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Mace delists from NASDAQ, gets new board member

Thursday, September 30, 2010

As of today, Mace Security International's common stock will no longer be traded on the NASDAQ, and instead will be traded on OTCQB system.

This move is the culmination of events that started last spring with a March 22 letter NASDAQ sent Mace saying the bid price of the company's common stock had closed at less than $1 per share over the  previous 30 consecutive trading days, which didn't comply with NASDAQ Listing Qualifications. Mace was then given 180 calendar days to regain compliance. To do that, they need to have a closing bid of $1 per share or higher for ten consecutive business days.

NASDAQ notified Mace of their non-compliance on Sept. 21. Mace decided against appealing the decision.

The only basis for an appeal of the NASDAQ determination would have been to effectuate a reverse stock split of the company's stock, said Mace CEO and president Dennis Raefield, in a prepared statement. The Mace Board of Directors believe  a reverse stock split "is not in the best interest of our shareholders at this time," he said.“Our Board of
Directors elected not to appeal the NASDAQ decision, as the Board believes the OTCQB will provide an excellent trading platform for our stock." Raefield said as OTCQB traded company, "we will continue to file periodic reports with the SEC and continue to provide our high standard of disclosure to our shareholders. We will also be maintaining our corporate governance procedures. The OTCQB will provide investors with a trading platform that will allow them to actively trade their

In other Mace news, the company announced on Monday that it’d named Michael E. Smith to its Board of Directors.

According to a press release, Smith is an independent consultant and the founder of Chesterbrook Growth Partners which provides companies in the security, RFID, auto-identification and electronic components industries with strategic assessment and implementation advice for revenue and profit enhancement. Before that, he spent 14 years with Checkpoint Systems. As senior vice president, he led worldwide marketing efforts and launched Checkpoint’s direct sales and operations activities in Europe. As executive vice president, he ran worldwide operations and also managed Checkpoint's Security System Group and Access Control Product Group. He became president and CEO of Checkpoint in 2001. Through his 14-year tenure, revenues grew from $35 million to more than $650 million through a combination of internal growth and key acquisitions.

In a prepared statement, Dennis Raefield said, “As Mace continues its focus on being a pure security industry operation, we are excited to have Michael join our board of directors. His previous security industry experience and broad management skills add additional security bench strength to our team. I have already benefited from great assistance and insight from Michael's participation in the boardroom. We are excited about Michael's continued contributions to Mace."

Will Apple patent move biometrics away from security?

Thursday, September 30, 2010

I was going through my Google Alerts today and came across an intersting article from WIRED  about a new patent recently granted to Apple. The patent is for what WIRED argues is THE new use for biometrics: Personalization. WIRED says biometrics has been oversold and doesn't work all that well for security, but may be a perfect fit for personalization.

We've written about Apple and security before.

From the WIRED article:

"The U.S. Patent and Trademark Office last week granted Apple a patent for biometric-sensor handheld devices that recognize a user by the image of his or her hand. In the not-too-distant future, anyone in the house could pick up an iOS device — or a remote control or camera — and have personalized settings queued up just for them."

Okay, I get that. That sounds pretty cool. The article then goes on about how the new patent will "protect" devices... which sounds like security to me...

Then the article claims this new use for biometrics will differ from the over-promised but undelivered use of biometrics in access control.

"It’s a very different use of biometrics than we’ve seen in the movies. Hand and retina scanners have been touted for years as a futuristic gatekeepers to high-security buildings. This is usually a much-embellished version of their real-world use by businesses and government agencies for whom secrecy is a big deal. In the wider world, tiny fingerprint scanners have been built into laptops, but they aren’t widely used for the simple reason that they don’t work reliably enough.

"But while they might be insufficient for security, biometrics might work just fine for personalization. Suppose my family shares a future-generation iPad that supports multiple user profiles and a version of this sensor technology. When my wife or I pick it up, the mail application displays each of our inboxes separately. When our young son picks it up, only games and other approved applications are available. If guests or intruders pick it up, a guest profile would make none of your personal information immediately available to them."

Don't get me wrong, I see the cool factor of all this. I mean, extrapolate this use of biometrics out to the automobile: As soon as my hand touches the sensor in the door handle, the seats and mirrors automatically adjust to me, the sound system automatically sets to my personal music playlists and ear-splitting volume levels... That's pretty cool. But isn't assuring that my 3-year-old son only sees his pre-approved Wiggles videos on the iPad and not my classic horror movie collection a form of access control? Even it it's only access control of movie playlists? and isn't access control security? I would argue that biometric control of personalized settings is still security.

The article aslo mentions that biometrics has been oversold as "futuristic gatekeepers to high-security buildings." I wrote a story a while back about a security company that uses a suite of technologies, including biometrics to secure buildings. That company--FST21--was followed by SSN later in a story about a security integrator who was having luck with the solution.

What do you all think? Is there still room for biometrics in security, or is it all about the iPad from here?



Fontana update: What's the legal impact?

Monday, September 27, 2010

I wrote a story recently about the settlement between Fontana and the local alarm association, the Inland Empire Alarm Association, which ended the two year long legal battle there. I just got off the phone with security industry attorney Les Gold over at Mitchell Silberberg & Knupp. Les was active in the litigation, but was unavailable for comment during the drafting of that story.

He let me know that the revised ordinance passed its second reading and forecasted that the announced settlement would be final on Oct. 22 after the 30-day waiting period was over. Fontana will pay the legal expenses it owes to the IEAA at that time.

Les also said the real positive impact on the industry (since the city settled with the IEAA, the case itself won't actually have any impact as a precident-setting case since it won't be a reported case), is in the assessment of fines.

"The important thing for us was that the old ordinance levied all the fines against the alarm company," Les told me. Such is not the case any more. "It's already having an impact. There were seven cities around the community who were all looking to do the same thing. Now none of them are going to do it because they know they'll loose. I think it will have an impact all over, a tremendous impact all over the country."

How does your municipality run things? Do they charge the alarm companies or the end users? Does your municipality require ECV? Do you do ECV already anyway? Drop by SSN's news poll on the subject and vote today!

Photos from ASG Grand Opening

Thursday, September 23, 2010

Here are some photos, from my iPhone, of the Sept. 16 grand opening of ASG Security's expanded corporate headquarters. For more details, see my Sept. 16 posting. It was a very nice event, with a fun band, and lots of food. Sorry, there's no photo of the actual ribbon cutting. It started to rain just as the ceremony was beginning. ASG CEO Joe Nuccio, Bob Ryan, Ralph Masino and others braved the rain to thank employees and partners and cut the ribbon. I stayed under the tent.

Below, ASG CEO Joe Nuccio,left, and Joe Sausa, president of Honeywell's First Alert Professional's Program


Below, from COPS Monitoring, Don Madden, left, Kat Tallman, (who runs a section of COPS that is dedicated to ASG's accounts across the country) and ASG's Glenn Seabury.


Below, ASG's Bill Rose, left, and Bob Ryan



Former Washington Redskins player and current NFL analyst Brian Mitchell, left, and ASG's Brian Seaburg.


Below, right, Eric Pritchard. head of the security practice at Kleinbard Bell & Brecker

Below, ASG's customers, employees and partners gathered under a big white tent to celebrate.




Below, ASG's Ralph Masino, left, and Johnathan Clark



Below, Tim Brooks of PSA Security



American Alarm gets state deal

Thursday, September 23, 2010

Wells Sampson had some good news to announce this week: American Alarm & Communications, of which Wells is president, won a re-upping of its contract with the Commonweath of Massachusetts as an "approved provider of video surveillance, access control, intrusioin protection, alarm monitoring and related security systems."

This means that American Alarm can offer preferred pricing under the state's purchasing contract to any public entity in Massachusetts, including municipalities, schools, housing authorities and public colleges and some non-profit groups.

This designation is something American Alarm has had for a while, and the company counts a number of public sector entities among its customers, including: all branches of the Mass. Registry of Motor Vehicles, the Mass. Medical Examiner's Office in Boston, the State FireFighting Academy in Stow, Western Mass. Hospital in Westfield, and public school districts around Greater Boston.

"Our track record of strong service was one of the reasons the Commonwealth expressed confidence in our company and approved our program for another three years," Sampson said in a statement.

Contract woes in the Sonitrol Security lawsuit

Wednesday, September 22, 2010

I wrote a story back in late August about a lawsuit filed against Sonitrol Security by Core-Mark Midcontinent and it's insurers. The long and short of it was that Sonitrol lost and was judged to have been negligent. ADT, which owned Sonitrol Security back when the loss happened refused to comment since it "does not comment on ongoing litigation."

Here's some of what I wrote back then:

DENVER—Jurors here deliberated over the accumulated facts in an appeal case at the Colorado Court of Appeals and decided in favor of the co-plaintiffs in a nearly decade-long legal battle against Sonitrol Corp. The lawsuit stems from a 2001 fire in which a warehouse owned by co-plaintiff Core-Mark Midcontinent was broken into and burned. The original decision in the lawsuit was that Sonitrol Corp., because of the exculpatory clauses in its contract was only liable for $500 in damages. That decision was appealed, and the result of that appeal, announced on Aug. 18, is that the three co-plaintiffs—insurers Commonwealth Insurance and United States Fire Insurance, and the insured, food distributor Core-Mark Midcontinent—are now owed a total of $18.3 million. Pre-judgment interest of 8 percent per year in Colorado could add millions to that number, according to Cozen O'Connor, attorney for the insurance companies.

The real question now is who will be left footing that rather hefty bill?

Ken Kirschenbaum recently took a brief look at some of the language in the Sonitrol contracts and I thought it was interesting.

Here's some of what Ken had to say:

Where was the waiver of subrogation clause?  This is perhaps the most potent provision in the alarm contract because, as in this case, most cases against alarm companies are brought by insurance companies [incredibly some of the same insurance companies who write alarm errors and omission insurance].  A waiver of subrogation clause will put a stop to the case, but of course the defense attorneys need to raise the clause as a defense.  I could not imagine that the Sonitrol contract didn't have a waiver of subrogation.  Well guess what?  The contract is so poorly written that its hard to tell.  The contract has this provision:

    "Client hereby waives his right of recovery against Dealer for any loss covered by insurance on the premises or its contents to the extent permitted by any policy or by law."

    What the heck does that mean?  Does it sound like "Subscriber hereby waives any right of subrogation any insurance carrier may have against alarm company?"

    How hard was that to say?

Legalese is all Greek to me, but I thought it was interesting anyway. I assumed there must have been something wrong with the contracts that usually protect alarm companies from such cases as these.

By the way, Ken sells contracts for alarm companies... Check him out.

Fontana's ordinance violated due process. Municipality settles with industry. Trend-setting?

Monday, September 20, 2010

So the news isn't actually all that newsy... The judgment that the city of Fontana, Calif.'s 2008 ordinance was at least in part  unconstitutional was reached by the San Bernardino Superior Court in March 2010. Both sides in this ongoing battle (Fontana and the Inland Empire Alarm Association) appealed that ruling, initially.

However, a settlement has now been reached, according to published reports. (The San Bernardino Sun), and SSN wants to bring you the inside scoop on what this settlement means for the industry.

In a sign that the legal proceedings of the last two years may have taken their toll on everyone and convinced them that working together is much better than litigating at one another, the parties released a joint press release on Sept. 6.

Here's some of that release:

City of Fontana and Alarm Industry Reach Agreement on Alarm Management

Settlement Preserves Both Public Funds and Verified Police Response to Electronic Security Systems

FONTANA, Calif. – Sept. 6, 2010— The City of Fontana and the alarm industry, through the Inland Empire Alarm Association (IEAA), have reached an agreement to resolve their dispute over the City of Fontana’s 2008 alarm ordinance.  The agreement ends on-going litigation and allows both sides to move forward cooperatively to serve and protect the residents and business of Fontana.

The 2008 ordinance provided that the Fontana Police Department would not respond to burglar alarm notification calls from alarm companies unless there was some audio, video, or eyewitness verification that an actual break-in was about to or had occurred. If alarm companies inappropriately notified police of an alarm call without such verification, a fine was imposed on the alarm company. Some of the key provisions of the 2008 ordinance were found to be unconstitutional by the San Bernardino Superior Court in March 2010, while the Court affirmed the validity of other portions.  Both sides had appealed that ruling.

In the spirit of compromise, the parties mutually and amicably agreed to dismiss their appeals and instead agree on terms of a new alarm ordinance to replace the disputed 2008 ordinance.  The new alarm ordinance maintains verified response to burglar alarms while eliminating the provisions of the 2008 ordinance that the alarm industry contended were unlawful. It envisions a continuing cooperative relationship between the Police Department and the alarm companies to adjust the verification requirement for burglar alarms as alarm technology improves so alarm companies can continue to serve their customers and police can continue to improve their level of service to the people of Fontana.  IEAA has agreed that the terms of the settlement adequately satisfy Fontana’s obligations under the Superior Court’s March decision to forgo any refund of the fine money collected by the City of Fontana under the ordinance.

President of IEAA, Morgan Hertel says electronic security companies will also work with law enforcement on appropriate alarm response to reduce false alarms and to help conserve limited police resources.

So it sounds like both sides are giving a little and everyone's allowed to walk away with a little dignity. I actualy began writing a story about this turn of events last week, when I picked up the story in the San Bernardino Sun. That story should move on our wire soon, once our legal sources have a chance to look at the larger legal ramifications for the security industry.

Even though the two sides have come to an agreement and are working together, there have been compromises.

The new alarm ordinance maintains the verified response requirement, which the Fontana Police Department believes reduces incidents of false dispatch of police. It continues to provide for fines against alarm companies for requesting police dispatch without first verifying an actual emergency exists and will also impose fines on alarm companies for misrepresenting that verification took place.

I've been blogging a lot about verification lately. I think it's going to continue to be a pretty heavy topic going forward.

CAA past president and law enforcement liaison for SIAC Jon Sargent said other state alarm associations may begin combing through their ordinances. “It’s a pretty remarkable thing to have in writing that the ordinance here was unconstitutional and violated due process,” Sargent said. “I would think this is going to shake up everything.”

Sargent also said that the actual amount of money the city has spent on the legal battle with the Inland Empire Alarm Association is actually much more than this most recent settlement. “We’ve been through two lawsuits with them. We started back in August of 2007. That was after they put a very restrictive verified response police in place. So far they’ve had to pay more than $357,000 in lawyers’ fees to the association. That doesn’t include their own legal expenses. The first lawsuit in 2008, they paid over $184,000. And now there’s the $173,000,” Sargent said

Stay tuned to SSN for continuing coverage of this story, including interviews with representatives from SIAC, the IEAA and attorneys from Mitchell Silberberg & Knupp, the law firm that's been working with the industry in this matter.

Party at ASG!

Thursday, September 16, 2010

Just arrived in Beltsville, Md. for the grand opening of ASG’s new headquarters.

They’re in the same location they’ve been in for years, they’ve just expanded, a lot though…about two and a half times.

In the past several years ASG has acquired several companies in this area and they’ve decided to bring them all under one roof with the corporate operations. They acquired Accutech, Tenn Security and Netversant.

“All told that’s about 75-80 new employees,” Bob Ryan told me. “There are about 130 people working in this building now.”

Bringing disparate businesses together is difficult to “integrate well with core operations unless you’re under one roof,” he said.

Expanding this building and bringing everyone together, “lowered our costs, there’s better employee synergy and morale,” he said.

There’s a big tent outside. I’ve seen some guests from the industry, Joe Sausa and Tony Martin from Honeywell, Mark Melendes from PrivateBank, and I hear that there will be some sports notables from these parts…someone from the Orioles and someone from the Redskins.

I’m also looking forward to talking to one of ASG’s blue chip customers, NIH, who will be here today.

“It’s the first time since we’ve been in business that we’ve taken the time to recognize our own accomplishments and our employees,” Ryan said.

This a big milestone and we didn’t want it to pass without saying thank you, without looking in the mirror and saying ‘we’re doing pretty good.’”

Party’s starting now, more later

Bay Alarm pays $1.7m. cash for office

Wednesday, September 15, 2010

Saw this story about Bay Alarm, the California super-regional which is owned by the Westphal family. Bay Alarm is helping out the real estate market in LA and expanding and upgrading its operations at the same time.

It’s from the Glendale News Press yesterday and it’s about Bay Alarm paying $1.72m cash for a new building in Glendale, which, according to a quote in the story from Graham Westphal, co-president of the Bay Area-based company, will be used as a “service, sales and installation hub for most of downtown L.A. and all of the valley.”

Here’s a photo of the front of the building (with a particular emphasis on the parking space in front) which appeared in the news report. It also appears that the building is currently protected by ADT–I think that’s an ADT sign out front–I’m guessing that will change.

TN gnp-0913-alarm-1.jpg

I haven’t called Matt Westphal, the other co-president of Bay Alarm yet, because it’s early in California and while Matt is always eager to talk to me about CAA business (California Alarm Association, of which he is president) he usually declines comment on his own business. He’ll confirm that I haven’t given up hope, though. I always call or email him in case he changes his mind.

In case Matt’s still mum, as I suspect he may be, here are some other highlights from the story:

The current regional center is located in Van Nuys and will be moved to this new spot. Bay Alarm liked the location of the building. From the story:

“Glendale is a business-friendly community with proximity to the freeway east, south, north and west,” Westphal said. “We like the neighborhood.”

About 40 employees will work out of the new office, which will also serve as regional training center.

The realtors involved say the deal was sealed shortly after the property was listed because it was a cash deal.

Bay Alarm has 100,000 customers in California, and they consider themselves “the largest independently owned burglar alarm company in the country.”

NFPA launches new fire show in December

Tuesday, September 14, 2010

I saw today that the NFPA is launching a new fire show in December in Orlando. It appears that they’re looking at it as a good way to get folks together for training.

I’ve got a call into Kim Fontes at NFPA to find out if there’s a show floor, and who from the fire installation community they think would most benefit from the show.

From the release:

slated for December 13-17, 2010 in Orlando with three days of educational sessions and two days of post-conference seminars. During the three-day conference, there will be over 50 intensive educational sessions presented by NFPA staff experts and committee members on the latest fire and life safety code related topics in four tracks – Building and Life Safety, Detection and Alarm, Suppression, and Codes and Standards.

Post-conference seminars will be offered for Fire Protection Concepts and Analysis for Property Loss Prevention, Sprinkler Hydraulics, Code Requirements for Maintaining Fire and Life Safety Systems, and Explosion Prevention and Protection.

“This conference is a new and exciting concept for NFPA. It is a great way for us to combine some of the most sought after code topics in a single week,” said Kim Fontes, NFPA’s division director, product development. “It will provide participants an opportunity to hear directly from NFPA staff experts and committee members who work directly with the codes and standards.” Attendees will be able to receive CEUs toward their professional certifications.