Archive for the 'Stock Exchanges' Category

Latest Second Life Financial News

December 19th, 2007 | Category: LindeX, Second Life Money, Stock Exchanges, Virtual Economy

From: Second Life Blog Economic Key Metrics for October and November 2007 Quote from the site - Key takeaways: In November, we had another slight reduction in overall Logged In User Hours (our first drop was back in August) that is related to the Unplanned service outages. Overall economic metrics continue to trend slowly upward, including the Lindex exchange figures and resident-to-resident transactions.

From: Second Life Blog Financial Statements For Everyone! Quote from the site - Many Residents use Second Life in a professional capacity. As such, being able to both keep and present detailed records of financial transactions is vitally important. To help you with this, we’ve added a new page to the “Your Account” section of the website: Account Statements.

From: Second Life Herald Op/Ed: Financial Myth Busting Edition Quote from the site - When Ted Castronova wanted to study a virtual economy, he decided against using Second Life. A number of people thought that was foolish because SL already has an economy. But SL is not like other MMO economies for two reasons; the LindeX makes asset prediction impossible and residents do not make predictable economic choices.

From: The Dewey Blog Second Life Quote from the site - A recent blog entry on foreign exchange rates elicited the comment/question, “Where would you class the Linden dollar?” The answer is that the Linden dollar is classed in 332.4 Money, given its including note for “other mediums of exchange.”

From: Wayne Porter Ebay powers Second Life and Live Gamer and Twitter Blackjack Quote from the site - Mashable reports on a new service that finally gives gamers what they want- a free economy of sorts. Backed with $24 million in VC from Charles River Ventures, Kodiak Venture Partners, and Pequot Ventures, LiveGamer went live targeting MMOGs with a platform to trade virtual goods. Andrew Schneider and Mitch Davis, (ad startup Massive sold to Microsoft) Live Gamer brings a sense of respecatbility to trading virtual goods. Suddenly that +3 Vorpal Blade of Troll Slaying takes on new and potent economic meaning.

From: SL Capital Exchange SL Capital Exchange to replace SkyRanger Hammerer Quote from the site - It is with some regret that I report to you that SkyRanger Hammerer has been relieved of his duties as SL CapEx Compliance Officer and is no longer an employee of the SL Capital Exchange or its parent JT Financial.

To be very frank, the MAJORITY of companies now listed are out-of-compliance in some manner or other - either via Errors and Ommissions in the requisite monthly Financial Reports (at MINIMUM an Income Statement AND Balance Sheet) in a GAAP-compliant format submitted no later than 10 days following the last day of each month, or in the mandatory WEEKLY UPDATES CEO’s are expected to file.

From: SL Reports Press Release: Goldflake comments on WSE notecards Quote from the site - The World Stock Exchange (WSE) has been distributing a notecard to the users registered at their website. While we commend the intention to inform and educate the users, we strongly disagree with section 3 (Banks and Exchanges) in the aforementioned notecard.

First off, the WSE claim to hold a 95% market quota is a joke at the best and we refer you to this post written by an independent and unbiased observer .

From: Orient Lodge Analysis of Second Life Exchanges Quote from the site - People have questioned how this 95% market share is calculated, and I must admit, I have no idea. So, I thought I would do a little digging into data available from the different exchanges. The International Stock Exchange (ISE) appears to provide the most detailed data, which can be aggregated.

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Second Life Financial News

November 26th, 2007 | Category: Banking, Second Life Money, Stock Exchanges, Taxes, Virtual Economy

From: Your 2nd Place Taxes……does that mean refunds? Quote from the site - You know I was sitting in the Emergency Room with my mom at hmmmm 3a.m. this morning….reading an August edition of Time magazine. Flipping through the pages I see, oh what do you know?….an article about Second Life….Second life and taxes…..I do not recall (famous last words) the dollar amount they say people made in Second Life……and if the government should tax those monies….well I for one hope they do!

From: Second Life Herald Midas Bank Insolvent - Trouble On The WSE Quote from the site - While there have been some concern about Midas Bank’s financials, no public signs of trouble occurred until November 2nd. Midas Commons released a notecard stating that an interest payment that was due on Hope Capital Bonds (HCB) was not paid. Midas reported having L$3.5 million invested in HCB. The Second Life Exchange Commission reports that L$650,000 was owed to Midas Bank as the interest payment on their HCB holdings.

From: Orient Lodge Commodity Trading, Coming to Second Life Quote from the site - Quanta was planning to set up a bank in Second Life where the deposits where backed by gold bullion at The Bullion Vault in Zurich. I’ve been interested in watching commodity trading coming into Second Life. I had a great discussion about this with Quanta when he first bought the land and I’ve been waiting for the next developments.

From: SLOz World Stock Exchange facing legal problems? Quote from the site - The Second Life Herald are running a story on the Midas Bank saga, alleging that Midas have done some legal investigations around their issues with the World Stock Exchange, run by Australian Luke Connell (LukeConnell Vandeverre).

From: Looker Lumet New Second Life “SLURRENCY EXCHANGE” to offer best rates, preferred programs. Quote from the site - Virtual world developer announced their new ventureinto the world of Second Life currency exchanges, with the openingof the SLURRENCY EXCHANGE,whose main office is located on theSimuality island

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Another WSE Scandal?

It looks like the WSE is in the spotlight again, and not in a good way, again. From the sounds of it, the WSE has defaulted on a scheduled payment of the Hope Capital Bond (WSE: HCB), this payment was worth about L$650,000 of income and Midas Bank had upwards of L$3.5 million invested in the HCB, and relies on the bond payment to fund the depositor’s reserve.

Ancapistan Capital Exchange (AnCapEx) Chairman IntLibber Brautigan agreed with a statement by Midas Commons in which a boycott of the WSE was proposed until it made good on its bond payment.

“LukeConell is not a fraud or theft master,” said Smithers Daviau, a representative of the WSE present at today’s gathering. Aside from statements and excuses from Smithers and one other WSE employee, however, regard for Second Life’s oldest and arguably most opaque securities exchange was not so positive.

Commons further reported that the bank currently had around L$8 million on deposit, and a total loss of value in its HCB holdings would represent a loss of about L$5 million – and unavoidable bankruptcy for the financial institution. Source: Updated: Midas Bank in limbo; Commons and Brautigan call for boycott of WSE

From a statement on the WSE website, they say they are not responsible for the financial decisions of the Midas Bank and that the management team if fully responsible. They have delisted the following Midas Group of companies to ensure that shareholders will have the best possible chance to earn a return on their investments through capital growth and dividends using the WSE Traders Fund.

Midas Commons, CEO of Midas Bank yesterday informed the World Stock Exchange that the Midas Group of Companies are bankrupt.

The WSE accounts controlled by Midas Commons were locked while we reviewed the situation.

The cause of this bankruptcy is not our concern as the WSE is not responsible for the decisions and actions of Midas Group and its management. Midas Group and its management team are responsible for all the financial and operational decisions.

The WSE has believes that the Midas Group of Companies were Over-Leveraged and did not hold sufficient cash reserves to allow for the potential risks and impact of increased customer withdrawals, lower than expected earnings from investments along with regulatory and economic challenges. Source: Bankruptcy of Midas Group

I agree completely with Lowell Cremorne of SLOz and have asked the same question myself during the Ginko Financials fiasco.

What this latest drama reinforces is the fundamental problem with the unregulated financial system in SL - why would any serious investor look at a system where there’s no regulation and multiple stock exchanges that publicly criticize each other’s viability? One of the main value propositions of Second Life is its freedom, but this is one area where too much freedom may be one of the virtual world’s major pitfalls. Source: World Stock Exchange - the latest controversy

More coverage:

WSE announces Midas Group are bankrupt The full statement (below the fold) makes interesting reading in one paragraph saying “the reasons are not our concern” and in the next explaining why they think the bank went under. Nothing to do with late payments from their own bonds of course. The value of the various Midas Group bonds have been transferred to the WTF rescue scheme, straining it yet further.

Midas Bank the next… Looks like it is 5 to 12 to get all funds out of SL. There is no more trust left in any bank or investment….sadly I think it would be better if one starts to legally track down these individuals in RL and get that continued fraud resolved once and forever.

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Ginko Financials CEO Hits the Door

There has been so much transferring and bullshit going on with Ginko Financials, I don’t even know where to begin anymore to try to explain what happened. The most recent activity has seen the CEO say he can’t make the interest payments anymore, and he has transferred everything to the aptly named WTF, or WSE Traders Fund, and is washing his hands of it.

I also thought I could do partial liquidations and use the money to lower our debt proportionally. However, first with the ban on buying bonds for less than the face value and later with the gradual erosion of our investments, both of these things ceased to be possible and my position became even weaker than it was when I created the bonds. The
fact is, there is no way for me to meet this quarter’s interest payment. Neither of our main in-world investments got off the ground (BNT and HCL), though they may still do so sometime in the future. The stocks are too weak to be sold to help meet this quarter’s interest payment. The L$2,400,000 we have inside Allenvest, despite Allen’s lie about me having withdrawn everything, are locked and probably lost forever.

The situation is such that I am left with no choice here. The bonds need
to be converted to a fund, which will hold these assets. Namely, the WSE Traders Fund (WTF) already listed on the WSE. Interest payments are no longer part of the equation and as I am transferring the assets to Luke, I will no longer be involved with anything regarding Ginko Financial as it will no longer exist. Assets previously held by Ginko Financial are being
transferred to the WTF. Source: Ginko Perpetual Bonds Important Announcement

The SLNN in an aptly titled article, Ginko CEO Escapes, I say aptly named because it is in a folder called bank robber, check the url when you get there.

Today, Ginko Bank CEO Nicholas Portocarrero posted a statement on the World Stock Exchange Web site saying he will not be paying any interest on bonds, allowing himself a back door to escape with $750,000 USD.

But Saturday, Portocarrero said he could not pay interest on the bonds and pinned partial blame on actions taken by banker Investor Allen, and the weak face value of his bonds. Source: Ginko CEO Escapes!

There is still a little bit of hope however, as Shaun Altman, majority bondholder of Ginko Perpetual Bonds (GPB) is taking it upon himself to see to the equitable liquidation of GPB’s current asset’s and to the timely compensation of all bondholders.

I will be charging nothing for my liquidation trust service. I believe that GPB bondholders have been through enough at this point, and have a right to recover as much as they can from this fiasco. Being the person with the most GPB bonds, as well as a neutral third party to asset holders, makes me the right person to handle this liquidation. The ball is already rolling, so I ask that all bondholders recognize this, and recognize that I am working in all of our best interest. I hope that it makes you happy to know that someone is finally working in YOUR best interest for the first time in a long time. I hope that I will be able to recover a sizable portion of GPB’s assets for distribution to all of us, but I can’t make any promises. Source: Ginko Perpetual Bond Liquidation Plan

Check that post for the exact way he plans to carry out the liquidation and distribution of the GPB assets. Let his be a lesson for everyone, if the bank is not backed by money to start with, then you are gambling with your lindens and we know how the Lindens feel about gambling.

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Business and Finance News about Second Life

August 22nd, 2007 | Category: Banking, Business, Investing, Stock Exchanges

Dutch research shows strategic advantage for businesses Recent research of the University of Utrecht on why companies establish in virtual worlds showed that Dutch companies feel they have a strategic advantage on competitors. Also they find themselves innovative and feel it gives them a better insight in the behavior and preferences of tomorrow’s customers.

The L$150,000 lindens that were taken by Jasper Tizzy, of the Atlas Venture Capital (AVC), has been returned, at least according to a comment from Cocky Dagger on this ISE press release.

cocky dagger
The issue with the money has been resolved. Jasper has paid the money that was deposited by the ISE.

Second Life Developer Out sources Accounting Linden Labs, creator of the online virtual world Second Life, has begun outsourcing its finance and accounting work to Consero Global Solutions.

Linden expects to save over $1 million over the next three years from the arrangement. The company’s Second Life online world has attracted more than 8 million registered users in 100 countries.

Virtual speakeasies defy Second Life gambling ban Last month, Linden Lab banned gambling in Second Life, bringing a thriving casino industry to an abrupt end. But while the old casinos have shut down, a vast network of illicit speakeasies have sprung up in their place, providing gamblers with new places to play.

Poker players in Second Life say anyone looking for a game can easily find one.

In Reality, Virtual Marketplace Falls Short The virtual world of Second Life is taking a media beating. What was recently touted as the next great frontier for advertisers and tech-savvy companies is now experiencing a backlash of negative feedback. For every successful company in Second Life, there seems to be countless others abandoning the virtual world in favor of other, more controllable worlds.

Cyber Boom With just the click of a mouse, virtual land barons are making a small fortune in real-world money. David Adams reports.

The new gold rush is on, but it’s no longer to the hills of Ballarat or California that people are flocking. Instead, it’s to the new frontiers of virtual cyberspace worlds where people are heading in their droves, eager to be among the first to snag themselves some land and set up shop.

What Second Life business exodus? Earlier in the summer, Second Life took several hits in the mainstream business press, which just last year was ga-ga over the virtual world and the potential for business activities. Pointing to negative articles in Forbes and Fortune, I concluded that “the honeymoon is over.”

A few readers agreed. One, identifying herself has “Shannon,” proclaimed that the “Second Life bubble has burst,” and described what she said was her own company’s experience.

People Don’t Like Marketing and Advertising Yeah, I know, if you’re here wondering what kind of obvious headline that is, you’re in the choir. I’m just translating.

When John Connell mentions this bit of Wired’s vanilla reinvention of what was predicted, I had to chuckle. People have shouted, they have screamed, and given the opportunity they will avoid marketing and advertising unless they like the product enough to get past the gimmicks.

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WSE Moves Office, Threatens Reporter

August 22nd, 2007 | Category: Investing, Second Life Videos, Stock Exchanges

Check out these two videos from SLJoe when he was trying to interview Luke McConnel from the World Stock Exchange (WSE). Lots more reasons to not put your money in their Stock Exchange.

Posted to Technology Videos on July 26, 2007

Posted to Technology Videos on July 26, 2007

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L$150,000 Taken from International Stock Exchange

August 21st, 2007 | Category: Investing, Stock Exchanges

Second Life Finance is starting to sound just like the old west, when it was pretty easy to grab a bunch of cash from a bank and disappear, Apparently, following last nights press conference where they announced they would not be auctioning off the Stock Exchange, Jasper Tizzy, of Atlas Venture Capital, has supposedly taken off with L$150,000 Lindens.

Jasper Tizzy of Atlas Venture Capital (AVC) Runs off with 150K of ISE’s Capital

FOR IMMEDIATE RELEASE - Immediately following the International Stock Exchange’s press conference scheduled yesterday at 6:30PM SLT -;

Jasper Tizzy in what appears to be his final act of desperation, departs the International Exchange with approximately 150,000L$ of the ISE’s deposited capital. Source: Jasper Tizzy of Atlas Venture Capital (AVC) Allegedly Runs off with 150K of ISE’s Capital

Anyone who puts their Lindens anywhere other than their avatars pocket is crazy if you ask me.

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International Stock Exchange News

August 20th, 2007 | Category: Investing, Stock Exchanges

The International Stock Exchange has decided to start disclosing all CEO stock transactions in direct relation to their listed company, and all CEO’s and their alts that resolve to the same IP address will have their transactions displayed for the last 10 days. No they aren’t displaying the ip address, just transactions coming from the same ip address. They are trying to stop any insider trading that has been going on and allow investors to gain a little more knowledge about what is going on in the ISE.

This has caused several companies, Atlas Venture Capital (AVC), Countless Galaxies (CGI), Bart Heart Estates (BHE), Valentine Heart Inc. (VHI), Kristatos Fashion Mall (KFM), and Mystik Designs (MDS), to delist and move to the new Stock exchange, Virtual Stock Exchange.

FOR IMMEDIATE RELEASE - Second Life, Talyn (235, 37, 61); Effective immediately the trading of Atlas Venture Capital (AVC), Countless Galaxies (CGI), Bart Heart Estates (BHE), Valentine Heart Inc. (VHI), Kristatos Fashion Mall (KFM), and Mystik Designs (MDS) have been halted and removed from the International Stock Exchange (ISE). Additionally, all investors will be refunded on trades of AVC, CGI, BHE, VHI, KFM, and MDS.

In an effort to protect investors and cut down on insider trading, we are implementing a policy of disclosing all CEO’s stock transactions in direct relation to their listed company. Furthermore, all CEO’s and their alts that resolve to the same IP address will have their transactions displayed for the last 10 days. Source: International Stock Exchange Responds On Companies Delisting

So, lots of stuff happening at the ISE, and I didn’t even mention the fact that they have put the Exchange up for auction.

Loads of comments about the new policy are available here.

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Techcrunch on Second Life Stock Exchanges

August 20th, 2007 | Category: Banking, Investing, Stock Exchanges

Following the ban on gambling in Second Life, Duncan Riley of Techcrunch decided to see if you could make money in SL by investing in one of the Stock Exchanges, he picked the WSE, probably because it was the biggest and most known. I would’ve liked to see him try his hand at all of them, but, any lights that get shined on some of the possible money scams in Second Life is good enough for me. He mentions the world of share trading is regarded by some s even worse than gambling, but doesn’t mention whether this is a real life or Second Life conclusion.

The World Stock Exchange (WSE) sits on its own Second Life island in a shiny multi-story edifice that just says money.

The trading floor on the third floor presents an initial lobby that includes an ATM machine (players must deposit money to trade stocks), rule boards and advertising for a bank that offers 15.75% PA. Walking through the lobby players are presented with a lounge area and customer service desks. There is usually a WSE representative on hand to assist with inquiries.

Can You Make Money Though?

There is only one way to find out. After perusing the 30 odd listed companies I made a number of investments which I may revisit at TechCrunch in the future to report on how they went.

For my opening portfolio I bought companies that sounded like they had substance. Hope Capital Limited (HCL) sounded hopeful, and as this is the holding company for the WSE you’d expect good results. Hype String (HYP) may not make string, but hype always rises, right? I expect Spontaneous Rich Investments, Inc. (SRI) to perform well. Ginko Perpetual Bonds (GPB) are all that remains of the funds from the collapsed Ginko Bank. After trading as high as L$26, today’s price of around $L0.19 makes them a steal. For good measure I rounded out my portfolio with the two IPO’s scheduled for August 20, Taft Worsley Enterprise (TWE) and Apez Corp (APZ). I have no idea what either do, but given the history of IPO’s in such markets, I’m confident of a strong performance. More in a week or so, unless of course I’ve made so much money that I’ve retired. Source: Betting On Second Life Stock Exchanges

He even created a video of his visit to the WSE. At least a bunch of armed guards didn’t show up this time to keep the peace. ;) I bet the GPB at L$0.19 a bond will still loose him money, any takers?

Posted to Technology Videos by eubeenhadd on August 20, 2007

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Lindens Say Skip the Banks in Second Life

August 15th, 2007 | Category: Banking, Scam, Stock Exchanges

In a post from Zee Linden today, the Lindens try to once again state that they have no plans to regulate Second Life banks, and that if it seems to good to be true, like Ginko Financial was, then it probably is. Until some regulations on banking and the stock exchanges are put into place that can hold people accountable for theft, fraud, etc, then I would keep my lindens in my virtual pocket, or transfer some out occasionally so too much doesn’t build up. If you put it in a bank, you are on your own as far as they are concerned.

It is important here to distinguish between real-world banks and the “virtual banking” services that some people are trying to develop in Second Life. From a simple perspective, banks exist in the real world so you have a place more convenient than your mattress in which to store your cash. Banks in the real world attract capital by offering to pay an interest rate. They then turn around and try to lend that capital to worthy borrowers earning money on the spread between the interest they pay and the interest they earn. Because Linden Lab holds everyone’s L$ as a database entry in each account, virtual banks don’t offer a superior “storage” alternative.

Probably the most important point is that real-world banks are regulated by real-world laws. Linden Lab does not intend to recreate or subvert real-world laws in any way. We are not aware of any institutions in Second Life that are insured by the Federal Deposit Insurance Corporation or similar governmental agencies in other countries. We caution our residents to be wary of anyone offering extremely high interest rates at no risk, either in the real world or in Second Life — if it sounds too good to be true, it probably is. Source: The Second Life Economy

He also discusses the Linden, the Second Life virtual economy and inflation, and some of the sinks they use to drain some lindens back out. (i.e. how we pay for our stuff in-world).

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SL Financial News August 11, 2007

August 11th, 2007 | Category: Finance, Stock Exchanges

Ginko Perpetual Bonds live If you’re determined to cash in your bonds by the way, you’ll get a bad price. The best price currently available is L$0.14/share (this changes quite fast, it was L$0.15/share when I started this article), but there are a limited number of offers at that price. You’d be lucky to realise L$125,000 on 1,000,000 bonds (that’s former savings of L$1,000,000) - that’s 1/8th of the value of your former savings.

Deficits, money supply and the Second Life business cycle Matthew Beller, a former employee of the Federal Reserve who currently works for the Securities and Exchange Commission in Los Angeles, notes that since the middle of 2006, when Second Life’s population really began to take off, Linden has been running a persistent and growing budget deficit within the virtual world’s economy.

Ginko Perpetual Bonds and You The Overview, Trading History and Last 10 Trades are indicators of recent performance. You can tell what the stock is presently worth, and even guesstimate the trend of the GPB based on recent performance. These will be important over time; despite your best efforts it is unlikely you will be able to sell your shiny new GPB because everyone else will be trying to sell. Who will be trying to buy? Likely it will be Ginko Financial itself, and perhaps a few speculative investors. Selling low to speculative investors will not help anyone but it can minimize your losses should GPB fold completely - and it will degrade the value of the bond for others.

Businessweek: Virtual Exchanges Get Real (Updated - Businessweek Article Error caught) “It’s a game,” says Connell, who in the physical world is the managing director of an investment firm called Hope Capital. “You don’t regulate something that’s not real.” He says that what happened to his exchange in recent weeks was an “ethical fraud,” but not a criminal act, because this is all fictional. Others disagree, as participants make real money, even if it’s not much, through these virtual businesses and exchanges.

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Was/Is Ginko Financials a Scam?

August 08th, 2007 | Category: Banking, Scam, Second Life Money, Stock Exchanges

Ginko Financials is apparently experiencing a run on their bank, meaning everyone wants their lindens out of there, and who can blame them with all of the shady stuff that appears to be going on in the unregulated world of Second Life finance. What can be going on there that they still offer a .10 daily interest rate, which works out to about 44% interest for the year, a pretty good return no matter what the currency is, as a matter of fact it’s still too good to be true. Ginko’s interest rates have always been high, and most banks in SL appear to be offering rates that are too good to be true. So, combine the theft at the WSE, the problems with Ginko and the fact that lindens are not backed by anything and are pumped into Second Life at the discretion of the Lindens, and we have a recipe for disaster, and this recipe is about done. Check out the notice posted in the Ginko Financials website, I have pasted the relevant parts below.

About a week and a half ago, we saw an increased number of withdrawals; the time to speculate as to why this happened has since come and gone, so I will leave it at that. No matter what started it, the result is the same: We have expended every possible short-term resource, and are still unable to meet the current demand for funds. We have attempted several different things to remedy the situation (which is in short why the interest rates and limits have fluctuated wildly), but none of them turned into a viable permanent solution.

For the time being, we have decided to continue doing business normally, but leaving the withdrawal queue in place with an expanded L$1,000,000/day limit, to give an indication as to where the end of this situation may be. However, a realistic estimate could possibly extend in to the realm of several months.

For those of you who wish to withdraw your funds, you may wait in the queue, or cash out to Ginko Perpetual Bonds, which is currently the only option if you don’t wish to wait the seemingly indefinite period of time it could take to refill the reserves. Source: Ginko Financials

So, they are taking deposits still and they are then paying those deposits out to existing customers who are trying to get their money back. How is this possible and how can they “look” their new customers in the avatar and feel good about letting them think they are actually going to be able to get their money out. I read somewhere that they just kept a little bit of the lindens on hand and invested the rest, what happened to all of the money they took from depositors in good faith? Why have they not liquidated all of their holdings to pay back their customers? A post at your2ndplace, a great blog that has been on top of this the whole way, asks this question.

A Coincidence?

But there is something in common with HCL, GPB and GCS. Nicholas Portocarrero is the major shareholder in HCL - which, by proxy, puts him heavily invested in WSE. And guess who is listed on GCS and GPB as a Non-Executive Director? Lukeconnell Vandeverre, the CEO of HCL.

Is it a coincidence that these two names have been coming up a lot in the timeline since the WSE was ‘hacked’? Doesn’t it seem odd that when Nicholas Portocarrero is having trouble raising enough money to handle withdrawals that he would be investing in Hope Capital?

What’s going on here? I’m not saying anything - but there are the facts right there. How do we explain these facts? Source: Peering Into The Depths of Ginko Financial

Many have said that what Ginko is doing is illegal and most certainly fraud, and it certainly appears that way to me, taking one persons money in good faith and passing it right out the ATM into someone’s hands who are trying to get out of this mess. Benjamin Duranske of Virtually has a huge post about the Ginko Financials troubles here, Commentary: Ginko Wrapup - No AVIX, IPO, or Funds and he says this won’t be over until someone is in jail.

If what you were saying was true, then they would close down deposits. What this indicates, to me is two things. 1) at some core level, they actually believe this might magically still work, and 2) they are hoping that as long as they leave it running, they won’t be prosecuted or sued.

But leaving deposits open when they go DIRECTLY from the depositor to the pocket of a previous depositor is so transparently criminal that I can’t even give them much credit for #1 any more, and I’ve been someone who has consistently said they bought their own nonsense, even as one of the loudest critics of their facially illegal methods.

Think about this — they knew how much money they had five days ago when they were offering 148% interest on 30 day term deposits. You think they’ll be paying those in, now, 25 days? Every penny that they take right now saying it’s a deposit that will earn interest is undeniably fraudulently received. Source: It doesn’t count for anything…

I wonder how the Lindens think their no banking policy because we don’t want to make everything complicated is working out now?

Added: Ginko Financials shutting down And Ginko Financial Closes It’s Doors (Updated:10:06 pm SLT - Now Official).

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