Here are the highlights of an email we received from Mark Feathers. The authenticity of the email has been confirmed with a personal phone call.
SB Capital Investors Harmed by SEC Action
$10 Million in 504 Loan Fundings Canceled
20 SB Capital Employees Laid Off
Concerned $10 million in SB Capital Liquidity to be Dissipated by Court
Receivers making "thousands of dollars per hour"
Victim of SEC Overaction, after SEC's criticism of the Bernie Madoff Ponzie affair.
Believes he has "seriously" alienated SEC by offering "substantially differing views on my business model than they have."
SEC Fraud Allegation Nullifies Legal Expenses from Fund
Personal Assets Frozen
Absolutely will not beg from family members for the $25,000 to $100,000 legal fee retainer.
Will Represent Himself against SEC Charges
Relocates Family due to Safety Concerns
Concerned about Investors Reaction, Demands SEC approve payments of Key Man Life Insurance
Lists Harley for Sale
Second Email Response from Mark Feathers
Mon, July 2, 2012 at 9:53 PM ET
Here is a follow on comment from me:
"I am a very firm believer in the federal government of the United State of America, and in democracy, and I would rather live here then anywhere else on earth. I take pride in being an American, and in my six years of federal service, and had I not been medically retired as a Naval Officer, I would likely have made a career in public service in the Navy, as my father did, with pride and sacrifice, before me."
"I am also perhaps the biggest fan of the country of the United States Small Business Administration, having worked with this product and Agency for the past two decades. There is no better private/public partnership in the country, in my belief. In particular, I have great respect for senior SBA personnel that I have had the privilege of working closely with, including Frank Pucci, Mark Quinn, John Wade, Jim Hammersley, Grady Hedgespeth, Pauk Kirwin, and in the past, Jane Butler, when she was with the Agency". I'd like them on my softball team, anyday, as well, because they're great sports as well as very dedicated public servants."
"However, I also believe, perhaps like many Americans today, there is an occasional tendency of governments at all levels to over react due to the occasional stinging criticism that they may receive in the carrying out of there mission. I personally have never met a public servant that was doing it "for the money". They perform their jobs with pride, and because they love their country. In my opinion, the SEC took far too much criticism, in particular, over the Bernie Madoff Ponzi affair. Mr. Madoff was truly a criminal mastermind, the kind who comes along once in a generation, no matter how big government is, nor what kind of resources that they may have. Government entitities face public criticism on their budgets, and then they face criticism for "missing the boat". America, you can't always have your cake and eat it, too."
"Because ALL of my personal assets were frozen into receivership over the past week, and I am receiving quotes from alot of ex-SEC attorneys for retainer fees of $25,000 to $100,000 which I don't have, and absolutely will not beg my family members to provide, I have been forced to represent myself in court".
"Today I participated in a teleconference today with the presiding judge of the Federal Court in Santa Clara county, as well as the court appointed receiver, the U.S. Securities and Exchange commission, and the U.S. Small Business Administration. The conference was in regards to a determination as to whether or not the judge should allow the financing of a few of the remaining projects of my fund that can be completed by way of HR 5297, and the special program considerations and beneftits hat this great program has created for borrowers and lenders, alike".
The judge was a patient and polite man who listened with considerable concentration to my comments, which were somewhat emotional at times, due to the nature of my situation. Due to no fault of their own, and the timing of the placement of the court ordered receivership on the VERY DAY that we were to finance $10M in new 504 1st mortgage loans, several businesses in the Bay Area and around California, operated by very respected businessmen, will now be grieviously harmed. My fund's investors, will also now not only miss the revenue opportunities from these loans, but also face years of lawsuits from justifiably angry loan applicants, which will cause substantial immediate and ongoing harm to their businesses and to them personally".
"During the teleconference, perhaps my comments on the financing of these loans was unexpected, the SEC took the opportunity to once again make baseless claims against myself and my business. Despite the personal anguish caused to me by these comments, I tried to keep the attention on the benefits to the fund's borrowers and to the fund's investors." The court appointed receiver is paid collective salaries for their team of thousands of dollars per hour, potentially for a very long time, and my fund had over $10M of liquidity when they were seized from my business. I believe that this huge amount of liquid assets creates an inherent conflict of interest in the receivership to side with the SEC, rather then patiently having the opportunity to truly delve into what is in the best interess of all parties".
"I believe that the transcript of todays' meeting (telephonic meeting) is of public record, and I encourage Coleman Report listeners to request to hear or read a copy of this meeting from the Northern California District of the U.S. Federal Court".
"I also feared, due to the opposition in my position to that of the SEC's today, that I seriously alienated the SEC further by offering substantially differing views on my business model then they have. Due to the SEC's damning press release of last week, I have several hundred investors who are likely now thining that I have operated a "ponzi like". I have temporarily relocated my family out of the area for their safety. Since the SEC temporary restraining order disallows any access to my personal or business funds, I have also asked SEC to approve a continuation of the key man life insurance policies on myself". I have twin nine year old boys, and I do not wish one of my investors to bring harm to myself, based on the hysteria created by the SEC's one-sided and damning press release. I am trying not to sound paranoid on this matter, however, let's not forget that Jeffrey Dalmer was killed within a few months of going to prison because the prisoners their did not like the nature of his crimes."
"My fund's operating agreements also clearly establishes that I am indemnified against legal expenses, except in cases of fraud". Despite the being only alleged, and despite their being no court verdict of any kind for fraud, the SEC's use of the word, along with the fraze "ponzi like" has enabled them to override my investor approved allowance for legal fees. I caution all private fund manager's at this time that your indemnification language may offer no benefits, due to the special powers of the SEC".
"I am very disappointed for twenty of my employees who were laid off on the day that the receiver unexpectedly showed up. We had an incredible year of loan fundings, and our SBA 7a and 504 portfolio were very soundly underwritten and serviced. My employees were dedicated, hard working, committed, and focused, and all had families. I encourage Bay Area SBA lenders to call 650-559-5601 for a list of my employees that were laid off, and may be looking for employment".
I also will be selling my 2009 Harley Davidson Heritage Softail to try raise money to support my family, once the SEC's temporary restraining order on my personal asses is lifted. Please contact me at 650-575-7881 to know more about my bike. It has only 2,000 miles on it, and is very well maintained with all servicing records available".
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