About The Spear Report, Independent Investor and Gregory Spear

Getting started

As mentioned we hammer out the details of the contract during Summer 2006. We agree on the major points. Gregory Spear uses a contract that he had used with another company earlier. He wants stuff in, I want stuff out. We do not use lawyers; we do the contract legwork ourselves. In retrospect, probably not the best of ideas. He would acquire non-exclusive rights to my software (the stuff I had been building and offering for free through my own website), pluss two years of my time, with an option for extension. For this he would pay a total of $20.000 per month, a total of $600.000 over two years. I would deliver products, improved versions of what he had already been using (they admitted being users of my website for some time). In June 2006 it seemed likely we would be working together, so I start helping Gregory Spear out.

At this time he had little or no technical expertise in-house, so I helped him ordering some equipment and recruiting local talent that he needed to run his operation. I started working on new software and did demos for a well known media brand in the US who Gregory Spear had brought to the table. As soon as he got his server ordered, I remotely installed the machine and put my software and data on it. At this point it’s also worth mentioning that I had made sure the data I had collected was explicitly excluded from the contract, i.e. he did not own that data. This was because I had not verified the legal status of redistributing data from disks I had purchased and cataloged, and regardless I would prefer to work on new professional data. I did upload data to the server to have a starting point for the new software I was developing, but only as a temporary measure.

Also worth mentioning about the contract; the contract was set up as a contract between two limited liability companies. His, Independent Investor, Inc, and my newly formed Tradesim AS. Since I would be working from  Norway, Gregory Spear had the options to either register (and file periodic reports) as an employer in Norway, or that I would set up a legal entity for him that I could work for. We agreed the latter would be better, and I also believed it would be more secure on my part; the “risk” of lawsuits etc. was limited to the equity in the norwegian limited liability company. I would later learn that this assumption is false, but more on that later.

By end of September, the server is up and running with my data and a first running version of the new software I had been working on on my own with my own data. Then I got the first indication that Gregory Spear, despite wanting to enter the software industry, knew very little about what he was getting into. He has been (and still does) market his “patent pending” (well, not quite, but more on that later as well) technology for generating stock picks, named PWR (“power”) and Consensus. This was technology that he had been very secretive about, and I had received no details about it. When I first told him the software was up and running, he got into the menus and then wondered where he would find his PWR and Concensus screens. I politely informed him that he hadn’t told me what they were, and that until he did, implementing them would be hard to do. Regardless, the contract was signed and shipped that very same day.

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