Gerova hits back at ponzi claims

The company — which employs fewer than 10 staff on the island — refuted allegations it is buying distressed assets as incorrect and said it will file financial reports in a timely manner this year.

A report by Dalrymple Finance attacked the firm as “likely fraudulent”, while a blog on financial website Forbes claimed Gerova has “close ties” with the $53 million Westmoore ponzi scheme.

Compliance

Gerova said the analysis by Dalrymple Finance, written by boss Keith Dalrymple, is incorrect.

A spokesperson said: “Dalrymple reaches a series of speculative conclusions.

“Gerova is in full compliance with all reporting requirements, including those of the New York Stock Exchange and the Securities and Exchange Commission.

“Its next financial report is due in June for the 12-month period ending December 31, 2010. This will be Gerova’s first full-year results after having converted from a non-operating cash shell (a SPAC) to an operating company.

“Gerova plans to file this report in a timely manner and anticipates disclosures will be comprehensive.

“Over the past year Gerova has issued several news releases that provide investors with detailed information on acquisitions and strategic plans going forward, including its agreements to merge with Seymour Pierce Holdings and Ticonderoga Securities.

“Darymple’s claims that the company has acquired impaired and overvalued assets are not true.

“He has no knowledge of whether the purchase price for assets is fair value, or a discount, or a premium — it simply serves his purposes to speculate that the assets do not represent value.”

Mr. Dalrymple had “no comment” with regard to Gerova’s response.

Gerova also said that accusations of “ties with Westmoore Capital” are misleading.

Their spokesperson added: “There are not, nor have there ever been, any former Westmoore Capital executives at Gerova. In 2008, the company considered purchasing a company in which Westmoore was a significant investor but declined to go forward with the acquisition, disclosed in public filings with the SEC.

Gerova’s board cited ‘unresolved due diligence concerns’ as the reason for terminating the transaction.

“Westmoore is not and has never been a shareholder of Gerova and Gerova is not and has never been a shareholder of Westmoore. There are no ‘links’.”

The Dalrymple report linked Robert Willison and Jason Galanis to Gerova. Mr. Galanis settled a civil non-criminal enforcement with SEC and accepted a five-year bar as acting as an officer and a director of a public company. 

According to Forbes, Willison used to have a job with Westmoore Capital. 

Gerova said: “The apparent purported ‘links’ are tenuous, indirect inferences regarding Robert Willison and Jason Galanis.

“Willison was mischaracterised as a ‘major shareholder’ and, in truth, is not a shareholder of Gerova but a 12 per cent non-voting shareholder of a third party real estate management company, as the Forbes reporter confirmed in his blog comment.

“Willison met Westmoore in or about August 2009 as a contractor for a duration of several months and departed Westmoore in May 2010.

“As to Galanis, Westmoore is cited as a July 2008 investor in a company Galanis is also a stakeholder in.

“We understand this to be accurate but are unpersuaded by the leap in logic that an investment by Westmoore in a company unaffiliated with Gerova substantiates a link to a Westmoore- alleged ponzi scheme.”

Gerova is also a partner with Bermuda insurer Argus in Northstar. Argus is not worried about accusations against Gerova.

They said: “Argus invests, via tracking stock, in a different class of shares to that owned by Gerova. The value to Argus of their beneficial interest in the tracking stock is not directly affected by the performance of the tracking stock which relates to the share class owned by Gerova.”

The Bermuda Monetary Authority said: “It is not our policy to discuss supervision of regulated entities.

“However, the Authority is aware of this situation and will monitor developments in this matter.”