Sep 23rd 2007, 20:22 system announcement
by Bogart Beck
FORMAL STATEMENT of BOGART BECK in Re:RECENT DELISTMENTS - 09/23/2007 - 8:14 PM
For Publication:DATE: Sunday, September 23, 2007
TO: All SL Capital Exchange Listed Company Executives, their Shareholders, and all other interested parties
FROM: Bogart Beck, Chief Executive Officer, SL Capital Exchange
Let me preface this dialogue by stating that I am NOT an attorney. Regardless, please accept this communique at face value and in the context that it is offered.
On September 04, 2007 I accepted the role of Chief Executive Officer of the Second Life Capital Exchange. Such appointment infers a responsibility for the greater interests of all parties who have elected to participate in this public market simulation. During my interview and subsequent negotiation with Arbitrage Wise, Chairman of the SL Capital Exchange, we formally agreed that our joint obligations were as follows;
(1) - To insure, to the best of our abilities, that the www.slcapex.com simulation would be offered and administered in a lawful manner, and, that we would seek qualified guidance where required to achieve same.
(2) - To insure, to the best of our abilities, that gameplay within the simulation would be fair and equitable for all parties, with particular concern and a bias for the well-being of "retail shareholders".
(3) - To insure, to the best of our ability, that any representations made by any particpant would be transparent, truthful and respectful of all other participants both in word and in deed.
During my very brief tenure as SL Capital Exchange's Chief Executive I have become increasingly alarmed at the total disregard of these fundamental principals by some participants in this and other Exchanges. I have personally witnessed blatant willful misconduct, misrepresentation, character assassinations, deception, and accusations of outright fraud. The list appears endless. Let me be CRYSTAL CLEAR. Such behavior WILL NOT be tolerated AT ANY LEVEL on this Exchange PERIOD. If you are found to participate here in any manner at any time without complete and absolute integrity you will be summarily and immediately discharged from the game at CapEx Management's SOLE DISCRETION.
This is NOT a democracy - this is a FUN yet SERIOUS GAME for SERIOUS PEOPLE. If you are unwilling to participate under such terms, PLEASE, take yer Lindens and go elsewhere - you are not welcome here.
So, you may ask, why the authoritarian tone? Honestly, we're compelled to do so. In our efforts to attain assurances that www.slcapex.com gameplay is well within the boundaries of current U.S. law and the Linden Lab Terms of Service and Community Standards as published and ammended from time-to-time by Linden Lab, we have directly sought guidance from several qualified parties over the last few weeks, including Linden Lab itself, several esteemed members of the U.S. academic community that have underwritten research and conducted both public and private discourse regarding the Second Life(tm) Economy and the Stock Exchanges and Banking simulations that have emerged in support of the Linden ($) economy, and the U.S. Securities and Exchange Commission (SEC) itself. The results of those inquiries, while still incomplete and relatively inconclusive, are profound in our view. Our own discovery and research has yielded the following somewhat conclusive opinions upon which we must act.
(1) - Several hundred individuals participate in these simulations - most of us assuming that such gameplay is both lawful and permissible, and, would discontinue play immediately were it determined to be inappropriate or unlawful in the jurisdictions in which we are domiciled.
(2) - Most participants recognize and clearly understand the terms and conditions under which the game is offered; specifically that the www.slcapex.com website is a business simulation and fictitional stock exchange intended solely as an entertainment and educational tool for participants.
(3) - Most participants recognize and clearly understand that any and all fictitious "securities" offered within the game are NOT REGISTERED SECURITIES and OFFER NO OPPORTUNITY for "INVESTMENT" or REAL-WORLD ECONOMIC GAIN. In spite of such clear and unambiguous statements and the generally mutual understanding amongst players, it would appear that some participants may indeed play the game with real-world profit motives and expectation, and therefore foolishly rely on the representations and claims of others within the game.
(4) - Each participant has ostensibly read and unconditionally agreed to abide by both the Linden Lab Terms of Service and the SL Capital Exchange Terms of Service including, but not limited to, those provisions that describe the unit of measure commonly referred to as a Linden ($L), and the unique conditions under which it is offered for gameplay within and adjacent to Second Life(tm). For clarity, I specifically call your attention to Sections 1.4 and 1.5 of the Linden Lab Terms of Service, and, Sections 22.1, 22.2, 22.3 and 22.4 of the SL Capital Exchange Terms of Service.
(5) - As such, most participants, if given a choice, would prefer to play the games offered therein without the need for any real-world securities registration requirement or exemption, or any other governmental or regulatory oversight. Frankly, our play is simply a game within a game within a game - the potential administrative and economic burden of such oversight on the individuals that have agreed to play the games and be bound by the terms and conditions therein offered, would likely far outweigh any benefit gained, with perhaps one exception; bona fide fraud prevention and recovery (which is likely already amply covered under existing law with ample precedent having already been established by local, state or US. Federal statute).
So, why all the legalese? I believe that the recent collapse of several of the SL banking entities, (Ginko Financial Services and others), and the ongoing accusations of fraud within the SL Stock Market community, have led some within the legal and academic community to begin looking more critically at the complexity and potential legal and regulatory obligations of such gameplay. At least one respected professional has authored and widely circulated an opinion that, while inconclusive, suggests that, due to any participants incumbent ability to convert the Linden Unit of Measure ($L) into real-world currency, a bona fide fiduciary obligation may have been created amongst the players and the operators of such fictitious banks and stock markets. While certainly unintended, this is clearly an area of legal and regulatory uncertainty. Further, in instances of potentially fraudulent transactions that involve the misappropriation of Lindens, without regard to whether such unit of measure were ultimately converted to another currency, the operators of, and particpants in, such banks or stock exchanges could be compelled to testify were such transactional disputes brought before a court of law, and, could be compelled to assist in the prosecution and monetary recovery efforts of those involved.
The direct result of these recent discoveries has ultimately compelled the operators of the SL Capital Exchange to err on the side of extreme caution. In our view, we have no choice but to become exceptionally vigilant and diligent in our ongoing effort to reform and self-regulate the activities and assertions made by participants in the SL Capital Exchange. The net result of this effort has led to the halt and eminent delisting of at least two "listed companies" and possibly a third currently under investigation by ourselves and an unaffiiliated SL "bank". In each instance we have found representations and assertions made by the Officers of said entities to be entirely unreliable within the context of fair and equitable gameplay for all particpants. It is on this basis ALONE that the SL Capital Exchange Executive Team has elected to initiate the actions commenced this past Friday. Any other claim for our action is entirely and patently false. At our sole discretion we have elected to terminate our "trading" relationship with these entities and are well within our legal right to do so. In our view, while unfortunate, our actions are a reasonable and necessary measure to protect the interests of ourselves and other game participants who are fundamentally innocent bystanders to this chain of events.
In the instance of Brautigan and Tuck Holdings (BNT), operated principly by Intlibber Brautigan, it is our understanding that BNT has the capacity and intent to form a new stock exchange. In an unprecedented gesture of goodwill, the Officers of SL Capital Exchange have agreed to confer with Mr. Brautigan early this next week to help assure a smooth and orderly transition of BNT shareholder records. We wish BNT and its shareholders good fortune in such venture.
In the instance of Allenvest Investment Group (AIG), operated principly by Investor Allen, our obligations are to some extent mutual. Whereas Arbitrage Wise has purchased certain assets formerly owned by Investor Allen, and whereas Investor Allen currently holds considerable shares in the SL Capital Exchange, and, whereas Investor Allen has substantial financial obligations to individuals and entities that also particpate in the SL Capital Exchange in various capacities, the Officers of SL Capital Exchange have agreed to confer with Mr. Allen in an also unprecedented attempt to assist Mr. Allen in equitably distributing said assets to such claimants in an orderly manner. Should the parties involved be able to reach mutual accord, seperate notice will be provided to those individuals entitled to the results of such negotiation.
In the instance of Second Life Media Specialties (SLMS), it is the policy of the SL Capital Exchange not to comment on ongoing investigations.
Please refer any questions you may have regarding this matter directly to myself or Mr. Wise. Please recognize that we may, or may not, choose to respond publicly.
Rspectfully,
Bogart Beck,
CEO, CapEx