJ plea deal made by one of Honig's alleged puppet CEOs how Honig allegedly runs things behind the scene, '['his plea deal was first reported and unearthed by me in a story for Growth Capitalist in May. Reiser Report: Stripped To Teeth (L2 92) The SEC has never been able to pin anything on Honig. We do sec a HNRA action settled against him as a young trader in 2000 when he was working for a questionable PIPE financing firm called Ramius Capital (or More Videos Ramius Securities). On June 14, 2000 FINRA said I lonig had acted as an affiliate trading with others and hid it by running the trade through two people instead of one. Trusted News Christopher Fountain: Best Source of Greenwich, CT News Harry Charles Honig (CNl) #2t627l'i, Kegistemd Keprcsentath c, Nen York, New ) ork) submitted a l etter of Ian Fraser: Investigative UK Financial Journalist Acceptance, Waiver, and Co/went in which he nv/s fined $2S.00U and suspended h orn association with any NASD member in any On the Case: Alison Frankel capacity tor JO business days. Without admitting or denying tin RT Kesier Report allegations, Honig consented to the described sanctions and to the entry offindings that he sought ti > inappropriate!) coordinate a trade report to AC T with another market participant as two separate trades instead ofone. Honig has a SEC deal lawyer, Harvey Kesncr at www.srff.com . who apparently has been able to keep the SEC at bay in tons of questionable pump and dump deals Honig invested in. i know from interviewing MGT's executives and reviewing Honig's financing transactions that he Document title: Investor Barry Honig Subject of SEC MGT Capital Subpoena Capture URL: http://www.teribuhl.com/2016/09/23/investor-barry-honig-targelof-sec-mgt-capilal-subpQena/ Capture timestamp (UTC): Frl, 24 Feb 2017 17:12:42 GMT Page 2 of 9 Case Case 1:17-cv-00184 1:17-cv-00184 Document D 1-4 Filed 03/03/17 Page 3 of 6 Honig has a SEC deal lawyer, Harvey Kesner at wvvvv.srfF.com , who apparently has been able to keep the SEC at bay in tons ofquestionable pump and dump deals Honig invested in. I know from interviewing MGT's executives and reviewing Honig's financing transactions tbat he wasn't a control person at MO T CEO Rob Ladd. who used to run a hedge fund, put blockers in Barry's finance deal that don't allow him to own a certain percent of the company. What we don't know is whether Barry teamed up with his favorite investing partner Michael Brauser and acted as an affiliate in trading MOT stock, which blew up to a 700% gain when news of a John McAfee merger was announced in May. Affiliate trading without disclosure is a big SEC no-no, which I explain my story today at vvww.grovvthcapitlist.com. Honig through his attorney did not return a request for comment. For now it's a wait and see as MOT scrambles to get the .SEC to clarify to stock exchanges that the reverse merger deal is clean. And market participants sit on the side line to see if the SEC can get the goods to finally charge Barry Honig. Clarification 9.23.16: Burr)' Honig is pulling out the big leg.il guns apparently worried about anyone reporting on what's inside that SBC subpoena. As of '5:30pm I was contacted by a California attorney, Charles I larder ( who repped Hulk Hogan), for Honig demanding to have the story taken down and to write an apology. I refused and stand by the sourcing in this story. I have spoken with people who have seen the subpoena again and clarified a sentence in the story that relates to a large portion ofthe SBC's questions are centered on Barry Honig, his company and people he invest with. The original sentence said "90% ofthe SBC questions are about Barry Honig. "Additionally, Honig had ft vo days to respond to questions about the subpoena before the story ran and refused to return a call and email for comment. Update 10.7.16: One of the sentences in this story that Barry Honig has denied through his attorney Charles Harder is that he invest with Michael Brauser. Harder wrote in item II 9 in his demand letter they sent me to get the story taken down: "Implication that Mr. Honig "teamed up with his favorite investing partner Michael Brauser". False; the two have not teamed up." I'd like to take the chance to remind readers of this 2012-2013 litigation against Barry Honig, Michael Brauser, and the Brauser Honig Frost Group for their role in Biozone Pharmaceuticals, Inc. It was filed by the O Document title: Investor Barry Hnnlg Subject of SEC MGT Capital Subpoena Capture URL: btlp:/Avww.teribuhl.com/2016/09/23/investor-barry-honlg-target-of-sec-mgt-capltal-subpaena/ Capture timestamp (UTC): Frl, 24 Feb 2017 17:12:42 GMT Page 3 of 9 Case Case 1:17-cv-00184 1:17-cv-0018 Document 1-4 Filed 03/03/17 Page 4 of 6 I'd like to take the chance to remind readers of this 2012-2013 litigation against Barry Honig. Michael Brauser, and the Branser Honig Frost Group for their role in Biozone Pharmaceuticals, Inc. It was filed by the company's former founder Daniel Fisher. This is from Fisher's amended complaint filed in Northern California District Court on 11.22.12 . Case number 3:I2-cv-037l6-\VHA "In January 201 1. Plaintiff Fisher met with a group of investors, the Defendant representing itself as Brauser Honig Frost Group ("BHFG"). Overthe course of the following six months, this group of investors misled Plaintiff Fisher through an investment scheme designed to divest Plaintiff of all of the economic rights and goodwill he had built through his company over the course ofthe previous 22 years." After Fisher beat their motion to dismiss and the case moved into discovery we see the case was settled with the defendants paying Daniel Fisher half a million dollars. And that's just one reason why I stand behind my reporting, opinion, and sourcing in this or any story of mine on Barry Honig! UPDATE 11.4.16 : 1 have filed a letter to the federal judge in Honig's lawsuit against me that you can read here. Honig used a process server who lied in an affidavit that he served me. I have video to prove he is lying. Additional. I informed the judge Honig asked MGT Capital CEO Hob Ladd to call me and set up a private 'off books' meeting. A move that is pretty much a no-no legal tactic given he sued me. His lawyers arc supposed to be the ones to contact me. I obviously said no to the meeting and told Rob Ladd if Mr. Honig wants to speak to me and comment on any of my reporting he can call me through his attorneys - he has enough of them. This secret meeting tactic is something I have learned he has used in other litigation... it feels like the purpose is to try and figure out if I am going to give up names of my story sourcing. I still need a pro bono lawyer to go up against Hulk Hogan's attorney Charles Harder. Honig apparently tried to hire Harder (an expensive lawyer who has been in the news for his anti-journalism legal work) to scare me into stoping reporting and it didn't work. If you are interested e Document title: Investor Barry Honig Subject ot SEC MGT Capital Subpoena Capture URL: http://www.t0rlbuhl.com/2O1 (i/09/23/investor-barry-honIg-target-of-sec-mgt-capilal-subpoena/ Capture timestamp (UTC): Fri, 24 Feb 2017 17:12:42 GMT Page 4 of 9 Case Case 1:17-cv-00184 Document 1-4 Filed 03/03/17 Page 5 of 6 i still need a pro bono lawyer to go up against Hulk Hogan's attorney Charles Harder. Honig apparently tried to hire Harder (an expensive lawyer who has been in the news for his anti -journalism legal work) to scare me into stoping reporting and it didn't work. If you arc interested in this easy to win suit please email mc at
[email protected]. I've been told NY laws make it favorable to sue back for attorney fees in NY court and this is an easy case to win given my sourcing and the fact a lot of what I wrote here is opinion. Donations are also helpfully now in case I have to defend my self pro se. UPDATE 1-10-17: I've secured a top first amendment lawyer to represent me pro- bono. Chuck Tobin of Holland & Knight filed last week in Manhattan Federal Court to he lead counsel. We have till February 10th to file a response to Honig's claim. I would like to thank Holland & Knight for stepping up and defending the rights of a freelance journalist. UPDATE 2-21-17:Barry Honig voluntarily withdrew his lawsuit against me on February 8th. This was two days before my attorneys were due to file our motion to dismiss and we were given no warning or nonce of why the suit was being dropped. I thought the litigation was over but now it looks like Honig and his attorney Charles Harder were just making a move to judge shop because today I got a repeat retraction letter asking again to take down my reporting and apologize. It's my expectation that team Honig will just refile their suit in another court or another state which means the bullying of this journalist for reporting on a matter of public concern continues. Sliare ihjs: II Shut U G»1 0 ! delated I lore it is: that MOT Capital (. aliftimia DO] IriHjttttK Capital's |nsh SEC Subpoena Investigating 1 lonig aotl Silverman Threatens f'ebrnary 9.2017 The Prosit Group Portfolio Stock CX.O I ti "Bjnksti rs Behaving l obulars 9,2017 (tint 11.2011 Barflv In *B<iiik»tcrs Behaving lit "B.mksters Itohav ing Barfly Barfly* 10 Comments e Document title: Investor Barry Honig Subject ol SEC MGT Capital Subpoena Capture MRU: http://www.teribulil.com/2016/09/23/lnvestor-barry-honlg-targel of-sec-mgl-capilal-subpoena/ Capture timeslamp (UTC): Fri, 24 Feb 2017 17:12:42 GMT Page 5 of 9 Case Case 1:17-cv-00184 1:17-cv-00184 Document 1-4 Filed 03/03/17 Page 6 of 6 EXHIBIT E Case 1:17-cv-00184 Document 1-5 Filed 03/03/17 Page 1 of 3 - I i TERI BUHL Smashmouth Investigative Journalism ji Home About Contact ^ Search this website ... California DO] investigating 8 Nov Donate with PayPal Honig and The Frost Group U Donate. The northern California DOJ has been sniffing around asking tough questions about the investing activities of a billionaire, Phillip Frost, a Your Voice former boxer turned investor and stock promoter Harry Honig and Honig's pal Michael Brauscr. California DOJ investigating Honig and The Frost Group "The FBI told me when they interviewed me they arc investigating Honig, on . j Investor Barry Honig Subject of Brauser, and Frost," said a person who has done business with what was SEC MGT Capital Subpoena called The Frost Group and ask for anonymity. A term sheet seen by this reporter shows all three men were in on a deal called Biozonc. Megan Schugart on Hedgie Greg lmbruce Found Guilty of Civil Theft Against This reporter has seen a letter from the FBI that states this person is a Investors potential victim of securities fraud. This person says the only securities they have arc with the Frost Group's takeover of Biozonc. A check in the Terl Buhl on Investor Barry Honig Subject of FBI's victim notification systems, seen by this reporter this week, shows SEC MGT Capital Subpoena the investigation is still active but doesn't list specifically who the FBI is investigating. C Mann on Investor Barry Honig Subject of SEC MGT Capital Subpoena The investor said they had also been interviewed by the Securities and Exchange Communion about their interactions in public companies with SKon Barry Honig, his lawyer Harvey Kesner, and others the regulator thinks Investor Barry Honig Subject of SEC MGT Capital Subpoena invest with Honig. Harvey Kesner, Honig's deal lawyer, recently became a named partner at a law firm that is very active in the microcap stock market called State v. Buhl Sichenzia Ross Friedman Fcrcnce LLP's. He replaced Richard Friedman who suddenly left SRFF w ith his team to inin another firm last month. Uaiii Document title' California DOJ investigating Honig and The Frost Group Capture URL: http://www.terlbuhl.eom/2016/1 1/08/california-do|-invasligating-honig-and-the-frost-group/ Capture timestamp (UTC):Wed, 09 Nov 2016 15:36:56 GMT Page 1 of 4 Case Case 1:17-cv-00184 1: Document 1-5 Filed 03/03/17 Page 2 of 3 uitt i v j iti^ ictw^cri i vc) iwsi ici . rtiiu uliiwi a u tc iir^uidiui ouimb -* j y - -.-J — - SEC MOT Capital Subpoena invest with Honig. Harvey Kcsncr, Honig's deal lawyer, recently became a named partner at a law firm that is very active in the rnicrocap stock market called State v. Buhl Sichenzia Ross Friedman Ference LLP's. He replaced Richard Friedman who suddenly left SRFF with his team to join another firm last month. Learn How Connecticut Wants to Jail Me For Rumors have been swirling around the legal field for a while now that Protecting Sources and Kesner's work with Honig could place him under investigation of the Squash Speech SEC but until now no one has come forward to say they have been interviewed by the SEC about Kcsner. Kcsner has not been named Read More » publicly in any SEC enforcement actions, A check in SEC filings shows that Kcsner is also a control person at a stock transfer company named Equity Stock Transfer. His wife, Rence, is Teri Buhl in the News listed as the owner since April 1st 2014, according the company's Form TA-L Harvey is listed on the SEC form as providing working capital to the company from time to time and is listed as having control over ,«r. management through "CMBS Document Solutions LLC. Harvey Kesner. Manager; Paradox Capital Partners LLC, Harvey Kcsner, Manager". A partner in a law firm that does transaction investing in rnicrocap companies, who also owns a stock transfer company, which has done Keiser Report: Stripped To business with companies his big client, Barry Honig, invested in could he Teeth (E292) considered a conflict of interest. More Videos The CEO of Equity Stock Transfer is Mohit Bhansali. The company avoids listing any names of executives or owners on it's website. A search in corporate records of publicly traded companies shows Mohit and Barry Honig have both been on the hoard of public companies together. Trusted News If you are an issuer who has taken investments from Barry Honig and it Christopher Fountain: Best Source of Greenwich, CT News was suggested you use Equity Stock Transfer by Flonig or his lawyer I would love to hear from you. Ian Fraser: Investigative UK Financial Journalist An email for comment was sent to Harvey Kesner and Honig's media On the Case: Alison Frankel lawyer Charles Harder. As of press time they did not respond. Honig in RT Kesier Report the past has tried to deny he invest with Michael Brauscr or that he is under any SEC investigation. Share thic f] Share if?] * Vrrt I i p Shar* 1 G'l 0 © I Related Document title: California DOJ investigating Honig and The Frost Group Capture URL: http://www.terihuhl.com/2016/11/Q8fcalifornla-doJ-lnvestigating-honlg-and-the-frost-group/ Capture timestamp (UTC): Wed, 09 Nov 2016 15:36:56 GMT Page 2 of 4 Case Case 1:17-cv-00184 1:1 Document 1-5 Filed 03/03/17 Page 3 of 3 EXHIBIT F Case 1:17-cv-00184 Document 1-6 Filed 03/03/17 Page 1 of 5 i TERI BUHL ' dB k Smashmouth Investigative Journalism More Search this website ... Here it is: that MGT Capital SEC 9 fob Donate with PayPal Subpoena Donate MGT Capital was subject to a subpoena sent by a lawyer at the Securities and Exchange Commission named Katharine Bromberg who is senior Your Voice counsel in the New york office of the division of enforcement. The Subpoena demanded a response by September 28. 2016. MGT's stock had California DOJ investigating been on a soar after it was announced the company was going to merge Honig and The Frost Group with John McAfee's private security company. MGT CEO Rob Ladd was on Investor Barry Honig Subject of forced to announce the receipt of the subpoena by the exchange the SEC MGT Capital Subpoena company listed on, the NYSE, and the stock started a slide. The NYSE latter delisted the company without explaining in writing what their Ripped of Investor on reasons were and did not allow the issuance of millions of new shares Investor Barry Honig Subject of SEC MGT Capital Subpoena that the company approved in a board of directors vote. Fellow Researcher on The company is now on the OTC pink sheets waiting for the top-tier of SEC knew Collecting S14.5 mn Hedgie Ribotsky fine Would Fail the OTC markets to approve their listing. John McAfee was eventually made a director of the company but the merger of his security assets isn't John Miller on completed yet. The company website says "MGT Capital Investments, Hacked By XwoLfTn Inc. is in the process of acquiring a diverse portfolio of cyber security technologies. With cyber security industry pioneer, John McAfee, at its John Miller on Hacked By XwoLfTn helm..." In September MGT CEO. Rob Ladd, who signs all SEC filings, said in a press release the company didn't think the SEC subpoena questions were State v. Buhl focused on 'the company'. Latter that month I was first to report on some of the people named in the SEC subpoena for the trade publication I Learn How Conneetici it report for Growth Capitalist I reported Barry Honig. Michael Brauser and Wants to jail Me For Josh Silverman's hedge fund as being subjects of the subpoena Protection Sources and Document title: Here II is: thai MGT Capital SEC Subpoena Caplure URL: hllp://www.teribuhl.com/201 7/02/09/here-il-is-lhal- mgt-capilal-sec-subpoena/ Caplure timestamp (UTC): Fri, 10 Feb 2017 17:00:07 GMT Page 1 of 6 Case Case 1:17-cv-00184 1:17-cv-00 Document 1-6 Filed 03/03/17 Page 2 of 5 t • r"' v State v. Buhl focused on 'the company'. Latter that month I was first to report on some of the people named ill the SEC subpoena for the trade publication I Learn How Connecticut report for Growth Capitalist. I reported Barry Honig, Michael Brauserand Wants to Jail Me For Josh Silverman's hedge fund as being subjects of the subpoena Protecting Sources and questions. I had interviewed an executive at the company who said they Squash Speech thought "the focus of the SEC subpoena was about Barry llonig and the people he invested with." I then wrote an opinion piece at tcribuhl.com Read More » that Honig and friends were the subject of this subpoena. Below is the subpoena for the reader to see and formulate their own opinions. This is the first time it is being made public. The name of the Teri Buhl in the News companies on page 7 arc all owned by the names of the people on page 7 ?, 8, I was told by a person at the company all of these people invested with MGT Capital and you need a flow chart to show their interconnectedness. I have also researched other public filings and found these people have invested in the same equities in the past. Most of these people say they are passive investors and don't know each other or don't 'invest together". It's my belief after a decade of proven investigative reporting and based on knowing how to read a SEC Reiser Report: Stripped To subpoena, along with interviews with people involved in the transaction Teeth (£292) and past investing transaction of Barry Honig. that the regulator is looking for evidence that these people traded as a group and therefore More Videos became beneficial owners of the stock. If you have beneficial ownership of a stock it affects when and how much you can sell your stock so investors, like the group here, often try to keep their public ownership of Trusted News the stock below 10%. I think the regulator also wants to know if any of the investors, who except for Josh Silverman were not on the board of Christopher Fountain; Best the company, had any influence in the McAfee merger or the paid stock Source of Greenwich, CT News promotion by Stock Beast. But the most interesting question is number lan Fraser: Investigative UK 10. Financial Journalist On the Case: Alison Frankel RT Kesier Report All Documents unci Communication concerning MG I 's acquisition ofcertain technology and assets nil)¦ Vasive, as stated in Mt d "s I t irm 8-K tiled on May 9. 20l(>. MG T had announced in its August proxy statement on page 23 that D- Vasive had had gotten a $850,000 bridge loan with convertible debt but didn't disclose who did the bridge loan. John McAfee owns D-Vasivc. 1 was told by a person at MGT that some of the names on the SEC subpoena had also clone the bridge loan. If the merger had been Document title; Here it is: that MGT Capital SEC Subpoena Capture URL; http:Mvww.teritniht.cani/20 1 7/02/09/here-it-ls-that-mgt-capital-sec-subpoena/ Capture timestamp (UTC): Frl, 10 Feb 2017 17:00:07 GMT Page 7 of 6 Case Case 1:17-cv-00184 1:17-cv- Document 1-6 Filed 03/03/17 Page 3 of 5 Vasivc had had gotten a $850,000 bridge loan with convertible debt but didn't disclose who did the bridge loan. John McAfee owns D-Vasive. I was told by a person at MGT that some of the names on the SEC subpoena had also done the bridge loan. If the merger had been approved, these people would have likely had D-Vasivc stock warrants that would have became MGT stock and while the stock was flying high would have made a killing if they were able to sell. There are a lot of unanswered questions about that transaction and since D-Vasivc is private they don't have to answer them. Well unless a regulator asks. Like the timing of the warrants being issued, share registration, and who is holding the shares for the required 6 month period. These people arc sophisticated investors with expensive lawyers who help structure transactions designed to protect them form violating any securities laws like trading as a group without disclosing it. That type of SEC violation is hard to prove and I don't know if the regulator will get the evidence to prove it but it is good to see them asking the questions. I want to hear from readers and market participants on what you think some of these SEC questions arc trying to get at. Use the comment section or email me at tcribuhl.com with your thoughts. MGT says it has compiled and answered the SEC subpoena. SEC. Subpoena MGT capital September 2016 by leilfiull! on Scribd -9/ i U< l KM It * AMI I V HAM,* I tlMMlVMltS Isw. m «*• m*--' I WWl* Of »*»«« tflili.Vh*** 1 1, 2t)|6 MCH < gfwu) fen* *l)fi Jf»4 H SY 10571 «• NVW? ife«r 1 of tiiwwsk. u».tf of tfv No \ e*i Hq t,| I IflUc «l ifst IffliteJ St Snwitm »»| I uliwiif I i«~ai ts. . » t« unArstejt trA(«ti^tHoo in it ., trixta t&nitfiaJ *Nak IhttwM tjipw K»* tuwd to Mtil < li i t |r«. ( Mtl i | •* f*»J U f t>*i* I Ik *k6j*h»'4i Wpttrt« Mtf T l« in dsimwli " > «ol if*' te4#^*svr4 £«f thj* IrtUi cjtftdti!?) I hi* Kttcf *uwne tjtwif uwt* my >v- ¦ urt It# Mtpiwcii Yew t?vT*ld •£«» «;*! g* SI. f 1 06.?. You mint with Ibr V«m ww) be l« a fin* if ytm «$«> not e il kat mtUriah tj frt*tmr * , I He fc'fpww )<*8 H> frtrtiJe in AwtiW ttt U*r dtlutfamMi K< flw :* Vow tRitf pwt^t th--ms b) Mjrt«m»u»r li, l»J6 lit* anjokmruf Ut At define* mm t*u*ti ** "MKwwtf') Hfarr hitibf j*h* mw** ptvvhk Document title: Here it is: that MGT Capital SEC Subpoena Capture URL: http://www.teribuhl.com/2Q17/0Z/09/here-it-ls-that ingt-capltal-sec-subpoena/ Capture timestamp (UTC): Fri, 10 Feb 2017 17:00:07 GMT Page 3 of 6 Case Case 1:17-cv-00184 1: Document 1-6 Filed 03/03/17 Page 4 of 5 ¦—~ "•'* • - - ruiliiJni I'-omiah B i4' t Ixit h>i*vi JWr * Ifw )m. *>« pirtuk «# ilfMnM tn ifeif t)i«|«urnl t«» U *t-bp>n.nt Vtnji t .«* (mv!r lh»:*K« Avumcntt by J*. JOIfe Ifa a? t*. Wort it t.i iltr tdhpncm 4< ftw* «* * (urn* (»iuih u 'Atwwn*«r» Nrfotr htim# wfen )>im U'wtf pnwfdv. 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In "Banksters Behaving hi "Batlksters Behavm;; In "Bankster* Behaving Bat lis* Badly" Badly" No Comments Subscribe Enter your email address to subscribe to TeriDuhl.com and receive notifications of new articles by email. Email Address Subscribe O Document tide: Here il is; lhal MGT Capital SEC Subpoena Capture URL: htlp://www.teribuhl, com/201 7/02/09/here-il-isThat-rngt-capital-seosubpoena/ Capture timestamp (UTC): Fri, 10 Feb 2017 17:00:07 GMT Page 4 of 6 Case Case 1:17-cv-00184 1:17-cv-00184 Document D 1-6 Filed 03/03/17 Page 5 of 5 EXHIBIT G Case 1:17-cv-00184 Document 1-7 Filed 03/03/17 Page 1 of 4 Lj TERI BUHL U Smashmouth Investigative Journalism * More Search this website ... Iroquois Capital's Josh Silverman LI Jllll Donate with PayPal Threatens Portfolio Stock CEO Donate UPDATE 7-3-14: I am reporting at Growth Capitalist heclgie Josh Silverman pulled tl teir support of a New Jersey gaming permit tor MGT in what Your Voice appears to be a retaliation move against MGT CEO Robert Ladd tor speaking to the press. California DOJ Investigating Honlg and The Frost Group Original Text on Investor Parry Honig Subject of There is a dirty battle going on between activist hedgie Josh Silverman SEC MGT Capital Subpoena and the CEO of an online gaming company his hedge funt I. Iroquois Capital, invested in. I reporter! today for Growth Capitalist that MGT Ripped of Investor on Capital Investments CEO. Robert Ladd, thinks he lias found a paper trail Investor Barry Honlg Subject of SEC MGT Capita! Subpoena that cot ild show Iraqi mis was parking stock to hide stock ownership above 10 percoi it. It could lead to violations ofSection 16 of the 1934 Fellow Researcher on Securities Act for Iroquois and the affiliate lie allegedly works w ifh Jay SEC knew Collecting $14.5 mn Hedgic- Ribotsky fine Would Fail Spinner (In 2006 Spinner was issued an enforcement action by the SEC for I us role in an illegal short selling scheme. He did t tot admit or deny John Miller on guilt and was bai ined from the u ldustry for only 6 months.) Hacked By XwolfTn Iroquois Master fund made a $l million PIPE investment into MGT in John Miller on Hacked By XwoLfTn October 2012. MGT also did a registered direct offering on the same day as the PIPE deal with Jay Spinner's company, Ellis International, who bought 200,000 shares of MGT via the RDO. Spinner has an office in Iroquois NYC office but is not believed to be an employee ot the fund. State v. Buhl Iroquois has a 9.99% stake m MGT and Spinner had bought a 6.7% stake. Ladd is alleging through a serious of transaction these two positions Learn How Connecticut acted as a group and Iroquois stake in his company was really more than Wants to Jail Me f or 10%. Protection Sources and (Document title: Iroquois Capitol's Josh Silverman Threatens Portfolio Stock CEO Capture URL hllo://www leribuhl.com/201 4/00/1 l/iroquois-capitals-josh-sllveiman-threatens-portfollo-stock-coo/ Capture tlmestamp (IITO): Fri, 24 Feb 201 / 17:22:01 GMT Paqe 1 of 5 Case 1:17-cv-00184 Document 1-7 Filed 03/03/17 Page 2 of 4 I i 1.> »-|I • V/ I ¦ » « State v. Buhl Iroquois has a 9.99% stake in MGT and Spinner had bought a 6.7% stake. Ladd is alleging through a serious of transaction these two positions Learn How Connecticut acted as a group and Iroquois stake in his company was really more than Wants to Jail Me For 10%. Protecting Sources and Squash Speech It was during my month-long investigation into how this transaction was set up I learned CEO Ladd and his CFO Robert Traversa had been Read More » verbally threatened by Silverman after Ladd refused to allow the hedge fund activist to put his own people on the board of Ladd's public company MGT Capital Investments, Silverman invited Ladd to come to his New York City office and said. "I am going to crush you and drive Teri Buhl in the News your stock down to 50 cents." r It's rare I hear a hedge fund manager be this aggressive and bold and .i even rarer the CEO is willing to go on the record-but they did. After the threat, Silverman then issued two public letters, filed with the SEC, railing on Ladd's management choices and compensation. _ Reiser Report: Stripped To If Iroquois, who invested via a PIPE deal, did own more than 10% of Teeth (L292) MOT'S stock and was selling stock for a profit, securities law says he would have had to reinvest the profits back into the company. Ladd thinks Silverman made profits off his stock in the millions and those More Videos millions should have legally been reinvested into the company, but without a regulator forcing the hedge fund to turn over trading records this is going to be very costly and difficult for the small cap company Trusted News CEO to prove. Christopher Fountain: Best There is also sentiment that Ladd made his own bed by allowing Iroquois Source of Greenwich.CT News to invest in his fund in the first place and get preferred stock with voting fan Fraser: Investigative UK rights. Ladd had previously run his own small hedge fund called Ladd Financial Journalist Capital and isn't a unsophisticated investor. On the Case: Alison Frankel Ladd's $MGT is now facing short selling pressure hut the CEO doesn't RT Kesier Report have the legal means to investigate who is doing the shorting. Even in the aftennath of Dodd-F'rank legislation it is still extremely tough to see a hedge fund's trading records. Silverman and jay Spinner refused to answer any questions for Growth Capitalist hut two days before the story ran Silverman published a public letter with the SEC calling out Ladd once again for what he views as poor management choices and then alluded to Ladrl starting a 'smear O campaign' against the hedge fund. I saw this as nothing more than a Document title: Iroquois Capital's Josh Silverman Threatens Portfolio Stock CEO Capture URUhttp://www.teribuhl,com/2014/06/11/iroquois-capitals-josh-silverman-lhreatens-portfolio-slock-ceo/ Capture timesiamp (UTC): Frl, 24 Feb 2017 17:22:0 1 GMT Page 2 of 5 Case 1:17-cv-00184 1:17-cv- Document 1-7 Filed 03/03/17 Page 3 of 4 VJII * V, I I I Itli I Ul 1U J t» J VVJVII II IV- t I V I VI.IV. u Uli^ Vjni, Ji itJi <.! Ivji vjiutiiii Capitalist but two days before the story ran Silverman published a public letter with the SEC calling out Ladd once again for what he \ iews as poor management choices and then alluded to Ladd starting a "smear campaign' against the hedge fund. I saw this as nothing more than a public relations move by Iroquois to get some spin into the news that bis fund might have violated SEC laws. And a bully tactic against a CEO who won't let him on his board. Sometimes in a PIPE transaction when a hedge fund has a large block of stock or warrants or debt they arc not holding onto them with hope the company stock will improve on performance. Instead they arc hoping the company goes bankrupt so they can gut the assets of the company and get them for cheap. At Growth Capitalist we've seen Iroquois focus on investing in companies with patents or intellectual property. MGT Capital has a valuable patent but it's currently in litigation. It's this reporters opinion that Iroquois wants downward pressure on MGT Captial Investment stock so it can hurt the company financially and buy their patent on the cheap when the company is short for cash or bankrupt. Another way they could have made money on the company is having a larger short position than they do a long position and use other affiliate funds or people to buy these short positions. To read the documented paper trail of how Silverman set up this possible illegal investment strategy click here. It's free to register for the first 30 days and the excellent story reporting is a cautionary tale of how some hedge funds can skirt the law for profit and sadly destroy company value. Share this: H OBl# Twee! Shane G»l 0 Related 1 1 en: it is: that MOT Capita! Investor Barry Honig I ledgie Investors file SIT' Subpoena Subject of Sir MOT Securities Violations f ibular) 2UI7 Capital Subpoena Complaint against Greg In 'Bankstcis Behaving Scpli mlrer if. 20l(i Imbrnce with Texas Flat IB* In "Bankuus Behaving Regulators Badly" Juno 2&. 201} In "Banksfers Behaving Badly" No Comments O Oocument title: Iroquois Capital's Josh Silverman Threatens Portfolio Stock CEO Capture URL: http://www.leribuhl.coniF2014/06/11liroquois-capllals-]osh-silvernian-threatens-portfallo-stock-ceo/ Capture limestamp (UTC): Fri, 24 Feb 2017 17:22:01 GMT Page 3 of 5 Case Case 1:17-cv-00184 1:17-c Document 1-7 Filed 03/03/17 Page 4 of 4