Delaware General Assembly

An Investment, a Vote, and a Windfall: What did Mike Ramone know and when did he know it?

The Delaware Board of Trade (DBOT) was a troubled company that had not yet conducted a trade when State Representative Mike Ramone heavily invested in it in early 2017.   Then Ramone voted with the rest of the General Assembly to pass a bill that would make Blockchain technology legal for corporations in Delaware to utilize, and the DBOT took off, garnering Mr. Ramone a windfall on his investment.   Was that all legal?   Well, let’s look at some facts and the timeline, and then ask some questions.

According to our information, Mr. Ramone invested a significant amount of money in the DBOT in the first part of 2017.   At that point, the DBOT was basically a company on paper and in name only.   The DBOT was pitched as a stock exchange for Wilmington for a number of years prior but, as of early 2017, had not found a physical location and only employed about a dozen workers, rather than the hundreds as originally promised.  And it had not conducted a single trade.

Here are Mike Ramone’s Financial Disclosures from 2014 until 2017, and the one from 2017 is on page 7 and 8 of the document:

On May 5, 2017, Senate Bill 69 was introduced.  The bill would, in part, allow corporations to utilize electronic databases and Blockchain technology to maintain and distribute certain corporate records.  The House passed the bill on the final day of the session, on June 30, 2017.  As you can see in the voting record for the bill at the link to the bill above, Mr. Ramone voted in favor of the bill.  He did not recuse nor disclose prior to the vote that he had any potential conflict of interest or stood to benefit financially from the passing of the bill.  More on that below.

Now, let’s pause for some questions.  Typically, bills like Senate Bill 69, which make revisions, amendments and additions to the General Corporation Law in Delaware, are a yearly occurrence and are generated from a working group of lobbyists and corporate law attorneys in Delaware and nationwide.  Therefore, even though the bill wasn’t formally introduced until May 5, 2017, the bill would have been in the works and being circulated in various offices for the year following the end of the 2016 session of the General Assembly.  And, Delaware being Delaware, these bills are passed without much controversy or opposition.

So the question on my mind is, did Mr. Ramone know a bill allowing Blockchain utilization by corporations was in the works?  Did he know it before or after his investment in the DBOT?  Did he know when he was voting on Senate Bill 69 that he stood to make a windfall off his investment?   The timing, for me, is fishy.  He did not make the investment in the DBOT in the two years prior to 2017.  It wasn’t until 2017 that he made the investment, and then, less than a few months at most later, he voted on a bill that allowed that investment to take off.

Back to our time line, days after the June 30, 2017 vote approving Senate Bill 69, the DBOT was up and running, conducting its first trades.   Then, in December 2017, Seven Stars Cloud Group bought a 27% stake in DBOT for an estimated $7-$8 million.   As reported in an article on Delaware Business Now, the Seven Stars Cloud Group purchased a stake in the DBOT so that it could leverage the DBOT’s “now established blockchain based technology.”

Here is the Seven Stars deal:

On page 26 of the deal, Mike Ramone sold approximately 918,000 shares of DBOT that he owned, which is approximately 11% of 8.2 million issued shares (see page 9 of the deal), at a value of $1.92/share (see page 34), receiving 587,000 shares (see page 28) from the purchasing company, which was valued at $3/share.   The day the deal was signed (December 18, 2017), Seven Stars Cloud Group’s stock closed at $4.82/share on the NASDAQ, a 61% increase from the $3/share purchase price. That would place the immediate value of Rep. Ramone’s stock at $2.83 million.

Pausing here for some more questions, it would be helpful to know the dollar amounts of Mr. Ramone’s early 2017 investment in the DBOT.   That information can likely be obtained from officers at the DBOT, but as of publication, we do not yet have it.  That information would tell us the exact profit Mr. Ramone saw from this sale.   However, whatever the initial investment was, it was substantial, given that it account for 11% of DBOT’s 8.2 million shares.  That’s a lot of shares.  And it would likely be a lot of money.  And that investment saw an 61% increase from the Seven Stars deal.

Under House Rule 16, House members are restricted from voting on legislation where they have a personal or private interest in the measure. “A member has an interest which tends to impair his or her independence of judgment in the performance of his or her legislative duties with regard to any bill or measure when the enactment or defeat of the measure or bill would result in a financial benefit or detriment to accrue to the member or a close relative to a greater extent than such benefit or detriment would accrue to others who are members of the same class or group of persons…”

“Financial interest” in House Rule 16 is defined as “a legal or equitable ownership interest in the enterprise with a fair market value in excess of $5,000, or owns more than 10% of the enterprise if not traded on an established securities market.”

Lawmakers typically recuse from voting on bills that could potentially fall into this category. Lawmakers often will err on the side of caution about voting on issues that could potentially impact an industry where they work or where they would financially benefit.  For example, the soon to be former State Representative Charles Potter, to his credit, often recused from bills on insurance matters, because he is an Insurance Agent.

Mr. Ramone should have known that he had made a substantial investment in the DBOT, and as a concerned shareholder in that company, he should have known that voting on Senate Bill 69 would financially benefit him, as the DBOT would finally be able to conduct trades and attract more investors like the Seven Stars Cloud Group by being allowed to use the Blockchain technology.

At the very least, Mr. Ramone has acted unethically by not recusing himself or not disclosing his financial interest prior to voting.   And he has engaged in the type of swampy legal corruption that voters hate: using his office to further enrich himself by voting in ways that would do just that.    I suppose he could say that he was unaware of what he was voting on when he voted yes on Senate Bill 69, but that excuse would prove him incompetent and negligent.  How often do you vote on bills that you have no idea what they are about, Mike?

At worst, if Mr. Ramone knew 1) that Senate Bill 69 was in the pipeline to be introduced and passed in 2017, 2) that it would legalize Blockchain for corporations, and 3) that DBOT would benefit from the passage of that law when he made his investment in DBOT in early 2017, then he might be in some legal trouble.  It sounds like an insider trading situation.    These questions need to be investigated, if not by the General Assembly itself, then by the Attorney General’s office.

Delaware politics from a liberal, progressive and Democratic perspective. Keep Delaware Blue.

54 comments on “An Investment, a Vote, and a Windfall: What did Mike Ramone know and when did he know it?

  1. I will be sharing this information. I will not comment on Mr. Ramone, as he is not someone I wish to tangle with again.

  2. This is really good info. Looks like Seven Stars was in discussion with DBOT about a transaction prior to the bill being passed so it’s likely that Ramone knew its passing would significantly and immediately increase the value of his equity.

  3. Is this guy being investigated by the SEC? Did he alter his position in the investment before the introduction of the Bill? As long as Joe public could have used the same information, he has nothing to worry about…. How did Tom Carper become a multi millionaire? Joe Biden?

    • The point though is that Ramone is not your everyday Joe Public. He is subjected to Rules on ethics and disclosure. And if the information that he was privy to about an upcoming bill was not available to the Joe Public, then he does have something to worry about.

    • “How did Tom Carper become a multi millionaire? Joe Biden?”

      Here’s a wild idea — instead of wasting your time here, why don’t you research it, instead of just lazily tossing it out on a blog? Oh, right…never mind.

      • Al, why don’t you mind your own business. Let someone make their point, instead of always berating them! CIVILITY…..try it sometime! DD addressed RSE’s statement and concern, you go the angry way!

        • Nope. Berating morons is my calling. Why don’t you go find your proper intellectual level? I know of a couple of pre-schools with openings for slow learners like you.

          For instance, you say “let someone make their point.” He made his point. It’s a stupid point, and I said so. You are so stupid it causes me actual pain to read your comments. Why don’t I skip them? Because ignorance should always be rebutted.

        • We’re you making a point? or were you asking questions? Or we’re you being cute and trying to make a point by asking a whataboutism? It’s called trolling, you don’t get civility when you troll, dipshit

        • cassandram

          Policing people on this blog is not your job, Anono. When you are a much improved commenter than you are, you might have some standing to critique anyone’s civility or anger. So stop it.

      • Tom Carper married a millionaire and Joe Biden sold books.

        • Joe Biden also got a series of sweetheart real estate deals. But the idea was to make those lazy asses look it up themselves.

  4. Great day to donate to Stephanie Barry:
    https://secure.actblue.com/donate/friends-for-stephanie-barry-1

  5. Before I forget, excellent work DD.

  6. RE Vanella

    Yeah, very good piece here. Nice work.

  7. Delaware Left

    Does Mitch still want to endorse this guy?

  8. Mitch Crane

    Mitch has not endorsed “this guy”. Delaware Stonewall PAC endorsed. I agreed with the reasoning Stonewall used, as it was based on the incumbent’s voting record on LGBT bills. I personally do not endorse Republicans.

    I responded because I was asked to.

    • Joe Connor

      Thanks for the clarification. Pick that turn of phrase up at “Weasel Words R Us” ? You are that perfect blend of pathetic and hilarious:).

    • RE Vanella

      Mitch. You defend your boy. Don’t lie. You get huffy and passive aggressive as well. Vague threats to our people. Especially when Jason called out your man. I see you, buddy.

      • Joe Connor

        🙂

      • Mitch Crane

        One reason most people do not express unpopular views on blogs is that no matter what they say, they will be attacked. I defended “my boy” on his position on LGBT issues. I do not think I was passive aggressive. I don’t believe Jason took it that way. If I were passive aggressive I would have reacted when Peter Schott and I were told to “fuck (our)selves”. I would not be bothered if I volunteered an opinion and was attacked for it. However, when I am asked to respond, I should be allowed to do so without personal attacks. I am not concerned with attacks from Joe Connor, as he has hated me since I ran against his patron Karen Stewart in 2012 and I then helped defeat her in 2016. He means nothing to me. I would have hoped that those I do respect would just stick to disagreeing on issues and positions.

        • RE Vanella

          You think my positions are popular positions? That’s funny.

          You know who you passively threatened. Dude, I know everything. Don’t fucking play with me.

          It’s not a personal attack, by the way. It’s a political attack. If you supported Carper over Harris… Or if you support Ramone… Upon your demise I will celebrate.

          You want to support oligarchs in a criminal enterprise and you want us to be nice. Tell the Delaware Way contingent those days are fucking over.

        • Joe Connor

          Geeze Louise I am crushed….. REV this dude is the master of passive aggressive. He calls himself “Judge” when he was the lowest level local judge in PA he was renowned for his empathy for the poor folk that came before him…… Oh wait No he wasn’t!

          • He’s another guy who wants credit for being “progressive” because he’s gay and opposes anti-LGBT policies. This is not “progressive.” The correct term for it is “self-serving.”

          • cassandram

            There’s plenty of reasons to criticize Stonewall PAC’s decision to stand by Ramone, but whether or not Mitch was a Judge (he was) or if he empathizes with poor people don’t count for this subject. Just indulging in your running stalking of Mitch because he dared to run against your friend doesn’t count as either interesting or as on topic.

            • He was a judge on the same level as the officials in Delaware’s JP courts. They call that a judge in Pa., where they also elect judges. In Delaware, the equivalent officials are called magistrates.

              This is the equivalent of people with PhDs in education insisting on being addressed as “doctor.” Technically it’s correct, but it’s indicative of self-puffery.

              Contra your contention, I found it off-topic but interesting.

              • cassandram

                As if this is the first time you heard it? He was pushing this dumb ass story as disqualifying when Mitch was running against KWS. It was silly and stupid then and it is sillier and stupider now. Especially since I can’t even recall a case where Mitch calls himself Judge or insists on anyone else doing it. There needs to be on-topic material now. The rest of it is played out.

                • RE Vanella

                  Don’t be a Mitch apologist. I know you’re in the club, but it’s a bad look.

                  And please don’t try to tell me why it isn’t. It makes it far worse.

                  • cassandram

                    And please don’t try to tell me what to talk about.

                    I’m going to go right back to my original point — there are GREAT reasons to critique Stonewall on their support of this guy and whether or not Mitch calls himself Judge is no where on that list. Stonewall gets a definite pass from y’all if all you can do is this mean girls thing on Mitch.

                    • RE Vanella

                      Disagreement and pointing out how dumb it sounds isn’t telling you what to talk about. I’m telling you it’s dumb. You never said you couldn’t continue.

                      Who’s more touchy you or Mitch?

                    • cassandram

                      And please don’t try to tell me why it isn’t. = Telling me what to talk about.

                      Plain words. No need to be touchy about someone reading what you clearly said.

              • Joe Connor

                Points above and below taken:)

                • Only as a clarification: Mitch reminds himself and everyone else of his status as a judge every day as he’s used it as his email handle since I’ve known him. judgemitch@…

                  • cassandram

                    An email handle is a very different thing than signing official correspondence, being listed in event programming, being introduced at events. Plenty of people have email handles that aren’t connected to their day to day official identities. So I’m going to score that one as a reach and just adding to the silly and stupid around this.

                    • Mitch Crane

                      My email handle was created when I left the bench in 1987 and used my legal knowledge and position as a national fraternity official to speak nationally on risk management issues-concentrating on hazing and sexual assault. I was known in the fraternal world as “Judge Mitch” and my agent suggested using that as an email handle would be something easy to remember. I spoke on over 500 campuses until I fully retired from speaking in 2017. I kept that AOL name as I still hear from people seeking advice or help on those subjects and remembered me from my time on their campuses. The fact is that I have long had an Gmail account using my first and last name and used that since 2011.

                      No matter what people think of my current positions, I am proud of the work I did and the people I helped as a speaker, just as proud as I am of my work (as a “low level judge”) in West Chester, PA. When I served I was the only Democrat in the Chester County judiciary. After I stepped down to run, and lose, a race for County Commissioner, the people who elected me judge,honored me the next year by returning me to the West Chester Council- overwhelmingly-and making me council president a few years later. As to Mr. Connor’s attack that I hurt poor people-those were the voters who elected me. During that time I served as a board member of the Chester County ACLU and as Vice-President and solicitor for the NAACP.

                      Attack me for what you perceive as my wrong positions of late, but any attacks on my service in Pennsylvania, or my work in Delaware for the Department of Insurance from 2007-2011 and 2017-18, or my work helping manufactured homeowners and member and the chair of DEMHRA and my service on the Industrial Accident Board have no basis in fact and are below what should be the minimal standards of people who support the purpose of this blog.

                • RE Vanella

                  Just saying don’t try to defend it, because it’s a terrible look. Just like italicized quote tweets.

                  You did so well with the Peterson thing. Don’t disappoint me now!

                  • cassandram

                    The good news is that not only is your comment still up where your plain words — italics or no — are there for everyone to see; but everyone gets to see what gaslighting looks like up close and personal. Followed by detailed instruction on what you are meant to take away, in spite of what was written.

                    You can stop digging any time now.

                    • RE Vanella

                      I see the NCCo chair made remarks. You should defend Mitch though.

                      You can type whatever you want, by the way. But if it’s fucking weak, I’m calling it fucking weak.

                      You can complain or block whoever you decide. It’s fucking weak shit from you. Crying about what I’m doing. Like you’re the boss. Weak.

                      Just block me . Delete this post and block.

                      Let that fucking Anono drool on though. It’s great.

                      RV

                    • cassandram

                      Weak is continuing to gaslight me here. Weak is having a minor tantrum here trying to deflect from that. Weak is trying to change the subject from your own gaslighting. Weak is trying to make yourself into a victim here. Weak is expecting that I’m somehow supposed to buy that shit.

                  • @cassandra: Telling someone what NOT to say isn’t the same thing as telling someone what to say. That should be obvious, but since you’re busy twisting that obvious truth into something else, I thought I’d point it out.

                    • Joe Connor

                      There’s been more twisting here than a night at The sallies Dance in ’65 with the turntable stacked 5 high with Chubby Checker 45’s 🙂
                      Gonna go watch some retro Jerry Blavet tapes, Enjoy 🙂

                    • cassandram

                      @Alby — Of course you would. I mean, really, of course you would. Thanks for being predictable.

                    • @cassandra: Likewise.

  9. Who’s Mike Ramone? serious question

  10. SO.. serious question… does Delaware Stonewall, Inc. continue to endorse Mike RaMoney?

    • That was from me. Does Delaware Stonewall, Inc. continue to endorse Mike RaMoney?

    • RE Vanella

      clubnoam. Well played.

      If my admiration for Del Dem’s working here was not caught on the first spin…

      …this is top work.

  11. RE Vanella

    Just felt it needed reiterating. No worries.

  12. cassandram

    See this?

    Even a progressive legend is caught up in supporting a sitting legislator who clearly bullied the employer of his opponent. Who clearly took up oversight of a grant that was the job of a real Government agency. Who is taking votes to enrich himself, hoping that no one will ever notice what he did. Who takes votes that undermine the economic lives of people — even LGBTQ people — just so that his business can pay his seasonal employees less.

    Does anyone know if Karen Peterson is the reason why Stonewall is insisting on standing by all of this corruption? This is an organization that has largely won the argument here in Delaware for LGBTQ rights, but feels the need to stand by a legislator who bullies (female!) opponents and thinks he can get away with a fair bit of legislative self-dealing. I get that Ramone voted for LBGTQ rights when it was a risk for a Republican to do so. But it is amazing to me that one of the signature political groups in Delaware would let its own reputation get dirtied up this way.

  13. RE Vanella

    That’s the spirit! Let’s rip her a new one as well.

    This entire fucking political clique should be fired into the sun. Party affiliation or legendary status (whatever that is) should be ignored.

  14. Karen Peterson has accepted Matt Meyer’s nomination for her to Chair the NCC Planning Board. She’ll be voted in next Tuesday. Not a good look to sit, meanwhile, in the middle of a partisan firestorm like this..

  15. Karen Peterson was always about Karen Peterson, even when progressives had her on such a high pedestal! She and Ramone are made of the same self serving cloth.

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