DS Healthcare Calls For Federal Govt To Take Action Against Terminated President

(RTTNews) - The board and management of DS Healthcare Group (DSKX) calls for Federal Government to take action to protect shareholders after the former President of the Company, who was terminated for cause, violated Federal securities laws and unlawfully seized control of the Company.

On March 17, 2016, the independent members of the Board of Directors, consisting of all of the members of the Board other than Daniel Khesin, among other things, unanimously terminated Mr. Khesin as President of the Company for cause.

The company further reported that on April 2, 2016, Mark Brockelman has tendered his resignation as the Company's Chief Financial Officer.

The company, through its independent counsel, has requested an immediate meeting with the SEC so that the federal regulators fully understand the illegality of Mr. Khesin's actions and the need for the federal government to take action to protect the shareholders.

The company also intends to file an action in U.S. District Court to, among other things, restrain Mr. Khesin from continuing his unauthorized conduct pending the results of the SEC's investigation.

The Company noted that in what appears to be an aggressive and harmful attempt to impair the health of the Company and all associates, Mr. Kehsin's recent actions included:

On March 31, 2016 Mr. Khesin advised the Company and filed a press release, announcing that he had solicited and obtained so-called "voting agreements," allegedly from individuals who, together with him, own a majority of the outstanding common stock of the Company. Mr. Khesin claimed that these voting agreements authorized him to vote their shares and that he did so to dismiss the entire Board of Directors. Mr. Khesin claimed that he would be selecting a new Board as the majority shareholder.

Mr. Khesin violated federal securities law by failing to properly notice and conduct a shareholder's meeting prior to his purported action to terminate the Board.

During the afternoon of March 31, 2016, Mr. Khesin instructed the Company's IT consultant to lock access to Company's file server for Ms. Barch-Niles and Mark Brockelman, Chief Financial Officer. In addition, Mr. Khesin, without any authorization, broke into their emails. Mr. Khesin and his consultant took these actions even after Mr. Khesin confirmed that no action had been taken to terminate management. Thus, Mr. Khesin interfered with management's ability to perform its functions at a most critical.

On April 2, 2016, Mr. Khesin issued a press release that defamed the head of the Company's audit committee and Chief Executive Officer. After hacking the Company's email, Mr. Khesin used a privileged and confidential email from outside counsel which had included a preliminary suggestion of future actions from one of the independent legal advisors of the Company that could be submitted to the shareholders for approval of incentive compensation in light of the work that would be required to repair the serious damage caused to the Company by Mr. Khesin's illegal conduct.