[Editor's Note, August 5, 2007: VB is providing ongoing coverage of the Ginko collapse in the comments to this article. I probably won't run further standalone articles unless criminal charges are brought, a lawsuit is filed, or Linden Lab takes action.]
One more post on this and I’m punching the clock at the financial desk and going back to covering issues more directly related to law. That’s because after tonight, there’s not much left to cover. Aside from some cleanup once Ginko finally disappears, the story has mostly been told.
Cliff Notes: The big bail out everyone was expecting occurred. Second Life’s self-styled high-interest “bank,” Ginko Financial, was supposed to buy one of Second Life’s stock exchanges, AVIX, using money from an IPO that was to be held on, you guessed it, AVIX. It didn’t happen.
Why not? Because lot of smart people who understand finance, law, and ethics showed up to explain why that wasn’t going to work and ask some very hard questions. As a direct result, Ginko no longer has an IPO on AVIX, and is, apparently left to drown on its own (we actually find that last part out later, in a strongly worded, though poorly timed, statement from AVIX).
In the transcript below, we learn that Ginko has basically no money to pay depositors, that AVIX’s ‘Investor Allen’ claims he doesn’t think that a company promising 60% returns is paying old investors with new investors’ money, and (in answer to one of my questions, thank you very much) that ‘Nicholas Portocarrero’ is really a guy in Brazil named Andre. [Or maybe not, there's some reasonable debate about even that name, now.]
So if you’re into the SL financial markets, or have money in AVIX, or in Ginko, you’re going to want to pay close attention and work through the transcript of this meeting. It’s actually pretty entertaining, though you’re not going to think so if you’ve got a lot of money in this thing. But if you’re here for the highlights, you’ll probably be more interested in my one on one interview with ‘Nicholas Portocarrero’ (Andre Sanchez [Or Michael Pratte] in real life) from earlier tonight. Why? We got to the important stuff. He told me he doesn’t have your money. Well, not in any “liquid” form anyway.
Where did it go? Well, for that, you do need to go to the transcript, because at this meeting we learned that some went to in-world investments that he can’t sell for what he paid for them for, that some went to real-world investments (e.g. his websites) that depend on “potential,” and, (also via one of my questions… I’ll take tips in the lobby) that he’s been paying himself and his buddies a couple thousand U.S. dollars per month each out of deposits. How’s that grab you, depositors who are limited to $19 daily withdrawals right now?
Basically, he’s in ur bank, spendin ur monez.
Here’s the transcript link again. Settle in for a long read.
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74 Responses to “Commentary: Ginko Wrapup – No AVIX, IPO, or Funds”
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