SOURCE: Modern Energy Corp.

December 03, 2007 05:56 ET

Modern Energy Corp. Informed That Scottrade Is Short 999,000 Shares of Modern Energy

Scottrade Obtains Temporary Restraining Order to Delay Forced Buy-Ins

LOS ANGELES, CA--(Marketwire - December 3, 2007) - Modern Energy Corporation (PINKSHEETS: MDNO) announced today that the company received a notice that on Nov. 29, 2007, Scottrade obtained a Temporary Restraining Order (TRO) versus Modern Energy Corp., The Depository Trust Company, National Securities Clearing Corp., Merrill Lynch, Ridge Clearing and Outsourcing Solutions, Inc., E*Trade Financial Corporation, and Penson Financial Services to prevent forced "buy-ins" by those parties to cover Scottrade's short position of 999,000 shares of Modern Energy stock. There is no restriction on trading Modern Energy stock (MDNO) in the market, as the TRO only applies to the securities firms that have been temporarily barred from enforcing these buy-ins.

Scottrade, a discount broker based in West St. Louis County, said in a lawsuit filed in Federal District Court in St. Louis, Missouri, that one of its clients re-entered a "good until cancelled" order to sell one million shares of Modern Energy common stock at $0.01 after the recapitalization had reduced the common shares outstanding to 1.2 Million from the previous 1.2 Billion shares -- without adjusting the price to reflect the reduction in common shares outstanding. Despite proper notices being given to and by NASDAQ, of a change in the symbol from "MODR" to "MDNO," and a change in the CUSIP number, it appears that Scottrade re-entered the order at the wrong price and sold the stock "over a three day period commencing October 23, 2007."

The TRO issued on November 29 also bars the defendants and their agents from carrying out Modern Energy's corporate action (although the reorganization was complete several weeks before the order was issued) or taking any action to force Scottrade to cover its short position. A hearing on the TRO is set for 11 a.m. on Friday, December 7.

Modern Energy notified NASDAQ of the corporate action on October 5, 2007, with an effective date of October 16, 2007, providing more than the NASD-required 10-day notice. On October 18 and 19, 2007 NASDAQ published the terms of the reorganization listing the addition of MDNO and the deletion of MODR at: http://www.otcbb.com/asp/dailylist_detail.asp?d=10/18/2007&mkt_ctg=NON-OTCBB and at http://www.otcbb.com/asp/dailylist_detail.asp?d=10/19/2007&mkt_ctg=NON-OTCBB. These notices clearly stated that MODR was deleted effective 10/19/2007, with the comment: "Reorganization (.001 sh of Modern Energy Corp. New Common Stk & 100,000 restricted shs of Modern Energy Corp. Preferred Stock, Class B)"

Modern Energy issued a press release on October 11, 2007, providing the details of the restructuring along with the record date. More than 51% of shareholders approved of the recapitalization. Additionally, Modern Energy management believes that on the trade date in question, Modern Energy shareholders that held the pre-restructuring Modern Energy (Symbol-MODR) had yet to receive their post-restructuring shares (Symbol-MDNO) in their accounts, so they would not have been available to sell, even if the shareholders desired. Management of Modern Energy expected that MDNO would open near $1.00, reflecting the innovative share restructuring that also created preferred shares that effectively represent warrants to purchase MDNO common shares for $1.00 a share, which, if converted, would double the number of issued common shares to 2,400,000. (Modern Energy closed at $0.001 a share as MODR the day before the new symbol MDNO became effective.) Yet, inexplicably, Scottrade apparently did not inform their client of the change in shares outstanding, despite being informed through NASDAQ notification of the symbol and CUSIP change and the reason for these changes.

Modern Energy management looks forward to seeing this matter resolved for the benefit of all of its shareholders.

About Modern Energy

Modern Energy recently sold its oil and gas interests and now has wholly owned subsidiaries on the island of Mindanao in the Philippines, which have mineral rights and agricultural land interests. The mineral rights have the potential for economically viable mining of copper, gold, silver and other minerals. The agricultural land interests involve 250,000 hectares (over 600 thousand acres) of agricultural land suitable for growing palm oil and jatropha, feedstocks for the production of biodiesel. In addition, the Company holds marketable securities, most of which were received as stock dividends in various corporations, and is also considering passing on those dividends and distributing shares to its shareholders of the following companies: Wall Street Capital, Inc., XXStream Entertainment, Western Pac Minerals, and Infinity Mining.

"SAFE HARBOR STATEMENT" UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This information contains forward-looking statements that involve risks and uncertainties. These statements are forward-looking statements that are made pursuant to safe harbor provision of the Private Securities Litigation Reform Act of 1995. Actual results, events and performance could vary materially from those contemplated by these forward-looking statements. These statements involve known and unknown risks and uncertainties, which may cause Modern Energy Corporation's actual results in future periods to differ materially from results expressed or implied by forward-looking statements. These risks and uncertainties include, among other things, development costs and risks, product demand and market competition. You should independently investigate and fully understand all risks before making investment decisions.

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