Kesner’s Out: Why is Barry Honig’s Securities Lawyer Retiring

UPDATE 9.5.18 – Harvey Kesner’s law firm has removed his name from the firm today. According to a member of the law firm this a clear signal that his fellow partners don’t want to be associated with him or his ties to his biggest client Barry Honig. You can see here the firm is now named Sichenzia Ross Ference LLP. This dramatic move happen the same week Barry Honig resigns from the board of the microcap company he is a 42.6% owner in called Pershing Gold ($PGLC). This means Honig is currently not on the board of any public companies. These actions could signal an SEC charge or settlement coming in the near future for both men. Remember if you are deemed a bad actor by the SEC you can’t serve on the board of a public company. Kesner and Honig have been unusually silent in recent weeks refusing to answer any questions about why the changes are happening now. And Honig recently put his water front Florida home on the market for $8.9 million. Kesner was the securities transaction lawyer for ($RIOT) Riot Blockchain and MabVax ($MBVX) which have both disclosed they are under SEC investigation. This publication was first to break news about Kesner leaving his law firm.

Original Text 8.29.18
Barry Honig’s securities lawyer, Harvey J. Kesner, is apparently hanging up his shingle. According to a person familiar with his law firm on September 5th Attorney Kesner will retire. Sichenzia Ross Ference and Kesner LLP made Kesner a named partner two years ago after long time partner Richard Friedman left the firm to join Sheppard Mullin LLP. The move comes as public scrutiny over the investing of one of his long time clients, Barry Honig, has come under-fire, which includes multiple SEC investigations into the companies Honig invest in.

Kesner has advised on the small cap stock industry for years and often shows up as counsel for issuers after Honig has invested with the company. A move that has gone unquestioned by the Securities and Exchange Commission even though a conflict of interest could come up by representing the company and an investor who often holds a debt note against the company.

In the last two years Kesner has also made an apparent move to claim Florida as his home state. Voting records for Kesner started to show up back in December 2016 with an address of a 2 bedroom waterfront condo in Fort Lauderdale, FL. Florida often becomes a home for people with judgments or government fines lobed on them because it is a ‘homestead state’. This means in the case of bankruptcy or say an SEC fine they can’t come and take your home. Kesner will be 61 years old on the planned date of retirement so he still has a few years before any investment pensions can kick in for him. It’s unclear if Honig will keep his business with Kesner’s firm upon retiring or if the law firm will keep Kesner’s name. Why is he retiring now is an unknown and no one at the law firm has responded with comment.

The law isn’t the only thing attorney Kesner makes his money from. There is the stock he he gets on some of the Honig deals. But what’s been a black hole is if a stock transfer company called Equity Stock Transfer benefits him and Honig.

I have previously reported on Harvey’s wife Renee having a 50 percent ownership in the company in 2014 along with a firm called Paradox Capital Partners giving Equity Stock Transfer a loan when it first registered with the Securities and Exchange Commission. EST started in 2011 according to SEC filings called TA-1 and TA-2 reports. In those reports you see Paradox is owned by Kesner and he list himself as its manager. A company called CMBS Document Solutions is also manged by Kesner and listed as maybe providing working capital for the stock transfer company. Additionally in an amended TA-1/A filing from June 6, 2014 it states that Paradox Capital Partners and CMBS Document Solutions could “directly or indirectly, through agreement or otherwise exercise or have the power to exercise control over the management or policies” of the company.

The registered address in Florida for Kesner’s Paradox Capital Partners just happens to be in the same Boca Raton building as Barry Honig uses in his 13g share ownership of Riot Blockchain ($RIOT).

In recent filings we see Kesner put in writing that he doesn’t have control over the firm but only lends the firm money. Equity Stock Transfer’s listed CEO is Mohit Bhansali. Chris Carry at Sharesleuth recently reported on Equity Stock Transfer in his excellent story on Barry Honig and friends ability to make millions on small cap stocks that seem to have questionable rise and falls in their stock. Sharesleuth pointed out that Equity Stock Transfer just happen to be the transfer agent in some these questionable stocks. And as I have reported multiple times Honig is being investigated for a lack of timely disclosure of when he owns a stock and what his true % of ownership is in the stock. Additionally I believe there could be issues of unregistered shares being sold or restricted shares being released when they should be held in restriction. It’s hard to get restricted stock to the DTC for free trading unless you have a friendly transfer agent not doing due diligence on if the shares are legal to trade in the first place.

The Sharesleuth story missed one important point though. While Harvey Kesner has told me through his attorney that he is NOT a control person at Equity Stock Transfer he does have a known relationship with its CEO Bhansali. You see Kesner and Bhansali worked together at Kesner’s previous law firm Haynes and Boone LLP. According to his Linkedin profile Bhansali was at the law firm from 07-09 and list his job as a ‘corporate securities specialist’. I have no idea what that job even means but he is not a lawyer. You also see Bhansali and Kesner serving on a board of a public company Honig invests in called PolarityTE known by its ticker $COOL. The Sharesleuth story did an analysis on the sudden rise and fall of $COOL stock price and Citron Research has published a report calling the company a fraud. Sharesleuth reported:

“He [Bhansali] was a director of Majesco Entertainment until March 2017, the month before it completed its merger with PolarityTE. He also was one of the investors who bought shares and warrants in Riot Blockchain through a private placements last April, when it was still known as Bioptix.”

RIOT Blockchain has admitted it is under SEC investigation after CNBC did a rare investigation into Honig’s investment in the company.

Kesner and Honig have never admitted any control over Bhansali in his role as CEO of Equity Stock Transfer and I’m sure they’d deny it if a regulator asked them but my reporter’s gut feeling thinks it’s very likely Bhansali is a puppet CEO. That issue is hopefully something the SEC or FINRA is currently looking at but then I have also never seen Kesner’s name show up in an SEC subpoena that related to Honig.

I have emailed Kesner asking if he will take an active role in Equity Stock Transfer upon retiring from his law firm and as of press time have not gotten a response. After I originally reported on Equity Stock Transfer in 2016 this publication was hacked and only my story mentioning Kesner, Honig and Equity Stock Transfer was taken down and I lost the reporting. I did hear from a lawyer Kenser hired when the story first came out that went on and on about Kesner not being a control person of this company. They also explained that Kesner’s wife Renee only held a 50% ownership in Equity Stock Transfer for 4 months in 2014 from April 1st to July 3rd.

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Comments

  1. Your work is well done. Often we engage behind the scenes “ experts” on particular issues. I can see several places I might be able to “consult w you.”

    I’m not on PayPal.

    You should add other payments methods.

  2. Dear Miss Buhl,

    Is ILNS owned by Honig? Is that company worth anything?

    • I don’t know that stock

      • Thanks for responding Miss Buhl. The stock to which I refer is a biomedical called intellect neurosciences. I believe a 10k suggests Mr. Honig owns presently quite a few shares. I believe
        Eliot Maza is involved with the company quite directly as well.
        I suppose my question is just wishful thinking as I own shares. It’s nice to see things work out for alzheimer’s research and for an investment in it simultaneously.
        I completely understand your reserving judgement. I deeply appreciate you courage and your charge in this report. Your work is very admirable and important to investors.
        Perhaps the efforts of the company have not panned out
        and my paper loss is permanent. Thank you again Miss Buhl.

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