About The Spear Report, Independent Investor and Gregory Spear

Filing for arbitration

The contract stated that we should try to work things out, and in that spirit I make an encrypted dump of the user list he wants me to hand over, telling him to hand it over to his technical guy to unlock the data. I also dispute his claims about a breach of contract from my side. Immediately, and before he has had any time handing the data over to his technical guy for extraction, he immediately makes additional claims about consessions from my side. He also requires that I set up the software on a server on a hosting centre. I refuse, referring to the contract which says that I am required to install it on one server on his side, which I had already done months ago, and kept up to date ever since. By this time he has shut me off the old system, and wants me to install everything from scratch on a new server. I offer my help for specific issues related to the system I’ve already set up, but explain that installing a new server from scratch is a serious amount of work, work I am not willing to do considering the amount I have outstanding with him.

We have an exchange about who owns what and when in the contract, and then I get the following demands from Gregory Spear that needs to be executed immediately to avoid him filing for arbitration:

Task #1:
Please post the following notice on the Keelix.com website immediately and block all access to the site except for our own III users. I repeat that I need this to be done immediately.  Here is the exact notice that I would like you to post when you close down the Keelix site to all outside access except for us by no later than Monday, July 23 at Noon Eastern Time US. That is approximately 1 hours and 45 minutes from now. The task of disabling access to the site and posting this notice should take only 10 or 15 minutes.

“Dear Backtester Community Members:

This Backtester was acquired by Independent Investor, Inc., the publisher of The Spear Report and other specialized financial information products ( www.spearreport.com) in September of 2006. The Spear Report has kept this service free for nearly nine months while we have been working hard on a far more robust version of the software. As we near completion of the new version, we must begin to charge for access to this site to begin to recover our development costs.

The fee for continued use of the Backtester is $87 per month by credit-card. (Hopefully, you’re making a LOT more money than that from this valuable Backtester service!) Each user will have access to an unlimited number of screens and tests that they created or may create in the future. Access to pubic screens will be added shortly. (We’ve had a problem with people copying them for other websites.) Access to the Backtester will be delayed a few days while we re-configure the software to accommodate these requirements. To subscribe and receive your access code, please call 1-800-491-7119 x31 or from outside the US, 860-242-2111 x31, or email us at backtester@spearreport.com.

Our new version of the Backtester is now in Beta and in a few weeks time, we hope to be allowing all of you to help us test it. The new site is scheduled to go public in September with loads of new features, 30 years of data, a far easier interface, a huge improvement in speed, and our proprietary Performance Weighted Rank (PWR) system. The PWR system ranks stocks by the past performance of the screens that recommend them now.  While the public waits for the fall release, you’ll have FREE access to this software in beta version as part of your paid subscription to the Backtester. When the PWR Backtester is launched publicly, its price for the professional level version will be $147/month. Your rate of just $87/month will be locked in for one year, as long as you maintain your subscription.

We hope you’ve enjoyed and profited immensely from the last nine months of free access to this service provided by The Spear Report.  Please feel free to call us with any questions or concerns, or to order a subscription, at 1-800-491-7119 or from outside the US, 860-242-2111 x31, or email us at backtester@spearreport.com.

Thank you.

Gregory R. Spear
Editor in Chief of The Spear Report, Spear’s Security Industry Analyst, The Options Professor, Spear’s ETF Analyst
President, Independent Investor, Inc.
President, Spear Capital Management, Inc.

If you refuse to complete this task yourself, please provide Mark with the access needed to accomplish it, and in any case, please immediately grant Mark administrative access to Keelix.com, to affect control of all of the Purchased Property.

Task #2: I would also like you to configure the site so that users have access to only their own screens and tests, for now. As soon as this is accomplished, we will let users back in on the subscription fee basis. We will need your help implementing an access system. It can be as simple as giving them a new password when they subscribe by calling us.

Without going into detail about the claims in his email to me, suffice to say I disagree with his claims in this email. This is part blackmail against me personally, and definitively blackmail against users that have built a significant body of research based on my free services.

I finally realize that no amount of politeness will get this relationsship back on track, and send the following response back:

Greg, this is totally unacceptable.

I have tried to be constructive, but you keep making up new demands,
claiming rights and making threats way beyond the contractual parts.
Furthermore, I have reason to suspect that you are not planning on
paying the already defaulted amounts, currently outstanding amounts and
future amounts according to the contract.

You have already defaulted on numerous payments and documentation
promised related to section 6 in the contract which states that you must
pay minimum royalties quarterly. I have yet to receive one statement or
payment from this part of the contract. Your 30-day-late 30-day-warning
notice only applies to purchase payments, as stated in section 8.a.

In my attempt to come to an agreement I have tried to help you and
supply you with what you claim you are entitled to, and I’ve been more
than reasonable so far, but no more.

Lately, you keep claiming that it is my fault that you are not earning
any money; I have brought up the issue of going live with the new
backtester on numerous occations, but have been brushed off because you
are delayed at your end. I’ve tried to help you in negotiations with
third parties and helped your company attract the competency it needed,
that you obviously did not have. It is entirely unreasonable to try to
pin our lack of execution and/or funding on me.

We can keep playing the “you’re in breach”/”I’m in breach” game forever,
but at this time I believe it is a waste of both our time. You keep
making promises about making up for your breaches some time in the
future, but keep demanding guarantees and deliveries from me within a
single day or even hours. You’ve offered concrete dates promising
payments where you did not do as promised, and later only paid parts of
what you had promised to pay in full. At the same time you keep making
up new demands and trying to gain control over what is not yours.

I am still open to negotiations, but since the contract has been
breached a long time ago I do not consider myself bound by its terms.
Until a potential new agreement have been reached, I will no longer
provide any services to your company or its employees.

Furthermore, I have re-checked the sum of the purchase payments and in
sum they are less than the $100.000 required for you to get any license
for the software. That means you have absolutely no rights to any of the
software or purchased property at all, and I ask that you immediately
remove the assets from all your systems.

Differently from what you want, I wanted to leave most of the things “as
is” to give us some time to come to a new agreement. I am not planning
to play this out in public before we have agreed to agree or disagree,
assuming do not force my hand. This is to make sure that the reputation
of our companies and the assets we are fighting over do not get damaged
beyond repair. This approach is sensible and reasonable, but
unfortunately not the way you want to do it.

Please let me know how you want to proceed. If you confirm that you want
to fight it out, I will seek proper representation and decide which
course of action I will proceed with from my end.

After this, Mr. Spear hands over the encrypted file with the user list to his technical guy, getting ready to start broadcasting his blackmail claims against an unsuspecting userbase. As luck would have it, I made a mistake and sent the wrong password, but by now I knew his agenda and saw no reason to try to be constructive any longer.

There are a few more exchanges like the ones shown above, where he makes additional claims and demands, how my action of shutting them out of the free site that I operate (the very action he demanded I should do to all the other users) is causing major financial damage to his business. I reiterate that since the contract has been breached I am under no obligation to deliver any services to him, never mind the fact that a lot of what he demands is outside of the contract anyhow.

On August 11th 2007 I receive a screendump of Gregory Spear filing for arbitration. My response is:

I believe you are lacking some perspective here.

I have already delivered almost everything in the contract, but after
our difficulties and your interests were no longer aligned with mine I
had to protect what I could to avoid irreparable harm to the assets.

You are claiming this course of action effectively ruined your chance of
raising cash. I claim it has and should not. It has effectively stopped
you from sending your blackmail emails – the ones you have tried to
force me to send on your behalf – to the users. The users are as yet
unaware of this transaction and our differences, so no damage has been
done there. Furthermore, your blacklist email is not what is going to
fund your company (your private offering as you call it yourself).

Except for the ability to send the blackmail emails, you already control
everything you would have bought according to the contract on your own
server, and you can run/test/create both screens and backtests locally.
I have even provided you with details and instructions in earlier
emails, and I know that people from within your company has been using
it already.

I suggested a solution where we would simply freeze the contract until
you had secured payment, but you still insisted to fight instead, and
not surprisingly you are claiming damages. I can and will not accept
responsibility for your lack of judgment.

I still plan to deliver according to the contract, assuming you do your
part, and I believe if you really feared _real_ damages (instead of just
claiming damages) you would be more interested in avoiding trouble than
seeking it.

Everything has escalated to the point where I have told you I can and
will no longer proceed without proper representation, and there is
plenty of new information (including claims) from your part that things
that have complicated matters significantly, and without the support of
my advisors I can not accept any way of resolving this that would not
allow me to defend my case properly.

This includes the fraud case that may be handled separately (and
possibly prior to the contract assuming you will admit no such thing),
where you told an employee to contact me anonymously end of 2004 to get
control over data under false pretenses. This data still resides on
servers at your end.

In addition, I email the following:

I have now finally received word back from my lawyer and been told that
anything I am awarded in arbitration, and later on in court if
necessary, will be practically impossible to collect as long as you have
no intention of paying, and that my absolutely best chance of receiving
payment is not to hand over anything else until I have secured payment
from you.

Unless we come to an agreement fairly soon, I will no longer fund
Tradesim AS out of my own pocket and the company will cease to exist,
and I will take my business elsewhere.

Tradesim AS was the company I incorporated for handling the transaction and relationship with Mr. Spear and Independent Investor, Inc. As a limited liability company I estimated that my maximum loss from worst-case losing the case would be the equity in the company, roughly $20.000 . Gregory Spear’s response to this was:

The company may cease to exist, but you cannot make the assets disappear. If the arbitrator says the assets are mine, then I hope that you will not defy a court-enforceable arbitration award to deliver them. As for me, I do not have the luxury of disappearing my company, nor do I have those ethical standards, so if Iose the arbitration, I will abide by the decision.

Keep in mind that except a list of a few hundred emails, Mr. Spear already had all the assets he claimed he did not have. The software had been installed and was operational on his own server in his office. The data, although specifically excluded from the contract, existed both on his server, plus his employee had “received” a copy of that data earlier as previously explained. He also explicitely states that he will abide by any decision by the arbitrator, yet another promise he would later break.


One Response

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  1. Allen Heng said, on February 28, 2011 at 3:51 pm

    He has been billing me $177 every 3 months but did not send me any product.
    I tried to call but no one is at 800 4917119 no call backs
    Is he a fraud

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