Universal Currency technology providers GETS has given IRTA notice that they will suspend trading and terminate their contract effective in 14 days (September 11, 2014). In this post I give commentary on the significance of this move, how it came about and what options IRTA has moving forward. This is a huge call on the part of GETS and will have significant ramifications for many people in the industry, short and mid-term. It’s not necessarily a terminal situation for the currency but it could be if the crisis is not managed well.
Universal Currency is the flagship of IRTA, the International Reciprocal Trade Association, an Association that has claimed to represent the Barter/Trade Exchange industry globally for close to three decades. In fact it has traditionally had a North American focus and it has had varying levels of success in representing the industry – in recent years it has been seen to be more of an old-boys’ network than what it was supposed to be but it has continued to conduct ‘business’ over the years under various leadership styles and personalities.
Their international trading platform (Universal Currency) has been mismanaged in the last few years or so and has suffered serious inflation with toxic and aged debt, with a few minor indisretions in the past, then to a few underhand practices to hide reality under the current Administrators.
I’ve blogged extensively about the situation consistently telling the same message – something is wrong, something must be done, demanding that trading be suspended pending an ethical resolution to the matters. I did this in the face of strong opposition from the perpetrators of the fraud – their defensiveness spilled over into outright defamation, and that led to my threat to sue the technology provider if they didn’t suspend the capacity to trade.
The actions of Richard Logie and Linda Sim of GETS Technology today are worthy of note. It was a big call and I believe the right one.
This is their communication”
Notice of Termination of the GETS Technology Service Agreement 28-08-2014 (Sent Registered)
Dear Annette and IRTA Board
cc Carl Steinbrenner
cc IRTA Board of Directors
Notice of Termination of the GETS Technology Service Agreement
We have taken legal advice, and hereby give you notice that we wish to terminate our contract immediately with IRTA’s Universal Currency Inc.
On the grounds of
- Clause 9. (ix) GSR Performance Obligations.
- Clause 19. (iii) Termination and Consequences of Termination.
As you will know, a string of blogs from Dennis Smith (www.dennis.co.nz) has made accusations of misconduct in the management of Universal Currency (UC) and culminated in a threat to include GETS Technology as defendants in a class action lawsuit (http://www.dennis.co.nz/2014/08/i-must-sue-irta/).
On the advice of our legal representatives they have recommended that we carry out our own internal investigations.
Having completed this summary internal audit of Universal Currency we too have concerns over many aspects of the account conduct and activities of Universal Currency Inc.
Based on these summary findings we strongly recommend to the board of IRTA (as the current custodians of the UC ) to consider suspending all trading activity conducted through the Universal Currency Inc. trading platform, and initiate a full independent audit of Universal Currency Inc. and all its activities forthwith.
We await your instructions if you wish to make UC (www.ucci.biz ) read only thus suspending all trading activity until further notice. This will allow you to conduct your own audit.
We also strongly recommend that any remedial actions be transparent and made available to the IRTA/UC members to help rebuild the trust and confidence in the brand IRTA/UC.
We will of course willingly assist all investigative and government agencies as per our service agreement (clause 9) in proving all the necessary data structures, logs and files for them to complete a full investigative audit.
As per previous transition to Virtual Barter we will advise how to extract the data from the GETS Technology platform. We will arrange to disable all trading functions (read only access) in 14 days (effectively locking the data set) or subject to negotiation.
We will arrange to cease active trading on the GETS Platform www.ucci.biz of the current data set at 12:00 GMT on the 11th-September -2014, or subject to negotiation.
We have today:
1. Deposited a copy of the Summary Audit Report and Universal Currency data with our solicitors [name & address withheld]
2. Instructed our solicitors to issue a copy of the data set and summary audit on request to Carl Steinbrenner only as per our service agreement (clause 9)
3. Instructed our solicitors to issue a copy of the data set and summary audit on request to investigative and/or government agencies under court order only as per our service agreement (clause 9)
This decision has been forced upon us based on information in the public domain and the results of our summary findings, this decision was not taken lightly.
Richard Logie and Linda Sim
In some ways I have painted them into a corner. As I learned more and more, blogged more and more, and got closer and closer to the unpleasant truth they would have watched with mixed emotions – on the one hand they must have known that I was onto something – on the other hand they were watching as their reputation, friendships and business opportunities could or may even be decimated if they were seen to do something that was not in IRTA or UC’s best interest.
I gave them advance warning of my intention to sue, granted not a lot of time, but it was enough for them to gather their thoughts, take legal advice, weigh their options and work out what was the best thing. I’m glad that they have terminated their agreement. I’m pleased for them because they can walk with their heads high knowing that they did the honourable thing; that they did ‘right’ by their client and took the decision to terminate only when they had no real choice in the matter.
It was a Hobson’s choice really, for with my stated intention to sue IRTA for defamation as well as to establish a class action on behalf of the UC Members, the threat of being sued was very real.
Their choice of ethics over economics could possibly hurt them in the short term, but in the mid to long term they are bound to win, for the industry will always know them as the guys that called it right when they said with their action.
I don’t know how big the fraud is. It could be a couple of hundred thousand or a million – I suspect that it’s somewhere in between. The figures that the members can see indicate something around a quarter of a million to me but nobody can tell without a properly balanced system and a full audit. The other thing is . . . what is fraud anyway? If a Board Member has high debt and hasn’t sold anything at all for years, therefore is in clear breach of the UC rules – is that bad debt? Is that toxic debt? Is that acceptable? Is that fraud?
Furthermore what are the other troubles within the system that I can’t see? I don’t know this but if there is stuff that the members can see that is wrong, then sure as eggs there will be stuff in the hidden accounts that is not kosher. After all why are they hidden in the first place if it isn’t to HIDE something WRONG!
Universal Currency is not necessarily dead. The currency is certainly over-valued at the moment – I would hazard a guess at 200% – but I don’t actually know. Once the dust settles and people are over the shock of this event, I will try to interview GETS again (if they will speak to me [!]) and try to get a better picture of the whole sorry mess.
If somebody takes the bull by the horns and steps up to the mark to fix it, UC could do quite well. The whole currency system is well set-up, it’s just that it’s been mismanaged. I suspect that the basics have been neglected for a long time and there needs to be a big cleanout, but there is still hope. One thing is for sure though, the current leadership are not up to it – they are the ones who got it into the mess it is.
GETS has offered to give the data to Carl Steinbrenner, IRTA’s lawyer. That’s smart for it puts the entire responsibility for the currency into the hands of a professional, who theoretically has his client’s [IRTA’s] best interest at heart. If he takes the data and puts it back to the current IRTA Board or the Executive then he runs the risk that he’ll be accused of failing the Members if the perpetrators try to hide or obfuscate or carry on with mismanagement. But if he puts it out to a third party either for analysis or for operations, then he will be effectively sidelining the current office-holders that have gotten it into the mess. Ouch! It’s a big call on his part, but that’s his job!
I don’t think the UC Members should panic. It is certainly a setback for the brand and may inconvenience a few people but it had to happen sooner or later. The sooner the better. Who knows what they will do. Putting the data onto Bartercard’s ‘Webturtle’ would be a massive headache [even if they could] and the ultimate in embarrassment for all involved, for despite all the rhetoric in their Prospectus I’m sure Bartercard will be nowhere ready to deliver. No one else in the industry would touch these clowns [IRTA] after what GETS had to put up with. The only hope I can see is that the current lot are bundled out at the upcoming conference and the new lot convince GETS to get back into the game, but ten times bitten twice shy on their part I would think! Of course, fessing up and doing the right thing to sort the problems out is another possibility . . . [gulp!]
Responding to the Crisis
IRTA, specifically the Executive and the Board have a real problem. They haven’t a clue what they are doing to be perfectly frank. I’ve said for the last three weeks that they’re ineffective and led by their Executive. Some of the things their representatives have said are just foolhardy. Annette Riggs the president clearly doesn’t know the figures or even how to get them. Ron Whitney seems to know how to cook the books but not how to see the full picture of his own system mismanagement. Their knowledge and understanding of what they have in their care is just pathetic.
Incredibly I’ve been informed that for days after I was blogging about the fraud and desperate to get the issues sorted, IRTA was running around desperately trying to find out how I got the data! Ridiculous! I’d already told them several times in my blogging AND in direct personal communications with the President where I got the data from – my tipline! Pulling this stunt is like a couple of old ducks on the Titanic running backwards and forwards trying to find out why their card table was sloping!
IRTA, through their lawyer will have its work cut out for it. First they will have to dig into the data and find the facts – what happened? Why did GETS pull the plug? What did they see that concerned them? If there was nothing in there of any major concern then surely they would have weathered the storm of a nutcase blogger threatening to sue and kept the service running. But GETS says that they had concerns and took a major step so sure-as-eggs I’m right and there’s some trouble in there. How much information also should anybody involved in this mess release to the public, to the UC Members, to the IRTA Members and how much do they keep confidential? Who is going to make the decisions moving forward? Who can trust who? It’s a BIG mess alright!
If I was in Steinbrenner’s position I would want to know all the facts. I would want to know what GETS knew and saw that caused them to pull the plug. Then I’d want to know who I could trust because if the President and the Executive Director are cooking the books (as well as bringing a lawsuit on the organisation) they’ll probably spinning the usual half-truth spiel to him, so who does he take instructions from – the Board? But they’re the ones who are either in on it, let it all happen or can’t make a decision to save themselves!
If I was in GETS’ position I’d want to keep a million miles away from everything and everyone. I’d want to get my message out so that people could see that I had good grounds for doing what I did but whew . . . imagine the politics that could stir up if it got into a fight over data, or figures, or personalities or motives!
If I was the Executive I would fess-up and face the music but if honesty wasn’t in my genes then I’d probably want to get out of there as fast as possible and to protect my butt as best as I could do – throw others under the bus or do whatever I could to save my bacon. Sadly based on past performance I don’t think affirmative, positive action is very likely.
The Winners and Losers
The losers out of this are the ones within IRTA who have been cooking the books, most likely Ron Whitney who will have pushed the buttons and the Annette who will have OKayed or instructed him in what he was up to. Who knows how many of the Board were in on it or whether they were just asleep at the wheel.
Strange as it may seem, I think the biggest winners could be the UC Members, for if this action forces a devaluation, or some remedial action that puts the currency back on its feet, then they could have a pretty good option moving forward. I know what I’d do in this situation but that’s all for another day.
The Barter Series
Make your good reading pleasure even easier:
View an index of all articles in The Barter Series, sorted by Date or by Key Subject.