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Letter Re Ryan Schulke

The document is an open letter urging the SEC and DOJ to interview Ryan Schulke, CEO of Fluent (FLNT), about potential fraud committed by Phillip Frost, Michael Brauser, Barry Honig, and other members of the "Frost gang". It provides background on the mergers and splits between IDI, Fluent, and Cogint, suggesting Schulke may have valuable insider knowledge as he was with the companies throughout. It also flags several areas as warranting investigation, such as the current valuations of FLNT and RDVT, Brauser's control of RDVT, and Frost's ongoing involvement at FLNT. The letter encourages prompt action given statutes of limitations for securities fraud charges.

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Lee Pederson
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127 views3 pages

Letter Re Ryan Schulke

The document is an open letter urging the SEC and DOJ to interview Ryan Schulke, CEO of Fluent (FLNT), about potential fraud committed by Phillip Frost, Michael Brauser, Barry Honig, and other members of the "Frost gang". It provides background on the mergers and splits between IDI, Fluent, and Cogint, suggesting Schulke may have valuable insider knowledge as he was with the companies throughout. It also flags several areas as warranting investigation, such as the current valuations of FLNT and RDVT, Brauser's control of RDVT, and Frost's ongoing involvement at FLNT. The letter encourages prompt action given statutes of limitations for securities fraud charges.

Uploaded by

Lee Pederson
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PDF, TXT or read online on Scribd
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Open letter to the SEC and DOJ re: Frost gang frauds

at IDI/Fluent/Cogint(COGT)/FLNT/RDVT

November 17, 2019

Dear agents of the SEC and DOJ,

I am writing to urge you to interview Ryan Schulke, CEO of Fluent (FLNT).


Mr. Schulke is in a unique position to provide information about Phillip Frost,
Michael Brauser, Barry Honig, and other members of the Frost gang. Schulke’s
biography appears on the FLNT website:
https://www.fluentco.com/meet-our-team/
I have written to you before on numerous occasions about IDI/Fluent/
Cogint/FLNT/RDVT (the “IDI Group” of Frost gang companies). IDI was a fraud
run by Honig and Brauser. IDI may have come close to bringing down the Frost
gang after an article by a writer called the “Pumpstopper” was published on July
21, 2015. Soon after the Pumpstopper article, the Frost gang changed the IDI
narrative by merging IDI with Fluent into a company called Cogint (COGT). The
formation of COGT was facilitated with a $47 million bailout provided by Phillip
Frost. COGT later split back into Fluent (FLNT) and Red Violet (RDVT).
Ryan Schulke was a co-founder of Fluent, and he has been with the
company through the merger with IDI and the subsequent split. Schulke is now the
CEO of FLNT. He went through Fluent’s merger with a Frost gang company
(IDI), shared control of Cogint for several years with Honig, Brauser and Frost,
and now heads a company where Frost still owns a sizable percentage of the
shares. Assuming that Schulke has not been co-opted into the Frost gang, he
probably knows as much about the psychology, behavior and specific acts of the
main Frost gang members as any Frost gang nonmember.
From personal experience, I know that it is possible to unknowingly get
sucked into the middle of the Frost gang’s frauds without joining the gang. During
the period of 2011 to early 2012 at BioZone, I believed the myth that Phillip Frost
was an honest businessman, only to pay a steep price for that belief. Though I
have no way of knowing, Schulke may have been similarly deceived. After all,

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deception is a core method of the Frost gang. The break-up of COGT into FLNT
and RDVT hints that Schulke had differences with the Frost gang. Therefore, I am
willing to give Schulke the benefit of the doubt and assume that he is now trying to
run FLNT as an honest company.
One of the many aspects of the IDI Group that warrants a close look is the
current valuations of FLNT and RDVT. FLNT seems to be undervalued while the
share price of RDVT seems to be grossly inflated. This may be a result of market
manipulation, since that is another core method of the Frost gang.
Another area that needs to be looked into is Brauser’s control of RDVT.
Though Brauser resigned as executive chairman of RDVT after the SEC filed ​SEC
v Honig​, Brauser apparently still controls day-to-day operations at RDVT.
Yet another area of concern is RDVT’s recent public offering. Despite ​SEC
v Honig​ putting a damper on Frost gang P&D frauds at new companies, the Frost
gang continues to sell new shares at Frost gang companies with the cooperation of
the SEC. This issue requires investigation of both RDVT and the SEC.
Frost’s continuing involvement at FLNT also deserves attention.

Both the SEC and DOJ have a history of procrastination with enforcing the
law against the Frost gang. The first sentencing of a Frost-Honig gang associate
(Imran Husain) just took place for criminal acts that began in 2008. ​SEC v Honig
was filed just a couple weeks before the SOL for the BioZone P&D would have
expired. The DOJ has not announced criminal charges for any of the frauds
described in ​SEC v Honig,​ nor has it announced criminal charges for any Frost
gang frauds outside of the now-ancient YesDTC P&D.
Federal securities fraud has a five year statute of limitations for both civil
and criminal charges. Both the SEC and DOJ are now procrastinating on the filing
of charges for recent Frost gang P&Ds like COOL/PTE, RIOT and AWSM, where
the frauds are easily provable, but the SOLs are a long ways away from expiring.
However, the original frauds at the IDI Group are now coming up close to the
SOL. It is time for the SEC and DOJ to act, and interviewing Ryan Schulke is an
obvious and necessary part of effective enforcement action against the Frost gang.

This letter is posted on Scribd, with a link from Twitter.

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Regards,

Lee Pederson

To:
SEC OIG

Bcc:
SEC agents
DOJ agents (FBI and Assistant US Attorneys)
Journalists and business writers
Other interested persons

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