Letters reveal hidden holders of Pure Play Music stock

Last summer, a group of closely connected companies managed to turn a $291,000 loan to Pure Play Music Ltd. (Pink Sheets: PPML.PK) into stock that soon had a market value of more than $70 million.

But exactly who got the shares was a bit of a mystery — until now. Sharesleuth has obtained copies of letters that eight entities sent to Pure Play’s transfer agent, asking to have restrictions on the stock lifted so that they could be freely sold.

The largest number of shares, 4.5 million, went to Cohiba Partners Inc., a Santa Monica, Calif., company with ties to Regis M. Possino, a two-time felon and disbarred attorney who has provided financing to numerous penny stock companies.

Cohiba was the company that provided the original loan to Pure Play’s predecessor – Latin Television Inc. – when it faced a severe cash shortage in 2007.

Sharesleuth previously wrote about Pure Play in June, detailing its ties to Possino and noting that the company retired its $291,000 debt by issuing 29.1 million shares to Cohiba and its assignees at a price of 1 cent a share.

The letters to the transfer agent show that many of the other entities that got blocks of that stock have ties to Possino, too.

Colin Nix, president of Cohiba, also signed as an agent of October Funds, which got 3.7 million Pure Play shares. Both Cohiba and October Funds listed their address as an office suite in Santa Monica that is shared with Possino’s companies.

Corporation records list Nix as the president of a third entity, European American Investments Ltd., which got 3.4 million of the Pure Play shares. It also uses the Santa Monica address.

But the letter that European American wrote to the transfer agent on July 18, 2008, was signed by Charles McGuirk – a convicted felon and longtime associate of Possino. McGuirk, who was listed as European American’s president, was sentenced to 18 months in prison in the 1990s after pleading guilty to mail fraud and tax fraud in connection with an embezzlement scheme at an insurance company.

Shearson Foundation, a Panamanian company, got 3.95 million Pure Play shares. Henry Ward signed its letter as managing director.

Nevada corporation filings also list Ward as a director of Quantum Companies Inc. McGuirk is that company’s secretary and treasurer, and its most recent SEC filing listed its headquarters as the office suite in Santa Monica.

Other SEC filings show that Shearson Foundation has invested alongside Cohiba, European American and October Funds in two other public companies, Ensurapet Inc. (Pink Sheets: EPTI.PK) and Who’s Your Daddy Inc. (OTCBB: WYDI.OB).

(See a previous Sharesleuth story on Who’s Your Daddy here)

After a law firm signed off on the removal of the stock restrictions, trading in Pure Play’s shares surged, as did the company’s share price. On Aug. 4, 2008, for instance, the daily volume totaled 402,900 shares, and the stock closed at $2, up from $1.11.

More than 1 million shares traded hands over the next six months, at prices ranging from $1.90 to $2.50. Pure Play’s stock price plunged in late February, and has been declining since.
The company’s shares were trading at 50 cents when our first story appeared in late June, and now trade for around 10 cents.

The letters to Pure Play’s transfer agent showed that 3.7 million shares from the debt conversion deal went to Donna Properties LLC, which listed an address in Panama. In 2001, investigators for the Nasdaq exchange identified Donna Properties as a “client” of one of Possino’s companies, Corporate Financial Enterprise Inc.

Their report said Donna Properties might have participated in his effort to secretly invest in — and influence — a publicly traded brokerage firm called Global Capital Securities Corp. Nasdaq delisted that company because of concerns about its ties to numerous people with criminal or regulatory pasts.

Two other companies that received Pure Play stock, Sandias Azucaradas CR SA and Vanilla Sky SA, listed the same Spokane, Wash., address. They got 3.6 million and 2.22 million shares, respectively.

The letter sent by Sandias Azucaradas was signed by Robin Rushing, who was identified as its managing director. She once worked for La Jolla Capital Corp., a Southern California brokerage that frequently ran afoul of regulators, and was a key aide to its chief executive, Harold “B.J.” Gallison. He was sentenced to prison for his role in a securities fraud facilitated by La Jolla Capital’s successor, Pacific Cortez Securities. He was released in 2006.

The last block of Pure Play stock, 3.95 million shares, went to Stock Certificate Transfer Service Foundation. It listed the same address in Panama as Donna Properties.

Pure Play 144 Letters

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