Op/Ed: AIG and SLCapEx Situation Redux
Yesterday when I posted Investor Allen's alternate avatars, there were things that were supposed to have been in process related to AIG and SLCapEx. Those circling buzzards you saw were rumors at the time, but they fell upon the reality of the situation with vigor. Today, Arbitrage Wise posted this:
Upon advice and counsel regarding the recent discovery of activities involving Investor Allen, we have been instructed to not conduct any further transactions or fulfill obligations with AIG or Investor Allen, including compensating AIG shareholders, releasing Investor Allen's SLCX shares or making further payments to Investor Allen. The current situation is subject to civil and potential criminal litigation. We are bound at this time to maintain all records as existed at the instant of discovery. No further comments can be made at this time regarding the current situation, and all parties involved must seek their own legal counsel involving the activities of AIG and Investor Allen.
Arbitrage Wise
Chairman, SL Capital Exchange
CEO, JT Financials
Let's back up. Remember the buyout of AVIX by JT Financial which spawned SLCapEx? Here's the original press release:
Wise Metaverse C.E.O. Arbitrage Wise announced today that JT Financial Bank, one of Second Life's largest financial institutions, has acquired 70% of the Allenvest International Exchange represenging 53.2 million shares from Allenvest Investment Capital C.E.O. Investor Allen, assuming all management responsibilities for the virtual securities exchange. Allenvest Investment Capital will continue to manage AVIX under the full supervision of JT Financial until full system integration is complete and a final switch has been made.
Terms for the sales of majority stake in AVIX is 1,000,000L cash upfront with 7,000,000 to be paid within 1 calendar year.
Now, lets connect the dots: AIG was supposed to collect 7,000,000 from JT Financial/AVIX, but that deal has fallen through - meanwhile, SLCapEx retains everything which they got for 1,000,000 Linden dollars instead of the total of 8 million Linden dollars that was supposed to be paid. I bet Investor Allen is feeling a little duped at this point, but he was delisted for fraud:
...Investor Allen was delisted due to extreme lies to the exchange and to the market. RL information provided was a lie and if many remember, Sal Ackland owes a lot of people a lot of money and this will explain the disappearing acts and the fraud...
So - Investor Allen caused AIG to be delisted, Arbitrage Wise (who has a turbulent history with Sal Ackland) isn't going to pay 7 million Linden dollars, and the AIG shareholders are screwed both ways. I understand that Investor Allen would be given the boot given his history of avatars. What I do not understand is why AIG shareholders who were not aware of this will be made to pay the price for the duplicity of one actual person.
There should be a better way. 7 million Linden dollars, though - that would be quite a temptation.
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covered here.
Second Life Consultant
It gets worse everyday.
When is Linden Lab going to step up and close these "virtual" stock markets down and bounce the con artists running them? When one exchange gets outed the next runs around demanding "accountability" only to be found to be just as crooked as the first a month later. There is no such thing as an "honest" exchange in SL history has shown us very clearly that if you put your money into one you will lose it. Now these people have even taken to running "insurance" companies so they can take more of your money. The Feds are so worried about gambling in SL, meanwhile these stock exchanges are allowed to run free.
Clean up Second Life.
Much as I dislike scam artists...
Here we see something little different than what exists in RL. How, praytell, do you expect Linden Lab to police such "enterprise" proactively when RL authorities are likewise unable to do so until after the damage is done? Fraud exists everywhere. If it is (and I'm not sure this is the case) but IF it is worse in Lindotopia, it is probably largely because of the relative anonymity that SL shares with the rest of the internet.
So you must ask yourself first, am I willing to provide more information about myself to Linden Lab than I provide to governmental authorities and businesses I interact with on a regular basis? And am I willing to insist that ALL others in my little playland also pass this information on to a private firm such as LL? And are you prepared for the consequences of those limitations? I think the vast majority of people are going to answer no to such questions.
And even if you were to give all your tax records, vital statistics and firstborn children to Linden Labs, I'm willing to bet that there would still be scams running in world anyway.
Please use some prudence and common sense. Why on earth would you hand the equivalent of hundreds or thousands of dollars to a perfect stranger when you don't know for sure that you have their real name, their real address, or any of the other assurances (such as a real legal system) that enable commerce to flourish (and laws against theft and fraud to be enforced) in the real world? Unless, of course, you just like the thrill of not knowing when that money is going to disappear. (That's why I did it. Really.)
Blaming the victims doesn't work.
Granted, banks which provide rates of return that are so high are suspicious - but people have different levels of trust.
Certainly, people who invest in untrustworthy sources should do so as a risk, and should be aware of the risk. What is lacking is a meaningful way to assess the risk. It is easy for someone to simply create an alt and start Yet Another 'Investment' scheme. Why? That is the crux of the problem.
There are tough calls to be made, and I'm fairly certain that the community would be willing to make those calls. However, the community has no way to do so.
Now, remember this: Linden Lab keeps saying that you *own* land in Second Life.
Second Life Consultant
Not sure I follow this
And I'm not blaming the victims/participants in such activities.
I think there's a logical flaw here. Just how does one meaningfully and reliably assess risk anywhere, let alone in Second Life?
While I assume that the guy who calls me from an undisclosed phone number, claiming to be collecting contributions for the local Police Benevolent Association is most probably working out of a boiler room, I might in fact be wrong. For all I really know he's legit. But the fact that I pay for Caller ID, and he fails to reveal any traceable information to me leaves me in an information vacuum.
Now if I were using my feelings, I'd give him my credit card information anyway, because, after all, Police are GOOD, and Benevolent Police are all that much betterer. The fact that he says he is one, or working for one, should be enough for me. Right.
But I doubt he would still be calling me, despite the fact that I'm on the national Do Not Call database, if that line weren't working with some substantial fraction of those he manages to get to answer the phone. Linden Lab and Mr. Phil are not my mommy. Mommy would never wear a bejeweled jock strap. I do not want Mr. Phil to pretend to be my mommy, and if he does I might even decide to sue his freaky little butt for engaging in unwanted behavior that, to me, seems "broadly offensive."
But that's just me.
As for my "owning" land, yes, I really believe that line. I'm guessing there are about a dozen places in the TOS that broadly contradict that sloppy comment, intended (I must assume) for press purposes only. I suppose it might help me if I were suing Linden Lab for fraud, but I don't really expect a court to affirm my "absolute" right to Linden Lab. If it did, I would think that at the very least I could insist that the Lab wrap up my roughly 4 regions on 2 servers and send me the physical servers as compensation for my "investment" in land at auction that is now "worth," at going market rates, roughly 70 percent of what I paid for it. In fact, there ought to be a button for that somewhere on the secure account interface. "Send me my land."
I'm not blaming victims -- after all, in this case I'm probably going to wind up being among the top 10 percent or better when it comes to real money damages incurred from this "game." What I am saying here boils down to the same maxim that applies in the rest of life, caveat emptor.
I'm pretty sure if I were to take any of this into court I would hear that phrase from both opposing counsel and from the judge.
If you choose to spend money blindly, the law tends to be clear that doing so is largely your own problem.
On the other hand, there are fraud statutes, and a criminal case on those grounds might bring some limited remedies to this situation, once fraud is proven. The problem here is at least partially the presumption of innocence that's encoded into common law. Linden Lab might be at serious risk if it were to go around assuming that ALL contracts that entail a degree of financial trust are de facto illegal. It's a briar patch even Phil Linden (or the LL lawyers) are smart enough to stay away from.
What does irk me are the repeated statements from Linden Lab that are based on a false assumption that Second Life is "safe." Such naivete (or is it something darker?) is just astounding to me. I'm not saying you can't be safe in SL. If I were starting over, I would have never put a dime of non-Linden loot into the "game" in the first place. That would have be "safe." But I accept that my unwise choices here WERE my choices to make, and for the most part the signs that those choices were unwise were present at the time I made them. They weren't being widely publicized, but they weren't a state secret either.
Let me help.
You wrote:
There is no logical flaw. If there is a flaw, there is a flaw in reality. There is risk in everything.
In Second Life, risk can be better mitigated by knowing more of the person you deal with - just like in real life. That aspect of risk is being addressed in some exchanges. With myself, I'm completely transparent - Taran Rampersad and Nobody Fugazi are one and the same, which means that my reputation goes with either name. Because of my reputation, people think it less of a risk to share things with me which they would not otherwise share.
The same holds true of money. If I *ever* ask for investors within Second Life - which I find highly doubtful - my reputation goes with it. I'm not trying to become rich in Second Life - granted, part of my living is made in Second Life - but I have scruples and a long history of using these scruples effectively.
But identity is only one aspect of risk. I alluded to motivation as well - and understanding the motivation of someone is also a way to mitigate risk. Character, and knowing the character of the person you are dealing with - this also mitigates risk.
But if I walked up to you and asked you for 1 million Linden dollars investment, I would expect you to balk. So then it becomes an issue of whether or not the investment I am 'offering' you is worthwhile to you. And your judgement should be based on who *I* am, the business model which I have, and the possible return on investment for the risk involved.
What I was getting at in my post was that a casual reader might read what you wrote out of context; I know I did the first time I read it. I agree that people need to use their money more wisely, but I also don't believe in beating up the victims further. If they do not learn their lessons in their own way, well - so be it, they will pay again.
After much thought and contemplation, I am realizing that much of the issues related to Second Life in the areas of finance come from the press which is undoubtedly enjoyed by Linden Lab. 'Make Lots of Money' in Second Life finds people hungry for ways to make money. When they find that they actually have to *work*, they opt for the next best thing - 'money for nothing'.
But, as many of us know... TANSTAAFL.
Second Life Consultant
I think we're saying pretty much the same thing
I was working on a new sculpture last night when a new resident approached me, fresh in his Welcome Island chainmail shirt, telling me he needed a job. Yes, SL makes its own sauce.
Get out while you can
Ginko, Jasper, Allen, one by one they all fall down. Each with a different sob story and promises galore, but in each case, the crook gets to walk while the investors are left with the check. The entire SL financial scene is apparently nothing but a handful of shady individuals and their multitude of alts, roleplaying bankers and brokers while looking for the right opportunity to take off with other people's money. Makes one wish they'd bring back the casinos... at least there we had a chance of winning something.
TT
Investors do yourself a favor and sell now.
Investors do yourself a favor and sell all the stock and get your money out of these exchanges. Not that all these companies are bad, but 2 of the cardinal laws of investing are being broken over at the capex. Accounting irregularities and lawsuits. I posted this on the capex forum and they deleted it , for obvious reasons. If allen was a complete scam he would disappear like Jasper. Not make a statement that he will be bring reports forward about who was scamming him. If they go at it all the money will be going to lawyers . Who knows they might both be in on it. Atms running short and such, leaves a lot to be desired. And if LL gets subpoenaed they might shut down the whole exchange. Don’t believe me do some research, or ask a RL broker.
RM
Get him!
If you buy a stolen car, do you own that stolen car? or does the ownership actually lie with the true owner as the person selling the car didnt have clear title to give you.
What about if you bought an exchange that was built with stolen money? do you own the exchange?
this all seems to me just another scam in an endlist list of backroom deals where the pants are all worn by the same person. left to right pocket, front to back pocket.
i say everyone that has been defrauded should band together to form a class action petition to subpoena the LL records of the fraudster, Sal Ackland, investor allen or whomever they are calling themselves today.
this is our secondlife, lets show him the power of the masses.
Retribution, restitution, ill get what i can take
sal, your day of reckoning is coming, dont bend over for the soap.
Burn him at the stake?
I do think that an example needs to be made, but I am leery of how it is done. Lindsay, who also responded to your comment, makes a valid point.
The beauty of Second Life prior to the moronic (and sadly, successful) attempts to use Second Life as a staging area for fraud or incompetence (or both?) was that it lacked bureaucracy. But bureaucracy is coming. My opinion at this time is that Linden Lab is causing a nasty bureaucracy to be necessary because they are not being proactive to the community.
Hell, they aren't even being reactive.
But we have Voice! O.o
Second Life Consultant
Your Second Life is going to
Your Second Life is going to suck more than first life with all the bureaucratic mess that a lot of us value in SL. I don't mind in world regulation but to have a RL company come in and do it....nah....I would close my account in a heartbeat and go back to playing Bioshock and Medal of Honor.
Or...
Take the advice of someone who will cut a lot next to your land and sell advertising space.
Pot. Kettle. Black.
Second Life Consultant
NF you really hate me that much. LOL
I am trying to help people here and your still mad. I know you would like to know more about me, you seem like a stalker, but I will leave it at this: I have a BA in Econ, RL investments with about 15 years experience, RL businesses, and enough sense to know a ponzi scheme when I see it. You make it look like your in on this. I can understand not wanting RL regulation, thats fine it is a game. But sometimes the sheep need to be lead from danger.
Bottom line people sell these phony securities and empty the phony accounts they will change then. Buy some real investments.
.
RM
I am not a sheep
Please don't consider myself needing you as a shepard. go and find a virtual herd for yourself! I can all get along by myself thank you very much
No, no, no.
I'm not a stalker, you're the one who keeps coming to this website. I don't want to know more about you. And I don't hate you, I just haven't found anything redeeming in anything you do - your actions are something which would probably get your throat cut where I live.
If you continue along these lines, I will ban you. This isn't the grid. This isn't your playground. And you'll never see me write anything nice about what you do until you do something nice.
Good luck with that.
Second Life Consultant
Gotta Love copy/paste
I have seen this message at three sites now. Gotta Love Copy/Paste.
What's even funnier is that he reportedly submitted an IPO application for SLBay auctions at CapEx... now he is saying this.
Don't forget the IPO for his
Didn't I hear he submitted an IPO for his 16M farms?......good luck with that Mr. Marx.
hahahah
If I did you both just violated a clients privacy. HMMMM See what you people are dealing with now.
That makes no sense.
Clarification?
Second Life Consultant
HAHAHA I never knew going
HAHAHA I never knew going public was a private matter.
Exactly
It seemed like extreme twittery to make such a complaint.
"Oooh! You said you saw me naked after I took my clothes off!"
Umm...
Second Life Consultant
IPO Applications are NOT Confidential
IPO Applications are NOT Confidential -- Even if they are declined.
"IPO Applications are NOT
"IPO Applications are NOT Confidential -- Even if they are declined."
Now that statement is truly interesting indeed! Are IPO applications really ever declined? Hmmm...maybe there actually is honor among thieves eh, Xavier/Abs?
You know....
Passive aggressive statements from people with names are ok, they're acceptable... but taking potshots under an anonymous moniker makes it look like a meat puppet.
If you want to challenge the folks - seriously - sign a name.
Second Life Consultant
Yes, IPOs are declined.
Yes, IPOs are declined. During my tenure as President of CapEx, I probably declined 80% of the IPOs I saw. All for various reason but some are plan frivilous and some look like ponzi from day one.