8:15-cv-00317-LES-FG3 Doc # 22-11 Filed: 10/05/15 Page 1 of 6 - Page ID # 163

UNITED STATES DISTRICT COURT

DISTRICT OF NEBRASKA

COR CLEARING, LLC, a Delaware limited

liability company,

)
)
)
Plaintiff,
)
)
v.
)
)
CALISSIO RESOURCES GROUP, INC., a
)
Nevada corporation; ADAM CARTER, an
)
individual; SIGNATURE STOCK TRANSFER, )
INC., a Texas corporation; and DOES 1-50.
)
)
Defendants.
)
)

Case No. 8:15-cv-00317-LES-FG3

DECLARATION OF CARLOS SALAS IN SUPPORT OF PLAINTIFFS EXPEDITED

MOTION FOR APPOINTMENT OF LIMITED PURPOSE RECEIVER
I, Carlos Salas, do hereby declare pursuant to 28 U.S.C. 1746(2) under penalty of
perjury that the following is true and accurate based upon my own personal knowledge and
belief:
1.

I am the Chief Executive Officer of Plaintiff COR Clearing, LLC (COR

Clearing). I have personal knowledge of the facts stated herein and, if called upon, could and
would testify competently thereto.
Request for Relief
2.

On various occasions since COR Clearing filed its Complaint in the present

action, COR Clearing corresponded with The Depository Trust & Clearing Corporation
(DTCC) regarding the recovery of the funds debited by DTCC from COR Clearings account.
3.

During this time, COR Clearing has also reached out to the U.S. Securities and

Exchange Commission (SEC) about this same issue.

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4.

On September 14, 2015, I had an in-person meeting with W. Carson McLean of

the SEC, along with other SEC personnel, in Washington, DC to discuss this matter.
5.

On September 24, 2015, I took part in a conference call with Mark Bell, counsel

for COR Clearing; David Aronoff, Saul Rostamian, and Andrew Smith of Winston & Strawn
LLP, outside counsel for COR Clearing; Isaac Montal, Aimee Bandler, and Ann Shuman,
counsel for DTCC; and Gregg Mashberg of Proskauer Rose LLP, outside counsel for DTCC,
regarding the best method for COR Clearing to obtain restitution of the money taken from COR
Clearing as a result of Calissios fraud.
6.

During this call, the representatives of DTCC explained that DTCC would not

reverse the transfers of funds at COR Clearings request, but would do so if Calissio made this
request to DTCC, and with it all debits and credits. Under DTCCs rules, DTCC will correct
errors within 90 days from the transactions, so COR estimates that the request must be made no
later than November 13, 2015.
Background
7.

COR Clearing is a settlement and clearing firm, which means it has execution and

clearance capabilities for all domestic and foreign securities including multi-currency settlement
and reporting. COR Clearing supports straight through processing of equities, options, mutual
funds and fixed income products complemented by a fully automated back office staffed with
responsive professionals. Its trading technology integrates information and analytics from a
variety of data providers, sophisticated order execution functionality and post-trade processing
applications to ensure timely and accurate trade execution and settlement.
8.

In this capacity, COR Clearing supports introducing broker dealers (IBDs) who

have customers who want to trade stock on the various markets, including the OTC Markets

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serving corporations such as Calissio. COR Clearing facilitates trades supported by the market,
which allows its IBDs customers to buy and sell stock through their accounts.
9.

DTCC is a post-trade financial services company providing clearing and

settlement services to the financial markets, including the market in which Calissios shares were
sold by COR Clearings customers. One of DTCCs products is performing interim accounting,
which entails debiting and crediting the accounts of member clearing firms (of which COR
Clearing is one) in connection with due bills that accompany certain shares of stock, in the event
that dividends are attached to those shares. Essentially, when a share that has a dividend
attached (i.e., coming due) is sold between the record date and the ex-dividend date, DTCC
will debit the account of the seller of that stock (or, in the present case, the sellers clearing and
settlement firm) and credit the account of the purchaser. This occurs even when (1) the
purchasers in this case the stock issuer, Calissio and its affiliates are ineligible to be the
receiver of a dividend, and (2) when the stock is not entitled to receive a dividend because it was
issued after the record date.
Calissios Dividends
10.

COR Clearing seeks relief because Calissio engaged in a scheme that resulted in

Calissio itself and affiliates, among others in the marketplace, receiving payments for dividends
that were never issued and should not have been funded. Even though only roughly 20% of the
available Calissio shares were eligible for the dividend, DTCC has informed COR Clearing -- in
the above referenced communications and others -- that it was following its procedures and when
it made payments on all shares on its system and not just those entitled to dividends and
therefore transferred with the right to receive these . COR Clearing has discovered that this
included shares that were not actually eligible for such dividends.

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11.

CORs records reflect that between July 29, 2015, and August 19, 2015, Nobilis

Consulting LLC (Nobilis), through its broker J.H. Darbie & Co. (Darbie)a customer of
COR Clearingobtained over 327 million shares of stock in Calissio through a conversion of
debt to equity, and that all 327 million of these shares were issued after the record date. From
my review of the facts, Nobilis was not entitled to receive a dividend on any of these shares
because they were all post-record date.
12.

Furthermore, Darbie, on behalf of Nobilis, sold more than 277 million of these

shares on the open market through COR as the clearing platform. Based on my review of
CORs records, at least some of these shares directly or indirectly went back to Calissio as a
result of Calissios repurchase program. Nobilis sold its shares for only $700,000. Calissio also
perpetrated this fraud against another customer of Darbies with a COR Clearing account,
Beaufort Capital Partners (Beaufort).
13.

On August 20 and 21, 2015, DTCC debited COR Clearing for over $3.3 million

in respect of these erroneous due bills assessed on the shares sold by Nobilis and another
$690,000 for erroneous due bills assessed on Beauforts sharessignificantly more than the
amount Nobilis or Beaufort received for their shares on the open market. COR Clearing, as the
clearing company for the transactions, would normally debit its customer, the broker (in this
case, Darbie).
14.

Attached hereto as Exhibit E is a true and correct copy of an August 25, 2015 e-

mail from Defendant Adam Carter to Michael Yarmish of J.H. Darbie & Co. (Darbie),
customer of COR Clearing, and a representative of Nobilis Consulting LLC (Nobilis), the
seller of shares of stock issued by Calissio that was forwarded to me.

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15.

Attached hereto as Exhibit F is a true and correct copy of an August 25, 2015 e-

mail exchange between Defendant Adam Carter and me.

16.

Attached hereto as Exhibit H is a true and correct copy of an August 28, 2015 e-

mail chain between Defendant Carter, Mr. Bogutski of Defendant Signature, and me.
17.

The reason that Calissio was not entitled to the dividends is because the majority

of the shares on which the dividends were paid 80% by my calculation were issued after the
record date of June 30, 2015. Thus, any stockholder who bought after June 30, 2015 was not
entitled to the dividend. By buying back so many shares which were completely ineligible,
Calissio appears to have taken advantage of how DTCC processes dividends. Those
shareholders not Calissio or any of its affiliates who purchased shares after June 30 who
owned the stocks as of August 19, 2015 were the ones entitled to these payments.
18.

In fact, the manipulation of this DTCC process appears in retrospect entirely

deliberate. COR Clearing determined that after the record date defendants Calissio and
Signature Stock Transfer issued hundreds of millions of new shares of common stock in
connection with the conversion of convertible debt previously issued by Calissio. These new
shares which were ineligible for the dividend due to the timing of when they were issued
totaled approximately four times the number of shares outstanding as of the record date. During
this period both Signature Stock Transfer and Calissio were in contact with DTCC to effect the
dividend payments owed to the shares outstanding as of June 30, 2015, but failed to give to
DTCC any instruction or warning concerning this flood of new shares that would massively
impact DTCCs interim accounting payments. And in connection with DTCCs payment of
these amounts to ineligible shares, Calissio and its affiliates benefitted from undeserved
payments as a result of their purchases during the same period.

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I, Carlos Salas, hereby declare and certify under penalty of perjury pursuant to 28 U.S.C.
1746(2) that the foregoing is true and correct. Executed this 5th day of October, 2015, in Santa
Monica, California.

Carlos Salas