NHDP - Scott Brown’s Penny Stock Scandal

What We Now Know, Six Days Later

And, What We Don’t Know:  Still NO Financial Disclosure From Scott Brown 
“...there’s the possibility for a securities fraud case to be brought.”  - Former SEC Enforcement Official 

Concord, NH—This week, new disclosures about Scott Brown’s $1.3 million advisory role with a shady beauty supply company turned arms manufacturer, raised serious questions about fraudulent behavior that could spark a securities investigation. No wonder Brown ran from reporters trying to ask him about the company as he formally filed his candidacy.

There are very serious questions surrounding Scott Brown's role in this shady company and those questions get more serious by the day as new information about wrongdoing continues to emerge," said New Hampshire Democratic Party Communications Director Julie McClain. "If Scott Brown has nothing to hide, he should come forward, answering these serious questions, and release his personal financial disclosure form." 

Two hours after Brown defended Global Digital Solutions, Inc. as a “start-up” that is “trying to create jobs,” he took a 180 and resigned from the Advisory Board of this shady company, a one-time beauty supply company, then tech company, then arms manufacturer with no products, no manufacturing, and run by executives sued for securities fraud.

Here’s a timeline of the stories that exposed Scott Brown’s close ties to this company and its phony $95 million deal.
Sunday, June 1st:
Boston Globe
Scott Brown got big stake in obscure Florida firm 
Accountants said in interviews that Global Digital’s filings raise a number of warning signs for investors, including its varying business model and lack of actual products. The firm reported it has four employees, $271,776 in cash and had $19.7 million in losses as of March 31. “Is it a real company with customers?” said Howard M. Schilit, author of the book “Financial Shenanigans: How to Detect Accounting Gimmicks & Fraud in Financial Reports.” “This is a very, very risky company for anybody to invest.”
Monday, June 2nd:
Fox 25
Scott Brown's Penny Stock Debacle
This obviously raises questions about judgment… this is not a good sign for Scott Brown. Reflects on his judgment.”
“Is there more to come, given the background of this company? It seems to be sketchy.”
“The numbers are eye-popping in terms of $1.3 million in stock. You have to wonder what voters think.”
Concord Monitor
Editorial: Brown needs to lift the veil on his finances
"To wait until a month before voters must choose the Republican who will challenge Sen. Jeanne Shaheen is the worst kind of political sleight of hand. Candidates who resist providing voters with information they need to make an informed decision about their representation in Washington are not worthy of the job."
Scott Brown’s friends at Global Digital Solutions 
“Global Digital Solutions Inc. has ‘no revenue, no patents, no trademarks, no manufacturing facilities, and no experience developing weapons.’ But that’s not the unusual part, either. Rather, what seems odd about GDSI’s enterprise is the fact that it’s partnered with former Sen. Scott Brown (R-Mass.), currently running for the Senate in his new home state of New Hampshire.”
Union Leader
Democrats questioning Scott Brown stock deal
“Campaign sources would not comment on whether Brown has sold any of the stock or what restrictionsmay exist on converting the stock to cash, referring all questions to a GDSI spokesman who did not respond to requests for comment.”
Tuesday, June 3rd:
Nashua Telegraph
Editorial: Scott Brown’s Rose Garden strategy 
Brown is employing the old Rose Garden strategy used for decades by incumbent presidents to hide from opponents. Except not only is Brown not the incumbent, but the longer he evades the other candidates – Karen Testerman, Jim Rubens and Bob Smith, to name three – and keeps his finances secret, the more his candidacy seems as vacant as the company on whose advisory board he sits.
Brown Defends Advisory Role With Obscure Florida Firm
In exchange for a role on the company's advisory board last year, Brown received $1.3 million worth of stock, which has since dropped considerably in value.

Huffington Post
Scott Brown Advises Firm Whose Executives Were Sued For Securities Fraud 
“This company is a total sham, even within the league of penny stocks. There is nothing behind the curtain,” said founder of White Mountain Investment and former State Senator Harold Janeway. “Global Digital Solutions is neither global, digital, nor solving anything.”[…] Clearly Scott Brown didn't do even the most rudimentary homework before joining the 'Advisory Board.'"


Brown touts energy policy in Windham

“Brown became defensive when a reporter questioned if it were a ‘legitimate company’… He did not elaborate about the stock and his campaign spokeswoman said he could not answer any more questions. Brown then bought a slice of cheese pizza and a bottled drink before leaving with his staff.”
LA Times
Ex-Sen. Scott Brown, business doofus

But what, exactly, is he advising it about? The broader question for voters in New England is: Why in heaven's name is Brown affiliating himself with this outfit? To ask the question is to answer it.  
Wednesday, June 4th:

News at 5:30

The scheme is where you sell stock in a company that doesn't do anything and the people who invested in it are left with nothing, which Brown's opponents say he could have found out if he'd done just a little bit of research, adding that simply resigning from the board does not make up for his bad judgement. 

Scott Brown Resigns from Florida Company Board Amid Criticism
“Brown referred to Global Digital on Wednesday as a ‘start-up . . . going through transition,’ even though it was created 19 years ago. He has declined to say why he joined the board, how he came to know the company’s executives, and what level of scrutiny he gave its business activities. Analysts said the issue — and Brown’s handling of it — constituted a major political stumble and could have ramifications for his bid to win the Republican primary and the right to face the Democratic incumbent, Senator Jeanne Shaheen, in November.”
Scott Brown Files Candidacy And Resigns From Florida Company
“The company  awarded Brown 1.3 million dollars worth of stock options exchange for advice. Brown declined to characterize this advice, nor would he say if he planned to continue his relationship to the company during the campaign. ‘Yeah, I’ll make any decisions known when the time is appropriate.’ “About 90 minutes later, Brown resigned from the company and relinquished his stock options.  In a statement Brown called his continued role at Global Digital Solutions an ‘unnecessary and unwanted distraction.’

Keene Sentinel

Scott Brown files for candidacy, visits Jaffrey to talk energy 

Brown referred reporters to his campaign statements about the company. But by late Wednesday afternoon, he announced he was resigning from the company and giving up his stock.“It’s clear from recent media reports that my continued role with the company would be an unnecessary and unwanted distraction,” Brown said in a statement. “I want the people of New Hampshire to know they are my top priority.” 
Thursday, June 5th:
 Boston Globe
Scott Brown cuts ties to Florida company
 Republican Scott Brown abruptly resigned Wednesday from an obscure Florida company and gave up stock initially valued at $1.3 million after facing a barrage of questions about his role as a “senior adviser,” a controversy that had dogged his US Senate campaign in New Hampshire. Brown’s resignation from the advisory board of Global Digital Solutions Inc. was announced about two hours after a news media event in the state’s capital designed to highlight his official entry into the race. He was repeatedly challenged by reporters in Concord seeking answers about what he had done to earn the stock grant, and whether he had scrutinized the company before lending it his name.
Scott Brown resigns from Florida firearm manufacturer
“The Republican candidate stuck to his talking points, dismissing the notion that there’s any kind of controversy and insisting there’s nothing untoward about his work with Global Digital Solutions Inc., a former beauty supply company with no products, no revenue, and no manufacturing facilities.  And about two hours later, Brown resigned from the company.”
Boston Magazine
Scott Brown’s Private Sector Life Is Haunting Him 
It seems, more than ever, that Brown is seeing the consequences of having considered a life that didn’t need to be accounted for to the public before turning to his latest office in New Hampshire.
Kenne Sentinel 

Washington Post’s The Fix

Scott Brown’s tenure as adviser to mysterious company worked out poorly for everyone

When former- (and, he hopes, future-) Sen. Scott Brown (R) signed on as an adviser to Global Digital Solutions, Inc. last September, it may have seemed like the standard sort of politician-makes-a-few-bucks agreement that we've all grown accustomed to. Over the past five days, though, that agreement has dogged Brown's campaign for the Republican Senate nomination in New Hampshire for days and sliced GDSI's stock price by nearly a fifth. 

Friday, June 6th:
Boston Globe

New doubt aboutfirm Scott Brown advised

“If those statements aren’t true, there’s the possibility for a securities fraud case to be brought,” said Thomas A. Sporkin, a former SEC enforcement official, now in private practice with BuckleySandler in Washington.
Boston Herald

Cashman: U.S. Senate seat means more to Scott Brown than $500G 

The issue is when you walk away from $600,000 when the average New Hampshire resident is losing their health insurance and trying to make a living,” Smith added. “That kind of candidate doesn’t identify with the people of New Hampshire.”

Boston Globe

A penny for your thoughts on Scott Brown 

“Any politician that would join the board of a penny stock company is showing signs of great naivete,” said Clem Chambers, whose British company runs InvestorsHub, a giant online forum for penny stocks. “It’s a serious lapse of personal judgment.” Brown was clearly out to make a fast buck, trading on his credentials and hoping investors would buy low and sell high. Now it’s time for voters to beware.

Boston Globe

Good week, bad week

Bad week Scott Brown: coping with an ‘unwanted distraction’ After facing questions earlier Wednesday about his involvement with a Florida penny stock company, Scott Brown made an announcement: He was severing ties with Global Digital Solutions Inc. and relinquishing his rights to company stock, calling the issue “an unnecessary and unwanted distraction.” Indeed, the attention from the GDSI story dominated the news this week, overshadowing Brown’s official filing for the US Senate race.