This story has been updated with a response from Laidlaw
It appears Honig’s lieutenants at New York brokerage Laidlaw & Company have been actively selling a new deal. One riddle with conflicts of interest and possible self dealing for Matt Eitner and Jimmy Ahern. This week I reported on an Limited Liability Company called PPLL Partners that is controlled by Eitner and Ahern. The duo call it Pump Pump Loose Loose and allegedly past brokers at the firm say it’s used as a vehicle to pay kickbacks to for getting Barry Honig-backed deals sold to Laidlaw’s retail clients. But now it looks like it will also be used to set up the next Honig-backed investment. Last week, Barry Honig was charged by the Securities and Exchange Commission for running a stock manipulation scheme in multiple securities for years.
According to brokers at Laidlaw they’ve been instructed to sell a private placement deal in PPLL Partners to the firm’s retail clients. This type of offering is known as a Regulation D offering and can only be sold to accredited investors. Allegedly the pitch is that PPLL Partners is now an investment fund that is going to buy small companies that work on drug development for diseases like cancer. One such firm PPLL Partners might buy or invest in is Voltron Therapeutics. On April 4th Matt Einter filled a notice with the SEC that PPLL Partners was trying to raise $500,000 and that $305,000 has already been sold.
In Eitner’s required disclosures for FINRA he states that he has a financial interest in Voltron Therapeutics but only spends 4 hours a month working on drug development and that “it’s not investment related”. This kind of language was likely suggested by his outside counsel so FINRA doesn’t ask for more details about the firms Written Supervisor Procedures for registered reps outside business activities and investments. Since Eitner is the CEO and holds a series 24 license he is the one that is suppose to be the broker supervisor of all capital market deals and the offerings the retail brokers sale. But since according to an internal document obtained by this reporter Eitner has also listed himself as the CEO of Voltron Therapeutics; so he needs someone else at Laidlaw to supervise the firm raising money for PPLL Partners to invest in any companies he would own. And the firm has to disclose all these conflicts of interest in the private placement memorandum they give to perspective clients to buy into the offering. At press time it is unclear if this has been done.
I have asked the national retail branch manager, Alex Shtaynberger, if he is supervising this deal today and also John Coolong, the CFO and Chief Compliance Officer. According to FINRA records both men hold series 24 licensees and could do the supervision so the firm is in compliance with FINRA laws. Neither Coolong or Shtaynberger would respond to an email for comment but Matt Eitner has finally deiced to respond this reporter. I got a carefully written email that said they want to answer my questions but couldn’t do it till Monday. I have learned Laidlaw clients are already calling the firm asking about the validity of their investment in PPLL Partners after my story earlier this week exposed Either and Ahern’s relationship with Barry Honig. I told Eitner I would not wait to print this story but if they wanted to comment at some point I will add their comments after they are fact checked.
Voltron Therapeutics was officially registered as a company in Delaware in July 2017, according to state records. I made a call to the State’s corporation formation office and they said an annual report hasn’t been filed yet for the company. But what is most interesting is how this company was formed. According to internal emails obtained by this reporter, attorney Michael Lerner at Lowenstein LLP began writing up Voltron company formation documents for Jimmy Ahern and Matt Eitner in May 2017. These documents also included stock issuance to Majella Partners, which is owned by non other than Eitner and Ahern. Eitner discloses some ownership in Majella in his FINRA records and this reporter has seen communication written to Jimmy Ahern at Majella Partners. The company formation agreement also includes equity incentive plans for ‘consultants/advisers’ and a subscription agreement for Majella Partners. That means Majella and anyone the company want to pay as a consultant would get cheap stock in Voltron. Voltron is still a private company but if it did a reverse merger that founders stock could be valuable if there was run on the stock.
After Ahern got the formation documents from his lawyers he then sent an email the same day to Barry Honig and John O’Rourke at their AOL and Gmail accounts. On May 19, 2017 he told Honig and O’Rourke, “Just getting started here but I figured I would pass these along.” The formation docs for Voltron was what Ahern was updating Honig on. Ahern signed the email Managing Partner, Head of Capital Markets, Laidlaw & Company. Now as I previously reported Ahern doesn’t have a series 24 license or an investment banking license. He doesn’t have the required licenses to even be running an investment banking deal. So why is he emailing Barry Honig like he is running this deal.
In a brief interview with Marc Ellis, Laidlaw’s former Co-President and Chief Compliance Officer, he told this reporter after reading my story on how Either and Ahern operate the firm that “I knew something like this was going to come out at some point. The conflicts appear to be endless.” (Ellis served until mid-2012 when Eitner and Ahern were being push up the ranks by the Sands brothers to take over the firm.)
This deal is a chance to see how a Honig style deal gets started. It’s hard to tell what Voltron even is? I have found no mention of it on bio pharma drug chat broads and no public filings except it’s Delaware corporate formation. That doesn’t mean it’s not a real start up trying to buy drug development licenses but based on the SEC enforcement action Honig’s investments often don’t have the real technology, asset, or potential deals the companies claim they do. What this looks like to this reporter is the beginning of the development of a cheap share exchange using other peoples money to sell an idea to unsuspecting retail investors that the players involved know will never work out.
UPDATE 9.14.18 4:15pm – A half an hour after I printed this story Laidlaw has magically come up with a response via their CFO John Coolong: “Laidlaw is not conducting a securities offering for PPLL Partners LLC. Rather, it is an outside business activity and private securities transaction by a few registered representatives. Pursuant to FINRA Rules, Laidlaw has reviewed and approved this outside business activity and private securities transaction. I, as Chief Compliance Officer, am supervising this activity.”
This story didn’t report they were selling a securities offering in PPLL Partners. I am reporting it’s a Reg D private placement but note it’s still selling an investment in a company owned by its CEO. Also we don’t know WHO at Laidlaw approved the outside business activity. That’s important to the firms compliance procedures. Also given that John Coolong is the CCO reporting into the CEO – Eitner – still feels like a big conflict of interest because he is not Eitner’s direct supervisor?
Additionally, since my first story on Laidlaw ran on September 12 the company has removed Jimmy Ahern’s photo from their Executives page on the Laidlaw website. Maybe the whole he isn’t licensed to be a supervisor of a broker dealer thing sunk in?
Editor Note: I would love to hear from any Laidlaw investors who bought into the PPLL Partners Reg D deal. You can reach me at firstname.lastname@example.org.