Martin Schlaff,LH Financial,Bawag Bank Austria,Refco,Bancafe,Guatemala
In January, TheStreet.com reported that Bawag had quietly become a key player in the PIPEs market by becoming either a significant investor or controlling shareholder in at least four foreign hedge funds that invest in such deals. The four hedge funds with close financial ties to Bawag are Alpha Capital, Austinvest Anstalt Balzers, Austost Anstalt Schaan and Celeste Trust, all of which are based in the tiny European country of Lichtenstein.
TheStreet.com also reported that Bawag has a financial interest in LH Financial Services Corp., an obscure New York investment firm that has sunk more than $70 million over the past two years into about 150 different PIPEs deals, almost all of them penny-stock companies.
In 2004, LH Financial was the second-most prolific PIPEs investor in the country based on the number of transactions, placing money in 102 different deals, according to PlacementTracker, a research firm. The pace slowed in 2005, when LF invested in about 45 deals -- still good enough to rank in the U.S. top 10.
LH Financial is the official investment adviser to Alpha Capital, the main vehicle through which Bawag has invested in the PIPEs market the past two years.
LH Financial also has ties to Martin Schlaff, a controversial Austrian billionaire, who is one of Bawag's biggest individual customers. Schlaff is a partner with Bawag in the Alpha Capital hedge fund, along with other business ventures. A relative of Schlaff's briefly worked at LH Financial. ...............
One instance in which Bawag's behind-the-scene activities became a point of controversy is a bankruptcy proceeding for Mooney Aerospace (MNYG:OTC BB) , a San Antonio manufacturer of small, single-engine planes. In that litigation, Paul Dopp, a former Mooney CEO and creditor, has claimed that LH Financial and Alpha Capital never disclosed in regulatory filings that they were acting in concert with Bawag to provide financing to the company.
The bankruptcy judge referred some of Dopp's allegations to federal prosecutors in San Antonio in August 2004. There's no indication prosecutors have seriously purused them.
Notwithstanding the court victories, the Bawag-affiliated entities keep some curious company.
The hedge funds -- Alpha Capital, Austinvest Anstalt Balzers, Austost Anstalt Schaan and Celeste Trust -- were once customers of two former Refco brokers, Matthew Drillman and Jacob Spinner, who were implicated in one of the first manipulative PIPEs trading cases ever brought by securities regulators
The Securities and Exchange Commission has never publicly identified the brokers, nor charged them with any wrongdoing. But people familiar with the inquiry confirmed their identities. The SEC, sources say, is continuing to investigate allegations that the brokers, working at the behest of an investment firm called Rhino Advisors, engaged in manipulative trading on behalf of Amro International, a Swiss hedge fund.
Michael Bachner, an attorney for Spinner, declined to comment on the investigation. Michael Sommer, the lawyer for Drillman, did not return several phone calls. Both men are currently brokers with Pond Equities, a small firm in New York.
Amro is now largely inactive. It hasn't appeared in a PIPEs deal for several years. However, for a time, Amro was investing in many of the same deals as the Bawag affiliates. In at least one PIPE, a financing for Bravo Foods International (BRVO.OB:OTC BB) , Amro and Austinvest are described as having a "common investment representative.' That investment representative was Rhino Advisors.
There's nothing to indicate that Drillman and Spinner ever engaged in any improper trading with regard to the Bawag-related hedge funds. Still, there is ample evidence the brokers were willing to go to great lengths to please their customers.
In January 2002, Drillman and Spinner wrote a "letter of reference' on Refco letterhead for Alpha Capital. The letter, which is part of the court record in the Mooney bankruptcy, was designed to persuade officials at the aircraft company of Alpha Capital's good character.
"We suggest that you should feel comfortable in your dealings with Alpha Capital with respect to the integrity of those who speak on its behalf as well as with respect to its ability to perform on its financial obligations,' the brokers wrote.
In the letter, the brokers also noted that Alpha Capital was "jointly owned by the Bank fur Arbeit und Wirtschaft' and "a group of well regarded high net worth individuals.' They added that Alpha Capital was formed by individuals "involved in similar investment vehicles,' and that Refco had worked on transactions for these individuals totaling more than $100 million.
Of course, writing a glowing letter for a customer is a far cry from what regulators suspect Drillman and Spinner did for Amro, according to sources and investigation documents. Regulators are looking into allegations that the brokers helped arrange a series of illegal short-sales for Amro after the hedge fund invested in a $3 million PIPE deal by Sedona (SDNA.OB:OTC BB) , a small Pennsylvania software company.
politicalandsciencerhymes.blogspot.com/.../mooney-airplane-company-t...Sep 5, 2014 - Mooney Airplane Company stock fraud MNYG (OTC BB) .... J. Nelson Happy, Roy Norris (both of AASI) and LH Financial Services Corp. claims ...
www.bizjournals.com/sanantonio/stories/2004/09/06/story2.html?page...Sep 5, 2004 - ... Updated Sep 2, 2004, 9:45am CDT. Industries & Tags: Legal Services.Share ... Pleadings filed on July 28 by former Mooney Chairman Paul Dopp take issue ... Structures Inc. (AASI), now known as Mooney Aerospace Group ... of AASI) and LH Financial Services Corp. claims that Dopp's accusations are ...
investorshub.advfn.com › ... › Wave Systems (WAVX)Jun 5, 2006 - Wave Systems WAVX Stock Message Board: SEC FILES SETTLED ACTION AGAINST ... which funds will be distributed to victims of the Refco fraud. .... However, Roy Norris, a former CEO of Mooney Aerospace Group (MNYG. ... Bawag also has a financial interest in LH Financial Services Corp., an obscure ...
www.offshorealert.com/ForumNewTopic.aspx?g=posts&t=37762... LH Financial Services Corp., its VP, Arie Rabinowitz, along with ... By: goldenrule7 (from Mooney Aerospace rb message board) 06 Nov 2004, 04:55 PM EST
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Jan 24, 2006 - 4 posts - 3 authorsBawag also has a financial interest in LH Financial Services Corp., ... have filed at least six lawsuits raising allegations of fraud and stock manipulation ... is a bankruptcy proceeding for Mooney Aerospace (MNYG:OTC BB) , a ...
cleveland.indymedia.org/news/2006/10/22982.phpOct 20, 2006 - The purpose of those penny stock frauds just like George Allen's et.al. ... a Republican connection,also has a Huffman Aviation of Venice, ..... Sometimes, LH Financial Services Corp. is listed as the representative for Alpha Capital. ... However, Roy Norris, a former CEO of Mooney Aerospace Group (MNYG.
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cmkxunitedforum.proboards.com › Reform CenterJan 26, 2006 - Bawag also has a financial interest in LH Financial Services Corp., ... have filed at least six lawsuits raising allegations of fraud and stock manipulation ... is a bankruptcy proceeding for Mooney Aerospace (MNYG:OTC BB) , a ...
www.argentumlitigationfund.com/forums.aspx?g=posts&page=-1...Aug 12, 2011 - Link to letter from Christopher Rossman to Mooney Aircraft. ... Letter written on LH Financial Services Corp letterhead ... alleged securities fraud involving purported reinsurer Gerova Financial Group - a former Cayman Islands ...
https://groups.yahoo.com/neo/groups/NMKT_IPVO/.../messages/116Jan 25, 2006 - Traders and investors in small cap growth stocks- no politics or religeous discussion. ... Bawag also has a financial interest in LH Financial Services Corp., an obscure ... allegations of fraud and stock manipulation against some of the ... point of controversy is a bankruptcy proceeding for Mooney Aerospace