Securities and Exchange Commission v. Nadel et al

Filing 987

MEMORANDUM in opposition re 979 Motion for Miscellaneous Relief filed by Richard Formica. (Attachments: # 1 Exhibit A, # 2 Exhibit B, # 3 Exhibit C)(Barker, Chris)

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EXI--IIBIT B Case 8:11-cv-00516-MSS- EAJ Document 126 Filed 11121112 Page 1 of 11 PagelD 3599 THE UNlTED STATES DISTRICT COURT FOR THE MIDDLE DISTRICT OF FLORIDA TAMPA DIVISION ---------- X RICHARD FORMlCA t MARILYNN FORMICA, AMI MARIE FORMlCA, MATTHEW JI'RANCIS FORMICA, AND KEVIril FRANCIS FORMICA, Plaintiffs, - 8: ll-CIV-OOS16-MSS-EAJ -against- DONALD H. ROWE, THE WALL STREET DIGEST INC., a Delaware corporation, and CARNEGIE ASSET MANAGEMENT, INC., a Delaware corporation, Defendants. DECLARATION OF RICHARD FORMICA IN OPPOSITION TO DEFENDANTS' MOTION FOR SUlVlMARY JUDGMENT I, Richard Formica, being over the age of 18 and under penalty of perjury, dec1are the following under 28 U.S.C. § 1746: 1. I am a plaintiff in the above-captioned matter. I make this declaration on personal knowledge in opposition to Defendants' Motion for Summary Judgment. {00219968.DOC} ----ease B:ll--€v-GGe±6-MSS EAJ--Document 126 Filed 11/21112 Pag~_.? of 11 Pag~lq ?,600 2. I have been a resident of Haworth, New Jersey for over thirty years. I am married to Marilynn Formica, and we have three children, Ami, Matthew and Kevin Formica. We were all residents of New Jersey during the time period relevant to this action. 3. I had full authority to make investment decisions for Marilynn, Ami, Matthew and Kevin, and I made those decisions on their behalves, as their agent, during the period of 1994 through 2010. 4. I began subscribing to The Wall street Digest ("TWSD") in the early 1990's. I received TWSD and the "special reports" up unti12009, though there may have been years when I did not receive it. For most of the years, I received TWSD once a month, though in certain years I received it daily via email. I read it regularly and paid a SUbscription fee. 5. I also received "special reports" and/or "bonus reports" from Donald Rowe. These were the reports that recommended the hedge funds in which my family and I invested. 6. My first phone contact with Rowe was in the mid-1990's. I called Rowe when I had an investnient decision to make, and when Rowe had an investment opportunity for me, Rowe contacted me. I had Rowe's personal mobile phone number, which was not published in TWSD or in any of Rowe's special reports. 7. I invested in five hedge fund families, and called Rowe to get his advice as to whether I should invest in the funds he recommended. I trusted Rowe and relied upon his purported expertise to advise me, given I am a doctor and he held himself out to be an expert regarding fmancial matters. Indeed, as per TWSD, Rowe claimed that TWSD is "Wall Street's Most Widely Read Investment and Financial Service." See Ex. 1. I also called Rowe any time I {00219968.DOC} Case 8:11-CV-00516-MSS-EA J · -:I l- 2-P ge-3-nLl1.2 ge ID 3601 l Document 126 R ted -l-1: -2-1 lCl -- was going to make an initial investment, if I had a question about the funds' trading, and when I was deciding whether to remain invested in a particular fund or switch. 8. Rowe gave me personalized investment advice tailored to my situation. He would advise me not only to invest in certain funds, but also when to redeem from a fund. For example, I called him about my concerns regarding High Street and he advised me to take my money out of High Street and put it in Nadel-Moody. He would also advise me as to the relative safety of investing in each fund and how ~e trading strategy in each fund worked. I relied heavily on Rowe's representations that he had met with the managers and trusted them. The DraseenolKenzie Funds (1996-2010) 9. In around 1995, I became aware of hedge funds when Rowe recommended that I invest in the Three Oaks Currency Fund. When Rowe ftrst told me about the Three Oaks Currency Fund, it was part of the Kenzie Group-later known as the Draseena Group-and was managed by Daniel Spitzer and Al Gerebizza. Rowe and I discussed the Three Oaks Currency Fund in detail after Rowe published information about it and I called him to get more information. 10. Rowe told me that KenzielDraseena had developed a proprietary trading program for dealing with currencies and sovereign bonds, that this proprietary trading program worked very well and was hedged so that its gains and losses were small and that the fund was profitable and safe. He also told me that Spitzer and Gerebizza were velj' competent, that they had been working on their proprietary trading program for some time and that they were trustworthy. II. When I spoke with Rowe, we discussed the volatility of currency investments, and Rowe explained that this was not the kind of volatile currency speculation that Rowe was {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126 Filed 11121/12 Page 4 of 11 PagelD 3602 opposed to, but instead was a proprietary trading system in which they bought global bonds, and they hedged the slight fluctuation in currency values. Rowe told me that he was confident in Spitzer and Gerebizza and in the fund's safety and profitability. Before I invested, I called and spoke with Daniel Spitzer, who told me that he had been dealing with Rowe for a W:hile and that Rowe's description of the fund was accurate. 12. As a result of Rowe's recommendation and in reliance on Rowe's assurance that Spitzer and Gerebizza were trustworthy, I began investing with the Draseena Group in 1996, and remained invested for fourteen years. In or around 2000, I learned from a conversation with Spitzer that Spitzer had voluntarily turned in his trading license to the National Futures Association to avoid a protracted conflict over what he told me was a "technical disagreement over the wording of certain advertisements that preceded the Three Oaks Currency Fund operations." Spitzer added that AI Gerebizza could do the trading for the funds so it was not worth the time to straighten out the disagreement. I was not concerned, because I believed that if it were something important, Rowe would have called me ~d told me about it. 13. Over the course of fourteen years, my family invested a total of approximately $5,849,121 in the Draseena funds (Three Oaks Currency Fund, LLC, Three Oaks Senior Strength Fund, LLC, Three Oaks Senior Strength Q Fund, LLC, Arrow Fund, LLC, Arrow Fund IT, LLC.) 14. However, in around 2010, I learned that the government brought criminal charges against Spitzer and Gerebizza and that the Draseena Group funds were a fraud. 15. Though I was able to redeem some of my family's investment in the Draseena Group, we are still owed in excess of$1,840,592. The SEC has told me that there are no assets left in the Draseena Group funds. {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126 Filed 11121/12 Page 5 of 11 PagelD 3603 The Nadel-Moody Funds (2001-2009) 16. In or around 2001, I received a report from Rowe--on Carnegie Asset Management, Inc. letterhead-about exceptional results achieved by managers of a hedge fund in Sarasota, Florida, Arthur Nadel and Neil Moody ("Nadel-Moody"). After receiving the report about Nadel-Moody, I contacted Rowe. 17. Rowe told me that the hedge fund discussed in the letter was the Valhalla Fund, and though it was closed to investors, Nadel-Moody created or had already created a clone fund. The report I received from Rowe stated that Rowe had done due diligence on Nadel-Moody, and I believed that the information about Nadel-Moody's results that were included in the report were based on Rowe's due diligence. I believed Rowe's representation that he had investigated Nadel-Moody's methods, their reports and their results before Rowe wrote his special report. 18. I believed that Rowe was an expert and a professional, and that Rowe had the ability to gather more information than I did and that Rowe knew what to do with the information and how to analyze it. Rowe told me that he knew Nadel personally, that Nadel and his wife were major contributors to the arts and to charity, and that Rowe had a lot of faith in Nadel's integrity. 19. Rowe also told me that Nadel's trading methodology was extremely safe as it was based on making very small investments using mathematical formulas. As a result of Rowe's recommendations, I invested millions in the Nadel-Moody funds. 20. But I did not know-because Rowe never told me-that Rowe received illegal referral fees in exchange for touting and recommending the Nadel-Moody funds. TWSD was nothing but a way for Rowe to tout the Nadel-Moody funds. Rowe never told me about the {002 19968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126 Filed 11121/12 Page 6 of 11 PagelD 3604 referral fees, and none of the "special reports" sent to me by Rowe about Nadel-Moody disclosed that Rowe received referral fees for rus solicitation of investors. 21. Rowe touted Nadel-Moody in one of his special reports and claimed that he perfonned "a due diligence visit to the offices of Moody & Nadel." See Ex. 2. 22. In addition, Rowe touted Nadel-Moody's perfonnance results as "actual results achieved by an effective team of managers in Sarasota, Florida." See Ex. 3. I was lead to believe that Rowe had actually verified these results through his due diligence. 23. In mid-January 2009, I learned for the first time that Arthur Nadel had abandoned the Nadel funds under suspicious cir~umstances and that all of the investors' money was gone. On January 21, 2009, the SEC filed a lawsuit in the Middle District of Florida, SEC v. Arthur Nadel, et 01., Case No. 8:09-cv-87-T-26TBM, which revealed that the Nadel-Moody funds were a Ponzi-scheme and that no money remained in the funds. 24. I did not learn that Rowe received fees for recommending Nadel-Moody until after January 2009, when the Nadel Ponzi scheme was exposed. 25. As a result of Rowe's recommendation to invest in Nadel-Moody, my family lost $3,893,535. High Street Capital Management (1006-1008) 26. In 2006, I learned about High Street from a conversation with Rowe or a report sent by Rowe. Rowe told me that the fund's manager, John Bartoletta. was a state~f-the-art trader with a staff of four or five experienced traders. Rowe told me that he was in favor of Bartole«a's strategy, wruch was trading specific markets when they were moving in a direction that was predictable, and that Bartoletla was very successful in employing that strategy. {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ 27. Document 126 Filed 11/21/12 Page 7 of 11 PagelD 3605 Rowe told me that Bartoletta was very competent and trustworthy, and that the funds were safe in part because he could stay away from volatile and unpredictable markets. Rowe told me that Bartoletta's trades were very short term and would last twenty minutes to an hour, which avoided the problem of having an overinflated asset caught in a bubble. Rowe told me that he spent a week with Bartoletta and his traders, carefully studying and watching, which led me to believe that Rowe looked over the books, the trading methods and the results. 28. As a result of Rowe's recommendation, on May 18, 2006, I invested $250,000 of my family's money in the High Street Futures Fund, LP. Over the next several months, until October J, 2006, we invested an additional $1,200,000, for an aggregate investment of $1,450,000 in the High Stre~t Futures Fund. On July 1, 2006 and August 1, 2006, I invested a total ofSSOO,OOO of my family's money in the High Street Global Futures Fund, Ltd. Both High Street Futures Fund and High Street Global Futures Fund were managed by Barto Ietta. 29. Rowe never told me that he received referral fees for recommending High Street. 30. After my family invested in High Street, I had a conversation with Rowe in which he said that he was disillusioned with Bartoletta's trading system and that I should move my money elsewhere. When I asked whether I should move my money to Nadel-Moody, Rowe encouraged me to do so temporarily, while Rowe developed the Carnegie Fund. 31. On August 31,2007 and December 31,2007, I redeemed $711,239 from High Street and invested that money in the Nadel-Moody Ponzi scheme. The remaining $488,761 was lost by High Street. On October 31, 2007, I redeemed $100,000 from the High Street Global Futures Fund and invested that sum in the Draseena funds . {00219968.DOC} Case 8:11-cv-OOS16-MSS-EAJ 32. Document 126 Filed 11/21/12 Page 8 of 11 PagelD 3606 Towards the end of2007, I was able to redeem approximately $222,862 from High Street, but ended up losing a total of$815,899. The Carnegie Fund (Late 2007-2009) 33. In late 2007 Rowe began soliciting investors--including me--for the Carnegie Furid, which was a "feeder fund" that he created. Rowe solicited investors for the Carnegie Fund through special reports and verbally. 34. Rowe told me that the Carnegie Fund was a feeder fund, and explained that he would be the general partner of the fund and that when he got money from investors he would .., feed it to twenty different managers, each of whom managed a fund. Rowe told me that he would select the best twenty managers out of thousands, and that he would vet each manager. 35. I relied on Rowe's representations and on November 1,2007, invested $200,000 in the Carnegie Fund. On February 1, 2008, I invested an additional $390,000 in the Carnegie Fund. 36. After investing in the Carnegie Fund, I learned that three of nine managers selected by Rowe were engaged in practices that may have been fraudulent. 37. While my family eventually redeemed $497,000 from the Carnegie Fund, we have been unable to redeem the remaining $93,000 of our investment. The Wall Street Digest Fund (Late 2008-2009) 38. Along with the Carnegie Fund, Rowe also created a fund offunds called the Wall Street Digest Fund and solicited investors through special reports and verbally. When I asked Rowe why I could not invest directly in the funds that the Wall Street Digest fund planned to invest in, Rowe told me that a certain manager required a minimum investment of $5 million, {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126 Filed 11121/12 Page 9 of 11 PagelD 3607 and that because investors like me could not afford that, the manager would allow Rowe to pool the money of a number of investors and invest in hi~ fund. 39. So, in order to invest with this manager, I had to go through Rowe. Rowe spoke in great superlatives about this manager, who ran a fund that specialized ~ betting against the market, and called this manager the best short trader he had ever encountered. Based on Rowe's recommendation, I invested $100,000 in the Wall Street Digest Fund. After receiving a report that we earned 5% during November 2008 and after a discussion with Rowe, my family invested an additional $50,000 in the Wall Street Digest Fund on January 1,2009. But on March 19, 2009, we received a letter from the Wall Street Digest Fund stating that the track record of the fund for November and December was incorrect and it had to be revised downward. 40. On April 7, 2009, my family was able to redeem $140,000 of our investment from the Wall Street Digest Fund. We are still owed $7,000. 41. I never knew that Rowe received referral fees for recommending the hedge funds that I invested in, or that he never did any actual due diligence on the hedge funds that.he recommended until after January 2009, when Nadel-Moody was exposed as a Ponzi scheme and the truth about Rowe's connections to the hedge ~ds he recommended carne to light for the first time. Summary of losses 42. In Defendants' Motion, he incorrectly claims that between 1996 and 2009, I invested a total of $2,885 ,607 in nine separate Draseena hedge funds and withdrew $3,203,718 for a profit of $318,110. See Defendants' Motion at 6. But in one fund alone, the Three Oaks Currency Fund, I invested $2,885,607 and withdrew $2,700,808 by 2005 for a loss of $184,799. I also invested $245,939 in a second Three Oaks Fund and withdrew $131,000 for another loss of$114,939. {00219968 .DOC} Case B:11-cv-00516-MSS-EAJ 43. Document 126 Filed 11/21/12 Page 10 of 11 PagelD 360B In sum, I, Marilynn Fonnica, Ami Fonnica, Kevin Formica and Matthew Formica, invested a total of$5,849,121 in the Draseena funds. We redeemed a total of$4,008,528, for a loss of$I,840,592 incurred between 1995 and 2009. 44. With respect to Nadel-Moody, Defendants also incorrectly state that "betWeen Oc"tober 2001 and May 2008 the Pension Plan invested $2,088,200 and withdrew $2,500.000 between 2004 and 2008." See Defendants' Motion at 10. TIlls characterization is misleading, because I did not take $2,000,000 as profit-instead, I reinvested that money in another NadelMoody fraudulent fund. So, I invested $2,228,000 and withdrew $500,000 from the Pension Plan's account in the Nadel-Moody Viking Fund between October 2001 and 2008. The $2,000,000 "transfer" was bogus and fictitious because my money was simply transferred by Nadel from an accOlmt in one fraudulent fund to an account in another Nadel-Moody fraudulent fund. 45. Ninety-five percent (95%) of the money I invested in Nadel-Moody was invested between October 2001 and the end of 2004, long before Rowe claims he stopped recommending Nadel-Moody. 46. Rowe never told me that he stopped recommending Nadel-Moody. 47. In reality, on my own behalf and on behalfofMarilynn Fonnica, Ami Formica. Kevin F onnica and Matthew Formica, my family invested a total of$5,813,535 in Nadel-Moody, withdrew $1,920,000, and lost a total of$3,893,535. 48. With respect to High Street, in 2006, I invested in two different High Street Funds on behalf of myself and/or Marilynn Fonnica. We invested a total of $1 ,950,000 in 2006. In 2007, I withdrew a total of$I,134,101 from our accounts in the High Street funds. The total loss forme and Marilynn as a result of our investment in High Street funds was $815,899. {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126 Filed 11/21112 Page 11 of 11 PagelD 3609 49. With respect to the Carnegie Fund, I invested $590,000 in the Carnegie Fund beginning in late 2007 and ending in early 2008 on behalf of myself, Ami Formica, Kevin Formica and Matthew Formica. In late 2008, I began withdrawing money, for a total of $497,000. I have since been told that the rest of the money is "not available and not liquid." I lost a total of$93,000 in this fund of funds managed by Donald Rowe. 50. With respect to the Wall Street Digest Fund, I invested $100,000 in 2008 and another $50,000 in 2009. I withdrew $140,000 from the-fund in 2009. The total loss was $10,000. I declare under penalty ofpetjury that the foregoing is true and correct and is executed this ~y of November, 2012. 6+i~~ Richard Formica {00219968.DOC} Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11121/12 Page 1 of 17 PagelD 3610 EXHIBIT 1 Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21/12 Page 2 of 17 PagelD 3611 Case 8:11-cv-00516-MSS-EAJ Document 114-77 Filed 10/23/12 Page 1 of 16 Pagel 0 2767 -- _ciOO ~-----------_ __ ~ ITHE WALL STREET DIGEST e - Our 31st Anniversary - - FJ2FEI±j August 2007 THE GREATEST GLOBAL BOOM OF ALL TIME The 2006-2010 bubple boom is being driven by record global liquidity that has been created by the world's central bankers. During his 18 years as Chairman of the Federal Reserve, Alan Greenspan created more money than all other Fed chairmen combined. Greenspan's automatic response to every financial crisis around the globe was to flood the u.s. banking system with ample sums of additional cash. His objective was to keep each crisis from washing up on our shores. He was successful in stabilizing the U.S. economy, but the eventual net result was the urrent inflationary pressures that Fed Chairman Bernanke is deaUng with. Gr ~n P,Ul crl!!ated t.oo much n oney, which produc~d a falling dollar, which then proTIlpted OPEC to rruse oil prices to compensate for the falling value of its U.S. dollar holdings and dolJar -denoruinatec.l lnvestmcnts. Greenspan also taught th.e world's central-bankers h.ow to create money; hence, the global super economic boom, which I forecast two years ago. R,l! C~rrcl glob~l I'qui. lly Will k eep any tnarke sdl-offs to a ITlinj.rllun'l becahlse the 1 1111 wtU pur 'base stocks (i)rJ ev ,ry market pullbaek. 'Ole cune,n l glob' J boom will I .::it t Inti! vlrt.u<;l.lly every' doJlt1T Q1' lIquIdity is finally jnvested' some\,.,here. Most: nalysts ab frect th a t. 2007 ~md 2008 w1.11 pro luce abov' averag~ proms for ' qllity iJ1Vestors in the U.S .. Europe, Asia, Laliu America, an the emerging markets. J expect the u.s. stock market to reach a bubble top at a newall-time high in late 2009 or 2010. However, the global boom is creating lhr "e oUler Inv "$ Il w nl ,IPI)(Jl'lul1itlcs th t should not be ignored. The global demmHi lor (')(1 will ccmUr, Ie l~ pLlsh oil pri ~e ", 1 to new highs. Global oil demand is ris ilJg 1'-11';I{';1' t.han global oj} s Ipply. Clot a l inDation is also forcing OPEC to raise oi l prices. Chinn, \>I,r!th ]. ' 1 iJ'11 n J c )pl ,' hoping to purchase an automobile, is ag,gressjvel ' sear hillg the world to se 'ure additional, reliable oil imports. Automobile sales are soaring in China, so the demand for gasoline and other petroleum products will continue Lo soar. China is rapidly building nuclear energ,y plants in order to produce electric pow r, which wi]] reduce the strain on rising oil import:'>. 'TWo bllndr'd mlc1C"l;11· en "rgy plants are planned in Mainland China . Ch..imt's 'o leaders are acntely aware that. future global oil productio n will nol liialisfy th I"CllJidly exp<.nding future needs that have been created by th e <: CO, ' boom in ,.Iljna, A. la India., and the emerging markets. Quarter after quarter. China reports economic growth in the 10.5 to 11.5 percent range. India just reported a 10 percent increase in industrial production last month, compared to 0,5 percent in the U.S. Oil prices are more likely to inch higher for the remainder of the decade. Therefore, I have added the following energy service investments to our recommended list: EXHIBIT 8830 South Tamiami Trail a Suite 110 • Sarasota., FL 34238 • www,~rallst' i Case 8:11-cv-00516-MSS-EAJ Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11121/12 Document 114-77 Page 3 of 17 PagelD 3612 Filed 10/23/12 Page 2 of 16 PagelD 2768 August 2007 Symbol %Gain National-Oilwell, Inc. (NYSE) NOV 84.5 Western Refining. Inc. (NYSE) WNR 141.6 PowerShares Dynamic Oil & Gas Services (ETF) PXJ 36.3 Fidelity Select Energy Services FSESX 35.8 ProFunds Ultra Oil Equipment Distribution Services OEPLX 42.9 The global boom is also creating un pre . den cd dem;)'nd for commodities . basi" materials, and the natural resourc es necess ary to build -out the g lobal ll1..frmrlructure. ~naJy ·ts bell ve hilla. India and Asia wfU continue t enjoy above average growth rates wtdlln tt) lhe- next d eca d e and survive the 2010 to 1012 U,S. bear rnarls:el a nd recession. 8as i rnatcrials are among the top-performjng sectors in both ETFs and mutual funds. Because of the global boom, every investor should own at least one of the investments recommended below: Symbol %Gain* 35.6 DBN WisdomTree Basic Materials ETF 31.4 FNARx Fidelity Select Natural ResoUrces 38.0 BMPIX** ProFunds Ultra Basic Materials +Percen.tage gain. 11112007·711612007 ++Leveraged at 150% The global boom is C lenl ecl profits from 34 of the world's 35 Consequently. in <: cldition to the profit from rising global st0 It prj e . you C;aJ1 capturti a 'e '/ lid profjt from the falling U.S. dollar. iobal/1Jltcrna fl nal inve: trnent profits ror Americans are enhanced by the rising kr\"g st ~Lock marke Cl: · ating tHlprC $. local CUTJ'cncy agfllnsl the faWn.g dollsr. The bottom chart on page 6 documents (he relentless Jall of the U.S. dollar. Th e U.S" Tr asury v rbally supports n S {J'O ll g Llollar, but allows the dollar to fall, w l)i'cb enhanCe$ Ule C01TlpeU tJve position or u.s, corporations. As a result of the fa! Ung doll; '1*, ll,s-,__ eX.U.QJ !" <1JJLg:ut}v1!JLCaS.lf.;.r than imports. However. a falling lollaT' is a r\ouhJe-cdgcd sword. While helping U.S. companies, !he purchasing power of the dollar continues to erode. which adversely affects all American consumers. The 2002 U.S. dollar h as already lost 35 percent of its purchasing power. Therefore, American investors should move a s b s tantia1 porUon of their total portfolio assets offshore. Let's compare the year -to-date return of the major U.S. stock market indices with the year-to-date gains from two groups of offshore investments: Index Gain* S&P 400 Mid-Cap 14.4 Dow Industrial Average 11.9 Nasdaq CompOSite 11.7 S&P 500 9.3 Russell 2000 Small-Cap 7.7 ·Percentage gain 1/112007-711612007 © Copyright 2007 The Wall Street Digest, Inc. -2- Case 8:11-cv-00516-MSS-EAJ Mutual Fidelity Fidelity Fidelity Fidelity Fidelity Document 126-1 Filed 11/21/12 Page 4 of 17 PagelD 3613 Symbol FSEAX FLATX FEMKX FICDX FSCOX Gain* 38.9 33.6 29. 1 27.1 18.5 UUPIX 49.3 EWZ Funds Southeast Asia Latin America Emerging Markets Canada International Small-Cap 45.0 34.8 32.0 26.9 24.0 23.5 ProFunds Ultra Emerging Market*" **Leveraged by 150 percent ETFs iSh ares iShares iShares iShares iShares iShares MSCI Brazil Index S&P Latin American 40 Index MSCI Malaysia Index MSCI Singapore Index MSCI Emerging Markets Index MSCI Mexico Fund ILF EWM EWS EEM EWW "Percentage gain 11112007-711612007 With the exception of the Nasdaq 100 aDd U e Nusdflq Com po sl'le . every major U.S. stock market index has recently po::,t .rl a n ewa ll -urn I'\igh. There are numerous low-risk investments til t h e U. Q. s l'.(rcl< nlnrl~et , . u '. 1: as the top1 performing sector funds whiCh I have recoimnended for more thai'} two decades. I have encouraged investors to own the top-performing sector funds because they have consistently outperformed every major u.s. stock market index. Study the year-to-date performance of our recommended Fidelity Select Funds and leveraged ProFunds shown below. Now compare their impressive returns with the major U.S. stock market indexes shown on page 2. Mutual Funds . Symbol %Gain* Fidelity Select Energy Services FSESX 35.8 Fidelity Select Wireless FWRLX 29.7 Fidelity Select Materials FSDPX 26.0 Fidelity Select Telecommunications FSTCX 22.2 FSPTX Fidelity Select Technology 20.1 ProFunds ProFunds ProFunds ProFunds Ultra Basic Materials Ultra Oil EqUip. Servo Ultra Mobile Ultra OTe ProFunds Ultra Telecom. 150% of DJ U.S. 150% of DJ U.S. 150% of DJ U.S. 200% of Nasdaq 150% of DJ U.S. Basic Mat'ls Oil Servo Index Mobile Telecom. 100 Index BMPIX 38.0 OEPIX 42.9 WCPIX 29.1 UOPIX 27.5 Telecom. Index TepIX 23.5 ·Gain 1/112007-711612007 Finally. for conservative investors. I recommend the WlsdornTr e~ International Dividend Funds because interest rates are higher In rnaJlY countries than they are in the U.S. Plus, your offshore return is enhanced by the C llLrlg dOllar. a Visit our Web site at -3- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21/12 Page 5 of 17 PagelD 3614 I I IlIff 1THE WALL STREET DIGEST I August 2007 IffffJ+J Symbol DNH DND DLS DFE DIM DOO J'und WisdomTree Pacific High-Yielding Equity WisdomTree Pacific Ex-Japan Total Div. Fund WisdomTree lnll Small-Cap Fund WisdomTree Europe Small-Cap Dividend WisdomTree IntI Mid-Cap Dividend Fund WisdomTree Top 100 Int'l Dividend %~.@JD* 24.2 24.0 17.8 16,5 16.5 14.9 *Gain 11112007-711612007 I encourage you to remain fully invested, with up to 75 percent of your assets in offshore investments because of the falling dollar. Global liquidity is one of the most important figures for you to keep in mind. $5.24 trillion dollars will keep the bulls In charge of the stock market for at least the next 18 to 24 months. There are two possible scenarios that I am watching closely. One could accelerate the end of the U.S. economic boom and bull market. Th · other 'ould terrninale the global boom and produce higher rates of global . nH tI(JI1. Th r1rsL see OliO is a laundry list of tax increases proposed by the new ong:rcs . If Iladed . they would add nearly $3 trillion to America's tax bill over til" Il' C t -ckr.ade. And, without fixing any of the problems we have with soaring entitlements! These lro < if enacted. will b1i1'1 a halt to the ecnnomlc growth tbal: Lax cuts 'so 11elped ,0 produce. T] at will hurt all 01" 1.15, lich or poor. ']he other Be' lruio : ".011 cEml.l s ar past $100 en demand" ~u d hr1n 1 the gln al bo 1 to c 'I end. Scott S I ddard wr .>tl:' the i'ollowinp: i:'lrth:l e 011 flag· OJ1(~ nrl~l ' .July 16.2007. Inuestors Busin S,5 DatLy: "U.S. cr.ude futures jumped $1.43 to $73.93 a barrel after the International Energy Agency said global oil demand growth in 2008 will be the strongest in years. A supply shortfall could herald further increases in oil prices, though experts appear divided on how much higher they can go. Some said a spike in prices wouJd derail economic growth, while others said significant price increases can be sustained. 'My line right now is that we're headed to triple-digit oil prices wHhin three or four years and the first digit is not going to be aI,' said Philip Verleger, an economist who heads energy consultancy PK Ver/eger, He cited 'huge' pent-up demand in China and the rest of Asia, lack of growth in production capacity and reduced investment in refineries amid local resistance to new sites, and worries about measures to fight global warming. 'We've created a situation where prices are going to go up a lot, said Verleger, a respected forecaster." There is no question among oir analysts: Insatiable oil demand from the global boom in China, India and the emerging markets will push oil prices to new highs by 2010. ac. I ·4· Case 8:11-cv-00516-MSS-EAJ J ,Tl ].·rt'L - Document 126-1 Filed 11/21112 Page 6 of 17 PagelD 3615 - --1 iTHE WALL STREET DIGEST August 2007 ---"1110Tl- Every money is asking: "At wbat pr ice will term inate I'he global boom?" Either of these two scenarios (high ~r taxes or high er oil p,rkes) c:ou.ld unfold and produce a recession ancl bear marl~'t ('~l rli r 1I.1flll my 'late 2009 sr 2010" forecast. In the meantime, record .rlobal Jiqu Idity shoul9 push gJObal stock prices much higher over the next 18 to 24 months . Th periOt1 h'om 2010forwaru, however, vastly different. During that time, the American investor and consumer will be dealing with a deflationary economy for the first time since the 1930's Great Depression, instead of relentless creeping inflatioll. American consumers learned how to use inflation to increase their net worth. Inflation destroyed the relative value of the mortgage on a home, while increasing the selling pnce of the home. That strategy will not work when deflation arrives in 2010. Instead of destroying the relative value of debt, deflation will relentlessly destroy the debtors, The price of most things will decline, and jobs will be eliminated to cut costs. COIl 'cq:Llently. the m ontJl,ly J 'o bs Creation Report is the most closely watched 'e onemic report. YO] sl'w- ,11d pay-off a ll debt before year-end 2009. Do not look for 1 rca l estate forecloS1J -e bargajns. Res id ential real estate located on the West Coast, the East Coast and the Gulf Coast will experience further price reductions during the recession of 2010-2015. Renting a home is still cheaper than owning a home. Consider selling all residential real estate investments, including homes, condos, and rental investment properties. Do NOT invest money in Mainland ChIna. China's problems are Just beginning. Corruption to the core of 1.3 billion people will prevent China from becoming a global power. THE FUTURE OF THIS BULL MARKET LOOKS VERY BRIGHT years ()t stttmg returns 011 ITljgh l expect investors to be euphoric. Instead, We cont'inue (), - e ~xtrl"me l eve ls of bearishness. It is not just the average investor ' Iia l' I._.lln-ery. r~,e. enrch fir ln s and stock <)nalysts currently have the fewest "Buy" ratin g..., lh an at any ()'th .r l-ime in the last ten y('!ars. These high levels of bearishness historically are very bullish for the markets. As long as there is plenty of pessimism around, the market should continue to climb the "wall of worry': toward new htghs. Anolher component of our asset allocation model that still reflects conditions sIrnilar La the bear market is our valuation gauge. Why are stocks still extremely undervalued after the huge market run? The main contrtbuting factor is that earnings for the S&P 500 have screamed up over 80 percent since October 2002. As we have stated in past market commentaries, we believe Ed Yardeni is on target with his forecast of continued Aft~r ' flv e WALL STREET'S MOST WIDELY READ INVESTMENT AND FINANCIAL SERVlCE. -5- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21112 Page 7 of 17 PagelD 3616 Cas e 8:11 -cv -00516-MSS-EAJ Filed 10/23/12 Document 114-77 Page 6 of 16 PagelD 2772 .;I" k Ili ...- -_ . ITUE WAL L STRBET DIGEST -- • [ I _J J. -'- rrlll i l August 2007 - SELL IBES Valuation Model i 60 I < , I : , . t I I 40 • ~ xtre m~ly Ove rv.lue~ ,: , , 20 BUY STOCKS NOW! a SELL BONDS I -20 . ; -40 · 1 1 , , '" i; .---, -60 · Q) tl 0 ~ 0 l:l ~ "7 -is 0 0 ~ l\> u 0 '" ~ ~ tl (j 0 '" '? tl 0 0 0 0 -tl 0 n Ii' 13 "i 11 0 S&P500 12 Month Forward Ea rnin gs : ~: ::i: : ~= :~:~:: :: ~:: !:::~ :'~::~' ::::~:: : : = ~:::::::;:::~;:- -:;;: .:'~: ••••. J .. ',' ••. o .:.. . M . ....: . . , . ..... : • :g .. -::"':". :;: --:o' ••• r • ~ I • • I . . .. . ... , • • _., . 1 .... . . . - ~ : • •• .. . . \.. ........ .r .. ... ........ ".... • • ,. "'f.. . ;. .... i ... .,. , ..;~ ..... ~ ...... ~-.. ....;.. . . 4 , I I • "' .... . . . . . . . .. . '" : : , • . . I .. .. I • • .. . . . . . f . . . ... . . , .. : I .. I ' . . I .. .. ~ t3 n -ci 0 0 --- ::::: !:; ... .: :: .~:::- : r ::: · ·::· " := L . . :: ::H .;.. •.• •.. ...... t .. - - .:.. ... . .... .... . :.•• ••• :._ •• - ,;.. ..... ;... ... ..... : : :: ~::~ ~ .. ... . , ', . . . . . J ... _ __ '- . . .... .. . . ... .. 1- . • - ,- I OJ OJ rr" ' ... • .-~ . 0;''' • • • • • .... _ . . . . ... - • . . ... .. :'! : r i : . . 1 I -~-~-~""'~ :~-~-~~-:-~.;.-.~ -~~-~",;~~-,~-~~---'J~~~}~~ J: ~: ~~~~:'F ~ :~!:~::: ' :::: t :~~;, ~ ~ I __ . : , ---:-> EtjYI:I:LTJ~~t:.+~~~:: ::.i:::.. :· : ' : ! ' !! . • .. • , l , .. I • I I---r -·L-;...--r.-4----r.--:---l-- -:--+__ .: 1 0'> ... m q 0; ..... :B l? "I t; u tl ~ U ~ o tl -u o o o o o o a o ,., ~ Corporate earnings are ri!Jing faster than stock price!J. • , .. _-t C! '!? 9 o a o tl 13 u Charts courtesy: Don Hays,! r-:;wrw-" . I l~ , t I~ I I The U.S. dollar is falling because we have created too many of them. . -.~-._._ . . _ ~_ . . ______ ...___L _ ._. . ... __0.l1.~._ . .._J01 . . O' ... ....... .. . . Oot G5 ApI )'11 Oct Apr J..,t O~, ApI Jvl Charls courtesy: www.slockcharts.collf WALL STREET'S MOST WIDELY READ INVESTMENT AND FINAN CIAL SERVICE. -6- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21/12 Page 8 of 17 PagelD 3617 August 2007 strong earnings growth for the S&P 500 and an earnings expectation of $104 by the end of 2007. Using Ed's earnings estimate and considering the old "rule" of 18-22; wh ich says a fair va luation P /E mu.l tiple range for the market can be calculated by sub tracting th e expected inflation rate from 18 and 22, we can create a PIE range and formulate some market projections for the S&P. With inflation currently running aro u nd 2 percent, accQrding to this rule. the expected Price/Earnings Ratio for the market should fall somewhere between 16 and 20. So how high can Ihe market go in 2007? Let's do the math. S&P EARNINgS PIE 16 18 20 x x x PRICE TARGET $104 $104 $104 = :::: = 1664 1872 2080 Compare these targets to where we are today and you get an S&P 500 ~eturn for the remainder of 2007 somewhere between 10-38 percent. It is our belief that we don't really need the Fed to cooperate with a more accommodative monetary poHcy in order to hit the lower end of those projections. But if we are going to hit th.e higher end, it will likely result with the Fed as the catalyst. Regarcll es of whether the Fed cuts rates now or later, with our psychology rea ·1ill g!J " L pOinting to a nervous investor and our valuation gauges still nI ~xtrej)] ~ ly t mdclvaJucd, the future of this bull market looks very bright. Source: Jeff Hays, Hays Advisory Portfolio Performance, July 12, 2007, GLOBAL LIQUIDITY AT RECORD HIGH $5.24 TRILLION of Ult! surprising resJlience a nd !'llrengl l"1 n/' \'h u.s. economy Quite H bit CtU1 be attributed to U1e Greatest. Clobal Boom of AJ J Thncs. The )'.It, • t OEeD d;;J,! ·:t. ~ Llggests tbaL themomen!:Uln (}f global growlh In 'lY (?t u ~ b ~ \c. leraullg. Tha-l.·~ lmpres:~lvc, esp(~ciaJly because the OECD incilid s:m tin 1ie5. 1 ut nol tIle fUSlC SI. growing ones such as the BRIlCs, i.e., Brazil, Russia. India. Indonesia and China. The Latest efforts by central banks to prop up the dollar are once again injecting lots of liquidity into the globaL economy. r" .K)[)OH- ful'e.ign ollJci8 1 IQ [j ;lr r serv ' s-Js up $3 15 bHlion ill' 19.5 percent y/y Lhn.lll,l(h M8Y 2. No J~t\l l d - in~erni'lll{Jl lal res yves conttnuuJ l. s uaI' to record highs In l i't(" rol l wing c'ountrir's m1(/ l"r~iUll : J ' LJ all ($884 bil Uon). Cb:i na ($1.15 trillion), A, ii~ " X :ll1ding ,)" I all a]l ('/'In;:t ($"l .2J lri llfofl l. La. i.n AmerI ca ($226 billion), and l U Ie: Mi ell' I', ,~s l ($24Ci I IlIionJ. . These add up to $3.7 trillion, accounting for 71 percent of total non-gold internatiollal reserves. Visit our Web site at -7- Case 8:11-cv-00516-MSS-EAJ Case 8:11-cv-00516-MSS-EAJ I I I Document 126-1 Filed 11/21/12 Page 9 of 17 PagelD 3618 Document 114-77 Filed 10/23/12 Page 8 of 16 PagelD 2774 II.!', " rT l-lE WALL 'STREET DIGEST 1 August 2007 ,, '11" 11 - The vast maj ority of the r eserves are among emerging economies. They almost all h ave trad e s urpluses, have paid o ff the ir debts, and have plenty of financial cushion . Russia ts accumula ting a large s tabilization fund to offset oil revenue' shortfaJl s in the futur e and fu n d curren t infrastructure projects. The greatest global economic and liquidity boom of all times continues 10 propel in'dustrial commodity prices in a nearly vertical trajectory. My favorite real-time we'e Jdy 1ndjcator of g l 1:>(1 \ economic activity is the CRE raw industrials spot price in d ex ,and, its m dals ('pu t price component, which includes steel scrap, copper scrap. lead s crap . ful . and zinc: (1) The overall index (1967=.100) is up 121 pereent {rom a la te- 2001 low of 214 to 474 last week. It now exceeds the previous cyclical record high in mid 1995 by 35 percent. (2) The metals index has soared 404 percent from 170 in late 2001 to 856 last week. It is now a mind-boggling 138 percent above its early-1989 peak. Surely this must be a bubble. It sure looks like it on the charts. However, everything is relative, and relative to the U.S. core PPI ' [or finished goods. the CRB raw industrials spot price jndex has simply rebounded back to its three previous cyclical highs. On the other hand, the CRB metals index has rocketed well above previous peaks relative to the core PPI. This ratio has risen fourfold from a low of 1.2 in late 2001 to 4.9 in March of this year. $ Currencies: Is the tra d e-weighled dollar heading high I· or lowel'? Currently it's heading lower. The curr ency dropped slightly bdow 80 In olLd-AprH, and remains there, after finding. su pport at this Jev Hour lLwe$ sine: 20 04. While the dollar might weaken further; we don't expect a collapse in the currency. Globalization is creating plenty of wealth that is pouring into US secUlities at a brisk pace, which is bunish for the dollar helping to offset other negative impacts on the greenback .... Global Liquidity & International Reserves: Is the world awash in liquidity? More than ever. Non-gold International reserves held by foreign central banks climbed to a new record high of $5.24 trillion in February, up 20,9 percent year over year. Emerging nations held a record $3.81 trillion, up 26.8 percent yly, Industri a l nations h e ld a rec ord $1.4,11 trilli on. up 7 .7 percent y /y. All this liquidily provides a hug s hock absorber t o prevent, or reduce the impact of, any globaJ finanCial crisis. Cammo Htjes: More u pside for commodities? They've gone vertical! When they do p a ]" W expec t 111em to stabilize in record territory. The global economy is booming. The CRE raw industrials spot price index continues 10 set new highs, led by lead and the other metal prices in the index. CHI3 rilW i ndw)tri~ l l. ~1.Il ., Illf' lals I Ice in<it"x san.> I Ij 22 percent and 46 percent y/y , re~ rWd iv ly. TI le t:HIl rI Jl. ll n~f': priC:' i n d x li p rrnln recent lows. but still 14.8 pcrcer Jl below M<ly peak w "lgllecl cl own by n · rgy IXJl11pO nents. II) STRATEGY: The grea t global ,·toe k u lilrket lI''Ie:! I' IlT) :') . !'; ome mol' rc'orcl ... yesterday. I. WALL STREET'S MOST WIDELY READ INVESTMENT AND FINANCw., SERVlCE. -8- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21112 Page 10 of 17 PagelD 3619 The DdlA has closed higher 2~3 of the pa ')!' :./.R s (". , ·.i() ll $. LyiI lJ LJl e longest streak of its kind in the index's history, achieved in . lI !y -I\'\.l[jU ~ I 1927. Il:'s starting to feel like the Roaring 20sin China too a:o; th e ·'h::lng'h al fORe t'N r 100 points this morning and is only 50 poInts cfway from I,{ 00, !lif-> u p) 1 p ' ITenty/y. At this pace, it will be at 10,000 in no time unless Lhe authorities get their act together and take some air out of this bubble before millions more investors get shanghaied, While China's stocl{ market is showing every sign of irrational exuberance, the U.S. market is driven by rati'onalxub'ranee over profits. The year over year growU1 rat.e for s.&P 500 earnu:,gs for Q 1 i s t ( mjn.g in about three times greater than was wide ly expected by b t-I · analysts ana strategists. This is partly at ributab1e to strong earnings from overseas operations combined with the weaker dollar. The share count is also falling, which is boosting earnings per share. HOWtwC'" lhes~ mlghl e)rpJ"h\ bOI''':, halJ the posiriv e::J l'nj ~l$s surprise dUling Ql. The ol'her ha ll is pr obably orglll1lc . While vend i product.IVIly growth has slowed, this~ is mostly attribut able to tJ c.ln:>p i:J 0\.1 put in llle housing industry. Most other lndustries continue: to boost their prori ldlvlly. Source: Dr. Edward Yardeni, Dr. Ed's Morning Briefing, May 8, 2007, 2011 - THE U.S. DOLLAR: R.I.P. In the past five weeks. we have seen a continuation of what I perceive to be the battle for the survival of the U.S. dollar. The main strategy to prop up the dollar seems to be to try to knock down the price of gold, the dollar's major alternative. The easiest way to do this is to have central banks sell gold. After selling about 1.3 million ounces of gold ill March and April, the Spanish central bank sold almost a million . ounces of gold in May. The European central bank also states that another of its member central banks has been selling gold in the past few months. but did not name which one. Austria, Portugal. and the Netherlands are central banks that have sold gold in recent years. So much central bank gold has been dumped onto the market since March that in early June the European Central Bank announced; that sales would have to cease in order to stay within the annual limits of the 2004 Central Bank Gold Agreement (CGRA). Under the CGBA. the European Central Bank. the SWiss and 13 other European cen tral banks. have agreed not to sell more than 500 metIic tons (16.1 million ounces) of gold each 12 months period from October 1 through the following September 30. Other central·banks-such as the U.S., Japan, China, Russia. the Bank for International Settlements. the International Monetary Fund. 201nd othershave not signed the agreement but stated that they will align their gold sales with the CGRA. WALL STREET'S MOST WIDELY READ INVESTMENT AND FINANCIAL SERVICE. ·9- Document 126-1 Filed 11/21/12 Page 11 of 17 PagelD 3620 Case 8:11-cv-00516-MSS-EAJ Case 8:11-cv-00516-MSS-EAJ ( 1--T[;Tll . .{J. ... ~: .. Document 114-77 Filed 10/23/12 . i THE WALL STREET DIGEST I 'vrTI; - . ' 1 /1]~_:: -I. j e 10 of 16 PH elD 2776 August 2007 , The Dollar? Or Gold? The U .S. dollar Is sl.lfferiT'lg from C\ long list of problems. Here are some of the more s.ignjficant ones. • £i'irs of all , I he dollar is a fiat currency. In other words, it Is bncked by noth1ng at ::ill other than the hot air promisl;s of u.s. politicians (Le, tl'1C fulI faith and creuit of th U.S. g vernment) . • Second. the U.S. money supply is now growing by at least 10 percent per year. and the efforts of the U.S. government to conceal this information have faiLed, The U,S. government stopped reporting the M-3 definition of money in March 2006, a definition of currency which would make it easier to track large quantities of U.-S. dollars that other central banks were shipping back to the ·U.S. Several analysts are smart enough to reconstruct this information. ' • Third, the increase in the money supply produces surging inflation, evel1 lhtl1lgh oWeia] government sla[isUc tt-y to represent an image of low. to rt1oder\1 e h"illatio.ll. By Itself, thi ~ inJI,a tion Will desJroy the value ofthe U.S. dollar . ov r time, .. routH], 'lJle U,S. e OnOrl1Y IHis a iTo: de deficit at so high a percentage oJ GDP that 11:0 other malor naU(Yll has manager.! to sustain for more than a few years before its cLIlTe.ncy lalled. This deficit has been growing as a percentage of GDP. • Fifth, the U.S. federal governmenl is running a $200 billion budget deficit. • Slxth, the value of the dollar is now mostly being prC1ppetl LIp by lht~ willingi er-~ or China. ,Japan. and other (mostly Asian) natioJls pUfcbt'IS'l g U. Q. gov~rnrnen l. debt. averaging about $2 billIon every day. l'I OW(:! " s vernl naUtilus have op /;.'l1ly announced that t.hey are shifting the aceur'n ddlng r.l !serv S aW'I}' rl'Om Ul U.S. dollar into other currencies and gold. • Seventh. the U.S. government is mired in two wars in . addition to heightened worries about terrorist activities. • Eighth. even though it may look like the stock markets are returning handsome results, the American stock markels have bi;\rely been able to offset he rI 'line in the value of the doJIar over t.he pasl couple of years. An investor whose sl ck has increased 10 rercent in the past two years has actually lost gro md "t the dollar bas droppec by more than that over that time. e Ninth, both gold and silver are in fundamental, longterm supply shortages. Every year for more than 15 years now, industrial and investor demand has exceeded new supplies from the mines. recycling, and government sales. Only the draw down of existing inventories has kept prkes temporarily down ... Tenth. the present value of the current debt of the federal government is more than $50 trillion. This includes the liabilities owed Jor Social Security and Medicare benefits. The d(~bt load is so larg<-; that t:'ven the Comptroller of the U.s. Currency and the C(Jngre~>sional Blldget Office have declared the U.S. government bankrupt. Along with oth(~r problerns, there nrc plenty of reasons for Americans and foreigners alike t() fear that the U.S. dolln!' wllJ continue its downward sllde, Visit our Web site at -10- Case 8:11-cv-00516-MSS-EAJ . Document 126-1 Filed 11/21112 Page 12 of 17 PagelD 3621 . C;Jse B:'j ")-cv-0mi10.:.&kiS:.8.::\J-Dfl,Cum(".LtLl ' /1.: :21..-f:tle cl . OIL'\( J:2 12af)£!..J-:Lol 16 I ~1~D-2J..Lt-_ ~TREET DIGEST ITHE ~~i1 -- - ".- - I -l~PIJI August 2007 Even though the u.s. dollar is being massively supported by many Asian and other central banks, it has slipped dramatically this year against a market basket of other currencies. 1 am sure that there is a lot of political arm-twisting going on behind the scenes to support the value of the U.S. dollar. If some of these actions are disclosed fo the general public, the reaction could quickly clobber the vaLue of the U.S. dollar. Source: Patrick Heller,Editor, Liberty's Outlook, 30 Frandor Avenue, Lansing, MI 48912, as quoted in The Bull & Bear Financial Report, Volume 21, No.4, JuneJuly, 2007. DO NOT INVEST IN MAINLAND CHINA The men and women who run the ruling communist party in China are now running scared because the corruption that so permeates and mayb~ even dominates the Chinese economy now threatens their oVJl] power, prestige and persona11ncomes. That is what lay behind the swift execution oj China's former Drug Safety Chief Stories of illegal ehernleais bell1g added to China's big and growing exports of food and 1l1eclir,in - 8IJ.'i n g deaths around the world-have led to so much fear of Chines e products ove)'\:) as that the future of China's surplus in world trade was bei ng threatened. So, the party ordered a speedy erial and execution of Zheng Xiaoyu. He w. s con rlGt d f taJ~tng .6 m illlon yuan ($850,000) in blibes to let potentially lif ··thr ~rt .ning dTUW" and m eulcinc!5 enter commercial markets-not only for xport 1)1.\ fOl' Chin -s itlz "nFL Hundreds died in China and overseas before the ' "cal ~ of Ul e nwd was un .oven l. This is the first time that an execution of such a highranking Communist Party official has been ordered. An I. qui te 01Jt 0 til ~ orclimlly for China, the news was not kept secret but was tI 1'I1.1c.r<ltely " jJr ud by he ruling P-l1-ty . It was disclosed that Zheng Xiaoyo's wife wn ' 1\ 0 found gu i1ty of L lei 11 ~ t rJl es worth millions of yuan. She set herself up in b I... ill(~ ::; .; LIS <'\ cou.';l.IJ!.::t nt lo drug producers. In making this announcement, the Communist Party declared that "Corrupt elements will be thoroughly investigated no matter who they are or how high their post." But this is hardly the fIrs t time people accused of corruption have been executed. lt is widely known that corruption run s wide and deep inside the Party bureaucracy. Indeed that is nothing n ew in China. There were a dozen royal Dynasties in ' Chin~se history, running back 5000 years. Each of them rose to heights oj power in their day, only to be brought down by popular anger and even disgust at the flagrant entrenched corruption of those who would rule them. WALL STREET'S MOST WIDELY READ INVESTMENT AND FINANCIAL SERVICE. -11- Case 8:11-cv-OOS16-MSS-EAJ Document 126-1 Filed 11/21/12 Page 13 of 17 PagelD 3622 Case 8: 11-cv-00516-MSS-EAJ Document 114-77 Filed 10/23/12 Pel J8 12 of 16 Pa ~Je ID _ _7 _ --. 27 _8 ,_ !IlLll ___ _ I J'HE WALL S'I'REET DIGEST !, ~!~! Ill·' August 2007 T ili~ tradll.lo n VIa - 'uTied 01"\ by the Nationalist regime which followed the 1I r );'1~'L royn1 DYlla.::; ly I and they too were forced out of power when the b~: aIT)t; f(~ d up wit h Ul' Cl'aven reaching out for bribes by even the cnd of public lowest t4(JV ·'rrllnc il t melal, It was not just the bribes demanded of those who were doing illegal actions that got people so mad. It was the bribes, layer after layer of them, demanded Irom people doing nothing megc I aL all. Pc.opie just wanted togo r.lbout tiJeh' daily life. Tl at i happening again jn China today. Th e hundreds of b1l11ons of loUt r c ir1g invest '> d in China by American banltS and corporation s see,kl g profll ..~nd Inllucnct: /)Hve formed a gian t P~Q! of money, and otllcials from lop to 1101Lom ee thi . PC» I as a huge piggy bank to draw on. So when that money is spent on new plants and equipment or on the building of needed roads or just the purchase of goods and services! corrupt Party officials demand their cut. The weight of these added bribes loaded on top of legitimi te ' 05tS for labor, materials, taxes, food. fuel. electli . power and the like, is b leeding th life's blood out of China. It is forcing people to demand more yuan for U1tir work - with 25 percent raises in each of the past t'l}lQ years being factored into indu strial and commercial costs. It means that China is suffering raging inflation internally, most o/which is being buried by Party officials who put out soothing lies about inflation only running at 3.3 percent per year. This h lJ.:~1 \ Lnl1a Liun is now being exported to America iJl the form of higher prices. Those \vhu see k o'u t a nd ac epE bTib~s today to let t.hings happen that violate the law arc: flOW s o nlren' ed that no executions or jail sentences have anything but a minor and temporary impact. . The view in China today is that the executed official had been carrying on such corruption for at least four years, with the full knowledge of many Party superiors. Al s o the p eople who suffered L1lness or death because of faulty drugs anQ me l:l ines W TC demanding reveng ~. SCI tJl''' feeling is that this man was chosen as thL scapegoa t ['or Ih e Whole 'ornlp l ~yst · rn. The universal belief of those who ln~iJlli.l[ ~ ly follOW l":'\fly act ivities i' 1 ,Ililt from now on local and regional corrupt )fflf"i a l ...· will b qui cit "l' <lnd more g De mus in sharing their .. take~ with senior I nr~y o m ·i"l~. Rising costs are forcing many companies in China to cut corners by substituting illegal components and raw materials, much of which are unsafe and even deadly. For e,\(clllipk. /\JII " r i C'(I 1'0 Illd tires fro m China w ere mis sing the key middle strip that bUllnd ti'l.y '·r.~ t lJ>hcr. 80 tires were coming apart and killing people. All of this is be . )J11ing known . When' it is ,combined with the fast-rising Chinese export prices, China's l:,Trowth is being thrown Into doubt. Source: Adrian Van Eck, Van Eck America-China Hotline, July 11, 2007, Visit our Web :lite at -12- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21/12 Page 14 of 17 PagelD 3623 C.3,~W,.U:..1.1£.)l:oms 1R- M SS-E-A,J-Cl.Q.t;WJ.llfiJ l ~-.:)..:j l --rt----r.::llH{:J.--~1 (jlUI-l2-P-ayfH.~(-}f-4f6--Pf1JHI b'-y.~+/"t.:j---, ! [-U;V-Ll _ __ ITHE WALL STREET p I Q..E ST (~'8+1 1 -FSEAX - - " - August 2007 1 - - 1 I 1 , I' Fidelity Soutbeast Asia 20 - ' 20 - fl,A'fX ,- - -,- - -1- - 1 - -1 ------'--Fidelity Latin America -- . ~j- ~--I----l---t -) 9 --~6 ,D '._~ ==~-. =---=---1 == ___ L~~ =-1----, - ___ .:~:: . ~ --- = _ _ ,.__ _ _ _ _ __ - -, , - u_ - - - - - .. -- j - -- - '-----l- - - J - - - - - - , S?P 47 .5 - ----1-, ---- Aug - -,= ~,~ :: = --J _==:- 1:---- -~-~-J-.-. i -]-._- -;- --, ' - 60 ,0 Oct ~r~-=c Nov Fidelity Up 33.6% 111/2007-711 6 /200·7 .. Dec ---, 37,5 -I--- - I -1 - 20 0 1 F <; b M :H Apr .~I:----------l M~y JUri 36.0 Jul Pgill 'M""I~cts _!_~. '~~ g I F -'.::=:L.=- ===-F-·-J -====J. "' 1 --1 -:=J- - - -- -~l- .----,--- I[-. ' ~: - 'r--'· t -. . ---- -f,. s~p -.-. =.=1~.~~ -" Xl j- - I -=.~ -.:..~_2~.1~tI1l~~~~11~12~O~~ :: Oct Nov De c 200'( F eb M'ar A pr M~y Jun Jul Charts courtesy: WALL STREET'S MOST WIDELY READ INVESTMENT AND FINANCIAL SERVICE. -13- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11121/12 Page 15 of 17 PagelD 3624 GilSO B:1 'I -c;v 00" 16-tvl SS-E AJ Document 114-77 I Filed 10/23/12 Pag e 14 of 16 P:.lliQ.!p 2780 ,~ _= __ . ~~hares M~c~raZil .J ' . I -'I -- 1 ,- -I ---"-J' ! . .___,I__=~- . I ,-~r _ ='l--_,l,_ - '=..-~+-=- .~~:~ ' : - EWZ -,- -I - I , Index C . -; I • . ..I~ ~ :~:~ - .... I .. f ·~ ~':::-l' '. ---- --~-- ."._. r~:~~::--t...:: : I' \_ . r . _. I ' . _ . .\ • I . ."I":"'==-+~=-4---=....::!---~=----..:. 1 Aug Nov .. Dec ~lI L~ 2 1101 iShares S&P Latfn . . __ . ~. _ . _. J _" I. _, I I .J • - ~-~ Feb . ' j. , . . ·3U5 ~·!----b .. -'~'30.0 - Apr May l - . 1 . •• __ . : I I , J~n Jul t .... t . lmertca'4'OiDd~X _ : - ' 1·- --·-·!- - . . , . . --... 1 - 40.0 . Up 34.8% 1/1/2007-7116/2007 . , ' 2 10 I - 2Q() I 1QO " -180 ,. 1 I j Aug Sep . - 1;'" .-. . · 150 I 1-- - -,. Oct Nov Dec 2001 Feb Mar .. I- -_ ... Apr ~'---1--··- .. ·~· May 150 ' -L:.==!-- ~p 3~.80,.'0 l/1/~007-71l6~20:_. t·, -I __'1 : I'" . Jun 140 130 Jul -UUPIX - - - -.! ! :.I ) .5 .\ - 1 \ -- --I Up 49 .3% 1/112007-7/1 6 /'2007 A~g ' -1 - '"- Oot Sep Nov Deo I 2(101 Feb ! - -' Mar Apr ..". _ .! . May Jun 22.0 - .!. Jut Charts courtesy: Ulww, WALL STREET'S MOST WlDELY READ INVESTMENT AND FINANCIAL SERVlCE, -14- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11121112 Page 16 of 17 PagelD 3625 mJ1l'1:MSS-E7\.J [Jocumel 11 'I '[ip-/- rile 110723TfT Page 'Ib of ll HH"J I 'I!:, Paqe lD TrW ____ THE WALL STREET DIGEST 1~ "l l ' n I August 2007 INVESTMENT SUMMARY [Th Bottom -Line - What To Do Now l e Stay fully invested in our recommendaUons summariied on page 16, Allocate up to 75 percent of your assets to the global/international investments. As local currencies rise against the dollar, the falling dollar will enhance your profits from global/international investments. I do not recommend owning gold investm.ents. You would thell be at the mercy of the central bankers, who regularly sell gold reserves to keep the rising price of gold from exposing their inflationary monetary policies. Keep in mind that record global liquidity ($5.24 trillion) is the driving force behind record global growth and rising profits. Meanwhile, Japan is financing the IPOs, leveraged buy-outs (LOOs), mergers & acquisitions (M&A), and the private equity purchases with loans at 0,5 percent. Europe is just beginning to raise interest rates because of inflation. China's manufacturing cost structure is rising. Net result? China will soon be a net exporter of inflation to the U.S, An Am ric:an manufacturing bom11 is coming. The Fed is maintaining the Fed funds ill' en_sl. r-ate at 5.25 percent. The housing industry and sub-prime loan foreclosure pn:>blems beg the Fed for a u t in the Fed funds rate. However, the falling dollar begs the Fed for an increase in the Fed funds rate 10 support the dollar. What can the Fed do? Nothing! Fed fun ds wLll stay at 5.25 percen t. If China were to suffer R stoc.l< market crash or a llnanctal criSiS, the Fed wo uld probably Ieeep Fed funds at 5.25 percent and DOCld th e U,S. bankJng system with liquidity, During the cdsis, a flight to quality into U.S . Trea.sufy bi:U. , no tes and bonds would be bullish for the dollar. Stay fully invested! The Greatest Global Boom of All Time is gaining more fans, . "The greatest economic boom ever," U.S. Treasury Secretary Hank Paulson declared in a recent interview with Fortune Magazine, Cisco's John Chambers seconds the notion that "this is the strongest global trend" of his career. "It is something we have never seen before." TElEl'HONE HOTLINE 'fhe TEJ.EPHONE HOTLINE NUMBER Is 94J-9S4- R942. Callihe Hotlin< or visil om Websile <)l www... all~l ... cldl~ ... I.~OIH/hollin~.phll Cor mothl '' end Buy/SeU recommelldallons on sptt I" Slocks . The Hotline is npd.!. d r:ve ry Tuesday ~.d Fri~~y by 6: DO pm. EST. h~eru~ tlfJdile, OOCUl whonwtnhe Dow Avtrage closes 200poirns Ln direC1ion 111' sinSLo I:rl!ding session. i'fil>""\V.,1i tll','1 1l11:,';1(1::;~~:;:)lijl1EP~5[,) If pl)l)llih;tll"o'~h r.." I!,:rl ntU",I, I,!t., (!IJjO !!V~I\T,,"iiiii~Uie \ 10, S'!1n<' .:-Fl. 34230-,1)Q l-"fII'l,,". II'u>"~<P"II I ~ !' ''.~I\I'. F1 ~, ."ri I M~l~j\tIIIM !llrv~ oifl(" I Illt!II~ II. 11"~I·<,I:tlI DII.I)!II'ithI.l.lJ." S~n:tm uulul"", ~l1lIft\d~, dll,tI~,d '0 '111. Woll S11«1 ell, t ,., :::,:!n~rrr""\11 :;S'fVl<: C. tW, 1 """III!. fM'"W',1 f'~IJ, $v~ : II 01 S,,",JOI~ H J·I 3\l·31~O, 9~1 ,~y' ·550o. ~iil»c'1'\~" 161';: \1 50 lUI 0,," Y")I, .\;.10 1(/ lor \~) yrOTS 1:lmi~" oUr .1 jl' ( ~;r4 pu .Y"" e>lrn ( ·)(f:r.OG. dl~r".j~ '1"' .·sn"ltJy~.$ 011·11. '1"o,il lilrl~1 nll(W. In<'_,IIdIQ'~' tlrlll"" , 'My l"Im 11m ' Q 'rro. h",.. ~I"~ In, ttl StC\lnuts JR -:, wilincd ~\~ I("f' ;\ \1 W(~flH~Il.. n H It.~(tn. rlOIf\ SOUltl':S h~ l;,~Yullo •• .dill!..: bur ,(c.ux -cy colLOOI ~c "U1'~n!CliJ ThttO lS n.d ~~loUlbnu lh~1 fly r«omrnt,..laJ" .... nl~.'nc\lllt"" 01 n:~rr'~ 11 "" • 1111,(1 Qf 1t:,uJ: or ~',(I1hlilr, ~O,. fll'1i' rtll\ mil b. Innfi'tbl~ vUI ' 11",1 p >1 "I~" .•·.. 1m"1 e-/tll , t. am5tm'lll !oms 111. "I I ru~tl.ll " f!J ~J.'.~ .n' Irl ,/'\$ 11.•hht"h' ~ ,W 11111 r"ru",11 I", tl{llldoclory I~, ," pu.d",;~ 41 lol! ,,! ""I HVr..v:~ 1.> , (~.u~~I~IC~ C1nlq!I,' ,hw\ . ~h\1l (\I(enltlll II nJftlJ'Jcd "IDh 11 \\1.11 : ' It'l 1}'l;t',I. l1'1' ... IS n.: W USlngl T'·~ I, h:t., (;M)~I:~ N;'tl t,{U"i'm,IU 0' r.""'r.~ W"hlo M''''''rlll/Ill 1 ",,,\ """ Iu lmn, I ntl!t/:O: ;'V't'U~h 1(1 ~1I1M ""'~"I AlIf,c~fil.l!l ~ :rf'tl)p , 1m" .. r~fUfl; ~~oi\ ,d Sttior ~hlllanrllltl1l, 1 , ~~~.tJClI~r.lI1f)1.1) , ClI1'f1hddt! t-~ill..'J Jt\·.m1 ; 1~Hl II. (n(',. Pl.lrHnlh4 m:. ,~"nll'r.1 .', In .. IIII' I! SU~'t1 f'opirnl ~ l rlll"Jl'· II'''III, C ,IIIl[I< SII/I"I;." .\JlIIIJlIW II,rll' m,"!1"'-Nd""fhl<~ ('''llilnl "'~I'JI/;'1I1 ~1l1, Ittf., "'" .fhll<:';lriviih ""h Ql l ,0' "Gil Cllofjl('~ie J\~lt( ~1111\~i''''JL\'~ ~(Ir "hi 11 Cu.t1J rl,i, Itf.... ,1 ~ bnJIJ;t!' II IIJ, 1 ur rurm'l~j_t" \Vt. 11/1 :"\1 f1 lti1ij IHl't,1 ru:ette1 U\b~.Hv:r ~"1'I11r:rtjc!~lln l:nl~UI~, ~lI'h rtfinu!~ tu~ I\Cl bo IIIP~~ "n c.n l~ oi.O:G$ \i1),II~ Til \1 1,,11Sit!,·, IJiCt";f1 .w,~" (lm'Gc,w ctdli!lllJr';CI",,,.r, c 'aoU1110 '~pf(~rl~tHlI;t; M I~ 6''l f)'<t lJ.- "t.m;ir4 or e;rlJ.. vi <lid I " orqw,prd"rl <I' "J.I:1I,'1 ,rr/.I"'''! ''.I''<I~ k "'Q' !~t " '''! II. \;r P.I. ';!, .k,. w/lllii"ll III" r,~. Ij'i\~t~ '0 II,RM .~::<I f •.Ji}} .. :rn Ol"V,1, I,e" ~'?I :;-"~n\l S"lo; "' I ;II I"'IleJlIOlI\ , I ... . Sr, h" I""'{'''fI~.' I.1 n'G'.Iw , t,~ t (;futI~~; h,)6JIl.uU Ooc"", h~ . r'Qllr~!:" }I1'>l'1.('''' h ••,,] A~, ~~":1I",\.,.e~nllj;ml I'n~' ~IASI Ell : S. I ewht~' 4)""1/;" I ~ Th. \V.II "\,,,.1',< Di(;e~c ijfj~SQJ.I, "mLmli 1;1 ~ 110. S",w,r. •. B. J-1:t;ft-3130 ~,n) 9!i-l-.lWO. 1/I\ItllI I. l..~. 6 ".du." ""v,.,., 'j,.". -15- Case 8:11-cv-00516-MSS-EAJ Document 126-1 Filed 11/21112 Page 17 of 17 PagelD 3626 Filed 10/23/12 Page 16 of 16 PagelD 2782 , Case 8:11-cv-00516-MSS-EAJ Document 114-77 ~ _~ Fffiff1 I TIlE WALl, S'l llE.E1' DIGEST ~/fm[r- - August 2007 WSD RECOMMENDED STOCKS PRICE HATA pcp NVTL CTB NYEC AAPL 1M N'1IiLOS Holdittgs COlpor01Lon FlomlU:ntlusmrs, Inc Pelini COfjJrJlUl io\'l Nl.llion -Qi!'ltell Y.are·o., h\c WOClom Roiining. Inc. NTI.S FIX PCR NOV WNR WSD RECOMMENDED S1:A:M BUY BUY BUY BUY BUY BUY BUY MENDED ~lE~llli.!1 2,91 55.54 97.20 17,75 23.79 34.32 122,30 25.90 29.23 62.78 107.75 64,25 09-27 -06 11·15-06 02-21-07 03·26-07 05-09·07 05-09-07 06-06-07 06-06-07 06-18-07 06-18-07 602-742-5300 352·27-759-101 503-417 -4800 858-320-SBOO 419-423-1321 952-829-9217 408-996-1010 540-946-3500 713-849-9911 50B-628-2000 713-346-7500 915-775-3300 CCBEF.OB l'v1ICC NYc (,0lfJ0'l'fjlI0 11 App~ J £l.J.mlli SYMBOl, k OM l'ANY Clearly C!\nlidi= BI.'V(Jm~es Milhc:oll'\ jnl') Cellula'!', SA PiccisiollCtlSrpo:tls COY}JOY tlnn Navate l WiTrless. Inc . (;oop'c~ Tiro & .Rubbor Co ~ ~ ;.c.:Q~I..: 07~11-07 07-11-07 BUY BUY BUY BUY BUY ETFs .11m; Sn:\.DQI.. EXCHANGE-TRADED FUND WisdomTne Europe Smllll,Cllp Dividend Wisdoml'rte Pacific High· Yil!lding Equity WisdomTne International Small-Cap WisdomTree Pacinc Ex-Japan 1'0101 Dividend Wisdoml'rte ]nl'l. Mid-Clip Dividend WisdomTneTop 100 Int'l Dividend WisdomTree lnt'l Basic Materials iShares MSCJ Emerging Markets Index iShores MSCI Singapore Index iShares S&P Lall" America 40 Index iSh ares MSCI Malaysia Index iShares MSCI Mexico Index IShares MSCI Brazil Index PowelShms Dynamic Oil & Gas Services WSD ~ RECOMMENDED RECOMMENPED ~ DFE DNH DLS DND '66.62 BUY BUY BUY BUY BUY BUY BUY BUY BUY EWM EWW EWZ 01·22-07 01·22-07 01·22-07 04.23-07 04-23-07 11·20-06 07·09-07 02·20-07 02·20-07 10·23-06 12-13-06 04-09-07 07-09-07 ?Xl 07-09-07 35,31 DIM DOO DBN EEM EWS ILF 63.55 64.42 72.15 71.10 60.11 38.81 117.10 J2.29 ]52.20 9.22 56.79 64.99 BUY BUY BUY BUY BUY RECOMMENDED MUTUAL FUNDS FIDELITY SECTOR FUND STRATEQX. FIDELITY 800-544-8888 FUND NAME SYM.!!ID. DATE RECOMMENDED Fidelity Latin America Fidelity Emerging Markets Fidelity Southeast Asia Fidelity International Small-Cap Fidelity Canada Fidulity Selecl Tedu\Ology' f icle l.ity Select T.elecom municl\lloIlS l'idnliry LO'/Claged CO:mptuI Stock Y Fjde uty Select Energy $nMt:e,) FLATX FEMKX FSEAX FSCOX FICDX 12-04-06 12·04-06 12-04-06 12-13-06 07·11-07 FSPTX FSTCX FLVCX FSESX FNARX FWRLX FNARX 10-23-06 02-05-07 05-14-07 07-09-07 07-09-07 07-11-07 07-11-07 Fi('k l ~ Scl(:cI Mblcri~l$ FideJity Se.lcc' vViTo\eS'.; Fidelity SeleC N {lltlTItI He~o\Uc es l PRoFUNDS INDEX & SECTOR MUTUAL FUND STRATEGy': PROFUNDS 888-776-3637 DATE FUND NAME ProFunds Ultra Emerg. Mkts. ProFunds Ultra International UUPIX ProFunds ProFunds ProFunds ProFunds ProFunds ?roFunds ProFunds UMPIX UOPIX Uhra Mid-Cap Uhra OTC UhraB ull Uhro. Telecom . Uhra Basic Moo 'Is Uhra Mobile Uhra Eq~ , Dist. Svcs. REcoMMlfNDED SVMBo.L UNPIX ULPIX TCPIX BMPIX WCPIX OEPIX 200% of Emerg. MUs. ~O ADR Index 200% orInt'l. MSCI EAFE Index 200% of S&P 400 Mid-Gap Index 200% of Nasdaq 100 Index 200% of S&P 500 Index 150% ofDJ U.S, Technology IndllX 150% ofDJ U ,So Bosu: Mtll'Ls Index 150% of DJ Mobile Telecom . Index 150% oiDJ Oil Services Index -16- 11-29-06 12-04-06 08-07-06 10-23-06 05-16-07 03·26-07 04-16-07 05-23-07 07-11-07 Case 8:11-cv-OOS16-MSS-EAJ Document 126-2 Filed 11121/12 Page 1 of 7 PagelD 3627 EXHIBIT 2 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21112 Page 2 of 7 PagelD 3628 CARNEGIE ASSET MANAGEMENT" INC. ------_..- - THE BEST TRACK RECORD I'VE EVER SEEN Dear Investor, Wall Street'g best and brightest began to leave "The Street" in 1995. By 1997, the exodus was 11 stampede. The top perfonning money managers from prestigious brokerage house3 and the mutua t fund industry are Ieaving well paying jobs to form their own private investment finna. " Traders" from Merrill Lynch and GoMman Sachs who had produced over 50% of their firms' entire profit for the year were increasingly unhappy. They were well paid, but only a fraction of what they knew they were worth. By the end of 1998, the exodus from "The Street" had the net effect of BubstantiaJly reducing brokerage company profits and seriously affected the performance of the Dation's 11,000 mutual funds. Over 98% of the mutual funds underperformed the market in 1998. Wall Street's 108s ofitB brig~test people is producing impreBsive investment opporturuties for the private investor for the first time. Before lhe exodus from Wan Street began, only the partners and officerB of the large brokerage houoe.1i e~oyed the llnUllual profits shown below. After 39, Neil Moody left a well paying job "On 'fhe Street" to form an 88sociation with Arthur Nadel, who combined years of investing experience and computer programming research to develop and perfect his "black box" trading program. Nl\~i1l" ll8..8 January February March April May June July August September October November December 1.9 10.7 9.1 7.7 4.3 ~ B&P fHHl 0.5 7.0 NnQQI >to a&£...ruJJ2 January 8.6 4.1 Februury 2.8 -:'1.3 4.4 March 3.4 3.n 2.4 April 3.9 May ~ 23.7% 3.0 7.6 2_6 3A -2.7 4.0 -1.1 -15.8 7.7 8.1 6.0 .-5.A 5.9 --liJl 90.9% 3.8. .":-z'V; 26.7% 5.3 (J.O% ("MaTUlgeT7t£nl fee!), illcl!ntiul! ("e:1 (wd Inlt/il/(/ fees have nol ueen dcdllcled (rom }l~rfDrm(J)It;'~ fitJure8. Pa&/ per{orm<Jncc i.!J no I.1UIlTlll) to! I! of future results. ) ©Copy:ricrbt 1909 ONE SARASOTA TOWER - - - - -- -- --~-- 0 SUITE 602 - -- 0 SARA5()TA FL }423<> 0 800-966-7693 ~ NDL-110-000722 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21/12 Page 3 of 7 PagelD 3629 !CARNE GlE AsSET MAN i\G EM £NT, INc. In 1998 Nadel's investment program was up 90.9%, compared tQ only 26.7% for the S&P 500 Index. In August of 1998, the maJ'ket suffered a mini crash. The S&P 500 Index WIlS down 15.8% in the month of Auguat, but' Arlhur Nadel's computerized investment program produced ~ 7.6% gain. In May 1999, the sap 500 Index was down 2.5%, but Nadel produced a 5% gain_ Through May 31, 1999, Nadel invBstors are enjoying above average returns: 23.7% va. 6.0% fot the S&P 500. My curioBity about Nadel's computerized trading program eventually lead to a due diligence viBit to the offices of Moody & Nadel. Understandably, I did not learn the varioua mathematical formulaa in Nadel's "black box" computer program. What I did learn is very important for the individual investor and truly exciting for me. After 26 years of reviewing the track records of over 11,000 mutual funds, 6,000 money managers and 5,800 hedge funda, Nadel's computerized trading/investment program has produced the best trllck record I have ever seen. His proprietary program has consistently produced a profit month niter month in both up and down markets without using maJ'gln or hot new isaues. Nadel arrivea at his office a~ 6:30 a.m., three hours before the market opena. He enters data from the previous day's market action into his computer which will produce the trading/investment instructions for the day. Three large screen televisions are positioned around the office, but the talking heads on CNBC are muted.. Neil Moody, the frrm.'s president and chief operating officer does not allow daily Wall Street "npise" to confuse or influence the reliable discipline of Nadel's computer program. Moody & Nadel offer private investment programs for pension plana and wealthy individuals, which are organized and administered' by Moody. Not aurpri8ingl), they do not advertise. Each investment program is oet up a8 a limited partnership which is limited LQ 99 investors. Each program may include up to 35 non-accredited investors. AJ1 accredited investor has a net worth of $1 million or an annual income of at least $200,000 each yellr over the paot 2 years. An investmeut program is ·almost always open to accredited investorB. Non-accredited inveators may to wait a month Or so for the next available program . Limited partnerships of thls type include a management fee and an incentive fee. Moody'e investment progrD.J1lB, however, are unique because they do not charge an incentive fee until investors have received the equivalent return of the S&P 500. Minimum investment is $100,000. The inVeBt.mcnt should be viewed as long term. However, investors may redeem all or a portion of hialher investment at the end of any calender quarter. Moody & Nadel offer private progrB.IIlB thAt are av.ailable to qualified inveSUlr9 and only through the fum's offering materials. If you have questions or would like to review the firm'~ offering sum.mary, call LuRee Campbell at (800) 966-7693, Sincerely. Donald H. Rowe NDL-110-000721 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21/12 Page 4 of 7 PagelD 3630 .. - ... ~. ~ . , ;. ~ ., : L:i;:~·gL~v.'2LLJ .~ TH.E)i;f"DiGES·T ·1 ~ . ; ' : • - - . . . .... ; ~ . . ... - . . . . . .. . - - •• " , _ ... .1 ,- ~~ IE: N ~ fO~E'O ~( h~ b~ ~ \Nt lJec~~ be~ N I $5 v'(" Jr WS() . hh4) r t\O IO,ODD IN .\--\\~ ~'i dN plA\J ~O~T -tv ~ .!1L.. ~ N~t (kce",,+ C~fl~6\)i<.- ~.s~-{- ~61 (~I u /02- r :J~~ EXHIBIT ~ ~ .1, !;) ~ 0- ~ () 0 3 1/10 p~ N DL-097 -000010 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21/12 Page 5 of 7 PagelD 3631 ~GIE ASSET MANAGEMENT, One Sarasota Tower Suite 602 INC. Sa rasota, Flo rida 34236 Did Your Money Manager Return 55% in 2000 and 19.8% in 2001? A.f'Wr Inot ye.ors IHurkot uiu.nat.or, woulel you be happy with an 19.8% raturn in 2001 Or a 55.1% return on yom of)uity invostments for the year 20001 Would you be happy with a 90.7% return in 1998 and 81.8% i Xl 1999? TheBe are the actual reBulta achieved by fin team ofmnnngera in So.nlBot.u, Florida. After 39 years on Wall Street, Neil Moody l-~rt tho: St."I'etl-~ 'Lo fonn an lla8ociet;lon with Arthur Nadel and his group to manage equity funda, The Nadel Group hucl e.ojoyed unusual success with private investment g,·oupa. tooting II technical t1"udmg syatcm Llini interacts with fundamentals t;{) produce TCOuJto that conniotentJy Oi.lL-parfoTLn t..b.~ roark~t averagea. My curioBity about Nudal'o computorized t.rading program eventually led to a dUG dilig'onco visit to thn offie 0 of NEldal & Moody, Understandably, I diil not learn the vanolla mathornn.t:ical fOl"Ullllos in Nadol'n "'blnck box computer program. ft What I did le1ll'D 18 very im,porLunt for the investor. After 26 years of T4lviolYWg ilio track rf.'!wrd,j} of OVGr 11,000 mutual [units, 6 ,000 money managers and 5 ,800 l)()dgo (imdB, Nndcl'£J investment program.hag produced the best track record nndmo9(, conB1Ilu"nt rolu,rnJi I hnva ever seen. His proVOElWryProgrnm, combb:JtJd willi 1:I<:rcwoiug for et.oclt fUlldol'llcntuln, haa produced a. profit monlh (lO:cr month il uoLh up and down mJlxkow. The highly tachnicnl program used by tho group i(l j)f'Opri et~ ry, 1m t 1 WIl8 gi yOU tln opportunity t.o see it in action during u duo dWgooca viui t to their office. ~n:aiotanUy A large group of complllor lTIoJliLorH dill)llny lnm·k.ot duul tontinuouBlyj roviowing TU1d digesting current 1Juu'Jc~t Illc)<iCl1)OntB 01)(1 co r lprll"ing them to T>TovioU1l dnlu. Iw:metliate n8WBwire fla.ahea nro inL())"miJ1glml with mil d "tuJkinu beod.n" 0 eNnC.Equity positiollS are adjwted,long and ahort, by means ofinBtant-response trading progra.rn.s. oro Nndol & MOI>uy 1" I rivM~ jnv(~ lI.rn nt. pTO[p"Gm.Ji for ponejon p lano o.[I(l wealt.hy individualu, whjch (lxU orenoi7:(~d nnd erhni.niElt~,r{:!d by Moouy. Not. aurpriaingly, tJu~y do not. Cldvort:il-t<l. f n h :iov 'LltwcmlI1nl[rnlm in ~ l1.p flU U limit~d "pu1't.nornh:ip wilko io limited to only 99 investors. Eneh progrrun LUay ul ao includo up t<l :35 llon~ llccreditcd invesWrB. An accredited investor hBB a not worth of $1 million or an annual income of at least $200,000 each year over the 2 years. An investment program is almost always open to accredited investors. Non-accredited investors may have to wait a month or 80 for the next available program.. Limited partnerships of this type include a man.a.gement fee and an lncentive fee. Minimum investment is $100,000, The investment should be viewed 8s1ong term. • 941-954-5500 • 800-%6-7693 • Fax: 941-364-8447 • NOL-097·000011 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21/12 Page 6 of 7 PagelD 3632 Nadel Moody 1998-2002 Performance Record 199~ 1998 InvesttJ Group January February March April May June July AugtlBt September October November December Invest' S&P fi..QU 0.5 7.0 1.9 10.7 9.1 7.7 4.3 5.3 3.0 7.6 2.6 4.4- 2.4 -2.7 4.0 -1.1 -15.8 7.7 January Febru..ary March April May June July August 8&P Gnll1P 10.0 fi.Q!I. 4.2 3.2 4.7 4.5 6.1 3.5 4.1 3.B 4.5 5.0 7.9 -3.3 3.9 3.B -2.8 5.5 -3.2 ·0.7 -2.8 6.2 S.l September October 5.9 November M 5Ji. December ·00.7% 26..7% -8'1.8% S&P l!l1!l.d•• Invest' ill!!! Fwld·· till.O. January 4.7 February 26.0 1.71 1.09 2.78 1.83 2.53 1.41 1.27 1.08 -0.04 1.60 1.93 3.48 -9.22 ..0.45 7.67 0.56 ·2.31 -1.30 -6.36 -8.20 .1J)2 Q.1.a 19.'18% ·18.03% 3.4 6_0 March 4.6 - 5.1 -2.0 9 .7 April May 1.5 ·3.1 2.B ·2.1 June 3.2 2.3 0.4 3.2 1.6 -1.3 -0.6 -1.6 -0.5 -8.0 M M -56.1% -10.1% July Au gun t September October Novamber December U 19.5% 2001 2000 Invest 1.9 6.1 -5.4 January February March April May June July Augunt Sepwmber OctQber November Decrunher S&P 1.83 -1.98 IIM(JJIQ8e~1I1 fe~. inceno'>'C fees GNJ trading fees /wYe /WI been rkducled from pciformanu figuru. · an! monJh 10 monJh. Tow are y<aT to da1l! and rifkcJ monlhly compoWlding oj gain.r. Ntl year~tu1 perjormlJltu is There/ore. f{TU1JD lhalt Ihe SWI'I O/molllA/y pufOTTllLlJttt bc= o/compounding. • -NeT of all Fcts aM E..rpvtu.s. Past ~rformtlJlCt: is tuJ guar(JnJLt af~ rr..nUu.. NDL-097-000012 Case 8:11-cv-00516-MSS-EAJ Document 126-2 Filed 11/21/12 Page 7 of 7 PagelD 3633 , • 2002 2001 S&P New Elmd·· Fnnd·· llill! Invest January February March April May June July August September October November December 1.71 1.09 2.78 1.83 2.53 1.41 1.27 1.08 -0.04 1.60 1.93 4.46 U2. ua 1.18 1.99 3.32 4.09 3.82 ·19.78% ·34..05% Invest New S&P l3J.n..d." Elwd·· fillil 3.48 -9.30 -6.38 7.67 0.56 -2.31 -1.30 -6.36 -8.20 1.83 January F.ebruary March April May June July 1.98 lQAa November December August September October ~13.03% 1.25 0.96 1.25 1.23 1.24 1.09 1.32 1.63 1.73 3.16 3,18 2,99 3.19 3.05 2.99 1.35 3.06 -1.57 -2.04 3.61 -6.10 -0.93 ·7.22 ~7.88 3.23 2.87 0.44 .11.03 4.14 8.71 ·15.88% ·33.98-% .22.82% ·CompariJo/U ~ month (0 rno.nJh. Totals, (1.Jld ItOr lhe .JW7IIOt.a/ of/he ,ompowu;/Ld nwf\lhly nlUnU. "Net of aI/ Ius onJ a;x:/lSt.r, at;/.uJjng pufortr\aJlCcf~c or 2001 cwJ 2002" Pasl perjorm/JIIU is no guarfJJIU~ ufjllJJJn reSllJu. T~ S&..P..5oo Inda i..r IJJIIf\tJMged, dou not rifltCI advlsory Jus. may /ItnIt volatility or olher maJeriaJ chara&ttrlstics thM an: di/J'lT'OIljrom III: Fund aM is inclu.dedJor illustnlJion purpous. However, investors may redeem all or a portion ofhia.lher investment at the end of any calender quarter. Nadel & Moody offer private programs that are available to qualified investors and only through the firm's offering materials. Over the past 67 months of managing money, Nadel's Management Group has been down on1y twice and flat once. Du.ring the earne period, the S&P 600 Index has been down 30 months out of 57. While past performance iB no guarantee of future results, keep in mind that a consistent annual return of 26% will double your money every three years. If you have questions or would like to review the firm's offering summary. call (800) 966-7693, Or you may e-mail your name, addresa and telephone number to info@carnegieaseet.coDl and we will mail the company's information out to you. Sincerely, {).J/L Donald H. IWwe Clul.irma.n Carnegie Asset Management NDL-097-000013 Case 8:11-cv-00516-MSS-EAJ Document 126-3 Filed 11/21112 Page 1 of 5 PagelD 3634 EXHIBIT 3 Case 8:11-cv-00516-MSS-EAJ 0:,;1;;10.1 I~ !!1I1 I.-/:!I) j :.\.\~ Document 126-3 Filed 11/21112 Page 2 of 5 PagelD 3635 . .d GaOl 'I I: -' . . ) 1 AMERICA'S MONEY MANAGER - - - - - ---- - - -._--- - - 1l1.arket Beating Pel/orrnan.ce in 2003 Z(}():l January l"euruary l\'Iarch Annl Th~'ll UH :l.g I cXW . Fund B 1.28% 2.5/3 :-3A4 ;~,:'l2 11.0,1% ·1130/03 !:'21U..9. -'~ :{a ~~ • .L '15 n.n:{ 11.)' ... ti.20% TEIE WALL ~')TREE7r DIGEST - ~ - ·· - t ·,·"" - · " , ,, - ..... . . . ..... - ...... - .. N DL·oeB·002723 Case 8:11-cv-00516-MSS-EAJ Document 126-3 Filed 11/21/12 Page 3 of 5 PagelD 3636 I • 05/15/03 TUU 15 : 11 PAX OH 164 84017 Till M LL STRfl lll' D I CL1S T -1->-+ ~00 2 No do 1- ~o o d.Y Did Your Money Manager Re.turn 21.7% in 2002 19.8% in 2001 55.1% in 2000 j .J After lruIt years market. disWlter (S&P 500 ·23 .3%), would y O\.l Lu hl, [l!lY with j\ :l1. 7\ %return in 2002, a 19.8% nlrurn in 2001 (S&P GOO -18%), ,or II. 55.J % r~L w'" li n your oquity mVE!Stnli!nts for the yaar2000 (8&P 600 -JO,1 %)? Woulr! you hchuppy wi Ul a 90.7% rut.lI rn in 1998 and B7.8% in 19997 Thoso are trIo actunl TCSult.a othiovcd by an ofJ'e d.ivB tea m ofmo.nllgcr" hI Bun)lJot.a. ll'!o'riu ll. Aftt'!r 3!l ~Ilt}l o n Woll S l rcn~ N U Moody 10ft. thl.! Slreet to rurD) un It:luocintion with A.I ~llllr Nod(:llllltl hiu (,rou p to rrlllnn~o r.<j u!l.y rllnds . '1116 Nudo) Group' hnd Ilnjoyed unusual nIlCcc,,}!./ wiUllnivn to UWOSl 011l1lL Ilr()U!l• • tl !jli nS a lech.nical trading rryot.em thnt interoet.'l wi ~ h /"lIlrln!110 l1lltl , to I' rnr\U l'11 T(isu ll:; L L wl\ uist.entLy oul;perfonn the market aVilro.gcs. hu Il'ry C:~lri oHity J\ holl t Nr.u ta l'/I ctl.mP' trading program eventually led to a due dili';(ln(!u VilliL lu tho oJI1CO:) I) Nud el & Moody. Underatnndobly, r did nollearn the vanoU.'l mathe mn til!ll l runnlJln r:; jl\ NllIl d'u ''LInck hox" computer program. " , II " !) I' i 'j Wlll:\:t> I (HclltlD,r n ill very bnlJorblllt for tho individual in veataI'_ After 26 years of revi(;wirl ~ L trnckrecords orovor 11,000 mutunJ funds, 6,000 money mll1lsgen; and 5,800 ha lVH!t:o fllndli, Node1'9 computeJ"izcu invl"llltment progTatD has producild the bellt track. !"f),c ord Il.nd mos t cOllsir.tOllt rehlrJlIJ 1 hnvo cv~r seeo. His propl'io t'l ry (ll 'Ob'T (l ID, l:!Jlnbi l1ocl wilh 5c'!"o e ni o lJ {or atQck fundamentalB, has catllli!'tllnlly pl'orlll-c.ll CI [JI'() EH TIlUnLb nflm' m onth in both up and down murkets. The highly technicru pl'orp'om I1sau by 1.110 r;rou Il is pl·oprlotnry. but I wos given IU1 opportunity to sua it in n-el ion d\l.rinr~ 1\ cllJC dlli(!mlCO v'ilJi t to thou Qffice. A Jorge group ortl\J1Upll l or l.lloniloro dicllllllY nlurkot dR til COil tinuolUlly, rOlliowing" ul'ld digeoting currellt tIlorlc· {. []) )v em e ntlJ nnd comparing UlOln to pr~vious daw . Immediate newswiro !la s hes ur Lillo' )- 1Il incl nd wi lh In uLed "wlldng hend!),' on CNBC. Equit.y pooi/;lon!l are adjusted, long and Ghort, by m eans of insU3n t-response trading programs. Nnd e l &. Mood y o rfoT PI" iY~lt(j il~VL·llI.J11 n t: pror,TlIlU!I for pCrtl:ioll p illm) Oll U wOI.d lhy OIw \ni ?,(~ t1 l\ l1<1 ncuwol!;t.c I'I!d by Muody. Not Jslll'P l'i IJillg l>,. L (!.y do not h :'If. '101ti':H!_ .m ilch ir)'lC5 /'lJlCl n t prlIgr u nliu OIJ!. \rD U~l 11 limited jJlIl l. l llll uh i p " !I idl IS Ihull. lto only 99 investors. '·.!.\. _ d "Urm: m.t iILCJ1J.:!.!I\1Jy" nr,r:Cll li l \7 IJnl,Y.l!f{ ;,,',t1·V!_lU[\y,eIlL'9.!:lJ ~ in clivid1.w.l Ii, which lin) An nccredited invostor- hIlS a oot worth of$l million or Oil. annual income of at least $200,000 each yeaT over th~ post 2 years_ An inveatmcmt program )8 almost nlways opan to nccredito<1 iovest<lr-s . .. , -, NDl.ooa.002724 . Case 8:11-cv-00516-MSS-EAJ Document 126-3 Filed 11/21112 Page 4 of 5 PagelD 3637 ____ 05/ I S/OJ_ntU_ (5: I 2 PAX 04( ~a4 8447 T!lll WALL STltIHlT DienST -.~ !4loo.) Nodel-ttoOdy Nadel Moody 1998-2002 Performance Record 199D 1998 Invest Grouplt Jnnuary 1.9 February March 10.7 0.5 7.0 9.1 4.4 April 7.7 May June July August September October November December 4.3 5.3 3.0 2.4 -2.7 4.0 -1.1 -15.B 7.6 7.7 2.6 3.4 6.0 mvest 8&P fiOQ M 8.1 5.9 Q& ~90.7% January February March April Mny Juno July. August September October November December 26.7% 10.0 4.2 3.2 -3.3 4.7 '4.5 3.9 3.8 -2.8 6.1 3.6 4.1 5.5 -3.2 -0.7 3.8 4.5 5.0 -2.8 6.2 1.9 7.9 M 1.Q 2001 S&P Janua.ry Februery Murch April May June July August September October November D e cember 4.7 26.5 500 - 5.1 -2.0 4.6 9.7 1.5 2_8 3.2 0.4 -3.1 -2.1 3.2 1.5 -1.3 -0.6 0.8 "50_1% 19.5% "'87.8% 2000 Fund t\"' .... S&P Q!!Q .GLCl!!I!# 2.3 January February Murch April 3.4B -9.22 -6,45 Ma.y June 1.83 2.53 1.41 7.67 0.56 -2.31 July 1.27 August -504 Soptember -0.5 -8.0 Odober Novembllr December -10.1% 8&1' iillQ 2.78 -1.6 6.1 M FundA** 1.71 1.09 1.93 -1.30 -6.36 ·8.20 1.83 -1.98 1m SJ.:B 19.78% -13.03% 1.08 -0.04 1.60 IIllICJIOS(.lIIen( fl'':. ], i/'Ci.·I1/~'·d /J!. I.'" ,J !ullrfl H/J:;r j i:.f'.1 IU1V~ /lot veen dttl"cfC,} firm I iJIJI/orrnnJIL' t! r~Ufl.~:. "Cf)n IPlJriJo/u . n(~ monlh !O m Olllh _ 7'0 /01.1 u r., _y~nr III '/tH ( "'." ,<,Jk<, "."" ,M)' CfJIIIPOIllU/inC o/llo/})1. N,'J y'n'r , ,~"1 />(.I/UIII"'JlL·,· illhnrJurr. &rr::U1Cf . /'flll,h" ' ;rJl''' of mOil''''>, p <:Ir,IfI"(JIIU br";" ...,,, ,,/r:tJllI(JI)roJIIllrlli' • of(J1J FCi!J 1m,) J~lPC(l'C_I·. f>1U1 p"'J"nlJ~lc~ "110 guarankr: off IlI'" !' re..rwu. 'Na. . NDl-088~(fci2i25 Case 8:11-cv-00516-MSS-EAJ 05/1~/QJ rmJ lG:12 PAX Document 126-3 Filed 11/21112 Page 5 of 5 PagelD 3638 g .., _ "64 2001 Ftmd A.~ January February March April May June July August 1.71 1.09 2.78 1.83 2.53 1.41 1.27 1.08 September -0.04 October Novembor December 1060 1.93 BH7 TllIl I1ALL STRIIIIT D1eBST S&P Fund A"'c ElmdB** 500 S&P :EmlliB'*C, GOO 3..18 -9.30 . -6.38 .January February Murch April 7.67 0.56 -2.31 -1.30 ·6.36 4.'16 1.18 1.99 3.32 \ . 4 .09 3.B2 au 1.17 1.35 AUg\lBt 1.09 1.32· 1.61 September October November Decembar 1.743.17 4 .30 !L1Q -13.03% 3.18 2.99 3.18 3.05 2.59 1.35 3.08 3.25 2.87 4.145.28 -1.57 -2.04- 3.61 -6.10 -0.93 -7.22 -7.B8 0.44 -11.03 8.71 5.64-5.98 *21.59% 11041.96% ·23,34% tCcmPOI /."JIII "r~ IIlfJ /IIh I<I/lltnllh. TIlIH/' h~ )'·,II·, '/I ·,!nll:. ,mti llQII/U .)um ,o ' lI l It"" Ilnfi (. is 1.25 .July .1.OAJl (>34.05% 1.12 0 .95 May Juno -8.20 1.83 1.98 1.fi2 rn 004 N"del-l!foodY 2002 _1-._0- _ _ ~19.780/0 Indu ... -t "11M C:O mPOUIIJa/ mon,hly I'dUnl.l. ··NLI lIf 01/ p~n.lo!J• .w;.1,1I1i"c prrfim' IIJ1lr:,:/t.o: / (w 2f111 / 111111 lUll1. PIU I p c:r[O m11Jnce i..I no gl.<llrilJ"ed oljuJllIc fwd,s. ~ S&I' jOO 'VlI'IUJln,~ e.(J. ,I"es /lol rv// trl W/vt.,"I Y {( ~J, I,II.Y 1t~ '\I;l v" /o ,fli!y or IJ,iJ(, "' Q/~rUJ l c/">1o ClrriJliulhaJ D r~ dij[Ur:fllfrol" ,ht Fund uruJ it '-nc//lJ~dJor IlIuJ(r(l1fnra purposu_ . Limited ptu-b1arahj pll of f.1~ s '/;ypn ilHdud ,! 1l 1l1ll lJ Il rpmll.:IIL feu unJ U.ll Ul '(mLi'/u fe!l' Minimum Th e m v f.\ lmc,nl. llhould ho VH:wc-d Il.':i l Ull~J Lonu . H OVlI! Vet. 1nvestors may redeem nll or 1\ porlio)') uf)u t\lh ot' iTlv~,'ltwcnt ot t.llr) onci uf Il ny CU1Itl\ UCH' cIIIJrrlm-. Nadel & Moody offer privnlo p . OCrL\J1l1J t h-r1t n:rc ILvu~ll\b I El to qu n l.ititld 1l J1(1 unly LhTIl II({ h the firm's offering lnnlorill l: . OV I))' rJu) PlIuL Ga Inonbh ll rl r I ti ll ueilll' IIIIHIl y, N fld ul'u MlIllllll /I'HUI l Gl' II p hali uoe ll down only t,wico un d I1 n ~ OI1 C:U. Dmjll l-: (.\Hl 5 fJllIO J.1r~r lllll, t.h .) oc:.l&.P 500 TtHl n..,< har; \)I jl)ll dOWI\ ~'l3 months 1 111: 1-)(' rpl. W IIi /u pUl; ~ p(l rr()l' rrUI I\~ I~ ill no UllIHIIlIl!l\l oL' [ \I hll'U l' UUlll t:t:, lc cnp i n minc1lhul; It CO Il))iu te l 1t otll1 11111 L 'durn {If!?.WJl wi ll (/ I)lIbll! yHIlI' I nlJ l ll lj' 1I\'\!ry l h flltJ YllI.t nJ . If you have queations ur wrJ~l kl ,1jkc to roviow the firm'o offering sllmmary, cBtI (800) 966 ..7693, or you may e-mail your n nm . Hdd l'IW:J lind t.elflphone number to info@camegiellsso~. com and we will mail the coropnny's i ufr))·l lll1l.-i Ql t lil t to yQ~I . . IDveoOoOtlt I A $JDO,O OQ, Sinc.orely, ' ) QJ6:.-.. - > Donald H. Rowe Chairman CamegioAsset Management ----1 IIl''j II ,: '·1J b.l n . 1': 1·: l' JJ .tW ':!:.I'l' VAL.!. !-1'1'H I' " 1-. 111 1/ 1 - - 83)0 S o utJ.l'.uni:uni fuil. Suilc" 110. S •• IlSOI,. Fl. )42)8 Phone: So{}' 785·5050 • hx : 941·)64-84.47 www.w J lbl'O:-Cld i gt!.lLCOrn NO -088-0 0272 6

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