Sat09202014

News

Meet the Mountain View City Council candidates

Meet the Mountain View City Council candidates


Nine candidates have filed to run for three open seats on the Mountain View City Council in the Nov. 4 election – none of them incumbents. The Town Crier asked them to introduce themselves to readers in the following Q&A format. We knew the...

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Schools

LASD committee looks to rank campus improvement projects

LASD committee looks to rank campus improvement projects


Traci Newell/Town Crier
The Los Altos School District’s newly expanded Facilities Advisory Committee met for the first time last week. The 28-member committee’s first task is to prioritize campus improvement projects.

The Los Altos Scho...

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Community

Sports

New-look Lancers find their footing

New-look Lancers find their footing


Ellie Van Houtte/Town Crier
St. Francis High’s Jenna Adams, left, and Carly Deale attempt to bump the ball Friday night. The juniors combined for 28 kills.

This year’s St. Francis High girls volleyball team faintly resembles last season’s squad ...

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Special Sections

MV Whisman teachers cite low pay

MV Whisman teachers cite low pay


Ellie Van Houtte/Town Crier
An estimated 75 supporters of higher teacher pay turned out for the Sept. 4 Mountain View Whisman School District board meeting.

Teachers, trustees and administrators are recovering from a dramatic Mountain View Whism...

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Business

Skin rejuvenation studio joins Rancho

Skin rejuvenation studio joins Rancho


Ellie Van Houtte/Town Crier
Esthetician Marjan Kashi showcases one of the treatment rooms at her new studio, Pure Serenity Skincare at Rancho Shopping Center. Kashi provides services including microdermabrasion and various light and heat energy the...

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Books

A woman's perspective on the Greatest Generation

A woman's perspective on the Greatest Generation


During World War II, Virgilia Short Witzel, a young mother and U.S. Navy officer’s wife, grappled on the home front in Menlo Park with wartime rationing, shortages and loneliness. During the ensuing Cold War, she experienced adventure and misadventur...

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People

JERALD (JERRY) NELSON CHRISTIANSEN

JERALD (JERRY) NELSON CHRISTIANSEN

Resident of San Jose and Los Altos, California

July 21, 1931 to August 4, 2014

Born in Arimo, Idaho, to Jerald Emmett and Rebecca Henderson Nelson Christiansen. Raised in Davis and Riverside, California, with summers in Downey, Idaho, and in Loga...

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Travel

LA photographer spends a night with cranes – and moose – in Alaska

LA photographer spends a night with cranes – and moose – in Alaska


Sandy Powell/Special to the Town Crier
Los Altos resident and bird photographer Sandy Powell recently visited Homer, Alaska, to photograph Sandhill cranes, below. While there, Powell also encountered moose, left.

Los Altos resident Sandy Powell, a...

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Stepping Out

Pear puts on a pair of plays

Pear puts on a pair of plays


J. Smith/Special to the Town Crier
Dan Kapler (as Teddy) and Betsy Kruse Craig (Trish) star in Pear Avenue Theatre’s “House.”

The Pear Avenue Theatre production of two interlocking comedies by Alan Ayckbourn – “House&...

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Spiritual Life

Back to Church Sunday offers opportunity to recommit

The children in Los Altos are back to school, and I can still hear parents cheering. Summer is officially over, even if the calendar doesn’t quite think so.

Parents have attended Back to School nights to meet their children’s teachers. B...

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Magazine

Los Altos Hills home showcases resort-inspired living

Los Altos Hills home showcases resort-inspired living


Courtesy of Spectrum Interior Design
In place of a more traditional fireplace, this modern living room features a linear-flame firebox that emits heat while offering a sculpturelike design element.

After traveling the world and visiting a host...

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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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