FAIR article on SEC claim of fraud for M Russell Ballard/Keystone

[Calm]

New article (I believe webbles and others here helped through me passing the info we found to FAIR, which then was able to fill in the gaps, but I was not involved in the write up…too lazy  ).

I think this entry fills in the gaps quite nicely and demonstrates not only no wrongdoing on the part of Brother Ballard, but he appears to have been the victim of government harassment in this case to me.

https://www.fairlatterdaysaints.org/answers/Criticisms_of_M._Russell_Ballard

summary

Quote

The history of the case clearly shows that M. Russell Ballard did not engage in any fraud or other illegal activity:

The supporting company he led as president was formed at the suggestion of the SEC.

The supporting company was charged with fraud, but that charge was later withdrawn and substitute for "aiding and abetting" such activity in the original company. In consenting to this charge, Russell did not admit or deny the charges.

The charges against the original company were eventually dropped.

Russell met with his stake president immediately after the charge of fraud to explain the situation. The stake president did not take any action against Russell.

A district court found the SEC guilty of issuing press releases about these charges in an "arbitrary and capricious manner" and without any justification for the press releases.

 

As I noted in the Tim Ballard thread, the cases are now cited for law on harassment of private companies and such.

This is the source that provided most of the missing pieces, I believe, the 1965 Senate hearing testimony of Dan S Bushnell, who was, I believe, the lawyer for Shasta, etc.

https://www.google.com/books/edition/Administrative_Procedure_Act/Yn3AmfxhG2cC?hl=en&gbpv=1&pg=PA251&printsec=frontcover

 

Edited December 9, 2023 by Calm

[SkyRock]

That may be washing over things a bit much. This does not provide me with much comfort but instead raises more concerns.

Forming their own securities firm instead of using an existing firm is a huge red flag and an open door to conflicts of interest.  Per the article, the SEC suggested using an independent firm and instead Ballard made effectively a captive one.  Looks like an alter ego and pretence.

Mining companies are infamous for selling fraudulent hope and speculation, vaporware before Silicon Valley vaporware.

The SEC could have been out of control, as alleged, but that does not mean there was no fraud and that Ballard knowingly was aiding and abetting.  He did take the plea.

Perhaps he is innocent, but I would not agree based upon this article. 

 

[Calm]

1 hour ago, SkyRock said:

The SEC could have been out of control, as alleged,

It wasn’t just alleged. The judge stated they went too far as discussed in the other thread.  And that there was no evidence found of fraud.
 

If you haven’t read the case law reports yet, I suggest you do as there is a lot of detail covered there.  If you can find where the judge agrees there was actual fraud and not just charges made without any evidence provided including after the SEC promised they would do so, I would like to see it. 

Edited December 9, 2023 by Calm

[Calm]

56 minutes ago, SkyRock said:

Forming their own securities firm instead of using an existing firm is a huge red flag and an open door to conflicts of interest.  Per the article, the SEC suggested using an independent firm and instead Ballard made effectively a captive one.  Looks like an alter ego and pretence.

Please explain this for someone who knows nothing about securities. 
 

How was Brother Ballard not independent when he hadn’t been connected to Shasta or Silver Mines prior to this time in a business capacity?

Edited December 9, 2023 by Calm

[Calm]

1 hour ago, SkyRock said:

The SEC could have been out of control, as alleged, but that does not mean there was no fraud and that Ballard knowingly was aiding and abetting.  He did take the plea.

Without denying or confirming the charges. 

And the SEC withdrew the charges against the company later on.

[SkyRock]

8 minutes ago, Calm said:

Please explain this for someone who knows nothing about securities. 
 

How was Brother Ballard not independent when he hadn’t been connected to Shasta or Silver Mines prior to this time in a business capacity?

The article notes he was one of the founders of Shasta and other mining companies with Kay Stoker.  Then he started Keystone to sell Shasta's stock.  He was definitely not independent.

Most companies don't go public and sell stock when they start.  There are lots of rules about soliciting investors.   Private placements have stricit rules as well. 

[SkyRock]

10 minutes ago, Calm said:

Without denying or confirming the charges. 

And the SEC withdrew the charges against the company later on.

Companies pay huge fines without admitting liability.  It doesn't mean innocence. 

Governments also drop charges for many reasons.   It doesn't mean the target isn't guilty.  It just means that the government is no longer pursuing charges. 

And who knows if some politcian or other powerful figure didn't lean on the SEC.  Or new priorities came up. 

Again, the article does not clear him. 

[Calm]

49 minutes ago, SkyRock said:

Companies pay huge fines without admitting liability.  It doesn't mean innocence. 

Governments also drop charges for many reasons.   It doesn't mean the target isn't guilty.  It just means that the government is no longer pursuing charges. 

And who knows if some politcian or other powerful figure didn't lean on the SEC.  Or new priorities came up. 

Again, the article does not clear him. 

Did you read the case law associated with it?

 

Quote

The defendants [SEC] have issued, or have authorized the issuance of, publicity not justified by any pending judicial or administrative proceeding and constituting under the circumstances unwarranted, arbitrary, capricious and unreasonable publicity for the purpose of bringing pressure to bear upon those involved in administrative or judicial proceedings and without reference to any actual violation of the Securities and Exchange Act or other justification, to the irreparable injury of the plaintiffs as more fully appears from the foregoing Findings of Fact; and unless restrained by order of the court may continue such conduct to the irreparable injury of plaintiffs. 

https://casetext.com/case/silver-king-mines-inc-v-cohen

Also https://casetext.com/case/shasta-minerals-v-sec (this provides some background not used in the article, so not included, but it shows that the SEC was likely acting without much foundation when it promised to provide evidence and then didn’t.

Quote

The following colloquy took place: 

"The Court. All right. Can you stipulate that each of you, without abandoning your position that a hearing is necessary, if summary judgment isn't granted in your favor, agree that the case may be submitted upon the motion of each of you for summary judgment, to be supported by affidavit and counter-affidavit within the time that we may agree upon? Would that be the most expeditious way to reach the problem?

"[Attorney for the Commission]: That would be fine. 

"[Attorney for appellant]: We have no objection." 

The appellant filed affidavits but the Commission did not do so. The trial judge thereafter pointed out to the Commission that the affidavits were, of course, not then required to prevent an adverse ruling, but in view of the matters contained in appellant's affidavit, he mentioned that some explanation from the Commission would be helpful. Despite this encouragement, the Commission did not act and stood on its Application for an Order to Require Obedience, which may be considered to be its "pleadings."

 

Edited December 9, 2023 by Calm

[Calm]

36 minutes ago, SkyRock said:

The article notes he was one of the founders of Shasta and other mining companies with Kay Stoker.  Then he started Keystone to sell Shasta's stock. 

Thanks, that didn’t sink in for some reason.

[CV75]

11 hours ago, Calm said:

New article (I believe webbles and others here helped through me passing the info we found to FAIR, which then was able to fill in the gaps, but I was not involved in the write up…too lazy  ).

I think this entry fills in the gaps quite nicely and demonstrates not only no wrongdoing on the part of Brother Ballard, but he appears to have been the victim of government harassment in this case to me.

https://www.fairlatterdaysaints.org/answers/Criticisms_of_M._Russell_Ballard

summary

As I noted in the Tim Ballard thread, the cases are now cited for law on harassment of private companies and such.

This is the source that provided most of the missing pieces, I believe, the 1965 Senate hearing testimony of Dan S Bushnell, who was, I believe, the lawyer for Shasta, etc.

https://www.google.com/books/edition/Administrative_Procedure_Act/Yn3AmfxhG2cC?hl=en&gbpv=1&pg=PA251&printsec=frontcover

 

Please don't tell me this 60-year-old, settled case is being conflated (elsewhere) with complaints over President Ballard's involvement with Tim Ballard.

[jonah747]

10 hours ago, SkyRock said:

but that does not mean there was no fraud and that Ballard knowingly was aiding and abetting.  He did take the plea.

@Calm

Taking a plea deal is admitting to wrong doing to get a more lenient punishment.  

But do you have a link where it says he took the plea?  I could only find something
on a YouTube channel.

Edited December 9, 2023 by jonah747

[SkyRock]

10 hours ago, Calm said:

Did you read the case law associated with it?

 

https://casetext.com/case/silver-king-mines-inc-v-cohen

Also https://casetext.com/case/shasta-minerals-v-sec (this provides some background not used in the article, so not included, but it shows that the SEC was likely acting without much foundation when it promised to provide evidence and then didn’t.

 

When someone is pulled over and was going 10 over and gets a warning instead of a ticket, this is known as prosecutorial discretion. 

Likewise when someone is charged with attempted murder and ends up pleading to attempted battery, there may be many many reasons why the prosecution decides to do this. 

The person speeding was still violating the law, even if the officer just gave a warning. 

[SkyRock]

1 hour ago, jonah747 said:

@Calm

Taking a plea deal is admitting to wrong doing to get a more lenient punishment.  

But do you have a link where it says he took the plea?  I could only find something
on a YouTube channel.

The stipulated finding is linked in the article in FN 5.  Keystone (and Ballard) stipulated to the findings, including willful violations of the SEC Act and that Ballard was the cause of the violations.

[Stormin' Mormon]

37 minutes ago, SkyRock said:

The person speeding was still violating the law, even if the officer just gave a warning. 

But if the state wants to impose consequences, the state needs to prove that a violation even occurred. 

In this Ballard case, it appears that the state didn't just fail to prove a violation, they didn't even try to prove it. 

I think we tread dangerously close to a category error when we attach the moral opprobrium warranted for an act of malum en se to an act of malum prohibitum. The former exists with or without state sanction, the latter only exists insofar as the state says it exists. They each require a distinct moral calculus.

[SkyRock]

57 minutes ago, Stormin' Mormon said:

But if the state wants to impose consequences, the state needs to prove that a violation even occurred. 

In this Ballard case, it appears that the state didn't just fail to prove a violation, they didn't even try to prove it. 

I think we tread dangerously close to a category error when we attach the moral opprobrium warranted for an act of malum en se to an act of malum prohibitum. The former exists with or without state sanction, the latter only exists insofar as the state says it exists. They each require a distinct moral calculus.

They didn't prove the finding because Keystone and Ballard stipulated to the finding.   He and Keystone agreed to it.  They waived their right to a hearing. 

Keystone agreed to the finding it acted in violation of the law.  It agreed that Ballard was the cause.   And since Keystone was Ballard, that means Ballard agreed to all these terms and findings. 

Fraud is fraud and stock fraud is a classic fraud that continues as people create phony companies and bogus ideas.   It is always wrong.   It was wrong prior to the SEC Act.  

[webbles]

1 hour ago, SkyRock said:

They didn't prove the finding because Keystone and Ballard stipulated to the finding.   He and Keystone agreed to it.  They waived their right to a hearing. 

Keystone agreed to the finding it acted in violation of the law.  It agreed that Ballard was the cause.   And since Keystone was Ballard, that means Ballard agreed to all these terms and findings. 

Fraud is fraud and stock fraud is a classic fraud that continues as people create phony companies and bogus ideas.   It is always wrong.   It was wrong prior to the SEC Act.  

Since the punishment (loss of broker-dealer license) was what Ballard/Keystone had already requested, what would be the point for them to fight?  The mining company did fight it since they didn't want the punishment and they were successful.  And Ballard/Keystone were "punished" because of what the mining company did and since the mining company was able to show that they weren't in the wrong, then it would mean that Ballard/Keystone was also not in the wrong.  But Ballard/Keystone just didn't want to fight it since there was no point in doing it.

[Calm]

6 hours ago, CV75 said:

Please don't tell me this 60-year-old, settled case is being conflated (elsewhere) with complaints over President Ballard's involvement with Tim Ballard.

I have seen it pulled out a few times over the past two decades by those wanting to show apostles were immoral when it came to money, but it has gotten more attention recently, whether because of the Church and Ensign Peak’s issues with the SEC fine or to group with claims that Elder Ballard was a business partner of Tim Ballard and promoted it through his church office to make money for himself and his family (there is some connection between his son-in-law and Tim Ballard, which shouldn’t be surprising if Tim Ballard was a close family friend, which was never denied).

[SkyRock]

53 minutes ago, webbles said:

Since the punishment (loss of broker-dealer license) was what Ballard/Keystone had already requested, what would be the point for them to fight?  The mining company did fight it since they didn't want the punishment and they were successful.  And Ballard/Keystone were "punished" because of what the mining company did and since the mining company was able to show that they weren't in the wrong, then it would mean that Ballard/Keystone was also not in the wrong.  But Ballard/Keystone just didn't want to fight it since there was no point in doing it.

Would you stipulate to findings that you engaged in securities fraud?  I would never stipulate to those terms, especially if I was named as the cause, even if I wanted to pull my application.  

He/Keystone was most likely to avoid fines or further punishment.

[Calm]

8 minutes ago, SkyRock said:

He/Keystone was most likely to avoid fines or further punishment.

Or further harrassment.

[Calm]

17 minutes ago, SkyRock said:

Would you stipulate to findings that you engaged in securities fraud? 

If I had a family to feed or others depending on me so they could feed their families and if I didn’t agree it meant I couldn’t feed them, probably would, especially if the ones I saw as harassing me promised it would stop and they would not be pursuing anything further.

Can some lawyer explain what does “consented to a finding” mean in the context of “without admitting or denying the allegations made against them”?

Quote

Under the terms of the settlement which were set forth in Exhibits 8 and 9 attached to the defendants' answer herein, Keystone Securities Corporation and M. Russell Ballard, Jr., without admitting or denying the allegations made against them in the order for proceedings, consented to a finding that Ballard and Keystone Securities Corporation willfully violated Sections 7 and 10 of the Securities Act of 1933, that Keystone Securities Corporation, aided and abetted by Ballard, willfully violated Sections 15(b) and 17(a) of the Securities Exchange Act of 1934 and Rules 15b-8 and 17a-3 thereunder, that it was in the public interest to revoke Keystone's registration as a broker-dealer, and that Ballard was a cause of the revocation. 

 

Edited December 9, 2023 by Calm

[webbles]

31 minutes ago, SkyRock said:

Would you stipulate to findings that you engaged in securities fraud?  I would never stipulate to those terms, especially if I was named as the cause, even if I wanted to pull my application.  

He/Keystone was most likely to avoid fines or further punishment.

I don't believe he stipulated to engaging in securities fraud.  It was "aiding and abetting" Shasta in making false statements and the SEC never proved that Shasta made false statements.  In fact, after 2.5 years, the SEC dropped the entire matter with Shasta because it couldn't find anything.  Since Shasta didn't make any false statements, it is hard for Ballard to "aid and abet" Shasta.

Here's what Shasta's lawyer said in the Senate hearing (page 263):

Quote

The SEC thereafter agreed to waive the charges of fraud, deceit, and misrepesentation and coerced a settlement of the case on reduced charges by further threat of a public hearing with the resultant adverse publicity.

If I had the choice with having more false slander against me that would take years to fight or just to accept a minor punishment that is what I already want, I'd go with the later.  I already know that Shasta was going to fight it out so, hopefully once it wins (which it did), I'd be able to recover my name.