Thu04242014

News

Paws-itively  ready for  disaster

Paws-itively ready for disaster


Dozens of local residents participated in the Pet Ready! program, which included first-aid tips for animals from Adobe Animal Hospital veterinarian Dr. Cristi Blackwolf, above right. Girl Scouts Rachel Torgunrud, above left, in purple of Sunnyv...

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Schools

Local students earn honors at Tech Challenge

Local students earn honors at Tech Challenge


Courtesy of Ann Hepenstal
Gardner Bullis School’s Tech Challenge Team “Fantastic V,” above, recently showed their project at the school’s STEM Expo. Teammates, from left, Brandon Son, Will Hooper, George Weale, Tripp Crissma...

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Community

Merchants, maypoles, music: Farmers' Market season launches May 1

Merchants, maypoles, music: Farmers' Market season launches May 1


Town Crier File Photo
Visitors examine the fresh produce on display at last year’s Downtown Los Altos Farmers’ Market.

It wouldn’t be spring without the return of the Downtown Los Altos Farmers’ Market May 1. The Los Altos Village Association sp...

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Sports

LA tops MV behind Beutter's big day

LA tops MV behind Beutter's big day


Ellie Van Houtte/Town Crier
Los Altos High pitcher Lizzie Beutter went the distance to earn the win against Mountain View.

The number of Los Altos High hits and Mountain View High errors may be in dispute, but there’s no debating which softball ...

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Comment

Enlightened California: No Shoes, Please

I recently read a newspaper article about the newly adopted sex-education curriculum in the state of Mississippi. In the city of Oxford, the following exercise is included: Students pass around a Peppermint Patty chocolate and observe how spoiled it ...

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Business

Cobblery makes short move next door: Longtime business relocating to State Street in May

Cobblery makes short move next door: Longtime business relocating to State Street in May


Ellie Van Houtte/Town Crier
European Cobblery owner Paul Roth is relocating his business from 201 First St., above, to 385 State St. in May.

The European Cobblery, a family-owned and -operated shoe store, is relocating to a new home just a f...

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Books

Local Author Spotlight

In an effort to support authors from Los Altos, Los Altos Hills and Mountain View, many self-published, Book Buzz periodically spotlights their books and offers information on where to purchase them. Local authors are encouraged to submit brief summa...

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People

'Champions for Youth' announced

Challenge Team will honor Mountain View Police Chief Scott Vermeer as “Champion for Youth” at the nonprofit organization’s annual fundraising breakfast, scheduled 7 a.m. May 7 at Michaels at Shoreline, 2960 N. Shoreline Blvd., Mountain View.

Lauren ...

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Travel

When tackling taxi trouble, just sit back and enjoy the ride

To park and fly or to go by taxi? – that was the question.

Either I could pay approximately $10 a day for long-term parking near Mineta San Jose International Airport and take a shuttle bus to the terminal or I could call a cab or airport coach – ap...

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Stepping Out

Last go-round for 'Hound'

Last go-round for 'Hound'


Tracy Martin/Special to the Town Crier
The actors in “The Hound of the Baskervilles” – from left, Darren Bridgett, Ron Campbell and Michael Gene Sullivan – take on dozens of roles.

TheatreWorks is slated to present “The Hound of the Baskervilles...

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Spiritual Life

Magazine

A yoga class a day keeps the stress away

A yoga class a day keeps the stress away


Van Houtte/Town Crier Yoga of Los Altos hosts a variety of classes, including Strong Flow Vinyasa, above, taught by Doron Hanoch. Yin Yoga instructor Janya Wongsopa guides a student in the practice, below.

It’s nearly 9 a.m. on a Monday mornin...

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Both sides move for decision in Ponzi case

In what may prove a last barrage of documents, the Securities and Exchange Commission and Los Altos resident Mark Feathers filed dueling requests for a judge’s final decision last month.

Feathers, accused of misleading investors in the funds he managed, asked U.S. District Judge Edward J. Davila for a summary judgment exonerating him.

His Los Altos-based company, SB Capital Corp., managed two funds that had gathered approximately $42 million from investors over the past five years. When the SEC seized them in June, an appointed receiver assessed the funds’ holdings at approximately 75 percent of their stated value, suggesting that investors lost some but not all of their money.

SEC prosecutor John Bulgozdy seeks more than $12.3 million from Feathers, the amount approximately representing what his 400 investors stand to lose as the business is dismantled, plus a $300,000 additional penalty. Bulgozdy did not suggest that Feathers necessarily had that money among his assets, currently frozen by the court.

In its case, the SEC depicts SB Capital as a company that had lost money on underperforming investments in recent years.

Bulgozdy presented evidence that Feathers had moved money around the business to disguise losses, present investors with the appearance of success and continue to pay himself.

Feathers, in turn, submitted documentation of SB Capital investor correspondence that he believes demonstrates that his company operated transparently and with investor notification and approval.

At the heart of the case lie questions of comprehension: Did investors understand, read and sign documents concurring with SB Capital’s business practices; and did the company break the law even if it had investor support?

Investor approval or deception?

One document, an SB Capital mailing introduced as evidence, illustrates the contending interpretations heard in court. In it, Feathers cheerily stated that fund note investments were “performing as agreed” but requested that investors sign a form allowing the company to make a loan to itself, or, as he defined it, “assume any deficit to the note amount through a receivable to the fund.” He assured them that “this action will not likely have any material bearing on future fund member earnings.”

According to the SEC’s interpretation, Feathers sought to borrow funds so that he could continue to return interest at a rate approaching 7.5 percent and fund his business, even as the investments failed to perform. Feathers alleged that this act of borrowing was explained in writing, but some investors interviewed by the SEC claimed they absolutely did not understand that their investments were not performing as well as returns seemed to indicate.

Campbell resident Robert Morris described investing larger and larger increments of money with Feathers’ company, as his account statements showed a rosy rate of return each month. He reinvested that return, sinking himself deeper into the enterprise.

“At no time did I understand that I was being asked to approve (SB Capital) borrowing money from IPF (Investors Prime Fund) or SPF (SBC Portfolio Fund), nor did I understand that I was being asked to ratify prior borrowing from the two funds,” he wrote in a declaration.

Decoding assets and liabilities

In addition to arguing that he fully met disclosure requirements, Feathers counters in his court filing that the borrowed money was used properly as “reimbursement of expense or for monies to be spent for expenses.”

David Gruebele, a consultant who worked with SB Capital on accounting issues, explained in a declaration that because SB Capital borrowed the money as a “due from” or manager’s note, it was recorded as an “asset” of the funds rather than an expense.

“I advised Mr. Feathers that (the funds) had distributed more to investors than the funds’ income at that point in time,” Gruebele said. “In response, Mr. Feathers usually assured me that additional income was going to be generated in the near future from new transactions that would balance the overdistributions and/or generate net management. From early 2010 through early 2012, the amount owed by (SB Capital) to the funds grew by millions of dollars.”

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