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Quality StocksWhere's you disclaimer. Name your 3rd party payer. Novori, Guilin Paper, Trustcash Holdings Named In Stock Promotions Tuesday, December 04, 2007; Posted: 01:12 AM http://www.tradingmarkets.com/.site/news/Stock News/879072/ (financialwire.net via COMTEX) -- TCHH | charts | news | PowerRating -- December 4, 2007 (FinancialWire) Who is behind stock promotions for Novori (OTCBB: NOVO), Guilin Paper Inc. (OTCBB: GUPR), and Trustcash Holdings (OTCBB: TCHH)? Often but not always, illegal junkfaxes and spam are distributed by unscrupulous "pump and dump" promoters without the company's knowledge. These junkfaxes and spam emails proliferate throughout the financial community, leaving many recipients begging for anyone to help stop them. It is usually a muddle that the U.S. Securities and Exchange Commission has been urged by the SEC Forum on Small Business to ferret out. In April 2006, Pink Sheets, LLC, entered the fray by asking the SEC point-blank to adopt rules mandating increased protections for investors against fraudulent activities by securities promoters and their sponsors. The proposal (viewable in full at http://sec.gov/rules/petitions/petn4-519.pdf) also specifically targets the flood of unsolicited spam emails and faxes promoting OTC securities to individual investors. The spam touting Novori said that a company named either Strategic Capital or Green Strategic Capital had been hired by an unspecified third party consultant to receive $115,000 for publication and circulation of the report. Strategic Capital and its affiliates and officers may hold or sell common shares in the open market without notice. There was a telephone number listed to be removed from the fax list, if you gave them your fax number. The spam hyping Guilin Paper said that a company named Strategic Capital was hired by an unspecified third party consultant for $75,000 for publication and circulation of the report, and that its affiliates and officer may hold or sell common shares in the open market without notice. There was a telephone number listed to be removed from the fax list, if you gave them your fax number. The spam touting Trustcash said a company called Undervalued Stocks had received money from Lapidarian Partners Inc. for the production and distribution of the newsletter, and that LPI may own a non-controlling share of TCHH, which it could sell at any time without notice. There was a telephone number listed to be removed from the fax list, if you gave them your fax number. The SEC has pursued many of these stock market promoters. On March 9, 2006, for example, the SEC filed suit against BMA Ventures, Inc., a registered investment adviser, and its president and owner, William Robert Kepler. According to the complaint, from January 2004 through March 2005, BMA Ventures and Kepler issued newsletters by bulk fax under names such as "OTC Premier," "Inside Wall St.," and "OTC Marquee" recommending that the recipients purchase the stock of 26 companies, virtually all of which were penny stocks. The complaint alleged that the newsletters were fraudulent because they did not reveal that BMA Ventures was secretly selling its stock in the same companies contrary to its recommendations, a practice known as "scalping." BMA Ventures and Kepler obtained approximately $1.9 million through this scheme. Finally, BMA improperly registered with the Commission as an investment adviser because it did not meet the conditions necessary for registration. The Motley Fool has warned: "[Pumping and dumping is] the illegal act of buying shares in a company, hyping it to pump up the share price, and then dumping the shares before they fall in value. Since this practice is usually done with small and volatile stocks, the pump-and-dumper's selling will likely contribute to the stock's rapid downfall. This practice has flourished on the Internet, where unscrupulous folks have found it easy to pump up the stock prices of penny stocks (those trading under $5 per share). The Securities and Exchange Commission and others have gone after many pump-and-dumpers...." Meanwhile, the public can take some steps. One action available is to contact the company and insist that it file an 8K with the SEC stating, first, if it has any knowledge as to who is behind the spam or junkfax, and second, specifically whether it has issued shares to promoters or financiers or anyone else now or in the past that could conceivably have wound up buying junkfaxes and spam emails, and their names and addresses and phone numbers so that aggrieved investors may contact them to determine who is behind a suspected pump and dump scam. Recipients may also fax or email the spam or junkfax to the company so that the company will have the full details. The SEC Forum, meeting in San Francisco September 19, 2005, voted to send to the full SEC a recommendation that it adopt "more stringent disclosure standards in Regulation 17(b), to include in addition to or instead of a company or partnership, whether in the U.S. or offshore, and the natural individual(s) behind any stock promotions, the holdings of those individuals and their nominees or agents, if any, and their specific intended sales of the promoted stock." According to the Forum participants, stock promotions "proliferate throughout the financial community, in the form of massive spam emails, junk faxes and websites, many of which mimic professional research reports, and whose sole purpose is to stimulate volume so that undisclosed holders and their promoters may sell into the buying of unsuspecting, and often unsophisticated investors." The SEC has also initiated a new and aggressive campaign to foil what it calls suspected pump and dump promoters by suspending trading in the equities of companies that either participate in or have been targeted by suspicious promotions. Some observers believe such a "cooling off period" could "cool the ardor" for suspect promotions if investors have an opportunity to further evaluate junk faxes and spam emails they have received, and could prevent some more naive investors from putting their money into stocks that are the subject of large-scale promotion campaigns based on questionable substance or fundamentals. The companies are among some 400 recently identified with aggressive stock promotions via unsolicited spam or junk faxes. It is not known if the companies approved of the promotions. A few of the group have disavowed any connection to the promotions, but most have not commented, and for many, the campaigns continue unabated. One thing consistent with most: after the campaigns end, and often before, their stock prices plummet. In fact, in a recent portfolio kept at http://www.spamstocktracker.com by Joshua Cyr, an individual investor, the experiment showed that of 37 stocks out of 955 spams he entered in the portfolio, a $17,405 tracking "investment" in those 37 stocks between May 15, 2005, and June 27, 2005, had turned into $9,574 by October 2005, a stunning and debilitating loss of half his investments! Perhaps more educational for naive investors, only two out of the 37 actually gained. Only three of the remaining 35 had single-digit losses. The remaining 32 had significant double-digit losses, from 20% to 99.83%, despite faxes and emails screaming that they were the next Microsoft or better when he "purchased" them. Worse, Cyr said, most had momentary, one-day gains and then "dropped like flies" the very next day. BusinessWeek, published by McGraw-Hill (NYSE: MHP), in an article May 15, 2005, said SEC Enforcement is zeroing in on micro-cap fraud with a novel strategy and new tactics. "In the past, SEC lawyers chased swindlers one company at a time. Now the agency is targeting gatekeepers such as broker-dealers, promoters, and lawyers, who show up in scam after scam. And rather than waiting months until it can prove intent to defraud, the SEC is halting trading in companies that it suspects are about to be monkeyed with as soon as it finds what it considers clear-cut evidence of violations. "The campaign to squelch micro-cap fraud was part of (previous SEC) Chairman William H. Donaldson's push to get ahead of abuses before they cause investors widespread harm." The article is at http://www.businessweek.com/magazine/content/05_12/b3925104_mz020.htm This theme is echoed in an article by Deborah Solomon of the Dow Jones (NYSE: DJ) Wall Street Journal, published March 1, 2005, "the SEC's move is part of the agency's broader attempt to get ahead of possible fraud before it becomes widespread." The article may be accessed at: http://online.wsj.com/search#SB110729717180142868 The SEC has apparently developed a "profile" to determine candidates for potential trading halts. Solomon said the agency has implemented a "risk based" approach to help identify potential problems, and last year took the unusual step of halting trading in the securities of 26 "shell" companies that failed to file timely financial disclosures with the agency. The SEC also recently temporarily suspended trading in Commanche Properties (OTC: CMCH) and Courtside Products (OTC: CSDP), both of which disclaimed any company or executive association with the spam email and/or faxes that triggered the SEC suspensions. In the case of Courtside, the SEC said it is investigating whether Courtside was misled by stock promoters who advised the firm to go public by relying on an SEC rule that allows companies to issue shares and raise money without registering with the commission, if certain conditions are met. The conditions include issuing a portion of the shares to "accredited" investors. "Federal securities laws define an accredited investor as certain entities or individuals, such as banks, insurance companies, registered investment companies or trusts," said the Wall Street Journal. "The SEC is looking into whether the stock promoters, who agency officials declined to identify, may have falsely portrayed themselves as accredited investors in order to gain shares of Courtside. The promoters may have then sought to sell their shares to investors and later drive up the price through spam e-mail and faxes. Investigators want to determine whether the ultimate goal was to artificially stimulate demand for the stock and then dump shares once the price increased. The SEC also recently suspended trading in as many as 39 companies in a single day, although it is not clear if those were involved in or victimized by promoters. These included Advanced Media, Inc. (AVMJ), Air Packaging Technologies, Inc. (AIRP), American Film Technologies, Inc. (AFTC), American Plastics & Chemicals, Inc. (APLC), AmeriQuest Technologies, Inc. (AMQT), Apparel Technologies, Inc. (APTX), BPI Packaging Technologies, Inc. (BPIE), Chantal Pharmaceutical Corp. (CHTL), CML Group, Inc. (CMLK), Compositech, Ltd. (CTEK), Crown Laboratories, Inc. (CLWB), DBS Industries, Inc. (DBSS), Dental Medical Diagnostic Systems, Inc. (DMDS), Dispatch Management Services Corp. (DMSC), Eglobe, Inc. (EGLOQ), and Also, Enamelon, Inc. (ENML), Finantra Capital, Inc. (FANT), First Scientific, Inc. (FSFI), Hayes Corp. (HAYEQ), Hybrid Networks, Inc. (HYBR), iPrint Technologies, Inc. (IPRT), Microage, Inc. (MICAQ), MigraTEC, Inc. (MIGR), Network Computing Devices, Inc. (NCDI), Pacific Systems Control Technology, Inc. (PFSY), Paracelsian, Inc. (PRLN), Pharmaprint, Inc. (PPRT), Pinnacle Micro, Inc. (PNLEQ), and Semiconductor Laser International Corp. (SLIC), Socrates Technologies Corp. (SOCT), Star Technologies, Inc. (STRR), Sunrise Technologies International, Inc. (SNRS), Telemonde, Inc. (TLMD), thehealthchannel.com, Inc. (THCH), Transmedia Asia Pacific, Inc. (MBTA), Tristar Corp. (TSAR), VDC Communications, Inc. (VDCI), Vianet Technologies, Inc. (VNTK), and Visionamerica, Inc. (VSNA). "At issue is the potential for so-called pump-and-dump schemes, whereby speculative investors, company insiders or others try to inflate demand for a stock by trumpeting positive-sounding information about a company, typically via e-mail, and then cash in their shares at the higher price. Often the information is false and the stock quickly declines again," explained the Journal. The SEC said that each week, the SEC's Internet enforcement division, headed by John Reed Stark, gets thousands of complaints from investors "about spam email plugging stocks and other investments." "We want to head off possible damage to shareholders before it occurs," John Reed Stark, chief of the SEC's Office of Internet Enforcement, was quoted as saying. Investigators want to determine whether the ultimate goal in many of these instances is to "artificially stimulate demand for the stock and then dump shares once the price increased." The SEC hastened to add that it is not asserting that many of the companies themselves are involved in the schemes. Often they are just bystanders, but sometimes it results from stock issued to offshore and even "promotional" sites and email and fax originators to create "visibility," and the promoters often violate their promises to the companies to sit on the shares. "Under certain circumstances, an improper stock distribution in violation of SEC regulations can be a prelude to a manipulation," Peter Bresnan, an associate director in the SEC's enforcement division, was quoted as saying. Investrend Information's (http://www.investrendinformation.com) Investors Resource Center has teamed with JunkFax (http://www.junkfax.org), which allows those receiving unwanted stock promotions to provide the evidence directly to FinancialWire. Many but not all have missing or incomplete disclosures under U.S. Securities and Exchange Commission Regulation 17(b): "It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof." The SEC has told FinancialWire that Regulation 17(b) means full and complete compensation for research and any other services provided, including amounts and sources, must be disclosed in "every press release," as well as other published documents, including emails or faxes. The SEC states that third-party compensations must include the relationship of the payer to the issuer. In an email to FinancialWire, John J. Nester, a spokesperson for the U.S. Securities and Exchange Commission, confirmed that regulators interpret 17(b) to mean that specific compensation information must be contained in all such communications to the public, and that a link to a disclosure somewhere else, for example, is a violation of the regulation. He further stated that the compensation disclosure required by the SEC includes "amounts and sources" in any and all communications mentioning the company. The SEC has indicated it is serious about violators. Earlier this year, the SEC charged JM Dutton Associates with violating 17(b) disclosures and penalized the firm $25,000. It also recently similarly charged BlueFire Research for the same transgression. For up-to-the-minute news, features and links click on http://www.FinancialWire.net FinancialWire is an independent, proprietary news service of Investrend Information, a division of Investrend Communications, Inc. It is not a press release service and receives no compensation from any company for its news or opinions. Other divisions of Investrend, however, provide shareholder empowerment platforms such as forums, independent research and webcasting. For more information or to receive the FirstAlert daily summary of news, commentary, research reports, webcasts, events and conference calls, click on http://www.investrend.com/contact.asp For a free annual report on a company mentioned in the news, please click on http://investrend.ar.wilink.com/?level=279 To become an investor monitor of independent research for a company in which you are invested, go to the not-for-profit Shareholders Research Alliance, Inc. website by clicking on http://www.shareholdersresearch.com/ The FinancialWire NewsFeed is now available in multiple formats to your site or desktop, free. Click on: http://www.investrend.com/XmlFeeds?level=268 http://www.financialwire.net http://www.tradingmarkets.com/.site/news/Stock News/879072/ |
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Msg # | Subject | Author | Recs | Date Posted |
12 | Re: Quality Stocks | onetinsoldier | 0 | 12/5/2007 9:39:24 AM |