June 25, 2010 Dear shareholders,
I am very aware that shareholders are exhausted, frustrated and some are even
angry that so much time has elapsed and nothing has come from their original
investment in this Company. I understand that many of you are even under
extended pressures from friends and relatives because you also talked them into
investing and now they are looking to you for answers. I too have many friends and
family members that are shareholders of CMKM and they are also looking for
resolution.
When Mr. Casavant turned this Company over to me and resigned in March of
2007, I still believed that there were stones left unturned that would allow for a
quick resolution and turnabout of the circumstances for the benefit of the
shareholders. I made promises to you with full intention to keep you updated and
fully aware of the current activities of the Company on a continual basis. To all of
our dismay, the unturned stones that were found did not show anything that
promised a quick resolution to the benefit of the shareholders. In fact, the
information that we became in possession of showed anything but the promises of a
quick resolution. Working daily in the atmosphere of ongoing litigation is not
anything remotely close to what I had hoped was waiting for shareholders just
around the corner in March of 2007.
In an April 20, 2007 press release I had the most unpleasant duty of telling
shareholders what was uncovered just days before when several boxes of
documents arrived at the Frizzell Law Firm. What was in those boxes foretold just
the beginning of the heartbreaking story that we eventually uncovered that told us
what really happened with our investments. Once this occurred, CMKM was
forced into litigation mode that required extreme amounts of time to be dedicated
to investigation and discovery of the facts which has led to the possession of
several hundred thousand pages of documents. Because of those events, the
Company was not left with many new things to report to shareholders on a daily,
weekly or even monthly basis. I can no longer discuss matters that may end up
being part of litigation and wish to thank Bill Frizzell for his recent update to the
Company that he allowed us to post on the website last month for all of you to see.
Just one week before Mr. Casavant resigned we were advised by then corporate
counsel J.T. Moran III to put the Company into bankruptcy. However, we did not
take that advice and the Company is still alive today and has a fighting chance to
succeed in some way. It is the belief of current management that through our
diligent efforts of seeking restitution through the courts that CMKM will have its
most reasonable chance to once again become a publicly trading company.
Management is making every realistic effort possible to set up the foundation of the
Company so that it is ready to move forward once the larger recoveries are made.
Currently, there have been a few small settlements won by CMKM that have
enabled the Company the ability to continue forward with litigation, budget the
initial and monthly fees of hiring the new transfer agent, corporate overhead, agreed
upon reduced salaries for officers, the payment of property taxes along with the
upkeep on two properties obtained in one settlement (see corporate updates
4.21.2009 & 5.11.2009) and the engagement of a CPA firm that is currently and
diligently working to reconstruct financial records from 2002 forward with the
intention of fully audited financials.
I still believe that CMKM Diamonds, Inc. was a victim of naked shorting or at the
very least had one of, if not THE, largest failure to deliver problems that ever
existed in the U.S. markets. I recently visited personally with attorney Al Hodges at
his office in Pasadena. Most of you are already aware that Mr. Hodges is seeking
the release of funds that he believes were collected on behalf of the CMKM
shareholders. I have known and remained friends with Al Hodges ever since that
fateful day in March of 2007 within an hour or so after Urban Casavant turned the
Company over to me.I find Al Hodges to be extremely forthright, honest
and fully believe he is working only for the best possible outcome and benefit of all
shareholders of this Company. I was not privileged to the evidence that he
maintains; However, after my visit with him early this month it is my personal
opinion that he is 100% committed to his current actions and that he firmly
believes, without any room for doubt, that he has irrefutable evidence of funds
being held for eventual distribution to the CMKM shareholders and that he
believes that the release of those funds is imminent.
Moving forward, while the current paths of CMKM and attorney Al Hodges are
not exactly the same, both can coexist independently with each one working
towards an outcome that is intended to be of the best possible benefit for all
shareholders. Mr. Frizzell stated in his last litigation update, “I personally think Al
Hodges is a very capable and experienced attorney. I am hopeful that his litigation
is successful but CMKM management does not have the luxury of waiting to see
what will come of that lawsuit. Based on the recovery sought in the Hodge’s suit, if
it is successful, the matters being litigated by the Company will pale in significance”.
In past updates, the Company has requested that anyone with direct knowledge
of anything that may be of financial benefit to the Company and its shareholders to
step forward with your information and the Company will investigate it fully. I want
to once again extend this offer to everyone. A new email address has been
set up specifically for this
purpose: NewInformation@cmkmdiamondsinc.com. Please note that
any email submissions to this address that do not have to do specifically with
providing new information that can be of help to the Company will be promptly
deleted. No emails will be answered or forwarded from this address. It is my
sincerest hope that this new attempt to allow for usable information to come
directly to the Company will not be abused and can be maintained for the sole
purpose for which it is being provided.
Because the Company is not in the possession of any materials, documents or
knowledge of any kind that points to a trust or any other means of monies or assets
having been gathered, demanded or put aside for the Company and/or its
shareholders we have had to move forward with the information that we do have
available to us which is one of the reasons for our current litigation.
I want to commend Transfer Online for doing a fantastic job to get the initial
onslaught of shareholders taken care of with their requests for account s to be set
up. Most people will probably not ever be able to comprehend the enormous task
that was undertaken by the new transfer agent to get this under control and taken
care of. To add to the scope of the task, there were several problems that were
reported to them by shareholders that had to be fully researched and eventually led
to only a few inaccuracies from the records of our former transfer agents that had
to be corrected. As per the shareholder list created with the new transfer agent on
April 7, 2010 there are: 800,000,000,000 common shares authorized;
703,514,957,466 common shares issued and outstanding; zero preferred shares
authorized or issued and 48,679 shareholders of record. Currently there are only
8,862 security account holders that have registered with Transfer Online for access
to their accounts.
There are still a large number of shareholders that have electronic shares being held
in brokerage houses both foreign and domestic. Since these shareholders do not
have physical certificates, they are not included in the current number of
shareholders of record listed above. Brokerage houses and clearing firms holding
bulk certificates that are theoretically used to back up all electronic shares held by
their firms are each counted as one shareholder but each of them may be
representing tens, hundreds or even thousands of account holders (CMKM
shareholders) and these are shareholders that we do not have all of the names or
current addresses for. To give you an example of most but not all of the brokerage
houses/clearing firms and their holdings as per the shareholder list of 4.7.2010
represented in bulk certificates: **
A.G. Edwards & Sons LLC
229+ Million shares
ADP Clearing & Outsourcing Services
486+ Million shares
Ameritrade,Inc.21+ Billion shares
Banc of America Securities LLC
3+ Million shares
Bear Stearns Security Corp.
73+ Million shares
Brown Brothers Harriman Co.
914+ Million shares
Brownco LLC
Zero shares
CEDE & Co
17+ Million shares
Citigroup Global Markets, Inc.
2+ Billion shares
Etrade Clearing LLC
27+ Million shares
First Clearing LLC
42+ Million shares
Gerlach & Co.
131+ Million shares
Goldman Sachs & Co.
410+ Million shares
H & R Block Financial Advisors
2 Million shares
Hare & Co.
212+ Million shares
HSBS Securities
34+ Million shares
Janney Montgomery Scott LLC
49+ Million shares
Larkoc/o Emmett A Larkin Co., Inc.
120,000 shares
Merrill Lynch Pierce Fenner & Smith
192+ Million shares
Morgan Keegan Co., Inc.
42+ Million shares
Morgan Stanley & Co., Inc.
416+ Million shares
National Financial Services Inc.
4+ Billion shares
NBCN Clearing, Inc.
11+ Million shares
North American Clearing, Inc.
17+ Million shares
Pension Financial Services Inc.
Zero shares
Pershing LLC
2+ Billion shares
Piper Jaffray & Co.
3 Million shares
Raymond James Associates, Inc.
700+ Thousand shares
RBC Dominion Securities
2+ Billion shares
Rush & Co.c/o Swiss American Securities, Inc.
298+ Million shares
Scotia Capital, Inc.
1+ Million shares
Scottrade, Inc.
Zero shares
Sterne Agee and Leach, Inc.
1+ Million shares
UBS Securities LLC
594+ Million shares
Vanguard Brokerage Services
104+ Thousand shares
Wells Fargo Investments LLC.
8+ Million shares
** Please note that these figures represent bulk holdings. Some of the firms
represented are holding certificates for individual accounts as the custodian.
These custodian accounts are generally representing IRA type accounts and
the figures above do NOT include those certificates. (For example: Scottrade,
Inc. has zero shares in bulk but they have several individual certificates held
as custodian for IRA type accounts of individuals)
As you can see, there are many shareholders not yet fully accounted for
because their shares are held in electronic form and not held in physical certificates.
If you have not signed up for your account yet at
www.TransferOnLine.com , it would be of benefit to you and the Company to do so. This account is
completely free of cost to each shareholder. By signing up for your free
account you will be able to make address changes which in turn will enable the
Company to have your most current mailing address so that it is available for any
possible needed communications to include a future shareholder’s meeting.
CMKM intends to hold its first ever official shareholder’s meeting within the next
12 months. As you could imagine, this event will be an extremely large undertaking
with a great deal of organizational and monetary requirements to make it happen
correctly. To begin preparing for this event now, it will be necessary to have
current information for as many shareholders as possible. If you intend to be able
to vote via proxy you will need to have a certificate in your name and have a
current address on file with the transfer agent. If you have electronic shares only,
then your vote(s) will be held by the brokerage or clearing firm that is theoretically
holding the bulk certificate for your position.
In closing, I know that some shareholders are hurting very badly due to economic
times and/or health conditions that could possibly be helped with any kind of return
from their investment in this Company. I wish there was a quick and simple
resolution. I can assure you that the management team is dedicated and that we will
continue to work diligently towards the best possible outcome for the Company
and its shareholders in as short of time as possible with the resources that are
available to us. Thank you once again for your patience and ongoing support.
Very sincerely,
Kevin M West
Chairman, CEO & President
BUT BEFORE HE WROTE THE ABOVE... HE WROTE THIS---> 12-12-07Dear shareholders,
It has been over eight months since the reigns to this Company were signed over to me by Urban Casavant. There has been a lot of work accomplished during this time that has not been made readily available to the public because of ongoing litigation. During these last few months, the Company has subpoenaed and otherwise acquired over 200,000 pages of documentation that has well established what really happened to your investments. Many of you have read the lawsuits that the Company has filed and understand the facts that are presented under oath in these petitions. Some of you have continued to deny what has taken place in this Company under the control of former management and are looking to current management for answers to questions that have been answered over and over.
In the normal course of litigation, the plaintiff does not give out the documented evidence it has acquired for dissemination to the public. Normally a statement of facts is presented in the lawsuit petition along with exhibits to support those facts. This is eventually followed by interrogatories and document requests by the opposing side. In our lawsuit filed by the Company against former management and other insiders, there has not been an opposing side to show up in court to request our evidence. I have discussed releasing some of our documented evidence to the shareholders via this public website. Company legal counsel has advised me against doing this because it is not a normal legal course of action. However, I am going to release a portion of our evidence because of the obligation that I feel to the shareholders to share with them the facts as they have happened. There are many documents that simply cannot and will not be made public at this time due to their role in a potential recovery of assets. With the support of our legal team, I still hope to be able to recover some of the assets that belong to the Company. If and when enough assets are recovered, they can provide a financial basis for this Company to appoint a Board of Directors and hire officers to initiate a formal business plan and finally move this Company forward to become a real and viable entity.
Many are wondering about the talk in the past of naked shorting of the Company’s stock when it was publicly traded. The Company does have proof of actual fails to deliver in our stock. The number of fails and the number of shareholders affected by this problem have not yet been established due to an ongoing shareholder audit. Most people do not realize the number of hours and the amount of money that has to be expended with every step the Company takes in any of the ongoing issues, the shareholder audit being one of most exhaustive of these resources. . Having a shareholder base of 40,000+ people multiplied by the fact that our shareholder base is from around the world, makes every step a massive undertaking. Because of the enormous size and international locations of our shareholder base, any event that would require the Company to attempt notification of all shareholders through a certified process would cost a minimum of $250,000 by the time all costs were added together.
Many are asking me to disclose my personal salary. Since this is a private company, I am not obligated to do so. However, since it is not a big secret, I will provide this information to you. Just before his resignation on March 29th of this year, the former Chairman of this Company gave me a new 3 year contract as sole officer and director of the Company at $10,000 per month. Since the Company was left with little more than $500 in the bank when I took over on March 29, 2007, the Company has relied upon loans put together by Bill Frizzell to continue to survive. Because most of this money has to be used in an effort to recover assets for continued survival, my personal income has been very minimal and has not been enough for my salary to be paid in full through July of this year.
Many are asking about the interpleader action that was supposed to have been filed by the former attorney of CMKM Diamonds, Inc., John T. Moran lll. The Company still does not know what actually took place during the time that Mr. Moran was hired to file the interpleader because that attorney is still refusing to turn over our Company’s file. At this time, the Company is now involved in yet another lawsuit that was filed by Entourage Mining in British Columbia in an effort to reclaim the shares of Entourage stock that was supposed to be included in the interpleader that was never filed in Nevada. This lawsuit must be decided before any further actions can be discussed or taken with these holdings.
The Company will not answer to threats by shareholders or anyone else. Current letters that have come to my attention that are threatening a phone, fax and email campaign will not be answered in any way, shape or form. Anyone that believes that wasting the very limited time and resources of our legal team and other service professionals are only looking for ways to get recognition and these acts are no help to the Company or the shareholders. These suggested ways to try and manipulate management into discussing matters that are pure fantasy are only going to further delay what we are trying to accomplish for the good of everyone.
Bill Frizzell and I have taken time out of our very busy schedule to visit with many shareholders who have dropped in without an appointment, but our limited time simply does not allow for unscheduled visits in the future. I would suggest that these individuals get a shareholder representative to call the law firm and ask to schedule an appointment to come and look at the real facts. If shareholders want to hire an attorney and have that attorney call Bill Frizzell, he will be happy to schedule time for him or her also.
As discussed earlier in this update, I am going to release some of our many documents on this website for shareholders to view. These documents are going to be released as we have time to put them into a form suitable for public viewing. These documents are only being shared as a way to show shareholders the truth as to what has happened. The Company will not give any opinions on these documents as they are pretty much self-explanatory.
Out of everything that I have to deal with on a daily basis, my biggest burden is for the families of those that continue to live in a fantasy land of big checks coming that will save the day. Families are suffering for the actions of spouses that are addicted to these get-rich-quick rumors. There are no checks coming from any source. As shareholders, our only hope for liquidity and any possible ROI in the future is to get this Company back to trading status with value in it so that you can one day make a choice to either sell your holdings or hold on and grow with the Company. Those that continue talk of checks are only misleading you for their own purposes or for the purposes of those that do not want to face the wrath of this shareholder base for the crimes that they have committed against them.
As the CEO, I am thrilled with the results of our legal work. I have confidence we will be successful in our efforts to rebuild this Company.
Sincerely,
Kevin West
CEO, President & Chairman