UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): August 1,
2008
MERRIMAN
CURHAN FORD GROUP, INC.
(Exact
Name of Registrant as Specified in Charter)
|
Delaware
(State
or Other Jurisdiction
of
Incorporation)
|
001-15831
(Commission
File Number)
|
11-2936371
(IRS
Employer
Identification
No.)
|
|
600
California Street, 9th Floor,
San
Francisco, California
(
Address of Principal Executive Offices)
|
94108
(Zip
Code)
|
Registrant's
telephone number, including area code
(415) 248-5600
(Former
Name or Former Address, if Changed Since Last Report)
Check
the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
As
with
the previous suits, the lenders allege that Del Biaggio defaulted on loans
that
were collateralized by several of the Firm’s retail client securities accounts
under account control agreements allegedly executed by a former Firm employee.
On the basis of these allegations, the lenders assert various claims against
the
Firm and others. The Firm believes it has valid defenses and will defend these
cases vigorously. If any account control agreement alleged in these cases was
in
fact executed by the former employee, the former employee did so without
authority or approval of the Firm.
The
Firm
also has been named in a lawsuit brought by a lender to Del Biaggio alleging
that the Firm entered into an account control agreement for an account that
Del Biaggio had previously pledged to another lender.
The
account pledged was in the name of Del Biaggio. Plaintiff has brought
claims for, among other things, fraud arising out of the failure to disclose
the
alleged previous pledge. Plaintiff alleges damages in the amount of $1.75
million. The Firm believes it has valid defenses and will defend this case
vigorously.
In
addition to the lawsuits identified above, the Firm has been named in three
separate lawsuits in which plaintiffs allege, among other things, fraud based
on
a former employee of the Firm having induced plaintiffs into making loans to
Del
Biaggio and certain related entities including Sand Hill Capital Partners III.
These matters do not involve account control agreements. Plaintiffs in these
lawsuits allege damages in excess of $4 million. In one of these lawsuits,
the
lender-plaintiff was a former client of the Firm. Other clients also may have
made loans to Del Biaggio and Sand Hill Capital Partners III. If the former
employee in fact induced any Firm client into making these loans, he acted
without authority or approval by the Firm. The Firm believes that these three
cases are without merit and it intends to defend them vigorously.
The
Firm
continues to cooperate with the SEC and United States Attorney related to these
events and other matters, as previously disclosed.
On
June
6, 2008, Del Biaggio declared voluntary Chapter 11 bankruptcy. The matter is
currently pending in the Bankruptcy Court for the Northern District of
California. On June 23, Del Biaggio made a filing in the bankruptcy matter
listing total assets of $53,869,057.70 and liabilities of $88,435,604.00. Del
Biaggio indicated in a separate filing that his financial disclosures may
contain material errors. Each lender that has brought suit against the Firm
in
the cases mentioned above has been identified as a creditor in the bankruptcy
matter. The Firm believes that these lenders may have recourse through the
bankruptcy process, and any amounts recovered in the bankruptcy matter may
reduce the amount of the lenders’ claims against the Firm in the civil
lawsuits.
The
Firm
has completed a thorough examination of its underlying business model. As a
result of this examination, the firm will continue to focus on growing its
recurring revenue business lines, as well as strengthen its core institutional
brokerage and investment banking business units. It has begun to phase out
its
high-net-worth client retail brokerage business. The high-net-worth client
business accounted for less than 1% of the Firm’s revenue in 2007. These steps
address changing marketplace conditions and will allow the Firm to further
concentrate on serving institutional and corporate clients and to provide
additional resources to support its ethical, hardworking and talented
workforce.
SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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MERRIMAN
CURHAN FORD GROUP, INC.
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Date:
August 1, 2008
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By: |
/s/ D.
JONATHAN MERRIMAN |
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D.
Jonathan Merriman |
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Chief
Executive Officer
|