http://www.theaxcess.net/microcap_02_1103.html
The Internet is cluttered with touts who have been promoting obscure over the counter companies, expressing unjustified optimism about companies' prospects, and minimizing, or simply ignoring, the limitations of those companies and the risks of a potential investment. Often, those promoters disclose that they have been compensated for their efforts with "free trading" shares of the company's stock - purportedly handed to them by an "unaffiliated third-party."
As it turns out, much of that stock is not really "free trading" and those "third parties" may indeed be affiliated with the company issuing the stock.
In a series of cases filed earlier this month, the SEC has targeted a group of Internet stock promoters who use "financial websites" and e-mail to pump up the value of obscure, struggling public companies, in exchange for shares.
On October 23, 2003, the SEC instituted seven administrative proceedings charging thirty one public companies, stock promoters, and their associates, with engaging in schemes to distribute unregistered shares of stock, and then unloading hundreds of thousands of shares on unsuspecting investors.
The SEC actions do not focus upon the accuracy of the promotions, but on the compensation paid to, and received by, the promoters. They highlight a common abuse; compensating stock touts with so-called "free trading" stock that they dump shortly after they pump up stock prices through aggressive Internet campaigns.
As the SEC discovered, this practice involved some of the Internet's most active promoters. Here's a summary of the SEC actions:The Equity Alert case
The SEC instituted proceedings against Equity Alert.com, a Vancouver, British Columbia-based Internet stock promoter; its parent, Innotech Corporation; two principals of those entities (Harmel S. Rayat and Bhupinder ("Bill") S. Mann); and two public companies (T&G2, Inc. ("T&G") and Virilitec Industries, Inc. ("Virilitec").
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The Small Cap Solutions Case
Proceedings were filed against Research Capital, LLC, a Florida venture capital company; its principals, Craig L. Smith, III and R. Craig Hall; and a group of Internet stock promoters - Wayne H. Jenkins; Jenkins' company, IR Specialists; Tyler T. Fleming; SmallCap Solutions, Inc.; Complete Financial and Operations, LLC; Scott H. Wilding; and Research Investment Group, Inc. (RIG).
The SEC maintained that Research Capital hired Wilding and RIG to tout a small company that was affiliated with Research Capital and its principals Smith and Hall. In return for those services, RIG promised to give Wilding four million shares of the company, at one third of the market price. In fact, Smith and Hall transferred 3,300,000 of the shares to Wilding.
...
The SEC noted that the promotional campaigns that ensued coincided with increased trading in the public company's stock. While the promotion was moving forward, the promoters sold their shares for over $130,000.
As in the Equity Research case, the SEC alleges that the shares received by these promoters were restricted and should not have been sold without registration.
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Several of the respondents (Research Capital; Smith; Hall; Jenkins; and Jenkins' company, IR Specialists) settled the proceedings without admitting or denying the findings. The other claims are still pending.....
The First Capital International, Inc. Case
The SEC filed a set of related proceedings involving First Capital International, Inc.; its president, Alexander Genin; stock promoter Edwin M. Koziol; OTC Live, Inc.; and Mark A. Suleymanov.
The Sec says that Genin hired OTC Live and a now-defunct stock promotion company run by Koziol, to promote First Capital on the Internet. In order to pay the promoters, Genin arranged to transfer to them a total of 64,500 First Capital shares from a brokerage account he controlled.
Reprinted by permission of StockPatrol.com
(ist ja nicht verwunderlich wenn bestimmte Leute ihre Insidertips hier nicht mehr veröffentlichen)
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