More Lies and Coverups

This is a great analysis of the Schwartz / Ruddell issue in which an employee allegedly accessed a Moniker customer’s account.

The article goes deep into the ethics and what you REALLY agree to when you register a domain name.

Snapnames Files Suit Against Former Employee

This morning I received the following statement.

SnapNames, and its parent company, Oversee.net, have filed suit against Nelson Brady in federal court in Oregon.

Brady is a former employee who, under the false name “Hank Alvarez,” improperly bid in certain SnapNames auctions. In some cases, Brady also embezzled funds from Oversee by fraudulently refunding himself a share of the purchase price for names he won.

For several months, the company has in good faith attempted to settle privately with Brady to recover its losses, including the rebate fund established by Oversee to address Brady’s activities and the funds he embezzled from Oversee. Those settlement efforts have been unsuccessful.

The suit seeks over $33 million in damages, including punitive damages.

Context

· In October 2009, Oversee discovered an employee, Nelson Brady, using an account under the false name “Hank Alvarez,” engaged in improper bidding activities in domain name auctions on the SnapNames platform.

· Oversee and SnapNames disclosed the situation to its customers and employees in November 2009. Oversee made available to affected customers a cash rebate in the amount of overpayment, plus 5.22% interest (the highest applicable federal rate during the affected time period), of any amounts paid exceeding what the auction price would have been without employee bidding.

· Since that time, more than 60% of the aggregate rebate amount has been claimed.

Impact of Brady’s actions on auctions

· Brady’s conduct affected:

· 5% of auctions since 2005

· 75% of total impacted auctions were between 2005 and 2007

· Less than 1% of SnapNames auctions during this period were won by the employee

· The remaining 4% were won by SnapNames clients.

· Brady’s bidding affected approximately 1% of SnapNames’ auction revenue during the full period.

Impact of Brady’s actions on SnapNames and Oversee

Oversee will be demanding millions of dollars from Brady for the damage he caused to Oversee and SnapNames. No amount of money, however, could compensate the damage Brady has caused to SnapNames’ and Oversee’s reputation in the marketplace.

Law enforcement

In November 2009, Oversee voluntarily disclosed Brady’s conduct to both the US Attorney’s Office and to the Federal Trade Commission. Oversee will not publicly discuss anything relating to law enforcement matters.

Customer Service

SnapNames customers who have questions about the rebate offer can contact the SnapNames support team:

On the web: http://snapnames.custhelp.com
By e-mail: supp...@snapnames.com

Phone:

+1 (866) 690-6279 (toll-free in the U.S.)
+1 (503) 241-8547 (outside the U.S.)

Oversee Appoints New CFO and Two Board Members

Elizabeth Murray has been named Chief Financial Officer (CFO) and Senior Vice President.  She will report directly to company President Jeff Kupietzky.

Board Members

Allen Morgan – Venture Partner at Mayfield Fund
Scott Jarus – CEO of Cognition Technologies

Background – Elizabeth Murray

• More than 25 years of experience in financial management, strategic investment and M&A activity.

Previously

• Executive Vice President and CFO of Fluid Music Canada, Inc.,
• CFO for RazorGator Interactive Group, Digital Insight Corp, and KornFerry International.
• Bachelor’s degree in Business Studies from Robert Gordon University in Scotland
• Chartered Accountant and member of the Institute of Chartered Accountants of Scotland.

Murray replaces Stacey M. Peterson, who has resigned to pursue other professional opportunities.

Background – Allen Morgan

• Almost 30 years counseling entrepreneurs
• Closed more than 750 venture capital financings, mergers and acquisitions, and public offerings.

Previously

• Partner at two Silicon Valley law firms, Latham & Watkins and Wilson Sonsini Goodrich & Rosati.
• Serves on the boards of directors of BlackArrow, DECA, Electric Cloud, Jobster, Slide, Snap Technologies, Tagged, Perfect Market and Zenprise.
• Undergraduate degree (summa cum laude and Phi Beta Kappa) from Dartmouth College
• Second bachelor’s and a master’s degree from Oxford University ( Christ Church )
• Juris Doctor from the University of Virginia

Background – Scott Jarus

CEO of Cognition Technologies, Inc., an advanced Semantic Natural Language Processing (NLP) technology company.

Previously

• Chief executive of j2 Global Communications, Inc. (NASDAQ: JCOM)
• President and COO of OnSite Access
• Senior management positions at RCN Telecom, Multimedia Medical Systems, and Metromedia Communications.
• Serves on the boards of directors of Cognition Technologies, Global Conference Partners and Ironclad Performance Wear (ICPW.OB), where he is Executive Chairman.
• Bachelor’s and master of Business Administration degrees from the University of Kansas

What do you think about these appointments? Strategic? Financial? Feel free to post a comment.

Oversee Cuts 10% Of Workforce

There have been some rumblings around the place regarding this matter, so I decided to contact Oversee directly. Here is the deal:

On the 15th of August, Oversee.Net told its staff that 10% would be cut across the board. It’s expected that up to 30 staff in total will go from middle level management downwards, across DomainSponsor, SnapNames and Moniker.

While general economic weakness has been cited as reasons for the cut – as an entrepreneur I can see that you need to shuffle the decks, especially post any merger of companies. So to me, this is just business as usual.

Once all the dust settles (especially around Snapnames), it would be good to see things getting back to normal.