UPDATE 5/7 – Huge success for Rossi E-Cat/QuarkX technology
Game is over…
Rossi and IH settled in court. Everybody smiling. Maybe a win-win deal made. Huge success for Rossi E-Cat and QuarkX technology.
It seems as if Darden et al do not want to tell SEC what they are actually doing for a business. This applies to both their “fake” environmentalism (with the chapter 11 hedge moving the risks to the tax-payer/investor), since not even their real-estate engagements are mentioned.
What are they trying to hide?
What are they trying to achieve?
Of course, also the Cherokee engagement with Industrial Heat/Rossi should have been declared in their filings due to the the close personal connections between the owners of Cherokee (Darden & Mazzarino) and Industrial Heat. But there is not a single trace of this in their filings!!!
On a side note I also find it strange that Cherokee removed all information about their supposed investment activities from the web (no links, nothing) at the same time as they were hard selling Industrial Heat to potential investors (Woodford, the Chinese, etc.) early summer 2015 … Hmm. A quick look in the waybackmachine on Cherokeefund.com reveals this interesting coincidence… (current and 2015 webpage below)
Again, What are they trying to hide?
As usual it seems as if they try to hide their activities behind obscurities company structures, like offshore entities, and no public information … Sharks as they are …
This is a good summary on the Cherokee SEC filings and the obligations in general. Here is a similar text posted by “SSC” (with some additional links) on LENR-FORUM.COM
FORM ADV ( UNIFORM APPLICATION FOR INVESTMENT ADVISER REGISTRATION)
Cherokee Investment Partners LL C is registered as an investment adviser with the SEC under the Investment Adviser Act of 1940. Cherokee , as investment adviser, must file the Form ADV to :
- register with the SEC
- register with one or more state securities authorities
- amend those registration
The amendments have to be filed :
- each year an annual updating amendment must be filed within 90 days after the end of investment adviser’s fiscal year.
- Other- than- annual amendments must be filed promptly in case of information becomes inaccurate in any way or materially inaccurate (it depends on the matter of the information).
Form ADV contains four parts :
- Part 1A ( it consists in a list of questions )contains information about an investment adviser and its business operations. Additionally it contains disclosure about certain disciplinary events involving the adviser and its key personnel.
- Part 1B asks additional questions required by state securities authorities.
- Part 2A requires advisers to create narrative brochures containing information about the advisory firm
- Part 2B requires advisers to create brochures supplements containing information about certain supervised persons.
Federal Information Law and Requirements ( reported from SEC website )
Sections 203 and 204 of the Advisers Act (15 U.S.C. §§ 80b-3 and 80b-4) authorize the SEC to collect the information required by Form ADV. The SEC collects information for regulatory purposes, such as deciding whether to grant registration. Filing Form ADV is mandatory for advisers who are required to register with the SEC and for exempt reporting advisers .The SEC maintains the information submitted on this Form and makes it publicly available. The SEC may return forms that do not include required information. Intentional misstatements or omissions constitute federal criminal violation under 18 U.S.C. §1001 and 15 U.S.C.§ 80b-17.
Glossary of terms
Before the beginning of the analysis of Cherokee’s answers, could be important to point out the definition of such terms according to the “ Glossary of Terms” attached to the FormADV Instructions published in the SEC website :
- Advisory Affiliate : Your advisory affiliates are (1) all of your officers, partners, or directors (or any person performing similar functions);(2) all persons directly or indirectly controlling or controlled by you; and (3) all of your current employees ( other than employees performing only clerical, administrative, support or similar functions).
- Charged : Being accused of a crime in a formal complaint, information, or indictment (or equivalent formal charge)
- Client : Any of your firm’s investment advisory clients. This term includes clients from which your firm receives no compensation, such as family members of you supervised persons. If your firm also provides other services (e.g., accounting services9,this term does not include clients that are not investment advisory clients.
- Control : The power, directly or indirectly, to direct the management or policies of a person, whether through ownership of securities, by contract, or otherwise.
a)Each of your firm’s officers, partners, or directors exercising executive responsibility ( or persons having similar status or functions ) is presumed to control your firm.
b)A person is presumed to control a corporation if the person : (i)directly or indirectly has the right to vote 25 percent or more of a class of the corporation’s voting securities, or (ii)has the power to sell or direct the sale of 25 percent or more of a class of the corporation’s voting securities.
c) A person is presumed to control a partnership if the person has the right to receive upon dissolution, or has contributed, 25 percent or more of the capital of the partnership.
d) A person is presumed to control a limited liability company(“LLC”) if the person : (i) directly or indirectly has the right to vote 25 percent or more of a class of the interests of the LLC; 8ii) has the right to receive upon dissolution, or has contributed , 25 percent or more of the capital of the LLC, or is an elected manager of the LLC.
e) A person is presumed to control a trust if the person is a trustee or managing agent of the trust
Employee : This term includes an independent contractor who performs advisory functions on your behalf
Enjoined: this term includes being subject to a mandatory injunction, prohibitory injunction, preliminary injunction, or temporary restraining order
Felony : For jurisdictions that do not differentiate between a felony and a misdemeanor, a felony is an offense punishable by a sentence of a t least one year imprisonment and/or a fine of at least $ 1,000. The term also includes a general court martial .
Investment-Related : Activities that pertain to securities, commodities, banking, insurance, or real estate ( including, but not limited to, acting as or being associated with an investment adviser, broker-dealer, municipal securities dealer, government securities broker or dealer, issuer, investment company, futures sponsor, bank, or savings association9,
Involved : Engaging in any act or omission, aiding, abetting, counseling, commanding, inducing, conspiring with or failing reasonably to supervise another in doing an act.
Misdemeanor: For jurisdictions that do not differentiate between a felony and a misdemeanor , a misdemeanor is an offense punishable by a sentence of less than one year of imprisonmentand7or a fine of less than $1,000. The term also includes a special court martial .
Order : A written directive issued pursuant to statutory authority and procedures, including an order of denial ,exemption, suspension, or revocation. Unless included in an order, this term does not include special stipulations, undertakings, or agreements relating to payments, limitations on activity or other restrictions.
Person : A natural person( an individual)or a company. A company includes any partnership, corporation, trust, limited liability company ( “ LLC”), limited liability partnership ( “LLP”), sole proprietorship, or other organization.
Proceeding : This term includes a formal administrative or civil action initiated by a governmental agency, self-regulatory organization or foreign financial regulatory authority, a felony criminal indictment or information( or equivalent formal charge) , or a misdemeanor criminal information ( or equivalent formal charge). This term does not include other civil litigation, investigations, or arrests or similar charges effected in the absence of a formal criminal indictment or information ( or equivalent formal charge
Related person : Any advisory affiliate and any person that is under common control with your firm.
Supervised person: Any of your officers, partners, directors ( or other persons occupying a similar status or performing similar functions) , or employees, or any other person who provides investment advice on your behalf and is subject to your supervision or control.
MISSTATEMENTS AND/OR OMISSIONS MADE BY CHEROKEE
Cherokee filed the last Form ADV Part 1A on 03/29/2017 and the last Form ADV Part 2A on 03/31/2017. The Form ADV Part 1A is the most important since the information given in this Form are the pilasters of the evaluation made by the Sec for the registration or for the suspension and/or revocation of the registration . The Part1A consists of 12 Items .In order to verify the truthfulness and completeness of the information it needs to check all the Items since the requested information constitute an unique and entire system.
The aim of this Form is double : 1. to give information to the potential customers about the name, address, n. of registration, name of key personnel, kind of clients, kind of financial products … 2. To give information to the officials of the SEC so that they not only acquire a check list for future investigation visits but also can evaluate potential conflicts of interest regarding the adviser and its related persons ( including the key personnel and companies and/or persons affiliate to the adviser) and also take notice of the disciplinary history of the adviser and its related persons.
Please let me give you a summary of the information given by Cherokee :
Cherokee is an investment adviser registered with the SEC : SEC file number 801-74482,and with FINRA’s CRD System : CRD number 161886. Principal office. 111East Hargett Street Suite 300 – Raleigh North Carolina 27601.
Another name declared by Cherokee as business name : Cherokee Advisers LLC (relying Advisor)
ITEM 6 LETTER B
In the premise the Form ADV asserts : In this Item, we request information about your firm’s other business activities .
Item 6.A Question : You are actively engaged in business as a (check all that apply) ? In order to answer you must check a list of activities …..among them : (5) real estate broker, dealer, or agent
Cherokee ‘s answer : “ none “ – despite all the related companies engaged in real estate activity : the brownfields are by definition a real estate activity in so far they are not just remediation but also revitalization by building and selling housing, commercial centers etc. Moreover the Form ADV points out: if you engage in other business using a name different from the names reported in Items 1.A or 1.B ( in this case Cherokee Investment Partners LLC and Cherokee Advisers LLC), complete Section 6.A of Schedule D . Cherokee , since it does not declare any activity except for the institutional activity, consequently does not declare any name of their related companies.
Item 6. B (1) question : Are you actively engaged in any other business not listed in Item 6.A ( other than giving investment advice)? Cherokee’s answer : “no” This answer is an omission, because Cherokee had to declare that it is actively engaged in another business with, for example, Industrial Heat LLC et Al.
The officers of Cherokee Investment Partners LLC are the same officers of Industrial Heat , the office address of Cherokee Investment Partners LLC and the office address of Industrial Heat LLC are the same, Thomas Darden and John Mazzarino are consistent shareholder both of Cherokee Investment Partners LLC and Indutrial Heat LLC therefore Cherokee Investment Partners LLC and their officers Thomas Darden and John Mazzarino are directly engaged in the activity of IH LLC. As requested by Form ADV they engaged in this business with another name. Cherokee-Industrial Heat acting as a licensee of an energy renewable device and acting as a sponsor of research and development in the LENR field , is engaged in a business activity different both from the activities listed in Item 6.A.and from an investment advice activity.
Both the omission in not declaring its real estate activity as a dealer ( obviously with other name , but it doesn’t matter for the SEC) and the omission in not declaring the activity of Industrial Heat could be very important in order to hide a problem of potential conflicts of interest between the investment advice activity and such others activities. The SEC is very focused on this matter. Furthermore we do not forget that every omission may constitute a federal criminal violation.
Item 11 Disclosure Information
In the premise the Form ADV asserts: In this Item, we ask for information about your disciplinary history and the disciplinary history of all your advisory affiliates. We use this information to determine whether to grant your application for registration, to decide whether to revoke your registration or to place limitations on your activities as an investment adviser, and to identify potential problem areas to focus on during our on-site examinations. One event may result in “yes” answers to more than one of the questions below. Your advisory affiliates are : (1) all of your current employees ( other than employees performing clerical, administrative , support or similar functions),(2) all of your officers, partners, or directors ( or any person performing similar functions), and (3) all persons directly or indirectly controlling or controlled by you. If you are an identifiable department or division” (SID) of a bank , see the Glossary of Terms to determine who your advisory affiliates are. If you are registered or registering with the SEC or if you are an exempt reporting adviser, you may limit your disclosure of any event listed in Item 11 to ten years following the date of the event.
Item 11.H (1) (a) Question : Has any domestic or foreign court in the past ten years , enjoined you or any advisory affiliate in connection with any investment –related activity? Cherokee’s answer : “ No”.
Now we should analyze every each term of the question according to the” Glossary of Terms”.
Enjoined : This term includes being subject to a mandatory injunction, prohibitory injunction, preliminary injunction, or a temporary restraining order.
Advisory affiliate: see the premise of this Item
Investment – related : Activities that pertain to securities, commodities, banking, insurance, or real estate( including, but not limited to, acting as or being associated with an investment adviser, broker- dealer, municipal securities dealer, government securities broker or dealer, issuer, investment company, future sponsor, bank, or saving association).
Cherokee made an omission because it did not declare that on April 4,2013 the United States Court of Appeals for the Fourth Circuit confirming the judgement of the District Court decided that Ashley II of Charleston LLC was a liable part under CERCLA ( Comprehensive Environmental Response , Compensation, and Liability Act) for the costs of the clean-up and remediation of the site.
Ashley II of Charleston LLC is a company controlled by Cherokee therefore is an advisory affiliate. The matter is real estate, Ashley II of Charleston LLC together with Ashley I LLC , both companies , controlled by Cherokee, bought a brownfield in order to clean –up it and build on the site. The Court’s verdict is a mandatory injunction in so far it ordered to the parties to remediate the site at their expenses.
It is important to underline that every omission may constitute a federal criminal violation.