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IN THE UNITED STATES DISTRICT COURT

FOR 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

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("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

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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

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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.

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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

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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

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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".

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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

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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.

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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."

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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.

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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

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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

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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.

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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

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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.

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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.

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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

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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: davidfox@mvalaw.com

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

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Jaclin's Co-Conspirator
Turned DOJ Witness in Shell 10 USD

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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/


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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

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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
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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, '
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Document title: Mlcrooap Attorney Janlin's Co-Conspirator Turned DOJ Witness in Shell l-aotnry Scheme
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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
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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
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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
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Case 1:17-cv-00184
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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
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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:

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Document title Microcap Attorney .laclin's Co-Conspirator 1 urned uOJ Witness In Sltull Factory .Schema
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Case 1:17-cv-00184 Document 1-1 Filed 03/03/17 Page 9 of 10


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Document title: Mlcrocap Attorney Jaclln's Co-Conspirator Tumed DOJ Witness ln Shell Factory Scheme
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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 microlihe,
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


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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
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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
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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
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Case
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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.

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Document title: Investor Barry Honlg Target ot SEC MGT Capital Subpoena
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EXHIBIT D

Case 1:17-cv-00184 Document 1-4 Filed 03/03/17 Page 1 of 6


r '

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Investor Barry Honig Subject of 23


Sep Donate with PayPal
SEC MOT Capital Subpoena
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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
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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.

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
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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
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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
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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 tcribuhl@gmail.com. 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 G1 0 !

delated

I lore it is: that MOT Capital (. aliftimia DO] IriHjttttK Capital's |nsh
SEC Subpoena Investigating 1 lonig aotl Silverman Threatens
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10 Comments

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-

I
i TERI BUHL
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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

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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

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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


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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

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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

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Investor Barry Hol|j !roc|lloi.s Capital's Jush California 0O|


Subject ofSEC M(iT Silverman Threatens mvostip.mng I Iniug and
Capital Subpoena Portfolio Stock CEO The Frost Group
September 25. 2tll<i JlllHF II, foi l February '>, 201?
In "Banksters Behaving hi "Batlksters Behavm;; In "Bankster* Behaving
Bat lis* Badly" Badly"

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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/
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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
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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.

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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/
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Case
Case 1:17-cv-00184
1:17-c Document 1-7 Filed 03/03/17 Page 4 of 4