Cogent Raises $600 Million in Debt as CEO Sells $5.5 Million in Stock

WASHINGTON - June 4, 2025 - PRLog -- — Just two days after being publicly accused of obstruction for withholding the schedules to Exhibit 2.5—a concealed acquisition agreement tied to the 2003 takeover of Fiber Network Solutions, Inc. (FNSI)—Cogent Communications announced a $600 million senior secured notes offering.

According to whistleblower David J. Koch, the timing of the debt raise and a series of undisclosed executive stock sales suggest that Cogent insiders are repositioning financially ahead of expected federal enforcement.

"This is not normal corporate behavior," said Koch, FNSI's original founder and a federally recognized whistleblower. "You don't ignore a federal demand, dump millions in stock, and raise $600 million in debt unless you're bracing for regulatory impact."

The federal demand involves the long-suppressed schedules to Exhibit 2.5—an unindexed document buried under "miscellaneous assets" in Cogent's 2003 S-1 SEC registration. Now confirmed to be the full asset purchase agreement for FNSI, it memorializes a transaction executed while Koch was medically incapacitated—during which his 1.2 million founding shares were erased without compensation or disclosure.

"Exhibit 2.5 was so 'inconsequential' to Cogent in 2003 that it wasn't even mentioned in the registration's main text," Koch noted. "But now that it confirms my federal whistleblower report, it's the most guarded document in the company's archive."

INSIDER LIQUIDATION BEFORE THE DEADLINE

Securities filings reveal that Cogent CEO Dave Schaeffer sold 115,000 shares—cashing out $5.5 million—just before and after the May 27 deadline to produce the Exhibit 2.5 schedules:

May 15 — 40,000 shares for $2,015,036
May 22 — 25,000 shares for $1,156,768
May 23 — 25,000 shares for $1,173,318
May 29 — 25,000 shares for $1,172,593

The May 15 sale occurred just one day before Schaeffer received a formal demand. His final sale came two days after the deadline expired, while the company remained silent.

$600M DEBT OFFERING RAISES RED FLAGS

On June 2—just hours after new complaints were filed—Cogent announced the $600 million debt issuance. While it's framed as refinancing $500 million in 3.5% notes due 2026, the unexplained $100 million excess, labeled for "general corporate purposes," raises concerns.

"If this were above board, why time it immediately after a federal deadline?" Koch asked. "Is this refinancing—or escape financing?"

FEDERAL VIOLATIONS CITED

Legal analysts point to a growing pattern of violations, including:

18 U.S.C. § 1962(d) — RICO Conspiracy
18 U.S.C. § 1519 — Concealment of Records
15 U.S.C. § 78j(b) — Securities Fraud
18 U.S.C. § 1513(e) — Whistleblower Retaliation

Koch alleges the company's inaction—and its board's silence—are now being documented as new predicate acts for submission to the SEC, DOJ, IRS-CI, and U.S. Attorney.

Supporting Documentation:
https://FiberNetworkSolutions.net
SEC Source; https://www.sec.gov/Archives/edgar/data/1158324/000104746...