In the May 23 civil filing by the Securities and Exchange Commission, outlining the misuse of investor funds and “Ponzi scheme-like” activities of Robert Morgan and two of his companies, multiple individuals alleged to have been working with Morgan are identified, not by name, but rather by aliases. However, a subsequent public filing by the SEC in support of the civil case – more than 1,200 pages long – offers clues to the identities of these Morgan associates.
These individuals have not been charged with any wrongdoing, and some or all of them may be witnesses helping the SEC and federal prosecutors. In any case, the SEC filing sheds further light on the people and activities that were part of this important case.
“Executive-1”: Dave Rumsey
Mentioned often in the SEC civil complaint is “Executive-1.” In paragraph 39 of the complaint, it is stated that “…in emails on or about June 30, 2015, in which Morgan and Executive-1 discussed Executive-1’s efforts to obtain additional investments in the Notes Funds, Morgan told Executive-1 to ‘put the hammer down and raise more funds’ and to ‘push as hard as you can.’”
This email exchange (pictured below) is found on page 880 of the SEC document, which indicates that “Executive-1” is Dave Rumsey. Rumsey is identified in multiple emails contained in the filing as general counsel of Morgan Management. A social media profile confirms Rumsey was general counsel from 2009.
The civil filing also notes in paragraphs 76 and 77 that, in 2017, while “Morgan pushed Executive-1 to obtain reinvestments of the redeemed funds into Notes Fund III” – which appeared to result in “more than $4.9 million of the $7.6 million redemption” being reinvested with Morgan’s funds – that “[n]either Executive-1 nor Executive-2 reinvested their portions of the redemption back into the Notes Funds.”
“Executive-3”: Paul White
Paragraph 96 of the SEC complaint states: “In an email to Morgan seeking approval for these transfers, on or about December 13, 2017, Executive-3 explained this conduct as follows: ‘It is a zero sum game but cleans up some of the questionable notes loans.’ Morgan approved these transfers.”
That email exchange is found on page 1,057 of the follow-up SEC filing (below) and indicates that Executive-3 is Paul R. White, chief financial officer of Morgan Communities.
White’s social media profile states that he was CFO of Morgan Communities from July 2016 through June 2018 and that he served in the same role for Grand Atlas Property Management – a related firm to Morgan Communities that later purchased some of the Morgan properties – from June 2018 through March 2019.
“Employee-1”: Kristy Trombley
Paragraph 89 of the SEC complaint states that “on or about April 19, 2016, a member of the Morgan Management accounting department (“Employee-1”) wrote an email to Morgan and others requesting funding from the Notes Funds…” and that Employee-1 stated that “[a]ll of these accounts are negative today due to the notes funds interest checks clearing today.”
This email (seen below) is found in pages 1,044 to 1,045 of the SEC filing, and indicates that Kristy Trombley is “Employee-1.” Trombley’s title in emails is listed as cash manager. Her social media profile states that she was cash manager at Grand Atlas Property Management starting in September 2013.
Again, none of these individuals have been charged criminally or accused civilly by the SEC of personal wrongdoing. But as more is learned about Morgan’s alleged activities – and especially if Morgan goes to trial – these names may become more familiar in helping the Rochester community to better understand this complex, unfolding story.
Parent companies of local newspapers to merge?
Gannett – parent company to USA Today and Rochester’s Democrat & Chronicle – has been in potential merger talks the past week with several parties. Yet the most serious discussions appear to be happening with Gatehouse Media, a locally-headquartered public company that owns 156 daily newspapers and 328 weekly papers.
If Gannett and GateHouse were to consummate a merger, about one out of every six daily newspapers in the United States would be under their control. Locally, the picture would be more startling.
Collectively, “GannettHouse” would own the Democrat & Chronicle, the Rochester Business Journal, the Daily Record, the Greece Post, the Brighton-Pittsford Post, the Gates-Chili Post and 14 other local publications.
Besides dominating the local newsprint scene, what else might a merger mean locally? Unfortunately, things locally will probably mirror other recent headlines made by GateHouse. Just last month, GateHouse announced its second round of layoffs for 2019 and that it will be “condensing” the 50 weekly papers it owns in Massachusetts into 18.
State launches ‘Grow-NY’, a startup competition for the food and ag sector
The state has launched a new business competition focused on creating “an enduring food and agriculture innovation cluster” in an area encompassing 22 counties, including Monroe, Wayne, Orleans and Ontario.
The competition is open to companies from across the globe that are willing to locate or operate a substantial portion of their business in this region. Each year $3 million in prize money will be awarded, including a grand prize $1 million winner.
Applications are now being accepted through July 15. Winners will be selected in November through a pitch competition in Rochester.
For more information visit https://grow-ny.com/