GMC Holding Corp (GMCC) Class Action Lawsuit

George M Khoury, a previous CEO of GMCC (then Here Comes Grandma), is trying to organize a class action suit against GMCC. Additionally he filed in 2005-May a suit (case number 13-2005-CA-008899-0000-01) against GMC Holding Corp, CEO Richard Brace, and former director Stuart Cooper. It would be great to see investors fight back against GMCC and Brace but I'm skeptical of this effort for a few reasons.

Khoury's announcement is filled with Richard Brace class wishful thinking and self-contradiction. Towards the end Khoury writes In the event the technology the Company claims ownership too (sic), has a value of 350 million dollars, shareholders will be well served in joining me and others in this class action suit. It's self-contradictory to entertain the idea of 9 figure asset sales while contemplating a suit, since if Brace really was negotiating a 9 figure deal, shareholders would want to cut him some slack. Worse, shareholders should not be encouraged to continue to daydream about the motor or selling it. They need to wake up and realize that there is no invention and there are no buyers.

It's hard to see what's the commonality of interests between the older shareholders such as Khoury who turned over control of the worthless GMCC to Brace in 2002 in exchange for a share of whatever he could make of it and the new shareholders who turned over actual money in 2004-2006 to own a portion of a "fueless motor". I've talked to Khoury about this and he hasn't answered.

Finally, given Khoury's past involvement with Brace and GMCC, it's possible that investing in a Khoury led effort to recover their investment wouldn't be throwing good money after bad. A credible recovery effort would need to be run from outiside Castleberry.

SEC Halts GMCC and Institutes Administrative Proceedings

The SEC News Digest for 2006-03-08 shows that they halted trading in GMC Holding Corp (GMCC).

The Commission announced the temporary suspension of trading in the securities of GMC Holding Corporation, a Florida corporation based in Casselberry, Fla., at 9:30 a.m. EST on March 8, 2006, and terminating at 11:59 EST on March 21, 2006.

The Commission temporarily suspended trading in the securities of GMC because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the proposed sale of GMC's alternative energy technology referred to as REMAT and the company's financial condition and because GMC is delinquent in its periodic filing obligations under Securities Exchange Act Section 13(a). This order was entered pursuant to Exchange Act Section 12(k). GMC, a non-reporting issuer, is quoted on the Pink Sheets under the ticker symbol GMCC. snip (Rel. 34-53442)

They also announced proceedings.

SEC INSTITUTES ADMINSTRATIVE PROCEEDINGS AGAINST GMC HOLDING CORPORATION FOR FAILURE TO MAKE REQUIRED PERIODIC FILINGS

On March 8, the Commission issued public administrative proceedings against GMC Holding Corporation to determine whether the registration of each class of its securities should be revoked or suspended for failure to file required periodic reports. In the Order, the Division of Enforcement alleges that GMC is delinquent in its required filings with the Commission. The Division of Enforcement also alleges that the common stock of GMC is quoted on the Pink Sheets.

Based on the above, a hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide GMC an opportunity to dispute these allegations, and to determine whether it is necessary and appropriate for the protection of investors to suspend or revoke the registrations of GMC Holding Corporation's securities.

The Commission directed that an administrative law judge shall issue an initial decision in this matter no later than 120 days from the date of service of the Order. (Rel. 34-53448; File No. 3-12232)

More detail should be available tomorrow at http://sec.gov/news/whatsnew/wn030806.shtml, including that the SEC tried to mail GMCC a delinquent filings notice in 2004, but the notice was returned since the company address had changed. So adding .pk to the ticker symbol doesn't grant a permanent get out of filing free card?

Water Pseudoscience and Attorney Induced Silicosis

The Gallery of water-related pseudoscience has an extensive list of magic, clustered, magnetized, and otherwise bunk-filled water schemes, including one free energy scheme, the joe energy cell. Update: I neglected to point out that I borrowed this item from a treasure trove of junk, debunkers.org.

NPR has a great story on plaintiffs attorneys cooking up silicosis cases for fraudulent lawsuits and the sharp federal Judge Janis Jack whose inspection of the expert testimony brought the fraud to light.