Tue06302015

News

LAH council approves  Page Mill Road expansion

LAH council approves Page Mill Road expansion


Megan V. Winslow/Town Crier
The Los Altos Hills City Council endorsed a plan to widen the congested Page Mill Road to six lanes between the Interstate 280 interchange and Foothill Expressway.

Infamously congested Page Mill Road should be widened to ...

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Schools

Local muralist tells a story of young Los Altos at two schools

Local muralist tells a story of young Los Altos at two schools


Eliza Ridgeway/Town Crier
Los Altos muralist Morgan Bricca, above, created a work at Covington School commissioned by the Class of 2015.

Just as school ended this year, new color bloomed on two Los Altos campuses – public art projects commissi...

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Community

Los Altos girl out to 'squash' inequality: 10-year-old raises funds for female players with motto Equal pay for play

Los Altos girl out to 'squash' inequality: 10-year-old raises funds for female players with motto Equal pay for play


Courtesy of Lisa Bardin
Mika Bardin displays a certificate of participation she received at the 2015 U.S. Junior Squash Championships. Although Mika is not competing in the upcoming NetSuite Open Squash Championships, she is helping other female pl...

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Sports

Hurdling adversity

Hurdling adversity


courtesy of Nicole Goodwin
Ella Goodwin, hurdling, above, has come a long way since her early-childhood battle with leukemia.

While Nicole Goodwin is proud of daughter Ella’s athletic achievements, it’s not her skills on the soccer field...

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Comment

No confidence in civic center proposals: Editorial

Few Los Altos issues have become more convoluted than the development of the 18-acre Hillview civic center property. Most agree that the area, as currently configured, needs improvement. But nothing has happened in the nearly 10 years since serious d...

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Special Sections

Star-spangled manor: Orange Avenue home boasts Americana theme

Star-spangled manor: Orange Avenue home boasts Americana theme


Megan V. WInslow/Town Crier
Los Altos resident Pinky Whelan’s Orange Avenue home features a patriotic theme, evident in her living room decor, her historical collections and displays and her welcoming entrance.

Let’s hear it for the red...

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Business

Thai Silks shutters Los Altos store this month

Thai Silks shutters Los Altos store this month


Megan V. Winslow/Town Crier
After more than 50 years in business in downtown Los Altos, Thai Silks is closing up shop at 252 State St. by the end of the month. The store will continue to offer its inventory online and via phone.

A longtime downtown ...

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Books

People

ALAN FRAZIER KREMEN, MD, PHD

ALAN FRAZIER KREMEN, MD, PHD

Alan Frazier Kremen, MD, PhD, aged 68, loving father & surgeon, of Stockton peacefully passed away on June 13th, 2015.

Born in Minneapolis on December 17, 1946, he received a BA from Stanford University, 1968, a PhD in Philosophy from the Univ...

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Travel

Venetian spa offers ways to de-stress

Venetian spa offers ways to de-stress


Courtesy of The VEnetian
The HydroSpa in the Canyon Ranch SpaClub at The Venetian in Las Vegas offers a muscle-relaxing bath and radiant lounge chairs.

Vegas cab drivers usually ask if you won or lost as soon as you get in their vehicles. They assum...

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Stepping Out

'Town' closes down

'Town' closes down


Chris Peoples/Special to the Town Crier
Hope Cladwell (played by Krista Joy Serpa) and Bobby Strong (Lewis Rawlinson) get romantic during their duet in “Urinetown: The Musical.”

The Los Altos Stage Company production of “Urinetown: The Musical” ...

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Spiritual Life

Magazine

Living it up Older adults aim to age in place

Living it up Older adults aim to age in place


Megan V. Winslow/Town Crier
Local enthusiasts flock to the Los Altos Senior Center to play bocce ball. The center hosts informal games four days a week and occasional tournaments.

As baby boomers in Los Altos, Los Altos Hills and Mountain View nose...

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Inside Mountain View

Carrying the torch

Carrying the torch


Members of the Mountain View Police Department carry the Special Olympics torch as they run along El Camino Real between Sunnyvale and Palo Alto June 18. Members of the department participate in the relay annually to show their support for Spec...

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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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