The only way to get money out of a company is via salary or dividend*. It's way easier to prove dividend fraud than it would be 'salary fraud' (if such a term even exists)

You better hope the DoJ, company accounts record it as a dividend

*Apart from Lederer overpaying his brothers company for our FTP merchandise
*Tourney Entries
*If you want cashy to buy houses!!

Houses which are being sold in a repressed market to foreigners for passports
Here come the Russians

US economy: Foreign home-buyers sought

When the "company" pays a "dividend" to a "partner" to knock off a competitor it's really just hit money. When con men divide up the money from the con, it's really just theft. The issue is: guys so stupid they can't walk and pick their noses at the same time or con artists who set out to bilk everyone figuring there'd always be a another sucker reloading.

An employee can only be made redundant if their job no longer exists - for example due to restructuring. Pocket Kings cannot subsequently employ someone else to do that job, they would be liable to a claim for wrongful dismissal and the employee could be compensated and reinstated. After their probation period, an employee can only be fired/terminated for serious misconduct and then usually only after a series of warnings.

http://forumserver.twoplustwo.com/29...fs-op-1089355/

You are generally correct that one cannot keep stolen property. Property and money are not the same thing.

I am not sure of this, but AFAIK, stolen money which was obtained through a valid transaction which has been concluded is not returnable. If I am wrong, please cite.

Furthermore, it is unlikely that the money shareholders received can be considered stolen money. IF there was stolen money, legally the Directors have it.

This is nonsense. Either the owners are entitled to the payments or they are not. If entitled, they don't have to give them up. If not entitled, there is nothing for them to go after FTP for.

I think you will likely find that whether stolen cash is recoverable from somebody other than the thief will depend upon how he came to be in possession of the cash. If it was by means of a valid, bona fide transaction, the cash is not recoverable. However, I know almost as little Irish law as you, so I could be wrong.

Of course this is not the case. You handing him the money is not a valid transaction, and you do not have an arm's length relationship from him in this case. It is as recoverable from him as it is from you.

Actually, in most states, you must know the goods are stolen to be guilty of being in possession of stolen goods. Also in most (perhaps all) states, you are not guilty of being in possesion of stolen goods if all you are in posession of is cash. Cash is not goods.

True that you will have to give it up. True that the police will give you no compensation for it. Depending on the circumstances you may be able to pursue compensation from the person who sold it to you. All totally irrelevant to the issue of whether dividend payments are recoverable from non-Director shareholders, since dividend payments are not sales of goods.

You have no right to the ATM money. In the case of Directors making improper dividend payments to you, you may well have a right to the money, in the same way that you have the right to keep a monetary gift. Since the Dividend is improper, the Directors are personally responsible for the money improperly taken from the company. If they are responsible for the money, it follows that you the shareholder are not. If the Directors are responsible for that money, it follows that the money they gave you is not the money taken from the company. Hence it is just a gift from the Directors to you, paid out of their personal assets, and you have no obligation to the company for it.

With all due respect, markksman, you clearly don't have enough knowlege of the applicable laws to be making a useful contribution on this matter. I'm not suggesting you need to have the knowledge of a judge. God knows I don't. I am sure I must be getting a few things wrong. Sometimes I think I should stop posting because, not being a lawyer, there is a chance I am leading people astray Then I remember this is NVG, and even lawyers make mistakes.

But nothing I have posted has the quantity of fail you just displayed. I have been exposed to the laws regarding Director liablity for three decades. I have received legal advice on the matter from highly qualified lawyers. When commenting on aspects of the law I am less sure about, I read first, post second. If you did just a fraction of this, you'd have far fewer errors and irrelevancies in your posts.

(I now await the post from some lawyer pointing out the 18 errors of law I just made in this post - karma's going to get me )

I think there are at least two CA suits filed by Canadians, one filed in NY and one filed in Montreal. There may also have been another suit filed more recently out west somewhere (Calgary?)

(and they say Americans are litigious!).

Links to the Euro suit?

we speak the same language (posted in other thread about 60 mins b4 your post)

Karma hasn't caught up with you yet, you pretty much have the law you reference correct.

I could quibble about some of the things you say regarding stolen goods (there are times when stolen goods are simply not recoverable from a purchaser, and other times when they are) but that is really not important to the FTP discussion as "goods" are not at issue - whatever else, "dividends" are certainly not "goods."

Yet the issue of lack of innocence by a receiver of dividends is a real one. The allegations against some or all the FTP shareholders go beyond the level of innocence needed to ensure the level of legal protection for shareholders you describe in your post.

An obvious example of this would be a shareholder who directly conspires with a director to issue dividends in clear violation of some applicable law. The fact of the conspiracy will trump the normal protection for that shareholder.

Skallagrim

Anytime FTP received a deposit of money from a player, made in reliance on FTP's representations and inducements that such money would be held in a safe, secure and segregated account and readily available to the player, FTP had a fiduciary duty and responsibility to actually hold the money in accordance with its warranties, representations and inducements. Any failure to do so, that results in financial harm to such a player, makes FTP, its officers, partners and principals liable for foreseeable damages resulting from the breach in its fiduciary duty.
The law is not interested in labels; if you make promises to care for something that I give you possession of, which I would not have given you but for my reliance on those promises, then you must either keep your promise or be liable for the foreseeable damages from the breach of your promise. It's the essential and substantive problem FTP, its partners, officers and principals have regardless of what labels someone puts on any part of the transaction in order to cloud liability. Very few courts are going to be confused by those labels.

I think I agree that if there is a criminal conviction relating to the player money having been originally obtained by FTP through fraud (or theft, but that isn't going to happen) that there is a greater chance that the dividend payments can be clawed back.

If a claim for unjust enrichment applied, I would agree that unspent money and probably unconsumed goods bought with the unjust enrichment could be recovered. However, I went on in my previous post to show why I don't think that a claim of unjust enrichment is applicable: the players had no interaction with the owners.

Mostly I was citing the defence of changed circumstances as an example of one of the principles that probably underlies the protection shareholders are offered by the law.

My analogy stipulated no opporunity to change money. The point was not material to my argument because I hold that you are not liable to B no matter what order the events occurred in. What protects you from liability is the nature of the transaction in which you received the cash from A. If it is a bona fide arms-length transaction then you are protected. I will now admit to some doubt that a gift to you immediately subsequent to a robbery will necessarily be regarded as a bona fide arms-length transaction, but I think my construction of the analogy contains an implied stipulation that it actually is one.

That fact that you are handing the money to a friend makes it less likely that the transaction will be seen to be arms length.

I'm not very comfortable persuing a discussion of what a friend might have to do when he is gven the proceeds of a robbery because that is different in three ways from the example I gave. In my example the donation was arm's length, was not done for the purpose of disposing of the proceeds of a robbery and was not stipulated to be from the actual proceeds of a robbery. My point was that a money transfer from A to you when A has an obligation to B due to having unjustly deprived B of some money does not give B a claim against you, if the transfer from A to you is bona fide.

If you give a friend proceeds of a robbery, he'll have to give it back, and may even be punished. My example was significantly different.

I don't think so. I think you are fundamentally misunderstanding the thrust of my argument. Perhaps I did not present it with sufficent clarity.

Yes. Because the nature of the relationship determines whether the payment is treated as legitimate.

I'd like to see a case where a merchant was forced to surrender profit made on a legitimate sale to a person who happened to be robber.

As I stated in another post today, I think the fact that the Directors are liable for the complete amount of the improper dividend makes it difficult to claim that the funds paid out to shareholders constitute stolen money. They most definitely do not constitute stolen property.

I appreciate your comments.

While we are waiting on Tapie, does anyone know just what laws they were charged with or by what laws the money was seized? The racketeering laws were written with things like "if you receive a thing of value that you know or should have known was stolen or obtained illegally..." stuff like that. I'm not a lawyer either but I don't think the have to prove they were all in on a scam just that a reasonable person would have known if they did due diligence.

Do we have a link to any criminal charges?

What difference will it make if FTP is a privately owned LLC with twenty fiveish investors rather than a huge publicly held corporation with tens of thousands of shareholders???

Also, most of FTP owners were directly responsible for the marketing of that company. Ivey, Seidel, Cunningham, Harmon etc... They can't claim total lack of involvement in the success or failure of FTP. Whether or not that will be enough to force any return of distribution payments remains to be seen but I certainly think it's plausible.

TY to DoTheMath and Skallagrim.

I never understood the endgame for suing shareholders who received dividends. There is just no way we could ever recover enough to make a dent into the total amount owed. It never seemed feasible to me. Filing lawsuits is one thing, but we also have to win them. And the analysis provided by DTM and Skallagrim make me extremely pessimistic that if players were to ever attempt this, that it would be a bleak proposition from the onset.

demet and markksman have been parading this message for a long time, and it's good to know that we can put this argument to rest.

Thanks for the helpful input Skallagrim.

Are you certain of this? I was under the impression that the Directors were liable regardless of whether they particpated in or concurred in the decision. Under what circumstances would a Director not be liable for an improper dividend payment? Where he has been deliberately misled?

Oh dear! Did I say that? That's not quite correct, is it? I should probably have said something like "The DoJ has not unsealed any allegations that the shareholders had any reason to believe they were not entitled to the dividend payment." Obviously I cannot know that the shareholders knew nothing.

I take it this is because their guilty knowledge means they didn't receive the payment in good faith.

Didnt they receive like 440m$ ? Seems that any double digit% of this would be more than "a dent".

Well you can either listen to skallagrim and dothemath educated law analysis or you can simply look at markksman pragmatic observation "if it was so easy to get away with benefiting from theft using this shareholder protection, everyone would launder money this way".

I am tempted to go for the simple and pragmatic one

edit: obviously no offense to skallagrim and dothemath, their analysis is very interesting.

Think we may be letting this analogy thing get a bit of topic here... but if I did take said money from table, it would matter greatly whether you were late repaying me or not. Also, I think you're drawing a greater distingction between money and property than is currently understood in modern times.

Of course there is a distinction between money, goods, and property, but it can be argued that in our times money is the most important of possesions (as the means through which to aquire goods and property), and thereby anyone in posesion of your funds is just as (if not more) resposnibe in restoring them to the righful owner. Now grated, as you have argued, there are some dificulties in establishing the nature of the funds, but as I am arguing, I think that can be done in this case, and shown that they were gotten through a ponzi like fradulent manner that leave them valunerable to clawback.

Supposed insted I lent you my car for the weekend, if you fail to return it and I drop by your house next week and use my spare keys to take it back you can hardly acuse me of theft. Again, timing and the exact terms of the deal in question matter and in either case I would be better going to the authorities than trying to take back my property myself, but if I did do so it is hard to see in the examples above how I would be found in vilolation of the law. MOST importantly I would argue you did not (knowingly) lend the money to FTP.

This is where I totaly disagree and think we have a very strong case against FTP. While there may not be an offical trust I think the case for a construtive trust being established is quite clear. The money was deposited with FTP for the specific purpose of facilitating your ability to play poker. The terms of their liscence required that even if those funds were not held in a seperate trusts, they had to at all times have sufficent liquidity to cover all funds deposited with them (again, a much higher standard than any bank is held to), and as such we already have a step toward establishing a consturctive trust. This can be easily demonstarated as FTP did not have anywhere near this liquidity for a long time before BF and their regulators ahve said they clearly misrepresented those facts in their audits. So we are starting to build a case for fraud.

Now we turn to the TOS. While they do not explicitly state a degree of security for the funds, you have every right to expect that at the very minimum the most lax requirments of the regulator had to be met, and they were not. Furthermore, the regulator alos required the licensee to state clearly if they did not hold funds in separate and sequre accounts. The fact that funds were comingled was not stated anywhere priore to BF (actualy late May I belive), which would lead players to beive that funds were safe and sequre, and also a violation of the company license. So far from protecting them, what you say is apsent from the TOS is actually another clear indication that they were commiting fraud.

In terms of the TOS you may be correct, and that is admitedly a big deal, however I would argue that most players were under the impression that this is actually the type of agrement they entred into with FTP when they made a deposit with them. And if it can be shown that statemnts from the company were purpousefuly vague and misleading as to the exact nature of the funds being held, one can again charge fraud, and at the very least argue that a constructive trust has been established.

I'm very suprised to hear you say this. Bank deposit in fact constitue you lending the money to the bank (hence the intrest you get) and they are free to do with it whatever they please, while still acknowledging your claim on the funds. It is this relationship with FTP that does not arise anywhere. In fact them not offering any interest on the funds would normaly indicate that there is a bailor/bailee relationship or at the very least they are either holding them in trust. The impresion FTP was trying to make was that depsoiting them was actualy closer to puting money in a bank safe (where you actually pay a small fee for the services provided) and not in a regular deposit where you are actualy being compensated for depositing (loaning them) the money.

LOL, obviosuly FTP in no longer holding any player money and therfore owe them that money. After all, isn't that the whole problem here. I've already stated my disagrement with this conclusion but I would like to clarify that they curently have debt to players because of the way they handled the funds. That is not to say that the initial relationship was that of a lender and a debtor, and in fact players have several reason to think otherwise as already stated above.


[QUOTE=DoTheMath;29412786]The question is: does its quasi-Ponzi status establish a condition under which players would be allowed to recover improperly-paid dividends (or even properly paid dividends) from non-Director owners? I doubt it, but this is an area of developing law, so who knows?

And I am making the case as to why what they did actually leave them exposedd to some of the commonly understod reason and methods involved in a clawback operation even from unknowing individuals. But I agree, I there is no way of knowing which way the courts will go, and I I were to bet I would guess they would side corporate interests as is typically the case.

NO they're NOT! But as already stated, they were actually required to be much more careful with deposits than a bank is. Thefore acting in such an iresponsible manner shoudl actually make the fraud case even easier to prove.

I think so too, but I think a lot of that has to do with politics and the current economic status. You said you get most of your income from dividends, so what kind of message would it sedd to you as an investor if suddenly you could stand to lose even profits that you had already bancked. That's not to say it shouldn't and couldn't be done in cases of massive theft and/or fraud, but it is certainly a reason I belive they will be very cautious about persuing such an option at this point.


I don't really think so. IF the money in the directors' posesion is in fact stolen, then they cannot possibly be making a gift/payment from their own money. In most case the relationship is actually more straighforward than in this case with any company liabilities much more clearly in the form of loans and other contractual obligations than in this case, so clawback from sharholders in a banckrupt company is a different issue than what we are faced with here.

I still think that at this point my use of stolen funds is much more approriate than that of a loan gone bad. And again, if you owe bank A for a loan and you rob bank B to pay it back, bank B has a much stronger claim on the funds than bank A even though it also has a legal claim to said funds.

Agreed, and I am arguing that this is the case to be made here. But even if the DOJ does not officialy bring up such charges that is not to say it is not an accurat assesment of what occured here, and such a case can be made (and is probably being built) by the class action suits.

I would largely agree here, but then again, if they catch you just as you are handed the cheesburger, there would certainly be a strong case for reversing the the sale even if it was legaly valid transaction. And again, I am not arguing that all funds paid out as didvidends are or even should be recoverable, but that there is a not insignificant amount that can be legaly subjected to clawback given the charateristsics of the operation FTP was running as I understand it. Perhaps those of us claiming this will be proven wrong, and FTP was acting a lot less fraudelently than it currently appears, but so far the more info that has come out the worse they look, so that is why I am betting on the more fradulent assumptions to be born out.

Most definitely a desperate hope that the right thing will result in that the dividend money will go back to where they originated from - the players.

I hate reading your well laid out arguments as it makes complete sense that it is the directors who stole the player funds and then passed it on to shareholders.

I just pray that there is a legal mechanism somewhere that you have overlooked or missed for getting that dividend money back which imo the shareholders should give back voluntarily anyway as its simply the right thing for them to do.

It just doesnt feel or seem right that knowing where that money came from it cannot be reclaimed at least in part.

Firstly many thanks to DoTheMaths and Skillagram and others for a high quality discussion on this subject it really is a high quality exchange of impressive proportions.

However I have to disagree with aggo's final sentence as this argument/discussion is a long way from being put to rest.

Its not for me to speak for DTM or S on this subject but my interpretation of this debate is that whether or not dividends will or can get clawed back from the shareholders depends on a number of factors and as such it is too soon to say that dividends will definitely be or not be clawed back.

I have seen neither of these knowledgeable posters state categorically that no dividends will get clawed back just that the conditions under which those dividends were paid will ultimately dictate whether some of them can be clawed back. (please feel free to correct me if I am wrong) Basically they have shown that there is a complex legal argument to be had before a concluded view is made on whether those dividend payments are recoverable.

They have merely outlined the legal environment as to why dividends may or may not be reclaimable.

Before a definitive answer to this can be reached we need to define how and why the dividends were paid and whether or not any of the shareholders had any knowledge of what was going on and a load of other things too.

I find it embarrassing that such a dumb and irrelevant comment can be made on whats probably been the most informative sub plot in this thread to date.

PS I still believe/desperately hope that there's a legal way to claim dividend payments back

Here's a case that contradicts your opinion and DotheMath's.

http://www.msnbc.msn.com/id/44996012.../#.TqNWXjDlaZ4

It's not clear how many buyers there have been. What is clear is that buyers' good faith is not a defense against the rightful owner's legal claim. One of the buyers even added $10,000 upgrades. One can hardly argue for a better case of good faith.

In terms of fungibility, it doesn't affect legal claims. It only affects forms of remedy. For example, if you steal a $100 bill, the victim can recover from you. It doesn't matter that you spend the original bill. Fungibility doesn't affect legal claim. Fungibility means that the court views $100 in your bank account equivalent as the $100 you stole. Neither can the victim insist on having the original bill back. The exception is if the bill is unique in itself.

Pretty sure there's a precedent in English Law for shareholder dividends that were unlawfully paid to be clawed back, I'll try to find it tomorrow. Whether the dividends were actually unlawfully paid is another question entirely, I'm no business law expert.

edit: meh it seems skallagrim has already pointed this out.

In most cases that would be true, but as I have repeatedly said I belive the nature of the fraud perpetrated here is such that interaction thourgh an intermidiary does not absolve the owners of any responsibility of restoring profits that I do think unjustly enriched them. To go back to the bank example, I think there is a distinction to be made between owners reciving bank operating funds instead of profits as dividends, and actually reciving the very money deposited with the bank, and that in fact in this case you can go even a step further and say that money from saftey deposit boxes was taken out to pay the owners. I know you dispute this, and that much of this is hypothetical as we are still to find out the true nature of the funds deposited with FTP as well as it's relation to both players and owners, but if the latter proves to be a close anology (as I belive it to be), then I think partial clawback from shareholders is a very real posibility.

And I hold that in a privately held company where there are only a couple of dozen shareholders, that are actually 'friendly' with one another to some degree, it makes people more likely to be vaulnerable to clawbacks than a publicly traded company with lots of investors. Note I am not trying to discuss what would generally be the case, but only what seems to be true about the actual circumstances that we are faced with.

Also if you have doubts about reciving money right after the theft, then I woudl suggest that in this case the theft was constantly ongoing on a small scale, precisely so that they could try and use the defense you seem to suggest, namely that it cannot be said with certainty that the money paid out to shareholders in fact belongs to players. Now that may succeed in shielding them, or it may actually open them up to the ponzi like charges that make a clawback more plausible. I am of course arguing for the latter.

Then the question is which example better mirrors the events before us. I would be as charitable as to stipulated the your 'friend' is indeed cluless as to the source of the funds though he might have a hunch you are not the most upstanding citizen. I would however point out that I never intended to suggest the donation was for the purpose of disposing of the proceds, but rather the opposite, that the theft/fraud/whatever was done for the purpose of forwarding the funds to someone else (even if unbeknownst to them). But I'm not sure that actually helps your friends' case

Yeah so would I. I honestly don't know that it's ever been done (or even attempted), nor that it would prove succeful, but I am far from convinced that it is not a legaly viable option, although I freely admit that this would actualy be even a lot more difficult (and rightly so) than the clawback action we are currently debating. Though partly I think because in most case on any significant value, the assets purchased are auctioned off or perhaps can even be returned for a refund if the criminal is caught soon enough, and settling things in such a way is a lot more practical than going after profits of the seller. But again, I feel this is geting rather far off topic as I don't think this is really a close analogy to the position of FTP shareholders here.

Thanks, but sadly while we're having a civilized discusion, this is not a debate I really want to risk getting into on these forums. That's why while I have monitored these threads relativley closely I have largely refrained from making too many comments and will probably go back to that approach.

I think success here rests on showing how this should be intrepreted in terms of common law instead of relying on corporate law to provide the desired resolution. Corporate laws (and coprporations in the first place) were basically invented for the express purpose of shielding the shareholders from any form of liability. Therefore a lot of the things that I have argued with DTM have to be shown to be more analogous to what I claim the case to be rather than the way he sees things, for there to be a realistic chance of getting any 'profits' back from sharefolders.

The argument I have been trying to make is that the only lawful dividends can be from company profits. Any other source, whether operational funds or player deposits which actually makes this a relatively unique case (and I belive a stronger candidate for clawback), are necessarely unlawfuly paid by the directors. The debat seems to be in which case the actual owners can be made to pay (notice I did not say punished) for the crimes of their CEO.

Sorry man, IDK for sure, maybe I mistook the 2nd Canadian CA for Euros, but I thought there was one mentioned some time ago. I just mentioned these to marksman because he seemed to think no one had filed any legal action against the "usual suspects"! Good discussion by you guys BTW!

Yes maybe, and another thing, maybe the attempts to legally get recovery from the Non officers and non directors would "encourage" them to maybe make some repayment settlements rather than pay huge attourney fees for years trying to avoid paybacks