8000inc (EIGH.pk) Shareholder Statement Relating to the Illegal Short Position

June 6, 2011 - PRLog -- The Board of 8000 Inc.  received and examined volunteered shareholder brokerage account records, letters issued by the SEC and statements made specifically by E*Trade in April 2011. That examination revealed, to the best of our analysis, that there is (by admission and through verified shareholder records and subsequent share count previously submitted to the regulators) an illegal naked short position held within EIGH.pk, the trading symbol of the company’s common stock. This situation, the Company believes, has defrauded the Company and its shareholders and constitutes manipulation of the Company’s stock according to SEC and/or FINRA rules.  And critical to the fraud allegation is this simple fact: EIGH.pk is not eligible for short sales (since it is not DTC-eligible—i.e., not transferable electronically).  The consequence is that EIGH shareholders who have purchased Company stock in cash and as confirmed by E*Trade on April 27, 2011 may  or may not own legitimate EIGH stock and have, in our considered judgment, been defrauded by E*Trade (or any other brokerage firm through whom shorted shares were bought)!  

The Board has resolved to proceed with the replacement of outstanding share certificates, to bring the stock issuance into compliance with the law and the number of shares lawfully and correctly issued by the Company. The Board will instruct the Company’s Transfer Agent (the “TA”) to register all applications for replacement of all provable legitimate EIGH.pk stock held within E*Trade brokerage accounts.  

Currently, E*Trade will be the focus of the Company’s actions being the only brokerage to admit short positions held by them in EIGH.pk, but the Company is now undertaking further examination of an additional 12 brokerage firms it is convinced hold short positions.

The Board believes that these admissions of short positions unresolved are illegal under the applicable SEC and FINRA rules and regulations relating to creating and maintaining a fair and orderly market as defined by SEC Rules, the SEC’s mission statement and FINRA Rule 6490.  The Company, in fact, believes this situation has been on-going for several years and in its opinion is that the true figure of shorts held is significantly greater than those declared through the Shareholder Statement dated May 31, 2011.

The Board has authorized its counsel, invoking Nevada state law, to compel correction of the acknowledged “share imbalance” prior to the cancellation of shares held at or by E*Trade Brokerage by June 27, 2011.  Specifically, pursuant to Nevada Revised Statutes for Governing Corporate Law and Corporate Responsibility (see appendices below), NRS §78.250 provides, in relevant part, that if “…it becomes desirable for any reason, in the discretion of the board of directors, to cancel any outstanding certificate for shares and issue a new certificate therefore conforming to the rights of the holder, the board of directors may …order any holders of outstanding certificates for shares to surrender and exchange them for new certificates within a reasonable time to be fixed by the board of directors…”  Given that E*Trade and the SEC each acknowledge short positions held in EIGH, the Board has concluded it has authority and should take action pursuant to NRS §78.250—based on EIGH’s count of shareholders brokerage account holdings and the figures generated through the certified transfer agents reports. This exercise will continue with a full examination of up to 13 brokerage firms identified which the Company believes holds short positions who will under the same conditions have all stock held within their accounts cancelled with immediate effect and the Company’s shareholders with accounts at these brokerage firms again being asked to provide details and submit the Application Form described below and attached. Details of these actions by the Company will follow the same process and shareholders will be instructed accordingly moving forward.  

The other issue before the Board related to whether certain stock sold to shareholders through E*Trade were issued technically without the authorized capital being available, this being confirmed through E*Trade’s statement of April 27, 2011 that “…[W]e are not able to determine who owns legitimate or illegitimate shares…”. The Company reviewed and affirmed its conclusion on Nevada corporate law, namely NRS 78.235 which provides that “every stockholder in a Nevada corporation is entitled to have a certificate, signed by the officers or agents, certifying the number of shares in the corporation owned by the stockholder” .   As a result, E*Trade by its own admission holds an oversold and over purchased short position in EIGH.pk or, more simply, holds illegal naked short positions.

We believe the foregoing identified naked short positions are in violation of SEC and/or FINRA requirements.  In that context, the Company resolved to order the replacement of the outstanding certificates for E*Trade through the cancellation of all shares they hold on 27, June, 2011. In the first instance, all shares held in E*Trade accounts will have a stop placed on them on Wednesday June 8, 2011. The Company will request physical delivery of the shares held in the street name at and on behalf of E*Trade customers and shareholders of EIGH.pk. In the event of a “share imbalance” (the evident code phrase of choice of these shorting firms), the Company will provide all information to the regulators and authorities accordingly.

Furthermore, the Board concluded that such replacement of the certificates serves the best interests of the good faith shareholders, whose interest and voting rights which we believe were illegally diluted by the trading firms in engaging in naked short selling of EIGH.pk.  

For full copy of the shareholder update contact enquiries@8000inc.net or visit the 8000inc Facebook page.


-ENDS-
This news release contains forward-looking statements that are subject to certain risks and uncertainties that may cause actual results to differ materially from those projected on the basis of such forward-looking statements. The words "estimate," "project," "intends," "expects," "believes," and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are made based on management's beliefs, as well as assumptions made by, and information currently available to, management pursuant to the "safe-harbour" provisions of the Private Securities Litigation Reform Act of 1995. For a more complete description of these and other risk factors that may affect the future performance of 8000 Inc., see published disclosure documents at www.OTCMarkets.com  Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date made and the Company undertakes no obligation to disclose any revision to these forward-looking statements to reflect events or circumstances after the date made or to reflect the occurrence of unanticipated events.

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