Brady acted alone, says he wanted to generate money for long term health care.

Nelson Brady has responded to a lawsuit filed by Oversee.net and SnapNames regarding the company’s bidding scandal. Brady admitted to many of Oversee’s allegations. The response does not implicate any other employees in the scheme, indicating that Brady acted alone and other employees did not know about his activities.

Brady admitted that he used the Hank Alvarez (halvarez) account to increase bids by other customers and that he refunded money to himself when he won some of the auctions. Prior to Oversee filing the lawsuit, Brady says he agreed to pay back all of the refunds with interest, but the company refused.

Brady says that his primary use of the Halvarez account was to get domain names for himself; not to increase SnapNames’ revenue. He says he did this to get money for long term health care:

Brady primarily used the Hank Alvarez account to legitimately purchase domain names that Brady believed would be profitable so that he could accumulate savings for his long-term health care. Brady’s mother suffered from a genetic neuromuscular disorder and died at age 56 wheelchair bound with her legs locked in a 90 degree angle at her knees. Brady has the same symptoms as his mother, including severe pain, weakness and stiffness in his muscles, among other things. All these symptoms have gradually worsened as Brady ages (he is currently 54) and for many years Brady has been able to function only by taking muscle relaxants. Brady’s use of the Hank Alvarez account to purchase domain names and accumulate savings for long term health care was driven by his intense fear that at some future undetermined time he will become incapacitated like his mother. Brady further states that he improperly used the Hank Alvarez account to increase other bidders’ bids in a small minority of the total auctions that SnapNames administered between March 2005 and September 2009. Brady further states that his improper use of the Hank Alvarez account to
increase other bidders’ bids was completely separate from Brady’s use of that account to acquire domain names for himself, and was done solely for the benefit of SnapNames and Oversee. Brady mistakenly and wrongly believed that increasing other bidders’ bids would help a small number of SnapNames and Oversee employees other than Brady retain their jobs by creating better financial health for the companies.

Among his defenses, Brady says that company representatives told him they were not suing him, and that is part of the reason he fully cooperated with the company during its investigation.

The entire response to the complaint is available here.

Please be respectful in your comments.

Epik adds to development capabilities.

Rob Monster’s Epik has acquired domain name development company DevRich. The transaction was an all-equity transaction and the valuation was not disclosed.

This is both a talent acquisition and a technology acquisition. Luke Webster, President of DevRich, will become SVP Operations of Epik. He will continue to run DevRich, which will be a division of Epik.

I met Webster and his business partner at DOMAINfest this past January, where they presented in PITCHfest.

DevRich will mass develop your domain names for about $5 each. As Monster points out in a blog post about the acquisition, mass development only gets you so far. The thinking is that by developing your domains on DevRich, you can figure out which ones have the most potential. You can then use some of Epik’s (and DevRich’s) more advanced solutions for product portals and directories to expand your sites.

Short .us country code domain names in the works.

Neustar, the registry that manages the .us top level domain name, is proposing to release available one and two character .us domain names for registration.

In a post on its new .us blog, the company explains that its distribution of one and two character domains will be handled in a matter similar to what it did with .biz domain names:

(1) an RFP round that invites interested registrants to propose specific plans for use and promotion;
(2) an Auction round that offers domains not allocated during the RFP round; and
(3) a First-come, First-served (FCFS) release of any domains not allocated during the RFP or Auction rounds.

A number of two letter .us domain names have already been allocated to states.

Unlike the .biz release, this one will not require ICANN approval. Instead, Neustar is waiting on approval from the U.S. Department of Commerce.

Separately, Neustar released a proposal to launch s.us as a URL shortener.

VeriSign celebrates 25 years of .com this evening.

I’m off to San Francisco for the 25 Years of .Com Gala this evening. The event will be hosted by one of my favorite comedians, Dana Carvey (Saturday Night Live, Wayne’s World, etc).

The evening will celebrate the “.com 25″ honoring “remarkable innovators, entrepreneurs and companies whose inspiring contributions were fundamental in shaping the Internet and, thereby, forever changing the way we think and act as individuals and as a society.”

Possible honorees to the .com 25 include Al Gore, Amazon.com, Google, Napster, Vint Cerf, and eBay.

I’ll try my best to cover the event live via Twitter, assuming there’s good cell phone coverage at the gala. You can follow me on Twitter at @DomainNameWire.

Complaint alleges CEO and board members have neglected their duties.

In what is the latest in the continuing saga of Live Current Media, its former CEO and other plaintiffs have filed a lawsuit (pdf) against current CEO Geoffrey Hampson and each of the company’s board members. The lawsuit was filed in the Circuit Court of Cook County, Illinois in the Chancery Division.

The suit goes after Hampson for alleged fraud, breach of contract, breach of fiduciary duties, and unjust enrichment. Its claim against the board is for breach of fiduciary duties through gross mismanagement, waste of corporate assets, and misappropriation of corporate opportunities. The suit alleges that the three board members are all either friends or business associates of Hampson.

Live Current Media owns and operates a number of category-killer domain names, such as Perfume.com, but has sold many of its domains over the past two years to raise money.

At the crux of the complaint is that Hampson did not devote all of his time to running Live Current Media, despite alleged assurances to outgoing CEO David Jeffs that he would do so. Jeffs had grown the company to over $9 million in revenue in 2007 when he brought in Hampson to run the business.

The complaint alleges that just three months after signing his employment contract with Live Current, Hampson formed another company called CoreLink Data Services, LLC. It alleges that Hampson has spent “substantial amounts of his time and Live Current’s resources traveling for and working to build up CoreLink”.

The plaintiffs point out several questionable decisions by Hampson:

-directing the company to pay a bonus of $1 million to Jonathan Ehrlrich to become president of the company in 2007
-hiring his girlfriend (who the plaintiffs say had little or no internet experience) to run Perfume.com, the only division of the company that was earning a profit at the time of her hiring
-causing the company to spend money to move its headquarters to Chicago so that it would be nearer CoreLink’s headquarters.

The complaint also cites a couple “disastrous” decisions by Hampson, including:

-Acquiring Auctomatic for $5 million
-Signing a deal requiring the company to pay $50 million over ten years to Indian Premier League

The complaint says that Since Hampson joined the company the market cap has dwindled from $46 million to just $1.8 million today.

The plaintiffs want at least $50 million in damages.

On May 21 Live Current Media filed with the SEC to sell more shares in the company. Its filing mentions the lawsuit, but says none of the parties have been served.