Topic: Usagi: falsifying NAVs, manipulating share prices and misleading investors. - page 20. (Read 92656 times)

It's all the shareholders of BMF (at that time) whose shares should have been worth a lot more had the insurance policy been claimed on.  When I first pointed it out I think BMF shares had a NAV each around 0.7ish.  The insurance policy was to guarantee a NAV per share of 1.0.

Put simply, they were paying premiums so that if the value of their shares dropped below 1 it would get topped back up to 1 by CPA basically.  Then pirate happened, CPA ran out of cash (not necessarily assets, liquid cash) so usagi just didn't bother claiming for BMF - and the shareholders had stolen from them the value they'd agreed a contract for (or, more accurately, usagi had agreed a contract on their behalf with the other party being usagi acting on CPA's behalf) and paid premiums for.

When asked about it usagi just ignored all questions for a month or two - calling anyone who asked a troll and claiming it had all been answered before (it hadn't).  Then finally the explanation came out - that it was somehow a test of a new contract: which is plainly bullshit given BMF investors were told they had insurance cover (NOT "here's what a contract would like like IF we had such cover") and paid some premiums.

It's not hard to understand.

Where is the evidence? Where are the shareholders claiming they have been defrauded?

C- : pretty weak attempt at trolling though shows willingness to try despite not understanding the subject matter.

Creditors is not the same thing as equity-holders. OK?

Being willing to pay back (in theory) is no replacement for actually doing so.  Acting in a a way which reduces your ability to pay back (it definitely doesn't improve it and there's a non-zero chance it lessens it) can't be justified away by intent.

Are you saying its only theft if the victim complains?  i.e. it's not theft when you take it (or announce that you're going to take it) - only when they notice and complain?  How does complaining change whether the act itself was right or not?

If your point is that there AREN'T customers (not the right word - but who cares) then get your calculator out.  Usagi said it + CPA owned 70% or so of BMF shares.  Type in 100. Subtract 70 from it.  Wow - the result is greater than zero!  That means there ARE shareholders other than CPA/usagi.

For reference, the image I linked to is a screen-cap I took Monday, ‎8 ‎October ‎2012, ‏‎7:49:34 PM Australian Eastern Daylight Time if anyone wants/needs to check for modifications.

Where are the victims of this fraud?

I still think the insurance thing is about the clearest example of usagi's defrauding one company for the benefit of another.  The (now reverted to) story about it just being a test of a new contract type just doesn't make any sense given the way usagi announced it to BMF investors and that premiums were actually being paid (until I started asking why it wasn't being claimed on).

It's also the easiest one to prove - as all the facts in it have already been admitted by usagi (basically ALL my evidence is usagi's own posts - plus the presence on blockchain of premiums but no insurance payout).  And the (now deleted) posts right before GLBSE shut down (like same day) had reached the point where usagi was admitting liability but arguing against BMF enforcing it as it would hurt CPA.

On the contract, that's already in the record on forums.  When I first asked about it, I quoted the entire contract.  Usagi then called me a noob for not knowing how to link to it (and referred to it as the whole contract) - totally missing the reason I'd quoted the whole thing in the first place (so there was a copy of it if happened to just vanish - or get modified).

So, where is the evidence which proves that Usagi is not willing to pay back his creditors?

Where are the customers complaining that they did not received what was promised?

BMF insurance contract (click image).

I think in this instance there may be no other debts.  The mining gear was BMF's - and they had no disclosed debts.  The debts were all CPA's/usagi's own (no way to seperate the two).

The preferential treatment of one shareholder (usagi) over the rest is nothing new.  One of usagi's favourite tricks was inflating the price of its own shares (easy to do due to the perverse valuation method used) then buying its own shares back at its own claimed full value, without the same being extended to others.  Or at the other end of the scale making a statement in the CPA thread bout how (paraphrasing as cba to find copy of original) "if more people default on us CPA will have nothing left", then buying up shares people panic sold, BRAGGING about getting those shares cheap, then announcing that after all there wasn't a risk of going bust and all was good.  And it actually seemed to think doing that was perfectly fine.

I notice in the last mentions usagi made about the BMF insurance thing (in theory BMF is still owed 500 BTC from CPA for that - or would be if usagi ever made a claim against CPA on BMF's behalf) that it's now back to its initial explanation (only eventually made a few months after I raised it - te claims it had been explained multiple times are just outright lies) that the contract was somehow just a "test" - though why BMF needed to actually pay premiums or the shareholders had to be told insurance cover was in place for this "test" to work was never made clear.  But if someone has a look in the last posts usagi made on that topic before GLBSE died (posts ofc are now deleted) you'd find that usagi was at the stage of admitting that the BTC was in theory owed and actually talking about various ways to address it - including CPA returning its shares in BMF to BMF.  The argument against this (by usagi) was basically that it would hurt CPA - as ever, consistently failing to seperate duties to different entities and advising BMF shareholders based on CPA's interests.

https://bitcointalksearch.org/topic/critique-of-the-various-businesses-run-by-usagi-115284

FTFY (easier to read)

Somewhat true.  Shareholders only get a distribution from any surplus left after all other debts have been satisfied unless they have a secured or preferential interest.  So even if usagi is the major shareholder, all other debts of the entity in question need to be satisfied before he can receive his share of the surplus.  All creditors within the same class must be treated equally.

The major problem with usagi's approach (from a practical as well as a technical point of view) is that there is no guarantee that any other assets of BMF will be realised.  If the equipment is the only asset which is realised, then usagi has given himself preferential treatment at the expense of other BMF creditors in order to pay off a CPA debt (which is essentially a personal debt).  usagi has provided no evidence that he had a secured interest in the mining equipment (which doesn't come about purely because he's the major shareholder in BMF or because his name might be on the receipt for the equipment).  He needs to explain how that secured interest was created and how he's legally a secured or preferential creditor of BMF.


He deleted literally hundreds upon hundreds of posts.  Here's one thread in which it some stuff was discussed.

The second post quotes in full an October 4 post by usagi which is pretty critical to the way this has all been handled.

https://bitcointalk.org/index.php?action=printpage;topic=115284.0

I have screen caps of the account 12, account 15 and account 16 CPA contracts if anyone needs them. 

It's tucked away in your merit certificate presentation cask. Look well in all the folds and thou shalt find it.

Im sure theymos can dig them up....

Contracts of usagi's companies
Links to spreadsheets and information about usagi's companies on his website (which he has also taken offline)
Announcements and results of shareholder motions
Arguments between usagi and various forum members about how he has been misleading customers in fraudulent business schemes

This thread is a good starting point but without the deleted posts it will be complicated to understand what really happened.

what evidence is contained in his deleted posts?

Usagi is only entitled to his percentage of the equipment not 100%. He cant take the entire amount but has to divide it equally amongst existing shareholders.

He basically stole 30% or whatever percentage of shares he doesnt own.