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Akazoo Sued By SEC Hired Randy Mastro Now Stip Filed Citing Wire Thru Citizens Bank

By Matthew Russell Lee, Patreon
BBC - Guardian UK - Honduras - ESPN

SDNY COURTHOUSE, Oct 22 –   The SEC sued Akazoo for fraud.

Akazoo hired Randy Mastro.

  On October 7 U.S. District Court for the Southern District of New York Judge Alvin K. Hellerstein held a proceeding. Inner City Press covered it.

   At issue was whether Akazoo can keep spending money, for example on D&O insurance.

Otherwise, Mastro said, no one will work for the "good guys" at the New Akazoo.

Judge Hellerstein, praising him, said no written order would be necessary beyond the oral representations. He said he would meet with the parties again on October 14. Inner City Press covered this as well.

 On October 14 Mastro was talking about the D&O carve out, and saying he had all interested parties on board. Judge Hellerstein worried aloud about someone coming in later. We got this, Mastro in essence said.

Now on October 22 the SEC has filed a proposed order: "Asset Freeze 1. Except as set forth in Paragraph 3 below, the Company’s assets, including all funds and assets owned or controlled by the Company in whatever form they exist and wherever located, shall remain frozen and the Company shall not incur further liability until October 27, 2020, which is the date of the parties’ next scheduled appearance before the Court. 2. The Company agrees to provide a copy of this Stipulation to all officers, directors, employees, and any other person acting on behalf of the Company. 3. Subject to the requirements of Paragraph 8 below, the Company can disburse immediately up to $2.6 million in respect of certain basic operating expenses and accounts payable, including, but not limited to, a D&O insurance premium payment of $1.25 million. Accounting 4. The Company and the SEC have reached agreement in principle on the scope of information the Company will provide to satisfy the SEC’s request in the Emergency Application for a sworn accounting, and the Company will produce such information (a summary in the form of the excel documents previously provided by the Company with the titles “Akazoo Disbursements 7.27.2020” and “Akazoo Aggregated Cash Analysis (1.2018-4.2020) and information sufficient to show cash holdings in all bank accounts owned or controlled by the Company, updated through October 16, 2020) within one week of the date of this Stipulation. 5. Upon delivery of the accounting summary, the Company will provide an attestation of the accuracy of completeness of this accounting summary from an appropriate representative from FTI. Repatriation 6. Akazoo represents that, prior to the SEC’s filing of its Emergency Application, the Company initiated the process of transferring the vast majority of its remaining funds held in overseas accounts to a bank account held in the United States. The Company further represents that, on October 2, 2020, it received confirmation from Citizens Bank (headquartered in Providence, Rhode Island) that the Company’s previously initiated incoming transfer of $30 million had successfully been completed. 7. The Company represents that it also maintains approximately 20 bank accounts overseas (many in the name of affiliated entities) in locations such as the United Kingdom, Luxembourg, Greece, Poland, Cyprus, Spain, and Ghana. The collective funds held in these accounts—prior to any disbursements referenced in Paragraph 3 above—totaled approximately $1 million, with the majority of that amount (~$800,000) held in an account with Barclays (UK). 8. With the exception of maintaining for any regulatory or practical reasons certain minimal funds in accounts outside the United States described in Paragraph 7, the Company will deplete the overseas funds before using any funds held in the United States when making any disbursements described in Paragraph 3 above. 9. The Company and the SEC have reached an agreement in principle that, with the exception of any funds transmitted pursuant to the $2.6 million carve-out discussed in Paragraph 3, all funds held in the Citizens account will remain in that account until such time that the parties receive further guidance from the Court."

The case is Securities and Exchange Commission v. Akazoo S.A., 20-cv-8101 (Hellerstein)


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