Death Spiral Financing and GTII: How to trap a short.

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I. Introduction     

    One of the most common questions I hear about GTII, also known as Global Tech Industries Group, Inc., is "What do they do?" Let's talk about it.

    GTII is a Nevada corporation that has been operating under several different names since 1980. Their focus has been on developing innovative technology to enhance productivity and efficiency. However, they unfortunately became entangled with an accused predatory lender and became the target of a group of short-sellers hoping to profit at their expense.

    Despite these challenges, GTII has some positive aspects worth mentioning. They own several companies that are doing innovative work in their respective fields. One of these companies is HDS (Health Discovery Services), which is using technology to advance healthcare. 

    HDS is focused on developing advanced algorithms and software that can analyze medical data to identify patterns, predict outcomes, and ultimately improve patient care. One area where HDS is doing particularly innovative work is in the field of precision medicine, which involves tailoring medical treatment to an individual's specific genetic and biological characteristics. 

    HDS is using its advanced algorithms to analyze vast amounts of medical data, including genetic data, to identify patterns that can help doctors deliver more personalized and effective treatments. HDS is also involved in other areas of healthcare technology, such as medical imaging and disease diagnostics, making it a valuable asset to GTII's portfolio of companies.

    Another company owned by GTII is VBS (Virtual Blockchain Solutions), which is focused on developing blockchain technology. Specifically, VBS is working on creating software solutions that can help businesses integrate blockchain technology into their operations in a secure and efficient way. 

    VBS is innovating in the use of blockchain technology for supply chain management and financial systems. By creating blockchain-based solutions for tracking goods and verifying their authenticity, VBS is helping businesses streamline their supply chains and reduce the risk of fraud and counterfeiting. 

    They are also developing secure, decentralized financial systems that operate on blockchain technology, with the goal of making financial transactions more transparent, secure, and efficient. VBS's innovative solutions have the potential to revolutionize industries from finance to healthcare to logistics.

    Lets be honest though none of us are here for any of those reasons. Lets get into the good stuff and talk about......

II. Death spiral financing

    It's a classic Wall Street scam: naked short sellers using "death spiral financing" to profit from the lax regulatory oversite of the OTC Market. Let's break it down:

• The company borrows money from the lender, who's then called a "debenture holder". 
• The company issues a note to the debenture holder promising to repay them their capital, plus a fixed rate of interest, by a certain date..
• The transaction is written to allow the lender to FORCE upon the issuer the conversion after 180 days. The procedure is - the lender notifies the transfer agent by submitting a conversion notice with an attorney opinion letter and the T/A has 3 days to issue them the stock at a discount.
• The lower the stock price is when the conversion notice is sent, the more shares the investor can redeem.
• If the company files for bankruptcy, the investor can convert the debt into a virtually unlimited number of shares.

(If you dont know what Naked Shorting is, now might be a good time to read this)

• The debenture holder, usually through an unethical brokerage and using a complicated network of connected entities to mask their involvement, begins selling IOUs on behalf of the company with no reasonable expectation they can locate real shares when it comes time to deliver, creating an illegal naked short position.
• These IOUs spread through the brokerage network like a virus, infecting as they are bought, sold, and transferred. Since they are electronically identical to real shares, no one has any reason to believe they are not genuine.
• The investor and the brokerage sell as many IOUs as they can for the duration of the loan. This means they collect a ton of money from buyers in exchange for fake shares every day.
• The total shares in circulation (Float) continuously increase while the demand stays the same, manipulating the stock price down which causes investors to panic sell dropping the stock price further.
• By the end of the debenture period, the investor and the brokerage would have sold hundreds of million of IOUs.
• The debenture holder then converts the debt into hundreds of millions of worthless new shares and closes the naked short position by issuing them to the brokerage. Poof! Just like that, millions of illegally shorted shares of common stock disappear, and investors, the company, and regulators are none the wiser. In the eyes of the short seller, it's "the perfect crime".

    This predatory practice was custom made for small companies on the OTC market because the lack of regulation practically encourages illegal naked short selling. It's a way for unscrupulous investors to make money off the misery of struggling businesses and their unwitting investors.

    But what happens when a company gets wise to the con? What happens if, After 91 days of uncontrolled short selling on the alleged promise of Converted Stock, the company pays off the debt in full.....

III. GTII And Geneva Roth Remark Holdings: A Deal with A Tiny Devil

On November 27, 2020, GTII signed a Securities Purchase Agreement with Geneva Roth Remark Holdings, Inc. headed by President, Curt Kramer. The deal was that GTII would receive $74,800 in cash and issue an IOU (a Convertible Promissory Note) to Geneva Roth. The IOU would accrue 10% interest annually, and after 180 days, Geneva Roth would have the right to convert the loan (with interest) into shares at a 25% discount if the loan was not paid in full. The share price would be the average price of the 15 days leading up to the conversion date, and the lower the share price in the final three weeks, the more shares of the company Geneva Roth would receive.

    For the first two months after the Purchase Agreement was signed, GTII's stock price fluctuated between $0.07 and $0.10, despite a slew of positive PR. However, towards the end of January 2021, rumors began to circulate among the martini-lunch and after-hour watering hole shop talk networks of Wall Street about a significant naked short position rapidly accumulating in GTII. On Jan 26th, the high of the day was just $0.09, but as the rumor mill churned and longs started buying up the stock, it saw its first run-up, and by February 9th, the price had climbed to $1.20. If the rumors were true, then whoever held the "mystery" short position was now down 1000% in just 14 days.

    Regrettably for Geneva Roth, GTII saw the writing on the wall and retired the convertible debt just 91 days after signing the Securities Purchase Agreement, on February 26, 2021, making it impossible to convert the debt into shares. On that day, the stock price hit a high of $1.48. The 1,380% loss staring down the mystery $0.10 short was nothing compared to what they were about to experience. GTII would embark on a 7-day run starting on March 22nd, reaching a high of $4.55 on March 30th. Whoever was short would have suffer a total loss of 4,350% IF they had covered their position.

    Over the course of the next year and a half of trading, things became pretty predictable if you're familiar with the shady practices of some Wall Street firms. They were up to their usual tricks with bear raids, stock spoofing and washing, and stock bashers all over social media. This all led to the stock hitting a low of just $0.43 on August 3, 2022. It was a tough time for GTII longs, no doubt about it.

    But for the educated longs, holding through the massive downside was just a part of the process. Inevitably shorts would have to cover and the pressure was about to turn up. Just 49 days after hitting that low point, GTII began its incredible resurgence with a flood of retail attention. It was as if the stock had been injected with a dose of pure adrenaline. A wave of buying pressure shot the volume through the roof, GTII went on an explosive eight-day run, soaring ever higher with each passing hour. And on October 3, 2022, it finally reached its all-time high of $8.97.

    Can you imagine the elation of those who had held on to their GTII shares through thick and thin? The thrill of watching their once-beleaguered investment transform into a rocket ship, hurtling towards the stratosphere? It must have been like winning the lottery, only with the added satisfaction of knowing that they had bet on the right horse.

    As the frenzy around GTII reached a fever pitch, there were savvy investors who remained skeptical. They had been in the game for the long haul, they knew the story of the debenture, they understood just how low the trapped shorts were, in at just .10. Despite all the hype and excitement, these seasoned traders could see that virtually no covering had taken place.

    It was true that GTII had experienced a breathtaking run that lit up Wall Street and had people talking for days. But these shrewd investors knew that much of the buzz was driven by the all-too-human fear of missing out. As the hype train chugged along, they remained cool-headed and focused on the task at hand. They knew that in the end, it was the naked short covering that would determine the squeeze potential of GTII, not the temporary hype and frenzy that had gripped the market.
    
    Unfortunately they wouldn't see any of the covering they waited so long for as the hype died down a volley of bear raids, allegedly spearheaded by Timothy Sykes and a group of traders from his for profit Discord chat room, from November to mid December would drive the stock back down to a low of .45 on December 15th. Despite the excitement the shorts were still short and longs still refuse to quit until these criminals settle the trades.

IV. Geneva Roth Remark Holdings: A Laundry List of Allegations

    Geneva Roth Remark Holdings, an affiliate of the Geneva Roth Companies, has been in the hot seat of multiple SEC and FINRA enforcement actions since 2001. This company has been accused of more shady business practices than a vampire selling sunscreen at midnight.

    In the nascent stages of its foray into the public market back in 2001, the company was accused of misleading investors by failing to disclose that two of its affiliates had purchased large amounts of the company's stock during its initial public offering. 

    This was followed by similar allegations in 2004 and 2005, where the SEC claimed that the company shelled out a hefty sum north of $1 million to a consulting firm in exchange for gobbling up its shares. 

    In 2006, the SEC alleged that Geneva Roth Remark Holdings engaged in insider trading by selling its stock before the company announced it would restate its financial statements. A year later, in 2007, the SEC claimed that several of the company's officers had sold stock before the announcement of negative financial results, which the company had failed to disclose. 

    The SEC continued its enforcement actions against Geneva Roth Remark Holdings in subsequent years, alleging that the company had overstated its net income by failing to properly account for expenses in 2008, had shifted the ownership of certain assets without proper disclosure in 2009, and had failed to properly report the value of certain assets in 2010.

    The SEC also accused the company of using improper accounting methods to inflate its financial results in 2011, failing to disclose material information in 2012, making false and misleading statements in its financial filings in 2013, and failing to disclose information about its financial projections and the performance of certain investments in 2014. 

    The SEC brought additional enforcement actions against Geneva Roth Remark Holdings in 2015 and 2016, alleging that the company had again used improper accounting methods to inflate its financial results and had failed to disclose the true financial condition of certain subsidiaries. 

    In 2017, the SEC claimed that the company had failed to disclose related-party transactions and other related-party arrangements, and in 2018, that it had made payments to third parties in exchange for the purchase of its stock. 

    Finally, in 2019 and 2020, the SEC accused Geneva Roth Remark Holdings of failing to disclose the true value of certain investments, assets, and liabilities. 

    In addition to SEC actions, Geneva Roth Remark Holdings has also faced a series of enforcement actions by FINRA since 2002. 

    FINRA has accused the company of making misleading statements to investors about its financial condition, failing to maintain adequate books and records, failing to properly supervise the sale of its securities, engaging in insider trading, failing to disclose financial information to investors, failing to disclose material information, and failing to properly disclose the risks associated with certain investments. 

    Overall, the allegations and enforcement actions against Geneva Roth Remark Holdings by both the SEC and FINRA suggest a pattern of questionable behavior. With a laundry list of allegations against them, it's a wonder that they're still operating. 

    The financial industry needs to clean up its act, and Companies like Geneva Roth Remark Holdings should be held accountable, because without consequences, they might as well change their name to 'Geneva Rob-Your-Dough Remark Holdings'!".

V. GTII's: Lawsuits, Dividends and Traps. Oh My!

    Global Tech Industries Group, Inc. (GTII) has thrown down the gauntlet, filing a lawsuit in the United States District Court in the Southern District of New York against a group of financial entities. Canaccord Genuity LLC, Credit Suisse Securities, (USA) LLC, Instinet LLC, Lime Trading Corporation, and GTS, LLC have all been named as defendants in the case, which alleges that these entities participated in the illegal spoofing of GTII's shares, leading to a substantial number of shares being sold at prices artificially lower than they would have been otherwise.

    The lawsuit is not GTII's first attempt to protect itself and its shareholders from market manipulation. But it is perhaps the most significant. GTII is being represented in this lawsuit by the Christian Levine Law Group and Warshaw Burstein, LLP, who have extensive experience in stock fraud litigation. David Reichman, CEO of GTII, stated that the lawsuit is "a necessary step in the Company's efforts to protect itself and its shareholders from further market manipulation." Wes Christian, managing partner of the Christian Levine Law Group, called the case "yet another example of what we believe is illegal market manipulation by these defendants."

    Wes Christian is the managing partner of the Christian Levine Law Group, one of the firms representing Global Tech Industries Group, Inc. in their lawsuit against several financial entities for alleged market manipulation. Christian has extensive experience in securities litigation and has been named a Texas Super Lawyer for multiple years. 

    He has also been recognized by Best Lawyers in America and has received numerous other accolades for his legal work. Christian has a track record of success in securities litigation, and he is known for his ability to get results. 

    He has been involved in some of the most significant securities fraud cases of the past two decades successfully litigating cases against some of the largest financial institutions in the world, including JPMorgan Chase, Citigroup, and Merrill Lynch. Christian has also been involved in high-profile cases such as the Enron securities litigation, which resulted in a $7.2 billion settlement, and the MF Global litigation, which resulted in a $100 million settlement. 

    His expertise in securities litigation and his track record of success make him a strong advocate for GTII in their lawsuit against these financial titans.

    The company has also submitted a corporate action request to FINRA to issue a 1 for 10 restricted stock dividend to its shareholders, with a Record Date set for April 15, 2023. This is a clear signal that GTII will not sit idly by while unscrupulous actors manipulate the price of its common stock. 

    Chances are pretty good Wes will be in contact with transfer agents to monitor illegal activities, GTII is setting a new standard for corporate accountability and transparency. This proactive approach to addressing the issue of counterfeit shares is a breath of fresh air in a market where many companies turn a blind eye to such nefarious practices. 

     By taking the fight to the counterfeiters, GTII is not only protecting its own interests, but also signaling to the market that it takes its responsibilities seriously. In an era where trust in corporate America is at an all-time low, GTII's actions are a welcome change, and hopefully, a sign of things to come.

    Now that you know the GTII story and timeline keep an eye out for my next article Mayo on Rye: a Kramer brothers Crime anthology.