Can you say “ponzi”? @digitalmusicnws: I’m a Former PledgeMusic Employee. Allow Me to Spill a Few Beans…

[Editor Charlie sez:  here’s the ponzi scheme evidence, if true]

6. A&R and Campaign Managers were only told to “launch launch launch” new campaigns so that payments could be distributed to other projects. They very well knew that they were unable to pay artists, but needed to launch new campaigns in order to gain more revenue. Employees knew that this was not ethical, but at the end of the day had no choice. 

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@hypebot: How To Contact The Court If PledgeMusic Owes You Money plus Confirmation That An Investigation Is Underway

Attorney and artist advocate Chris Castle received a confirmation via tweet that the Official Receiver was also tasked with determining “the cause of its failure.” Further, “if unacceptable conduct is identified she can seek to have the directors banned from running other companies for up to 15 years.” That’s not exactly the punishment that those affected had hoped for it wrongdoing is proven but also does not rule out further legal or government action against the PledgeMusic board and executives.

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@stuartdredge: PledgeMusic founder responds to criticism over liquidation

PledgeMusic founder Benji Rogers has responded to criticism of the crowdfunding company’s liquidation this week in London. That criticism was based on the fact that Pledge had filed papers for its wind-up hearing in June, at a point when artists were being led to believe a sale might still be possible for the company….

Meanwhile, people are digging back into PledgeMusic’s past financial results – this blog post on music blog My Emu is Emo for example – to explore how and when it all started to go wrong.

Read the post on MusicAlly

@cmu: Official Receiver provides updates on PledgeMusic liquidation

US websites Music Technology Policy and The Trichordist both tweeted the Official Receiver. The former pointed out that artists in multiple countries have likely been affected by the collapse of Pledge, many of whom won’t be able to make physical representations in the UK. The latter asked whether affected artists should be approaching the Crown Prosecution Service as well as the Official Receiver demanding some kind of criminal investigation.

Confirming its process and powers, the Official Receiver tweeted back: “Following the winding up of PledgeMusic, the Official Receiver has been appointed as liquidator and will now determine the cause of its failure. If unacceptable conduct is identified she can seek to have the directors banned from running other companies for up to fifteen years”.

Read the post on Complete Music Update

@thetrichorist: Pledge Music Fiasco is Weirder Than You Think PT II: Who is behind Panama company Dolan Services Inc?

It’s been awfully quiet over at Pledge Music.  After declaring in May they were going into administration (UK equivalent of bankruptcy) I can find no reporting that indicates Pledge has even started the process.

Here is the current website notice. Completely lacking in specifics. Nothing about administration. Maybe this is normal. Maybe it’s not. I will say that publicly available documents indicate the financial history of Pledge Music is extraordinarily complex.  And if I were an administrator or creditor I would have a lot of questions. This could be the reason for the delay.

My colleague here at the Trichordist, David Lowery published this extensive overview of the Pledge Music fiasco two months ago. In the article he goes beyond the SEC charges against one of Pledge Music’s current owners and looks into the strange structure of the company; the multiple sub companies; the related entities; the offshore “panama papers” shell companies; and an SPIV (special purpose investment vehicle).  Quite a complex structure for a company of its size.

Go read the piece: The Pledge Music Fiasco is Weirder Than You Think.

I’ve been looking at another loose end with Pledge Music.  Who was the original investor that funded the company?  Here is an excerpt of an April 2015 interview that Benji Roger (Co-founder of Pledge Music) did with Andrew Warner of Mixergy.

Andrew: Where did you find the angel investors who funded this and allowed you to actually bring it to fruition.

Benji: It was somebody I knew. I basically pitched them the idea and I said, “Who should I send this to?” I sent out, I think, five business plans originally and I said, “Who would you send this to? Who do you think this is a good idea for?” One guy wrote back and he was like, “I love this. This reminds me of how Obama was elected.”

Andrew: Who was the guy?

Benji: He was just a friend. He’s a private guy. He doesn’t want to–

Andrew: He doesn’t want–can you tell us what he does for a living that he can suddenly do this? Is he a musician? Is he an entrepreneur?

Benji: No. He’s in a totally other space. He’s in a totally other space. He’s a very private lad. I don’t want to–

Andrew: But you can’t even say what his background is?

Benji: No. He went to business school.

Andrew: That’s it?

Benji: That’s what I will say.

Andrew: Is it his dad’s money? His parents money?

Benji: No. It’s his.

Interesting.  Go to the UK website where UK companies file required corporate documents. Look up Pledge Music LTD. By process of elimination (all the other original investors are listed by real name) it seems the silent investor is represented by an anonymous Panamanian company called Dolan Services Inc. This is from the 2010 Shareholder list.

Read the post on The Trichordist