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Jamie Dimon Is in a Whale of a Mess on the WeWork IPO
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2019/08/jamie-dimon-is-in-a-whale-of-a-mess-… By Pam Martens and Russ Martens: August 23, 2019 ~ Jamie Dimon Is In a Whale of a MessThe WeWork IPO preliminary prospectus was filed last week with the Securities and Exchange Commission (SEC) and the company has been getting savage reviews ever since. WeWork is a commercial real estate company leasing out office space but is attempting to mesmerize the public into believing it is some genius new-age thinker. JPMorgan Securities LLC, a unit of JPMorgan Chase, and Goldman Sachs & Co. are listed as lead underwriters on the IPO. Scott Galloway, a professor at NYU’s Stern School of Business, wrote on his blog that “bankers (JPM and Goldman) stand to register $122 million in fees flinging feces at retail investors….” What has not been crystallized as yet, however, is how Jamie Dimon, Chairman and CEO of the largest bank in the U.S., JPMorgan Chase, sits smack in the middle of this mess. Dimon should definitely have seen this mess coming. Dimon was co-CEO of Salomon Smith Barney when it began its super chummy relationship with Bernie Ebbers of WorldCom, which ended in multi-billion dollar legal settlements by Citigroup, Salomon Smith Barney’s parent, and Ebbers serving a 25-year Federal prison sentence. The WeWork IPO prospectus (the company will officially be called The We Company) uncannily channels the relationship that Salomon Smith Barney (SSB) and Citigroup had with Ebbers. To ostensibly get Worldcom’s investment banking business, Ebbers received lots of favors from SSB and Citigroup. According to a 2003 lawsuit brought by Alan Hevesi, the Comptroller of New York State, SSB and Citigroup had provided $499 million in personal loans to Ebbers, some of it collateralized with Worldcom stock, which meant the bank had a conflicted incentive for the share price to do well and to tout the stock to public investors, even if it meant wearing due diligence blinders. Compare that set of facts to this language in the WeWork IPO prospectus regarding the underwriters relationship with Adam Neumann, the Chairman and CEO of WeWork: “UBS AG, Stamford Branch, JPMorgan Chase Bank, N.A. and Credit Suisse AG, New York Branch, affiliates of the underwriters in this offering, have provided a line of credit of up to $500 million to Adam Neumann, of which approximately $380 million principal amount was outstanding as of July 31, 2019. The line of credit is secured under a security and pledge agreement by a pledge of approximately _____shares of our Class B common stock beneficially owned by Adam and held through WE Holdings LLC, of which Adam serves as a managing member. The line of credit has a scheduled maturity of September 18, 2020 and may be extended from time to time at the discretion of the lenders. The lenders have received and will receive customary fees and expense reimbursements in connection with the loan.” Then there is this paragraph which suggests JPMorgan has gotten especially chummy with Adam Neumann: “In addition, JPMorgan Chase Bank, N.A, an affiliate of J.P. Morgan Securities LLC, has made loans and extended credit to Adam Neumann totaling $97.5 million across a variety of lending products, including mortgages secured by personal property and unsecured credit lines and letters of credit.” Hevesi’s lawsuit against WorldCom assessed its Board of Directors as follows: “Among other things, the underwriters failed to conduct any due diligence to determine whether it had the means, intent, and ability to satisfy the staggering amount of debt it was accumulating…Had the bankers seriously weighed the import of the WorldCom board minutes, they would have seen what the Examiner and Special Committee found immediately apparent: the WorldCom board was nothing more than a ‘rubber stamp’ and was in no way an internal check and balance on WorldCom’s management.” Compare that assessment of WorldCom’s Board with this statement in the WeWork prospectus: “Adam [Neumann] controls a majority of the Company’s voting power, principally as a result of his beneficial ownership of our high-vote stock. Since our high-vote stock carries twenty votes per share, Adam will have the ability to control the outcome of matters submitted to the Company’s stockholders for approval, including the election of the Company’s directors. As a founder-led company, we believe that this voting structure aligns our interests in creating shareholder value.” Fortune magazine turned to Charles Elson, Director of the John L. Weinberg Center for Corporate Governance at the University of Delaware for his thoughts on this governance structure. Elson said: “It’s a mess any way you look at it from a governance standpoint.” Bloomberg News published the assessment of Rett Wallace, CEO of Triton Research, who called the WeWork prospectus “a masterpiece of obfuscation,” citing, for example, the fact that “the company stops counting sales and marketing expenses at a given location once it’s been open for two years — but the spending doesn’t actually stop after that. Instead, it counts as an operating expense.” Professor Galloway at NYU adds an additional point about WeWork’s $47 billion in long-term obligations versus its revenue stream, writing: “WeWTF is an especially risky business going into a recession, when the ability to variabilize costs is limited, but revenue decline is unlimited. WeWTF has $47 billion in long-term obligations (leases) and will do $3 billion in revenue this year. What could go wrong?” Jamie Dimon has somehow remained as Chairman and CEO of JPMorgan Chase despite three felony counts from the Justice Department on his watch, to which the bank pleaded guilty. The bank remains on probation until January 2020 for the last of the felony counts. Dimon also famously called the London Whale fiasco at his bank “a tempest in a teapot” at the time it was first disclosed in the press. The “teapot” turned into $6.2 billion in losses at Dimon’s Federally-insured bank from traders in London using bank deposits to make high-risk gambles in derivatives on subprime debt. That episode resulted in more than $1 billion in fines and settlements by the bank and a 300-page, highly unflattering assessment of incompetence in risk controls at the bank by the U.S. Senate’s Permanent Subcommittee on Investigations. Unlike in the WorldCom matter, the underwriters and their highly-paid lawyers seem to have gone out of their way in the WeWork IPO prospectus to reveal the ugly warts and entrenched conflicts of interest. The theory today is if it’s revealed by the company to investors, it’s not illegal. But JPMorgan Chase, as the largest bank in the U.S., and already a three-count criminal felon, does not need any more reputational damage. At some point, even Dimon’s snoozing Board is going to say “enough.”

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WeSuck: First Came the Hype; then Came Adam Neumann’s Self-Dealing; then Came the IPO Scandal; Now Comes the Bankruptcy
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2023/11/wesuck-first-came-the-hype-then-came… By Pam Martens and Russ Martens: November 3, 2023 ~ Adam Neumann, Co-Founder of WeWork Adam Neumann, Former Chairman and CEO of WeWork WeWork, the flexible-office-space company, is the quintessential proof that you can’t put lipstick on a pig forever. On Tuesday, the Wall Street Journal reported that WeWork “ is planning to file for bankruptcy as early as next week….” On October 5, the credit ratings agency Fitch downgraded WeWork’s long-term debt deeper into junk bond territory after WeWork elected to withhold interest payments on its debt that were due Oct. 2. Year-to-date, the publicly-traded stock of WeWork has lost 98 percent of its value. Its shares were trading for pennies in August on the New York Stock Exchange when the financial wizards at the company came up with the idea to do a 1-for-40 reverse stock split in early September to put a little lip gloss on the pig. Yesterday, the stock closed at $1.11, which would mean that it actually closed at just under 3 cents were it not for the 1-for-40 reverse stock split. The collapse in the share price in August came as a result of an 8-K filing with the Securities and Exchange Commission on August 8 which had included these fatal words: “…as a result of the Company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern.” Back in 2019, venture capitalists had valued this company at $47 billion and were hoping to cash out in a hot IPO. Yesterday, the company closed with a market value of $59 million. JPMorgan Securities LLC, a unit of five-felony-count JPMorgan Chase, which is currently making headlines with its own scandal of being the financier to Jeffrey Epstein’s sex trafficking ring for 15 years, was going to be the lead underwriter of the 2019 IPO of WeWork, along with Goldman Sachs. But then Scott Galloway, a professor at NYU’s Stern School of Business began to write viral posts on his blog. One of those posts stated that “bankers (JPM and Goldman) stand to register $122 million in fees flinging feces at retail investors visiting the unicorn zoo.” After reading the 2019 IPO prospectus, Wall Street On Parade called WeWork’s planned IPO “hype wrapped in subterfuge.” We said “It’s a money-losing commercial real estate company attempting to pass itself off as the Dalai Lama of office space rentals. The company has never made a dime of profits and its losses spiraled to $900 million in the first half of this year.” To enhance its valuation, WeWork attempted to portray itself as interconnected to technological breakthroughs. We explained in 2019: “We’re also going to have to excise ‘the extensive technology infrastructure’ because what they’re really talking about is not Silicon Valley breakthrough technology but jazzing up drab offices with beer taps, microbrewed coffee, fruit-infused water and WiFi – the latter of which you can get for free in any Panera’s, along with a table and chair, for the price of a cup of herbal tea.” In 2019, WeWork was represented by a very sophisticated law firm, Skadden Arps, Slate, Meagher & Flom. The Wall Street bank underwriters were represented by another sophisticated law firm, Simpson, Thacher & Bartlett. Somehow, all of the Big Law masterminds paid big fees to scrutinize what they were helping to bring to the public markets, failed to see the self-dealing by WeWork’s then Chairman and CEO, Adam Neumann, as fatal to a public listing of its stock. Neumann owed his loyalty to the company under the past century of corporate law. But, instead, he was buying up commercial real estate on his own behalf and then leasing it back to WeWork. According to the IPO prospectus, WeWork was leasing four properties from Neumann on which it owed “future undiscounted minimum lease payments” of “approximately $236.6 million….” Neumann also owned another six properties which WeWork might decide to buy from him according to the prospectus. Neumann also had the right to overrule the Board of Directors. According to the prospectus: “Adam [Neumann] controls a majority of the Company’s voting power, principally as a result of his beneficial ownership of our high-vote stock. Since our high-vote stock carries twenty votes per share, Adam will have the ability to control the outcome of matters submitted to the Company’s stockholders for approval, including the election of the Company’s directors. As a founder-led company, we believe that this voting structure aligns our interests in creating shareholder value.” That didn’t turn out to be true. As of this morning, Forbes puts Neumann’s net worth at $2.2 billion. WeWork’s shareholders are sitting with an effective 3-cent stock that is likely to be wiped out in bankruptcy. How did Neumann get so rich bringing a dog to market? In October 2019, CNBC reported this: “Former WeWork CEO Adam Neumann will get up to $1.7 billion to walk away from the company and give up his voting rights, according to people familiar with the matter. SoftBank will pay Neumann up to $970 million for his shares, a $185 million consulting fee and will offer him $500 million in credit to help repay his loans to J.P. Morgan Chase, UBS and Credit Suisse, said the people, who asked not to be named because details of the agreement are private.” What is Neumann up to lately? Last week he was cavorting in Riyadh, along with speakers Jamie Dimon, Chairman and CEO of JPMorgan Chase, and David Solomon, Chairman and CEO of Goldman Sachs, at the Saudi Arabia investment summit. The IPO in 2019 was so heavily panned by Professor Galloway, ourselves, and numerous others that it was cancelled — delivering egg to the faces of its underwriters and their well-paid lawyers. Neumann resigned as CEO shortly after the IPO was pulled. Two years later, WeWork did an end run by going public by merging with a special-purpose acquisition company (SPAC). The key functions of Wall Street are to efficiently allocate capital to deserving businesses and act as an effective pricing mechanism. When a company goes from a valuation of $47 billion in 2019 to $9 billion in 2021 to $59 million in 2023, Wall Street’s pricing mechanism is broken. And when a CEO pockets $2.2 billion after nefarious self-dealings and the company files bankruptcy four years later, Wall Street’s key function as an efficient allocator of capital is also broken. (See House Lawmakers Will Hear Today How the Integrity of U.S. Markets Is Being Dirtied by SPACs and Direct Listings: Coinbase Should Be a Case Study.) Yesterday, another once highly celebrated young entrepreneur, Sam Bankman-Fried, whose FTX crypto exchange had been gearing up to go public but is now in bankruptcy, was convicted of pulling off a massive fraud. For why WeWork’s Adam Neumann was never prosecuted, see this blog post from former U.S. Labor Secretary Robert Reich, titled: “The 6 secrets to becoming a fabulously rich con artist.” Something is fundamentally wrong with the structure of Wall Street, the watchdogs that are supposed to be policing it, the Senate Banking Committee that is supposed to be attending to timely reforms, and the Big Law firms that seem more interested in raking in billions than insuring the integrity of markets. The failure of all of these checks and balances have their roots in the corruption of campaign financing laws with unlimited money from corporations, hedge funds and Wall Street’s billionaires now grossly disfiguring every aspect of government by the people. This simply can’t end well. As we saw in 2008, markets eventually collapse under the weight of their own corruption, cratering the U.S. economy in the process.

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In the WeWork IPO, the Money Trails End Up at JPMorgan’s Doorstep
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2019/09/in-the-wework-ipo-the-money-trails-e… By Pam Martens and Russ Martens: September 16, 2019 ~ According to the amended prospectus filed with the Securities and Exchange Commission to alert the public to the thousands of warts with malignant possibilities sprouting out of the office rental company, WeWork, which plans to offer its shares to the public for the first time, JPMorgan Chase will receive something no other underwriter is getting in this deal: a cool $50 million extra as a “structuring fee.” On top of that, of course, the bank will also get the fat underwriting fees that the other banks involved in the IPO get. That’s just one of the many curious ways that JPMorgan Chase stands out in its relationship with WeWork. (The parent of WeWork, The We Company, is actually offering the shares to the public.) As it turns out, quite a few of JPMorgan Chase’s commercial real estate clients who have obtained massive loans from the bank are benefitting from WeWork taking out big leases in their buildings, helping JPMorgan Chase’s clients thus have a lower vacancy rate and thus a smaller chance of defaulting on their loans to the bank. Those corporate clients include Rudin Management; L&L Holding Company; and Midwood Investment and Development, to name just a few. JPMorgan Chase is also one of three banks that has given an eye-popping $500 million line of credit to WeWork’s CEO, Adam Neumann, a 40-year old who previously lived in a kibbutz in Israel. According to the prospectus, Neumann has drawn down $380 million of the line of credit thus far. In addition, JPMorgan Chase “has made loans and extended credit” to Neumann “totaling $97.5 million across a variety of lending products, including mortgages secured by personal property and unsecured credit lines and letters of credit,” according to the prospectus. And then there is JPMorgan Chase’s central role in a very, very strange deal that was spun to the public as WeWork having the financial clout to buy the Lord & Taylor flagship store in Manhattan for $850 million in 2017. On October 24, 2017 two very savvy business writers for the New York Times, Michael J. de la Merced and Michael Corkery, wrote this: The company that owns the department store chain, Hudson’s Bay, said Tuesday that it was selling off the flagship store to WeWork, a seven-year-old start-up whose office-sharing model is helping to reinvent the concept of work space.” Three days later Ginia Bellafante said it again in the New York Times – that WeWork was buying the Lord & Taylor building, noting that “WeWork’s purchase of the Lord & Taylor building has a resonance beyond the obvious. WeWork leases office space to small but growing companies, giving them shared access to communal rooms that look like lounges with bars, air-hockey tables, lemon-infused water and so on.” Again on December 30, 2018 and as recently as August 28, 2019 someone was giving the New York Times the script which it dutifully spit out that WeWork had purchased the Lord & Taylor building. But according to the prospectus, JPMorgan Chase put up $607 million in a loan toward the purchase of the Lord & Taylor building at 424 Fifth Avenue, which is listed as long-term debt owed by The We Company in the prospectus. The We Company only shelled out $50 million according to the prospectus and received a 17.4 percent interest. The We Company is also on the hook for $1.7 billion in lease payments for the 20-year lease it signed on the building. Here’s the actual wording from the prospectus: “In February 2019, the Company invested $50 million for a 17.4% interest in a joint venture that simultaneously closed on the acquisition of a $850 million real estate investment located in New York City (the ‘424 Fifth Venture’). The WPI Fund is also a 39.1% owner in the 424 Fifth Venture. The 424 Fifth Venture was initially capitalized with a total of $287 million of equity and a debt facility of up to $900 million, of which, approximately $600 million was drawn down at closing.” According to the prospectus, “the entities that currently advise and manage the WPI Fund [which owns the 39.1 percent of the Lord & Taylor building] were each indirectly owned 50% by us [The We Company] and 50% by affiliates of the Rhône Group. This year the WPI Fund was merged into something called ARK with various consideration contributed by both The We Company and Rhone Group resulting in a structure that is as clear as mud in the prospectus. At the time that WeWork was being reported as buying the Lord & Taylor building, the New York Post reported this: “WeWork will convert the 11-story building at Fifth Avenue and 38th Street into its headquarters while making a $500 million investment in Toronto-based HBC [Hudson’s Bay Company] along with Rhone Capital, which formed a joint venture with WeWork to create WeWork Property Advisors.” Hudson’s Bay (HBC) announced in June of this year that a consortium of shareholders wants to take it private. That consortium includes Richard A. Baker, Governor and Executive Chairman of HBC; Rhone Capital L.L.C.; and WeWork Property Advisors. Advising on the deal will be…wait for it…J.P. Morgan Securities, a unit of JPMorgan Chase – thus opening the door to potentially more fees for the bank. According to more recent reporting, HBC going private may be scuttled by other investors who see the deal as a low ball bid. To understand what’s really going on here, it helps to have some historical perspective on JPMorgan Chase. It is the only mega U.S. bank in U.S. history to survive admitting to three criminal felony counts and the only mega U.S. bank in history to leave the same Chairman and CEO, Jamie Dimon, in place after having its reputation dragged through the mud over those felony counts and $36 billion in fines for other outrageous allegations by its regulators. Two of the criminal felony counts came in 2014 in conjunction with JPMorgan Chase looking the other way while Bernie Madoff ran his Ponzi scheme out of a business checking account at its bank over two decades. According to Irving Picard, the trustee of the Madoff victims’ fund, this was not just incompetent risk controls at JPMorgan Chase (which it is also famous for). This was an operation structured like those Russian nesting dolls with lots of moving parts and hidden agendas. After reading the details in the criminal charges released by the Justice Department in the matter, the Los Angeles Times asked in a photo caption of Madoff standing outside the Federal Court: “Bernie Madoff: Was he part of the JPMorgan ring, or was JPMorgan part of his ring?” One might now be forgiven for suspecting a quid pro quo embedded in the WeWork IPO: Is Adam Neumann part of the JPMorgan ring or is JPMorgan part of the Adam Neumann ring? Our money is on the former since all of the labyrinthine money trails uncannily end up at the doorstep of JPMorgan Chase. Neumann, of course, has been making hay while the sun shines and the SEC is asleep at the switch. Despite owing his loyalties to WeWork as its Chairman and CEO, he has bought four buildings on his own and leased them back to WeWork on which the company owes “future undiscounted minimum lease payments” of “approximately $236.6 million….” In addition to those four properties, Neumann owns another six properties which WeWork may decide to buy from him according to the prospectus. Neumann and his wife, Rebekah (who has been serving as the brand manager for the company) aren’t putting all their eggs in the WeWork basket. They have put those extremely generous loans from JPMorgan Chase to good use, diversifying their assets away from a highly speculative IPO and into residential real estate in some of the toniest, upscale communities in America. The Neumanns now own five opulent homes for which they paid a total of $80 million: two in Manhattan; one in the Hamptons at the East End of Long Island; a country estate in Westchester, New York; and a $22 million estate in the Bay Area of San Francisco that was newly added to their residential asset base just last year.

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WeWork’s Stock Imploded to 13 Cents Yesterday; Its Cult-Master, Adam Neumann, Cashed Out Years Ago and Is a Billionaire
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2023/08/weworks-stock-imploded-to-13-cents-y… By Pam Martens and Russ Martens: August 10, 2023 ~ Adam Neumann Adam Neumann, Chairman and CEO of The We Company in 2019 That office space company we warned our readers about so extensively in 2019, WeWork, collapsed to 13 cents a share yesterday. Its bonds were trading at about 13 cents on the dollar. WeWork’s stock has been on a steady decline since the company began to trade publicly on October 21, 2021. The chart above shows how investors would have fared in WeWork stock versus a 10-year U.S. Treasury note since WeWork started trading in 2021. The collapse in the share price this week came as a result of an 8-K filing with the Securities and Exchange Commission on Tuesday in which the company uttered these discomforting words: “…as a result of the Company’s losses and projected cash needs, combined with increased member churn and current liquidity levels, substantial doubt exists about the Company’s ability to continue as a going concern.” The reason we invested so much digital ink on WeWork back in 2019 was because some very shrewd Wall Street lawyers and investment bankers were planning to dump this dog on the American people as an IPO with an insane valuation. JPMorgan Securities LLC, a unit of five-felony-count JPMorgan Chase, and Goldman Sachs & Co. were to be the lead underwriters on the IPO. Scott Galloway, a professor at NYU’s Stern School of Business, wrote on his blog at the time that “bankers (JPM and Goldman) stand to register $122 million in fees flinging feces at retail investors….” The deal was so dodgy that Galloway took to calling it WeWTF. Wall Street On Parade called WeWork’s planned IPO “hype wrapped in subterfuge.” We said “It’s a money-losing commercial real estate company attempting to pass itself off as the Dalai Lama of office space rentals. The company has never made a dime of profits and its losses spiraled to $900 million in the first half of this year.” To enhance its valuation, WeWork lamely attempted to suggest it was tied to technological breakthroughs. We explained in 2019: “We’re also going to have to excise ‘the extensive technology infrastructure’ because what they’re really talking about is not Silicon Valley breakthrough technology but jazzing up drab offices with beer taps, microbrewed coffee, fruit-infused water and WiFi – the latter of which you can get for free in any Panera’s, along with a table and chair, for the price of a cup of herbal tea.” In an attempt to give this lipstick-on-a-pig of an IPO added luster, WeWork was represented by a very sophisticated law firm, Skadden Arps, Slate, Meagher & Flom. The Wall Street bank underwriters were represented by another sophisticated law firm, Simpson, Thacher & Bartlett. How all of these legal eagles yawned at the conflicts of the then Chairman and CEO of WeWork, Adam Neumann, was a question worthy of the napping SEC. As then Chairman and CEO of WeWork, Neumann owed his loyalty to the company under the past century of corporate law. But, instead, he was allowed to buy up commercial real estate on his own behalf and then lease it back to WeWork. According to the IPO prospectus, WeWork was leasing four properties from Neumann on which it owed “future undiscounted minimum lease payments” of “approximately $236.6 million….” Neumann owned another six properties which WeWork might decide to buy from him according to the prospectus. Unfortunately, Neumann had the right to overrule the Board of Directors according to the prospectus: “Adam [Neumann] controls a majority of the Company’s voting power, principally as a result of his beneficial ownership of our high-vote stock. Since our high-vote stock carries twenty votes per share, Adam will have the ability to control the outcome of matters submitted to the Company’s stockholders for approval, including the election of the Company’s directors. As a founder-led company, we believe that this voting structure aligns our interests in creating shareholder value.” In 2019, Neumann was 40 years old, a former member of the Israeli military, and had previously lived in a Kibbutz. Where did he get those huge sums of money to buy up all that real estate? According to the prospectus, JPMorgan Chase Bank, UBS, and Credit Suisse gave Neumann a $500 million credit line, of which he had already tapped $380 million. In addition, JPMorgan Chase had “made loans and extended credit” to Neumann “totaling $97.5 million across a variety of lending products, including mortgages secured by personal property and unsecured credit lines and letters of credit.” The IPO in 2019 was so heavily panned by Professor Galloway, ourselves, and numerous others that it had to be cancelled — a big embarrassment to JPMorgan, Goldman and those big name law firms. Neumann resigned as CEO shortly after the IPO was pulled. Two years later, WeWork did an end run by going public by merging with a special-purpose acquisition company (SPAC). As of this morning, Forbes puts Neumann’s wealth at $2.2 billion. He made his wealth by selling shares in WeWork when it was still private. Professor Galloway predicted four years ago how the end would come to WeWork. He nailed it, writing: “WeWTF is an especially risky business going into a recession, when the ability to variabilize costs is limited, but revenue decline is unlimited. WeWTF has $47 billion in long-term obligations (leases) and will do $3 billion in revenue this year. What could go wrong?” Galloway was also ahead of his time calling WeWork a “cult.” Last year, Apple TV released a series called WeCrashed, depicting the cultish nature of the company. It starred Jared Leto as Neumann and Anne Hathaway as his wife, Rebekah. (See trailer below.) The purpose of Wall Street is to be an efficient allocator of capital so that businesses with real prospects for innovation, job creation, and growth come to market to make America more prosperous and to keep it competitive on the global stage. Unfortunately, we find ourselves writing more and more about cults that are trading on the New York Stock Exchange. (In addition to WeWork, see here, here and here.) And, of course, there is the cult at the FTX crypto exchange which was gearing up to go public but imploded under the weight of its massive frauds instead and is now in bankruptcy proceedings. In that company, the key executives lived together in a penthouse and took billions of dollars in personal loans for themselves — money which belonged to its customers. Something is deeply, deeply wrong with the structure of Wall Street and the watchdogs that are supposed to be policing it.

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WeWork?s Unraveling Is Another Indictment of Wall Street?s Universal Bank Model
by Gunnar Larson 28 Apr '24

28 Apr '24

https://wallstreetonparade.com/2019/10/weworks-unraveling-is-another-indict… By Pam Martens and Russ Martens: October 22, 2019 ~ Adam Neumann Adam Neumann, Founder of WeWork WeWork is just one more in a long series of Wall Street scandals that prove that the universal banking model is little more than a thinly-disguised wealth transfer system from the pockets of average Americans to the 1 percent. Just two months ago WeWork’s two lead Wall Street underwriters, JPMorgan Chase and Goldman Sachs, were planning to offer WeWork’s shares to the public investor at a valuation in excess of $47 billion. Now we are learning that the company may run out of money next month and has an actual valuation of $8 billion or less. WeWork’s founder, Adam Neumann, who was attempting to cash out of his company that had never made a dime of profits in its nine years of existence and had run up losses of $900 million in just the first six months of this year, will walk away as a billionaire according to a report in the Wall Street Journal this morning. According to the Journal, the Japanese SoftBank is planning to take over the mess and plow in more billions in a private buyout. SoftBank already has $10.5 billion invested in WeWork so it is effectively doubling down on a bad trade – something that even rookie stockbrokers know better than to do. The obvious questions are why did two seasoned underwriters agree to bring this dog of a company public; why did JPMorgan, pre-IPO, shower Neumann with more than $100 million in personal loans despite his egregious conflicts of interest with WeWork, a company it was planning to bring public; what does it say about the capital allocation process in the United States that this charade came so close to going public and when the ethically-challenged Neumann can walk away as a billionaire? Neumann was buying up real estate and then leasing it to WeWork. He also trademarked the name “The We Company” and sold it back to the company for $5.9 million. (The money was returned after the deal was reported in the media.) Goldman Sachs and JPMorgan Chase are known as “universal” banks. Each is the owner of a commercial bank which takes in federally-insured deposits from moms and pops across America while also owning an investment bank that underwrites and trades in high risk stock and bond offerings. That is a combustible mix that is completely incompatible with U.S. statutory mandates for the “safety and soundness” of commercial banks whose deposits are backstopped by the U.S. taxpayer. >From 1933 until 1999, universal banks were illegal in the United States. Then one day Sandy Weill whispered to John Reed that “we could be so rich,” and got the Clinton administration to go along with repealing the 66-year old Glass-Steagall Act which prevented these kinds of mergers. The universal bank that Weill and Reed created, Citigroup, did indeed make both men obscenely rich. It also collapsed in 2009 to a 99 cent stock while receiving the largest taxpayer bailout in U.S. history. In order to maintain safety and soundness, federal regulators require that commercial banks stay clear of dangerous reputational risks that might prompt a run on the bank by depositors. The poster child for this dangerous cocktail of mixing depository banks with Wall Street’s risky trading is the London Whale scandal that occurred at JPMorgan Chase in 2012. JPMorgan Chase had the not-so-brilliant idea to create a unit known as the Chief Investment Office (CIO) inside its federally-insured commercial bank where it would gamble in high risk derivatives in London and call it hedging for the commercial bank in hopes of slipping under the radar of regulators. The derivative bets became so large that they rocked the derivatives market, which resulted in media coverage and exposure of what was really going on. What was really going on was $6.2 billion in depositor losses from derivative bets gone awry inside JPMorgan’s federally-insured bank. The federal regulator of national banks, the Office of the Comptroller of the Currency, stated in its consent order against JPMorgan Chase that its findings “establish that the Bank has deficiencies in its internal controls and has engaged in unsafe or unsound banking practices and violations of 12 C.F.R. Part 3, Appendix B (Market Risk Management Amendment) with respect to the credit derivatives trading strategies, activities and positions employed by the CIO on behalf of the Bank.” What does WeWork have to do with the safety and soundness of JPMorgan Chase? It sounds an awful lot like JPMorgan may have been “tying” its offer of personal loans from its commercial bank to Adam Neumann in exchange for its investment bank landing the role of lead underwriter in the Initial Public Offering (IPO) of WeWork shares. Tying is illegal and could, once again, subject the bank to charges of engaging in unsafe or unsound banking practices. If tying was not involved here, how does one explain the size of the money that was lavished on Neumann, the CEO of a failed business model of taking out long-term leases on office real estate (to the tune of $47 billion) and then subleasing it to startups and freelancers on a short-term basis – folks who are known to flee to a home office in a downturn. The failure of this model was further evidenced by the fact that in 2018 the company had lost $1.6 billion with an escalating $900 million in losses in the first two quarters of 2019. According to the prospectus filed with the Securities and Exchange Commission for the now-aborted IPO, JPMorgan Chase “has made loans and extended credit to Adam Neumann totaling $97.5 million across a variety of lending products, including mortgages secured by personal property and unsecured credit lines and letters of credit.” The prospectus also revealed that JPMorgan Chase was one of three banks that had given Neumann a $500 million line of credit, of which he had already drawn down $380 million as of July 31, 2019. The line of credit was secured by shares of stock in The We Company, the parent name of WeWork. In addition, according to multiple media reports, JPMorgan Chase was the third largest investor in the pre-IPO shares of WeWork. Clearly, it will have to take a major haircut on those investments. Related Articles: The Dickensian Tale of the WeWork IPO In the WeWork IPO, the Money Trails End Up at JPMorgan’s Doorstep JPMorgan Chase Has Billions in CRE Loans Riding on WeWork Surviving Will Jamie Dimon Finally Lose His Job Over Racketeering Charges?

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Death blow to the patriarchy time!
by pro2rat＠yahoo.com.au 28 Apr '24

28 Apr '24

Death to Michael Bloomberg ( my 2k sats ) “NO GODS, NO MASTERS, NO HUSBANDS ' https://www.anarchistnews.org/content/%E2%80%9Cno-gods-no-masters-no-husban… Gunnar Larson type suits go fuck yourselves.

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Fwd: FOIL Request No. 2021-085728 (Larson) - DFS Tech Sprint
by Gunnar Larson 27 Apr '24

27 Apr '24

Dear Carmen and Pascale: xNY.io - Bank.org today elects to re-visit FOIL Request No. 2021-085728. Specific to NY-DFS asking xNY.io - Bank.org for certification, "With respect to your request for a list of names of Techsprint registrants, pursuant to Public Officers Law § 89(2)(b)(iii), an unwarranted invasion of personal privacy includes, but is not limited to the “sale or release of lists of names and addresses..." xNY.io - Bank.org can confirm we will not release the information publicly. Would NY-DFS kindly be able to fulfill this request? Have a great day. Thank you, Gunnar -- Gunnar Larson xNY.io | Bank.org MSc - Digital Currency MBA - Entrepreneurship and Innovation (ip) G(a)xNY.io +1-917-580-8053 New York, New York 10001 ---------- Forwarded message --------- From: JeanBaptiste, Pascale (DFS) <Pascale.JeanBaptiste(a)dfs.ny.gov> Date: Fri, Jun 4, 2021, 1:31 PM Subject: FOIL Request No. 2021-085728 (Larson) To: G(a)xNY.io <G(a)xny.io> Cc: Garrett, Carmen (DFS) <Carmen.Garrett(a)dfs.ny.gov> Dear Mr. Larson: Please see the attached determination in response to your FOIL request. Thank you. ANDREW M. CUOMO Governor LINDA A. LACEWELL Superintendent One State Street New York, NY 10004 │ www.dfs.ny.gov VIA EMAIL (G(a)xNY.io) June 4, 2021 Mr. Gunnar Larson xNY.io - CryptoBank New York, New York 10001 Re: Your Freedom of Information Law (“FOIL”) Tracking No. 2021-085728 Dear Mr. Larson: I write in response to a FOIL request that you submitted to the New York State Department of Financial Services (“Department”) on March 3, 2021, which has been assigned the above-referenced tracking number and seeks the “DFS' approval roster (complete approved registration list) with corresponding business affiliation” for registrants of the DFS Techsprint. Specifically, your FOIL request reads as follows: “Good day: Per the e-mail correspondence below concerning the DFS Tech Sprint Innovational, this request is to define and keep the public informed of DFS' approval roster (complete approved registration list) with corresponding business affiliation on the basis of New York's Freedom of Information Law (FOIL) One of the tools available to the public to attain this type of information is access to records concerning any participants role in computer crimes actively engaged at the will of xNY.io's Tech Sprint denial. As the Sprint is now ongoing with DFS' approved participants. the member roster report and affiliation statistics stand already available. Can you kindly advise if this FOIL records request can be complete this week? Thank you. -- Gunnar Larson - www.xNY.io MSc - Digital Currency MBA - Entrepreneurship and Innovation (ip) G(a)xNY.io+1-646-454-9107New York, New York 10001 ---------- Forwarded message --------- From: dfs.sm.DfsNext Date: Mon, Feb 22, 2021 at 3:56 PM Subject: Update on DFS Techsprint To: dfs.sm.DfsNext Hello, Thank you for your interest in the Techsprint. Unfortunately, at this time, we are not able to extend you an invitation to participate. Thank you again for applying. Best,DFS Next DFSNext New York State I. Business Affiliations of Techsprint Registrants The Department is withholding the business affiliations of Techsprint registrants pursuant to Public Officers Law § 87(2)(b), which provides an exemption from disclosure for records or portions thereof that, “if disclosed, would constitute an unwarranted invasion of personal privacy under the provisions of subdivision two of section eighty-nine of this article.” Public Officers Law § 89(2) provides a non-exhaustive list of the types of information that, if disclosed, would constitute an unwarranted invasion of personal privacy, which includes employment history. See Public Officers Law § 89(2)(b)(i). In our view, because employment history is specifically protected, the release of business affiliations of Techsprint registrants would constitute an unwarranted invasion of personal privacy under Public Officers Law § 87(2)(b). Accordingly, the portion of your request that seeks the business affiliations of Techsprint registrants is denied. Pursuant to N.Y. Public Officers Law § 89(4), you may appeal the Department’s determination to withhold records within 30 days by sending an email to D. Monica Marsh, Principal Attorney, New York State Department of Financial Services at FOIL.Appeals(a)dfs.ny.gov. II. List of Names of Techsprint Registrants With respect to your request for a list of names of Techsprint registrants, pursuant to Public Officers Law § 89(2)(b)(iii), an unwarranted invasion of personal privacy includes, but is not limited to the “sale or release of lists of names and addresses if such lists would be used for solicitation or fund-raising purposes.” Please provide your certification that you will not use the requested information for solicitation or fundraising purposes by June 11, 2021. If the Department does not receive your certification by that date, we will deem this portion of your FOIL request withdrawn. Very truly yours, Pascale Jean-Baptiste Acting FOIL Officer Office of General Counsel

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Crypto lender Nexo seeks $3 bln in damages from Bulgaria over aborted investigation | Reuters
by Gunnar Larson 27 Apr '24

27 Apr '24

My God! --- https://www.reuters.com/technology/crypto-lender-nexo-seeks-3-bln-damages-b… LONDON, Jan 24 (Reuters) - Cryptocurrency lender Nexo is seeking $3 billion in damages from Bulgaria over an aborted criminal investigation that the company alleges scuppered its plans for a U.S. stock market listing and a soccer sponsorship deal, legal filings seen by Reuters show. Nexo AG, a Swiss unit of Cayman Islands-based Nexo Capital, alleges the investigation tarnished its reputation and destroyed shareholder value, according to a document filed with the World Bank's International Centre for Settlement of Investment Disputes (ICSID). The Washington-based ICSID, an international arbitration institution that handles disputes between international investors and states, registered the case on Jan. 18, its website showed. An ICSID spokesperson could not confirm the level of damages sought or other details. Bulgaria's finance ministry said it had received a request for arbitration from the ICSID, which would be reviewed by a specialised inter-departmental committee that would then propose next steps. "This or any other communications... shall not be considered in any way an admission as to the substance of any claims or as an acceptance of any arbitral jurisdiction," it added. The prosecutor's office, also a respondent in the case, did not respond to requests for comment. Bulgarian prosecutors in Jan. 2023 launched an investigation into Nexo AG, raiding offices in Sofia and charging its founders with offences that included participating in an organised crime group to launder money and commit tax and computer fraud. But they dropped the case last month, saying there was no evidence of criminal activity. Prosecutors said there was no legal framework for crypto asset services in Bulgaria. Nexo, co-founded by former Bulgarian lawmaker Antoni Trenchev, had denied wrongdoing and alleges the investigation was politically motivated - an allegation previously denied by prosecutors, local news agency BTA has reported. U.S. regulators in particular have been cracking down on alleged illicit activity at top crypto firms, but it is unusual for a crypto firm to take on a country over compensation for a investigation that was dropped. ICSID has previously ordered various countries, including Pakistan, Ecuador and Venezuela, to pay out billions in damages to companies. Reuters was unable to verify Nexo's alleged damages. In an interview with Reuters earlier this month, Trenchev declined to publicly name the banks he said had been instructed for any listing or which European soccer club ended sponsorship talks. Crypto lenders act like banks for the crypto world, offering customers interest on cryptocurrencies they deposit with the platform. Nexo, founded in 2018, phased out its U.S. products and services last year and agreed to pay $45 million to settle charges from the U.S. Securities and Exchange Commission and state regulators that it failed to register its crypto asset lending product.

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SpaceX Corporation Board of Directors One Rocket Road Hawthorne, California 90250 Sales@SpaceX.com Re: Potential SpaceX Interlocking Directors? Intent to Manipulate Markets
by Gunnar Larson 27 Apr '24

27 Apr '24

https://docs.google.com/document/d/1lv9Wt6y1ld4bNap0z3epIxttEGiP_oVpfxH0GTS… May 21, 2022 BY ELECTRONIC MAIL SpaceX Corporation Board of Directors One Rocket Road Hawthorne, California 90250 Sales(a)SpaceX.com Re: Potential SpaceX Interlocking Directors’ Intent to Manipulate Markets Dear SpaceX Board of Directors: >From our New York headquarters, xNY.io - Bank.org, PBC embodies the notion that rather than a merry-go-round, the process of change and innovation is like a slide. Today’s memo aims to notify the SpaceX Corporation of concern of potential market manipulation that could impact cross-border digital asset innovation, free speech in the United States of America, the global ESG economy and Moon exploration. We do not see this as a stereotypical democrat versus republican battle (as Mr. Musk alludes). We see this as a risk arbitrage matter for xNY.io - Bank.org’s profit (subject to regulatory approval). Some may argue a scheme to leverage the protection of “free speech” has led to Twitter deal advisors attempting a $44B LBO market manipulation exercise. Further cause for reasonable concern is warranted if similar intent is at play in the form of Tesla’s ESG scam claim. xNY.io - Bank.org indicators signal risk of possible intent to manipulate public and private markets prompting clarification of the SpaceX Corporation’s intent concerning Moon exploration and exploitation as a ESG digital asset vault. To be very clear, SpaceX directors should understand xNY.io - Bank.org’s work to protect cross-border digital asset innovation was born before Twitter's prospective LBO. Our concern specific to the intent of Twitter’s LBO deal makers is party to our work in New York to usurp Goldman Sachs and JP Morgan Chase board directors who may be potentially engaged in similar market manipulation referenced here: 1. xNY.io - Bank.org | DOJ Memo #4 - Goldman Sachs Deferred Prosecution Agreement. 2. xNY.io - Bank.org | Memo #2 - JPMorgan Chase Board of Directors ESG Marketplace Manipulation. 3. xNY.io - Bank.org’s work also includes research into oil and nickel marketplace manipulation as an ESG concern. The Twitter LBO includes Goldman Sachs and JP Morgan Chase operating as deal advisors. As referenced above, claims of Twitter robot scams and claims of Tesla ESG scams display a pattern of questionable intent. xNY.io - Bank.org asks SpaceX to clarify your board's intent concerning the Moon and any connection to USDD (now in Moon phase). SpaceX directors may agree that the Moon can also be defined as one of the most valuable ESG digital asset vaults known to modern humanity. Protecting the Moon from explo8itation is fundamental to Space exploration. SpaceX is party to any potential Twitter deal maker advisors that may exercise questionable intent risking the Moon’s ESG vault potential. xNY.io - Bank.org is concerned with interlocking directorate syndicates that include SpaceX, Tesla, PayPal, Goldman Sachs and BitGo. This setup breeds a galaxy of third and fourth party risk(s) at the demise of pure cross-border digital asset innovation. Twitter robots are not the focus of the Orlando Police Department Pension Fund, who suggests that Twitter’s LBO is suspected of questionable intent as potentially illegal. - Mr. Musk’s ingenuity as an entrepreneur is historic and greatly respected as a model inside our organization. As a Gates Scholar and Blockchain Scholar holding international law distinction(s) The concept of the Moon being an ESG digital asset vault is logic USDD seemingly embodies. - For obvious reasons, we seek SpaceX’s board to confirm if the intent behind your CEO’s Twitter LBO and Tesla ESG claims and if SpaceX is party to a USDD type matter given your syndicate’s close association with USDP. xNY.io - Bank.org kindly asks the SpaceX Corporation board of directors to respond within 15 days of receipt of this correspondence. Default in the form of no response within 15 days is not an extortion technique on our part. Rather, it is a design benefit in disclosing our intent post 15 days to ask for approval to engage New York’s False Claims Act in response to SpaceX, Tesla, PayPal and Meta interlocking directors potentially engaging in digital asset marketplace manipulation (exemplified by USDP and USDD) that may exploit Space and Moon exploration at xNY.io - Bank.org, PBC’s overall expense. Respectfully yours, Gunnar Larson | xNY.io <http://www.xny.io> - Bank.org <http://bank.org>, PBC MSc <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&u…> - Digital Currency MBA <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovat…> - Entrepreneurship and Innovation (ip) G(a)xNY.io +1-646-454-9107 CC: Tesla Board of Directors Twitter Board of Directors Goldman Sachs Board of Directors JP Morgan Chase Board of Directors

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Fwd: Tech Sprint | xNY Design Mechanism to Report Digital Regulatory Computer Crimes
by Gunnar Larson 27 Apr '24

27 Apr '24

---------- Forwarded message --------- From: Gunnar Larson <g(a)xny.io> Date: Tue, Mar 2, 2021, 1:49 PM Subject: Tech Sprint | xNY Design Mechanism to Report Digital Regulatory Computer Crimes To: Shah, Seema (DFS) <seema.shah(a)dfs.ny.gov> Cc: dfs.sm.DfsNext <DfsNext(a)dfs.ny.gov>, Joshua Plant <joshua(a)plantpr.com>, <innovation(a)dfs.ny.gov>, <VCLicenseQuestions(a)dfs.ny.gov> Dear Ms. Shah: Attending each of the Tech Sprint “info-calls” and our subsequent email correspondence, being denied Tech Sprint participation without context or reply <https://thecapital.io/article/tech-sprint--ny-department-of-financial-servi…> leaves us in an awkward situation. The facility of the Tech Sprint offered four “all day working sessions” along with two weeks of workshops for problem solving issues like “marketplace manipulation.” Moving on, and to properly close the Tech Sprint chapter from our perspective, today's memo is a vehicle that aims to deliver the tool of a “new-clean-slate” as foundation to our continued dialogue together. Yes, xNY.io is very fond of the idea of our friendly regulatory future relationships with DFS. Either way, xNY.io is under strict mandate of earning the Superintendent's various approvals, thus leaving no room for us to wallow in Tech Sprint blues. Tech Sprint Submission : A Design Mechanism to Report Digital Regulatory Computer Crimes Today I briefly submit an outline of reporting innovation observations and key concerns defined by the four Tech Sprint Problem Statements. Delivery of this submission files xNY.io’s Tech Sprint participation as complete. The best hybrid virtual currency architecture and pioneering modern innovation, xNY.io and the proposed “xNY” virtual currency is of pedigree with foundational intentions beyond our counterparts xRP (Ripple) and NEXO (Nexo.io). From our direct experience on the matter, xRP and NEXO built entire global operations as direct/indirect BitLicensees with intent to profit from various cross-border computer crimes <https://www.justice.gov/sites/default/files/criminal-ccips/legacy/2015/01/1…> such as market manipulation while being partially funded and/or directed out of New York. - Virtual currency fraud is a serious problem for such a developed country as the United States, whose bank regulators have drawn attention to the increase of these crimes. Having discovered that an unregulated virtual currency sphere (such as in Africa, or other developing markets) is very popular among virtual currency fraudsters <https://www.americanbanker.com/news/jpmorgan-chase-warns-of-upcoming-fine-o…>, the New York State Department of Financial Services concluded that this kind of regulatory fraud was threatening US national security. - If the basic problem with crypto reporting innovation is monopoly power, policy should address that issue directly. If the problem is a lack of transparency and accountability in government activities, one should find ways to open up the public sector to oversight from outsiders. If the problem is an opaque and confusing regulatory structure, rules should be simplified and clarified. - As elegantly as possible xNY.io must strive to innovate beyond a Laissez-faire attitude concerning the systems and processes in which transactions between our peers are now free from (or, almost free from) any form of economic/regulatory interventions such as the BitLicense lacking cross-border regulatory logic concern. - Ms. Shah, the BitLicense and bank innovation from the great state of New York touches people on all continents on Earth, and it seems that if given the opportunity, DFS would want to solve any market manipulation matter through technology - xNY.io underscores the need for reporting innovation specific to virtual currency marketplace manipulation and/or other crypto cross-border regulatory arbitrage frameworks directed out of New York that touching over 1 billion people (as clearly detailed in the Earth_ID conditional BitLicence application currently in DFS review). - xNY.io is concerned that DFS has potentially ignored our interests ensured through interpretations of specific provisions in the existing national and supra-national legal framework (civil law, securities law, bankruptcy law, international human rights law and civil rights law). The Superintendent may now lead New York and the global virtual currency industry in clarify the rights of the public and obligations of BitLicense members engaged in the global virtual currency economy. - This can be achieved through subtle action on “conditional approvals” that are well earned from DFS review. - BitLicense regulation must preserve a technology-neutral, principle-based, non-discriminatory framework for the next generation of modern New York virtual currency public policy, naturally to support innovation within the limits imposed by overriding international public interests. Our Tech Sprint participation was aimed at working through these matters together in a structured setting. Being champions for the rights of our future customers, it is xNY.io’s observation that DFS is not winning at engaging technology and reporting processes specific to fostering civil <https://www.nysenate.gov/legislation/laws/CVR>/human rights <https://drive.google.com/drive/folders/1R1ExVvx8uIibM_w5X3BjG4eTDbJH_oSC?us…>. There should be no open question on where New York stands on any matter concerning human and civil rights at home or abroad. About the Design Mechanism Behind our Tech Sprint Concept Ms. Shah, during our calls together, we discussed focusing on the listed problem statement concerning “Marketplace Manipulation.” xNY.io is concerned that these "Computer Crimes" are a marketplace manipulation matter associated with current BitLicense architecture and subject to DFS attention related to cross-border/international organized groups (that are cyber-based in New York). Given the critical role that honest and fair dealing of virtual currency is core to the BitLicense mandate, should admitted felons and serial miscreants (aka New York banks) be allowed to further expand their racket via global crypto regulatory arbitrage? xNY.io’s key definition of virtual currency computer crimes, is a consistent message across markets. These crimes are relatively new, having been in existence for only as long as Bitcoin has—which explains how unprepared society and the world, in general, is towards combating these crimes AND we see this as no fault of DFS and the original BitLicense mandate (unless not resolved before end of 2021). Goldman Sachs’ MoneyGram, NEXO, BitGo, Ripple and several BitLicensee connections profit daily from virtual currency market manipulation computer crimes with cross-border reach operating as a large syndicate group from lower Manhattan. Many DFS sanctioned BitLicencees today are very profitable enterprises and they may straddle nationalities in ways that you never would have imagined. xNY.io notes our relationship with xRP and NEXO as examples. - Ms. Shah, the jury is in and the NY-EU "CryptoBank '' regulatory loophole is a case for virtual currency market manipulation affecting computer systems and software (aka the Bitcoin blockchain) in Africa, Europe and New York State at the very least... - This activity is harming New York and xNY.io’s international virtual currency computer systems, process and overall technology (as outlined in the Earth_ID conditional Bitlicense application under DFS review) ... - xNY.io points to Ripple.com and Nexo.io as party to delaying blockchain innovation AND possibly humanity as a whole only in the name of profits of Goldman Sachs and associated bad actors - For example, New York, Europe and Africa are connected by a freeway of cross-border arbitrage frameworks. Due to easily exploitable laws in developing countries, some BitLicensees straddle daily New York, Europe and in Africa operations that evade detection and prosecution from law enforcement. Our first “conditional BitLicense” application outlined this matter in detail. - xNY.io efforts to bypass this creatively, certainly pioneering innovation and modern New York enterprise with opening CryptoBank and the xNY virtual currency Keeping all this in mind with a positive/optimistic attitude, many agree any best Tech Sprint design mechanism must have potential to innovate virtual currency industry's reporting standards should (at the very least...) aim to tackle computer crime and/or innovate beyond and strive to meet a new level that is required to support the generation of a New York international CryptoBank. Ms. Shah, in reality foreign regulators have repeatedly filed enforcement actions against the largest banks on Wall Street for engaging in fraud and rigging markets. Communicating it another way, NY-DFS may find xNY.io’s approach exotic and/or fresh, but in reality our foreign regulators have repeatedly enforced actions against (directly or indirectly) BitLicensees now freely leveraging virtual currency frameworks to rig markets abroad while being headquartered in New York. Computer Crimes (Cross-Border) and Modern BitLicense Regulatory Logic xNY.io seeks various approvals by the Superintendent to protect our enterprise and overcome any and all unnecessary delay or further loss or harm related to interstate or international transmission of threats directed against computers and computer systems (aka the Bitcoin Blockchain) and CryptoBank. New York banks’ traditional engagement of regulatory arbitrage has overflowed the BitLicense and correspondingly is responsible for global virtual currency marketplace manipulation computer crimes, some experts debate if Goldman Sachs is a RICO concern. xNY.io is at various levels a product of the best of New York banks domestically and internationally (New York, Europe and Africa…) and as such chooses to innovate rather than litigate. Given the inherent universal cross-border nature of virtual currencies, there is no real good reason for New York firms under the BitLicense mandate to manipulate other global markets via regulatory arbitrage. Circumnavigating this problem is key to modern BitLicense logic - MoneyGram, for example banks customer fees spanning postal mail, a telephone call, electronic mail, or through a other computerized messaging service. Computer Crimes as a threat is no less a threat because it is contingent, because the speaker does not intend or is unable to carry it out because the threat was not directly communicated to the MoneyGram customer as a target, or because the language used might be considered cryptic or ambiguously not part of the current BitLicense mandate. - Goldman Sachs’ legacy MoneyGram investment vs. direct correlation between xRP and NEXO virtual currencies arguably covers many computer crimes including wire fraud and cross-border marketplace manipulation. - Additionally, xRP and NEXO operating as potential bad actors have put the purity of blockchain systems, processes and pose purity risks to exchange software as Dark Pools, from our direct experience on the matter. - Over the last five years Goldman Sachs created layer upon layer (MoneyGram, NEXO, xRP, BitGo) of BitLicense related disguises and cross-border systems under potential conspiracy and plausible deniability to computer crimes and marketplace manipulation. - Our CryptoBank aims to elegantly side-step all this basing our innovative operations in New York and winning necessary DFS approvals. - xNY.io’s approach in seeking confidence in “reporting systems and process” as a fundamental best practice that protects ourselves and our customers from interstate or international transmission of threats against computers, computer networks, and virtual currency data networks and their programs. - xNY, CryptoBank: xNY.io vs. Nexo.io and Ripple.com - XNY, Cryptocurrency: xNY vs. NEXO and xRP Finally, and forever forgetting any sentiments about being denied Tech Sprint participation, we encourage DFS to consider that the Tech Sprint’s overall success is already a success from the xNY.io side. From our Tech Sprint “marketplace manipulation” calls together ... DFS now has a potential cross-border human/civil rights solution developed as a "tech-based" response to the problem statement(s) that specifically addresses both the threats of future damage AND the current cross-border "computer crime" merry-go-round responsible for extortionate damage already inflicted. Thank you, Ms. Shah! Next Steps … Onward! Surveying the best next steps, we hope DFS embraces the fact that xNY.io has no other option outside of moving from low into high gear on the journey of seeking various conditional approvals and beginning a long-term regulatory relationship all at the will of the Superintendent's action. - For all people on planet Earth, the question should not hinge on any debate or worry that New York regulators are not taking market manipulation seriously. - xNY.io again has every right to earn conditional approvals with the aim to serve billions of people as customers. PayPal, MoneyGram and Robinhood had their chance, so did xRP … While now NEXO aims to further leverage computer crimes at the expense of New York and the BitLicense. Our team in Europe, Africa and New York comes to DFS with an impressive and sophisticated solution of xNY.io to evolve up and innovate beyond whatever roadblocks stand in our way. Moreover, we look forward to doing all this in collaboration with DFS while fostering meaningful contributions to the legacy of New York (if nothing else, via evergreen State tax contribution). - xNY.io will be submitting a new/updated folio for DFS review and hopeful consideration of "conditional approval(s)" by the Superintendent over 2021. The new application is remarkably revolutionary … Including wise architecture for DFS and xNY.io to leapfrog cross-border computer crimes efficiently as foundation to CryptoBank and the xNY virtual currency being an elegant solution as the world deserves - Note, xNY.io aims to privately seek DFS' signal, through a series of upcoming private conversations together … Given many good reasons, DFS has a historic opportunity to signal sentiments on xNY.io’s new “conditional approval(s) on the viability spectrum on/before the DFS Tech Sprint's public 12 March "demo day" awards party. - This way, everyone wins … New York and the world is watching, let’s deliver what is deserved over 2021 via innovation that xNY.io can deliver in various forms with DFS regulatory oversight controls. xNY.io’s obvious consequences on the emotional level are associated with economic risks, directly linked to the obligation and respect to the institution of CryptoBanking and/or DFS as the regulatory body from which xNY.io entrepreneurship and innovation are required to interact. Every effort has been made to offer DFS the best possible scenario to advance xNY.io’s successful review while planting the seed for historic contributions to New York State and lead virtual currency CryptoBank innovation worldwide. Ms. Shah, please keep a lookout for xNY.io's updated “conditional” application materials concerning our good natured enterprise for DFS’ corresponding review with hopeful 2021 approval(s). Let nobody stop us. Please let me know if you or the DFS team has any feedback. Wishing you the very best Tech Sprint! All the best, Gunnar Larson On Tue, Feb 23, 2021 at 6:29 AM Gunnar Larson <g(a)xny.io> wrote: > Dear Ms. Shah: > > I hope you are doing well. > > This memo is to kindly ask for your review and/or reconsideration, and > ultimately seeks the esteemed Superintendent's permission to participate in > the upcoming Tech Sprint and corresponding workshop events beginning next > week. > > My application exceeds the Tech Sprint's participation criteria on various > levels. Further, from our last correspondence on ethics/legal on January > 28th (below), combined with the background of several intro calls with the > DFS team related to excitement of participating in the Tech Sprint, it > seems that perhaps a simple mistake was made on the application's approval. > > *The Tech Sprint focuses on virtual currency innovation concerning > reporting standards:* > > - Please trust with certainty, myself and the xNY.io team hold nothing > more than respect for DFS and understand we are at the will of the > Superintendent. > - Further, I sumit for the Superintendent's consideration, any > institution or organization, which sponsors or conducts a contest or > exhibition (*aka Tech Sprint*), and advertises or bills such contest > or exhibition as a New York state championship contest ("*The event > will end with an awards ceremony to celebrate the winning teams..."*) or > uses the words "New York state" in its announcements ("*https://www.dfs.ny.gov/techsprint > <https://www.dfs.ny.gov/techsprint>"*) is subject to equal rights of > public accommodation. > - Ms. Shah (and, please do correct me if I am mistaken), at base level > standards, civil and political rights are a class of rights that protect > individuals' freedom from infringement by governments, social > organizations, and private individuals. They ensure one's entitlement to > participate in the civil and political life of society and the state > without discrimination or repression. > > Given many factors, I am concerned my application being denied to > participate in the Tech Sprint has been a simple mixup as the only > plausible scenario. Today's memo seeks to freely navigate the process of > being granted Tech Sprint participation approval without delay. I would > like to clear this up any confusion on the matter today, if possible. > > Greatly looking forward to hearing your thoughts and approval for the Tech > Sprint's workshop participation. > > Warm regards, > > Gunnar > -- > *Gunnar Larson - www.xNY.io <http://www.xNY.io> * > MSc > <https://www.unic.ac.cy/blockchain/msc-digital-currency/?utm_source=Google&u…> > - Digital Currency > MBA > <https://www.unic.ac.cy/business-administration-entrepreneurship-and-innovat…> > - Entrepreneurship and Innovation (ip) > > G(a)xNY.io > +1-646-454-9107 > New York, New York 10001 > > On Mon, Feb 22, 2021 at 3:56 PM dfs.sm.DfsNext <DfsNext(a)dfs.ny.gov> wrote: > >> Hello, >> >> >> >> Thank you for your interest in the Techsprint. Unfortunately, at this >> time, we are not able to extend you an invitation to participate. >> >> >> >> Thank you again for applying. >> >> >> >> Best, >> >> DFS Next >> >> >> >> >> >> *DFSNext* >> >> >> >> *New York State Department of Financial Services* >> 1 State Street, New York, NY 10004 >> >> www.dfs.ny.gov >> >> >> > ---------- Forwarded message --------- > From: *Shah, Seema (DFS)* <Seema.Shah(a)dfs.ny.gov> > Date: Thu, Jan 28, 2021 at 6:14 PM > Subject: RE: TechSprint > To: Gunnar Larson <gunnar(a)mydr.co> > > > Hi Gunnar, > > > > I would totally appreciate you inviting the folks in your network > mentioned below! You can craft something, but I’m just including a brief > template that you can edit/modify as you see fit. And I don’t handle the > ethics checks, but I really don’t anticipate any challenges coming from > that for anyone. We should have an update on those by next week, so please > stay tuned! > > > > Thanks! > > Seema > > *Seema B. Shah* > > Assistant Deputy Superintendent, Innovation > > seema.shah(a)dfs.ny.gov | www.dfs.ny.gov > > >

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