Why do you have to make a Claim?
Some people has been calling SLIB dishonest and Ponzi due to having to make a claim, and partial conversion to shares. This was explained in the initial press release that why is this process necessary. Here is some clarifications to that.
Biggest reason of all for the claims is that there is a bunch of accounts by people who have quit SL, banned from SL, conducted fraudulent activity etc. If we directly payout each account balance as they are to every account happens several things:
- Those who condoned fraudulent activities would go unpunished, maybe even rewarded for their actions.
- Those who have quit SL or been banned from SL isn’t exactly capable of collecting the money, thus Linden Lab would pocket these proceeds.
There you go, the biggest reasons for this practice to be taken into use.
Fraudulent activity? These include people who deposited stolen L$ or L$ purchased with stolen CC, phished paypal account etc. Furthermore, when we had account to account transfers enabled for the brief period of few weeks, people used it for money laundering, and as an “insurance”. A bunch of no payment info on file accounts deposited, then transferred to a single person, who immediately withdraw everything and never returned. While, there’s no hard evidence of fraud happening on those accounts, there’s enough subjective and alarm bells triggered. Especially, when all of the no payment info on file accounts were fresh, and never used again. Some of these left some L$ behind, some left the money for a little bit of time to gain some interest. The amount on these accounts is minimal, however, some of these have still tried to make a claim, without solving the case initially first.
All of those who were catched has neglected to make any contact attempt and get their account unfrozen in all these months, but all of sudden a claim emerges even tho when they queried balance they got account frozen message telling them to contact us? Smells fishy.
Banned or Quitted SL, is more major group, these people did something bad and got banned by Linden Lab, or have long forgotten about SL.
Communication is a key, and every active account has been contacted via an automated IM message instructing them to make a claim and read the press release, in order to gain access to their funds.
Deadline? Deadline has to exist so we can make the shares hit the trading floor, and know that the process is done and over with in due time. It’s highly unlikely that there will be even a single exception to the deadline.
There’s multiple reasons for the deadline also, foremost is to avoid printing new shares after SLIB has hit the trading floor, thus devaluating the share value afterwards, and decreasing investor confidence. It’s very urgent and important that a high level of investor confidence is maintained. As has been explained, we are unable to buy back all shares at once, thus investor confidence is a major key in establishing a base line on which people are able to sell their shares without any loss or at a minimal loss, and in the best case scenario, higher than 1L$/Share. Higher than 1L$/share is likely figure after a major portion has been bought back.
Also, if we don’t have a deadline, we have to get back to the process time after time, create more shares, do alternative compensations etc. Generally causing a major hussle and grief. Even bigger factor is the human nature, basic psychology, if there isn’t any deadline, people will keep postponing and postponing, and at worst, we have to keep printing new shares even a year from now. You wouldn’t want that, now would you?
Benefit for those who did make a claim
All this is in the end to ensure beneficial reimbursement plan for those who actually make their claim, as that means less shares to buy back, higher net asset value per share (NAVPS) etc. essentially ensuring higher share price, thus higher value for our depositors.
It wouldn’t be that honest to just convert everything in shares, atleast now depositors have choices and options to choose from. What do they take for their money? SLIB Shares? SLIB RE Shares? Land? Pay tier fees? Pay rentals? All that is an option.
Hmm. Sounds fishy to me. It is the people who deposited their money’s money, not yours or SLIB’s money. You should do a direct payment to each avatar or at least leave the deadline open indefinitely. Maybe someone invested their hard earned L$ with you and went on a long vacation.
Also, the whole IPO thing is shady. You’re just extending the problem onto even more people. In all likelihood, LL will ban stock exchanges very shortly, if they have not already. What I don’t understand is: if you made sound investments and had this big profit going that you claimed every week, why not simply slowly divest and sell all the investments and slowly pay everyone back? Why the need for these shady shifts to IPO funds and stocks? Sound like Ginko all over again.
You should be careful as LL states they will assist in any lawsuits against bankers not paying their depositors back.
Comment by Joe Mama — January 28, 2008 @ 6:10 pm
How is it that out of te 12 million deposited, SLIB still owed over 10 million to their depositors? Try liquidating things. You can’t pass on the debt you owe your depositors to others via an IPO noone is going to even buy and keep the 10 million for yourself. You advertised youself as “safe and insured by the Rock”. Pay us back or I’m getting a lawyer.
Comment by Jenny — January 28, 2008 @ 6:22 pm
I have to say that NEITHER of you actually seemingly did read the press release.
The plan is to slowly repay back, without selling of the companies, only the portions which generates too small profit.
Secondly, the figure on website is old, very old. A lot more has been reimbursed since withdrawals were frozen. This was announced on the website.
We haven’t bankrupted, and The Rock can’t cover if a higher up kills a whole sector. That’s how insurances work, i hate to say it, but that’s how insurance is
And as for extending to other people? Sure, in that portion you are correct, people can opt out BEFORE i’ve bought their shares back.
I really recommend you guys to read the initial press release: http://blog.sl-investors-bank.com/2008/01/23/slib-reimbursement-plan/
Or atleast, use your real identity if you want to make critique.
Comment by Tyrian Camilo — January 28, 2008 @ 8:59 pm
“Communication is a key.” Truer words were never spoken. Frankly my little bank adopted a policy early on that less is better. I know it is frustrating for my banking community to understand all the efforts and idiosyncrasies it takes to operate an interest bearing account, and it may seem as if I want to hide information, but really I might be trying to avoid relaying information that I myself may not understand. For example, what are the reasons a server would go down? All a patron wants to know is “When can I get my money?” In my little RL banking experience the word “TRUST” was assumed to be a description, or an action of financial institutions. Yes, it may have been a advertising plea generated at a point in history when stock markets crashed and poverty rampaged.
We could stand some of that now. We could stand for our banking communities to support our efforts to get this whole thing right by Linden measures. We could stand for the Lindens themselves to look at what we do as a service for residents, and see it is truly a convenience. We could stand a little TRUST.
Comment by Cliff — January 29, 2008 @ 4:01 pm
The Rock pays out bankruptcy certificates only. During the month of January, even tough there was lack of cash availability due to the ban, The Rock paid out Banca d’Italia and KJL bankruptcies taking the money from our non invested cash reserves as per our terms.
In the case of SLIB and other important banks of SL, we are not facing bankruptcy but a very strong commitment from these institutions to try to pay back their customers. We consider these examples a prove that not everybody is “Ponzi†(It was much easier to run away like many others did before).
Also, The Rock was covering approximately 10% of SLIB total deposits which means that, you’ll probably have higher expectancy in a conversion plan.
Best regards,
Eliale Morigi
Comment by Eliale Morigi — January 29, 2008 @ 5:52 pm
I don’t profess to understand the working out of your financial world or criticise you for anything that has happened, although my understanding of the word insurance has been severely redefined, maybe in SL it means virtually insured, however whilst banking with your company I had a HUD that displayed the amount of my savings with you, is there any way I can see MY shares in a similar fashion or how they are performing with the same or similar HUD? … Maybe it would trigger reinvestment and confidence if people could visually see their profits as they did before.
Comment by Stuart Leominster — February 4, 2008 @ 2:13 pm