via Briefing.com - Shorting Against The Box

In the CNBC report of major shareholders of GBN.V shares, Netoltzky's name disappeared, but was still maintained in INK Research. There was a 'sale' or 'short sale' of 15.6m. shares, which is half of Netolitzky's long position. This is also equivalent to Sprott Asset Management's holding, but not quite.

I would say that while Netolitzky was the managing director and openly shorting GBN.V shares, and running a scorched earth policy, he opened a second short position(by shorting against the box) while claiming operations had restarted in August 2013, then shut down again. He settled the 5m. shares short in December of that year, while planning to close the shorting of the box in 2015.

There was no apparent volume to indicate a 15.6m. share short position in August of 2013, thus the only method available was 'shorting against the box' using one's own long position.

Thus the misleading claim that operations were shut down, when in fact operations were ongoing, and the false and misleading requirement of reverse splitting the shares that led to no bid under the stock.(according to the rules, a reverse split could still come in January)

http://apps.cnbc.com/view.asp?country=US&uid=stocks/ownership&symbol=gbn

Under U.S. law:

https://www.briefing.com/investor/learning-center/strategies/Selling-Short-Against-the-Box/

Under Canadian law, it may still be a tax-advantaged strategy. If this position was closed before the new year, then taxes would have to be paid for the 2015 calendar year. But it seems if you arrange for a swap, then tax implications are different, thus being a tax advantaged strategy.

http://www.law-lib.utoronto.ca/law-review/abstract/ultr57_1/57_1_43.htm

The conclusion you can draw is that Netolitzky does not see it as his fiduciary responsibility to add value to the shareholder, and instead, sees the shareholder as someone to be taken advantage of. He uses his minority stranglehold on the company for his personal benefit, rather than the shareholder benefit, as a managing consultant or board member of the swap agreement with Sprott and the mint.

-F6