George Economou steals $160 million from DryShips

With a pen. And the board signs off on it.

Where is the outrage on this theft? I suppose $160 million is petty change after we find that AIG burned shareholders for $150 billion, and Madoff burned investors for $50 billion, and the taxpayer is getting burned by Uncle Sam, by paying for Wall Street's sins. But let me disgress for a moment to put DryShips theft in perspective, in another theft of shareholder money, by another shipping company, seven years back. Why seven years? Because 7 years ago, Barron's was saying that Madoff's now $50 billion scheme, was a scheme, but no-one would dare question one of their own. And 7 years ago, you had the ACLN shipping scam, that all the shortsellers knew about, but no one from the SEC or the NYSE could find anything wrong. But then again, the NYSE was getting listing fees and transaction volume. And as long as their are fees, the frauds will be overlooked.

Where was the outrage on ACLN in 2001? Remember this big board listed company, that rang the bell of the NYSE while shaking Grasso's hand? This "shipper" was supposedly shipping used cars to Africa, and booking the profits? The SEC said it was an "exceptionally bold and elaborate financial fraud." Yeh it was "elaborate" all right. ACLN showed a picture of someone else's ship on their annual report, with a photo-shopped number, and nobody in Africa had seen any of these cars, and no-one could find the shipping records in Lloyds. Meanwhile, the executives involved in the scam, were dumping $50 million of stock paper in Luxembourg, Lichtenstein and the Netherlands and another $30 million in Monaco. The $117 million that supposedly existed in a bank account in Luxembourg, was as phony as the ships they claimed to own. It was a cut and pasted phony document, but since ACLN conned investors in a private placement, and the NYSE, the gumshoes at the SEC said it was an "exceptionally bold and elaborate financial fraud." Makes you wonder what the gumshoes will call Madoff's $50 billion spin! I can't wait for the euphemisms on that!
http://www.sec.gov/litigation/complaints/comp17776.htm

But back to DryShips latest scam. Supposedly DryShips was going to pay the inflated price of $400 million for four Panamax dry bulk carriers from it's Chairman, George Economou's company. Two of these ships are allegedy being constructed in China, and supposedly DryShips was not able to get financing for these ships. Thus DryShips is walking away, and is going to pay a $55 million dollar fee. Coincidentally, this $55 million is the same amount that DryShips was supposed to receive for selling the M/V Lacerta, of which that buyer has now walked away.

But DryShips, unlike ACLN, actually has cash on it's balance sheet, and George Economou needs to steal this money also. So DryShips is paying $26.5 million for each ship, or $105 million in total, to have the option to acquire these ships by the end of 2009 for the sum of $160 million dollars. So DryShips is paying it's Chairman, $160 million, to have the option of buying ships for $160 million, that may or may not be worth collectively $160 million today.
http://www.sec.gov/Archives/edgar/data/1308858/000131786108000417/f121008drys6k.htm

So let's look at this logically, comparing it with what DryShips ships. If we had a contract to buy 100 million ounces of copper at $4 a pound, and now it's worth less than $1.5 a pound, would anybody in their right mind pay $2 a pound for the right to buy copper at the price of $2 by the end of 2009? And would they pay that price to someone who may or may not actually have the copper? Then why do shareholders allow George Economou to do the same? Here's the largest shareholders of DRYS. Why aren't they complaining? And why doesn't George know if these ships are in Korea or if they are in China? Does he have a magic ship transporter?
http://www.nasdaq.com/asp/Holdings.asp?symbol=DRYS&selected=DRYS&page=holdingssummary

Seven years ago, we had the ACLN scam. Now DRYS is enacting another scam, but this time it is a bit more elaborate and a bit more bold, but this time the bagholders will include banks. But just like last time, the SEC won't have a clue, until even those who are clueless will be clued in.

And the NASDAQ? The couldn't police their former chair in his $50 billion scam. So do you think that they could even follow this?