April 2014 – Goode Trades

Why a paid pump is bad news for Fortitude Group $FRTD shareholders

Most of the people trading (and getting rich on paper) off of marijuana stocks are new to the wonderful, wild, and woolly world of OTC stocks. Let me do them a kindness (that they will almost universally ignore) by explaining how pump and dumps work. Most of the companies whose stocks trade on the OTCBB or OTCMarkets are either failing companies or scams. There are some real companies on the OTC but they are few and far between and many of them are just bad companies. Lighting Science (LSCG) and Noble Roman’s (NROM) are a couple great examples — I made big money selling both of them short in 2007 and early 2008. Both are still below the prices at which I covered. And these are some of the better OTC companies.

$78,693 profit NROMShort Stock
auto-import all trades old IB account

Interactive Brokers

Posted by MichaelGoode /
http://profit.ly/1MmgQX

$88,401 profit LSCGShort Stock
auto-import all trades old IB account

Interactive Brokers

Posted by MichaelGoode /
http://profit.ly/1MmgQE

It is true that some companies do eventually acquire a real stock market listing after being OTC stocks and some of these companies do well. But these companies are even more rare.

Most of the companies on the OTC — if they are not outright scams / set up for the sole purpose of selling shares in a pump and dump — are marginal companies with inept management with little hope of survival without continuous dilutive financing. Management of these companies are usually dumb or inexperienced. Serious people with serious backing do not reverse-merge their companies into OTC shell companies.

There is one thing I can see that can quickly make me very skeptical of a company’s prospects and that is a paid stock promotion. If someone pays for a stock promotion they are desperate to sell shares — if there were plenty of buyers for their shares they would just sell. Instead, they pay promoters to pump the stock and find buyers so they can dump their shares. A sizable stock promotion is a clear sign that a fairly large shareholder is not bullish on the company and they are in a hurry to sell. So when I received emails yesterday morning from a couple stock promoters promoting Fortitude Group (FRTD) I tweeted that that was a bad sign for investors in the company:

More bad news for the #wolfpack $FRTD now a paid pump & dump — $55k paid to http://t.co/aGv6mm5Uux to pump it today (paid by Data Capital)

— Michael Goode (@goodetrades) April 28, 2014

Of course the #wolfpack didn’t see it that way because their idea of due diligence is to listen to some anonymous guy with no particular experience or understanding other than he had the good idea to buy marijuana-related stocks last autumn and early winter. Some of the OTC-traded marijuana companies may do well but I believe they all will fail. The odds are even worse for those companies that have undergone paid stock promotions, including SKTO, SMVR, NGMC, WBXU, EMBR, PZOO, PLPL, PTOG, XTRM, NVLX, REFG, ICBU, AXXE, PUGE, ERBB, TRTC. And these are only the paid pumps I found in a quick 5-minute search of my inbox.

Below are screenshots of the disclaimers of two of the promotional emails I received this morning on FRTD (click images to see full-size):

I could go into some details on why Fortitude is a bad company and how horribly inadequate their disclosures to OTCMarkets are (the company is not an SEC-reporting company) but I don’t wish to waste any more time trying to convince the marijuana cult members not to drink the hemp Kool-Aid.

Disclaimer: I have no position in any stock mentioned above. I have made money buying and short selling many of the above-mentioned stocks. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Cannabis-Rx $CANA is the new BillionaireStocks pump & dump

Cannabis-Rx (CANA) was widely speculated to be the new BillionaireStocks.com / Speculatorpicks.com stock promotion. The promotion officially began over the weekend with emails from BillionaireStocks.com to some subscribers, linking to http://canaresearch.com/report/. The BillionaireStocks email list is split into many parts and some people will not get the initial pump email until next week. CANA could go up a bit more but with massive front-running and a large market cap it would be quite risky to buy.

Disclosed budget: $1,800,000
Promoter: Trend PR Agency / BillionaireStocks.com / SpeculatorPicks.com
Paying party:
Shares outstanding: 154,000,000
Previous closing price: $0.96
Market capitalization: $147 million

Screenshot of pump page:

PDF copy of pump page

Excerpt from disclaimer:

Trend PR Agency has managed up to a $1,800,000 USD advertising production budget as of March 20, 2014 in an effort to build industry and investor awareness. Any funds leftover after expenses for research, overhead, advertising and public relations related to Cannabis-Rx Inc (CANA) will be considered profit. Entities related to Trend PR Agency hold a large amount of shares in CANA and intend to sell those shares.

Full disclaimer:

MICROCAP MARKETPLACE (MCMP) SAFE HARBOR STATEMENT: Statements contained in this online report and/or video, including those pertaining to estimates and related plans, potential mergers and acquisitions, estimates, growth, establishing new markets, expansion into new markets and related plans other than statements of historical fact, are forward-looking statements subject to a number of uncertainties that could cause actual results to differ materially from statements made. MCMP provides no assurance as to the subject company’s plans or ability to affect any planned and/or proposed actions. MCMP has no first-hand knowledge of management and therefore cannot comment on its capabilities, intent, resources, nor experience and makes no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company or its agent and related sources believed by MCMP to be reliable, but MCMP provides no assurance, and none is given, as to the accuracy and completeness of this information. DISCLAIMER: The information, opinions and analysis contained herein are based on sources believed to be reliable but no representation, expressed or implied, is made as to its accuracy, completeness or correctness. Past performance is no guarantee of future results. MCMP is an independent paid membership website. (www.MicroCapMarketPlace.com). This online report and/or video is a solicitation for membership in MCMP services. MCMP did not receive any direct compensation with respect to the writing of this online report and document. MCMP expects to generate new membership revenue, the amount of which is unknown at this time, to its paid website through the distribution of this online report and/or video. This constitutes a conflict of interest as to MCMP’s ability to remain objective in its communication regarding the subject company. Analysts, principals, associates, employees and affiliates of MCMP do not own or trade equities in the subject company. MCMP is not an investment advisor and this report is not investment advice. This information is neither a solicitation to buy nor an offer to sell securities but is a paid advertisement. Information contained herein contains forward-looking statements and is subject to significant risks and uncertainties, which will affect the results. In the interest of full disclosure, Mike Casson, Publisher and Executive Editor of MCMP is also president of Casson Media Group, Inc. and affiliated companies (hereinafter “CMG”). CMG has received a seventy-five hundred dollar cash fee for this and other advertising efforts from a non-related third-party. The opinions contained herein reflect our current judgment and are subject to change without notice. We encourage our readers to invest carefully and read the investor information available at the web sites of the U.S. Securities and Exchange Commission (SEC) at http://www.sec.gov and the National Association of Securities Dealers (NASD) at http://www.nasd.com. The NASD has published information on how to invest carefully. Readers can review all public filings by companies at the SEC’s EDGAR page. Third Party Advertiser/Advertising Agency IMPORTANT NOTICE AND DISCLAIMER: Trend PR Agency has managed up to a $1,800,000 USD advertising production budget as of March 20, 2014 in an effort to build industry and investor awareness. Any funds leftover after expenses for research, overhead, advertising and public relations related to Cannabis-Rx Inc (CANA) will be considered profit. Entities related to Trend PR Agency hold a large amount of shares in CANA and intend to sell those shares. Their sales of CANA common stock will affect the value of your shares (negatively). This should be considered a direct conflict of interest. Please review all investment decisions with a licensed investment advisor. This report is a commercial advertisement and is for general information purposes only. Trend PR Agency is engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on this site or emails unless you can afford to lose your entire investment.

Disclaimer: I am long 20,900 shares of CANA in one account and short an equal number of shares in another account. I have no net position but will likely acquire such a position. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Black River Petroleum $BRPC gets promoted by Capital Financial Media via landing page

With a high price, relatively large market cap, big move on low volume since the pump started, and small pump budget, BRPC is an almost ideal short. There is an online landing page here: http://www2.untappedwealthonline.com/brpc/index.html

StockMister.com has been compensated Eighteen-Thousand Dollars Cash via Bank Wire Transfer by a third party (Speak Easy Media LLC) for a 1 Day Marketing Program regarding WIIM.

More recently I have received emails linking to a landing page: http://www2.untappedwealthonline.com/wiim/index.html

Disclosed budget: $250,000
Promoter: Capital Financial Media / Rising Stock Advisor
Paying party: Intermix Corp
Shares outstanding: 72,093,414
Previous closing price: $1.09
Market capitalization: $78 million

PDF copy of landing page

Excerpt from disclaimer:

Black River Petroleum,(BRPC), the company featured in this issue, appears as paid advertising, paid by Intermix Corp to provide public awareness for BRPC.
…
CFM has received and managed a total production budget of $250,000 for this print advertising effort and will retain any amounts over and above the cost of production, copy writing services, mailing and other distribution expenses, as a fee for its services. Rising Stock Advisor is paid $2,500 as an editorial fee from CFM and also expects to receive new subscriber revenue as a result of this advertising effort.

Full disclaimer:

IMPORTANT NOTICE AND DISCLAIMER: This featured company sponsored advertising issue of Rising Stock Advisor does not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as a recommendation by Rising Stock Advisor or an offer or solicitation to buy or sell any security. Black River Petroleum,(BRPC), the company featured in this issue, appears as paid advertising, paid by Intermix Corp to provide public awareness for BRPC. Intermix Corp has approved and signed off as “approved for public dissemination” all statements made herein regarding BRPC’s history, assets, technologies, current as well as prospective business operations and industry information. Rising Stock Advisor and Capital Financial Media (CFM) has used outside research and writers using public information to create the advertisement coming from Rising Stock Advisor about BRPC. Although the information contained in this advertisement is believed to be reliable, Rising Stock Advisor and CFM makes no warranties as to the accuracy of any of the content here in and accepts no liability for how readers may choose to utilize the content. Readers should perform their own due-diligence, including consulting with a licensed, qualified investment professional or analyst. Further, readers are strongly urged to independently verify all statements made in this advertisement and perform extensive due diligence on this or any other advertised company. Rising Stock Advisor is not offering securities for sale. An offer to buy or sell can be made only with accompanying disclosure documents and only in the states and provinces for which they are approved. Many states have established rules requiring the approval of a security by a state security administrator. Check with http://www.nasaa.org or call your state security administrator to determine whether a particular security is licensed for sale in your state. Many companies have information filed with state securities regulators and many will supply investors with additional information on request. CFM has received and managed a total production budget of $250,000 for this print advertising effort and will retain any amounts over and above the cost of production, copy writing services, mailing and other distribution expenses, as a fee for its services. Rising Stock Advisor is paid $2,500 as an editorial fee from CFM and also expects to receive new subscriber revenue as a result of this advertising effort. *More information can be received from BRPC’s investor relations firm. Further, specific financial information, filings and disclosures as well as general investor information about publicly traded companies like BRPC, advice to investors and other investor resources are available at the Securities and Exchange Commission website www.sec.gov and www.nasd.com. Any investment should be made only after consulting with a qualified investment advisor and after reviewing the publicly available financial statements of and other information about the company and verifying that the investment is appropriate and suitable. Investing in securities is highly speculative and carries a great deal of risk especially as to new companies with limited operations and no history of earnings. The information contained herein contains forward-looking information within the meaning of section 27a of the Securities Act of 1993, as amended, and section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding expected growth of the featured company. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act, BRPC notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the Company’s actual results of operations. Factors that could cause actual results to differ include the size and growth of the market, the Company’s ability to fund its capital requirements in the near term and in the long term; pricing pressures, technology issues etc.

Disclaimer: I have no position in any stock mentioned above. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Zenosense $ZENO gets an Undervalued Quarterly landing page pump

UndervaluedQuarterly.com is known (at least to me) as producing nice looking landing page pumps that attract fairly low volume and generally dump quickly. I first received emails promoting Zenosense (ZENO) and linking to http://www.undervaluedquarterly.com/zeno/ yesterday before the market open. I will look to short ZENO if I can find shares.

Disclosed budget: $960,000
Promoter: Undervalued Quarterly / David Katz
Paying party: Rolling Media Solutions
Shares outstanding: 48,461,741
Previous closing price: $0.75
Market capitalization: $36 million

PDF copy of landing page

Excerpt from disclaimer:

UVQ has received $15,000 from or on behalf of Rolling Media Solutions Inc (“RMS”) in compensation for this advertisement to enhance public awareness of Zenosense Inc (“Zenosense” or the “Company”). UVQ endorser David Katz received a fee of $1,500. UVQ also expects to receive new subscriber revenue, the amount which is unknown at this time, as a result of this advertising effort.

…

Zenosense, the Company featured in this issue, appears as paid advertising, paid by RMS to enhance public awareness for Zenosense. RMS is managing an online weekly advertising budget of up to $120,000 USD out of a total budget of $960,000 USD in an effort to build industry and investor awareness, paid to RMS from a shareholder(s) of Zenosense. These shareholder(s) hold a large amount of shares in ZENO and intend to sell those shares.

Full disclaimer:

IMPORTANT NOTICE AND DISCLAIMER: This is a paid advertisement by The UnderValued Quarterly Newsletter (“UVQ”). UVQ has received $15,000 from or on behalf of Rolling Media Solutions Inc (“RMS”) in compensation for this advertisement to enhance public awareness of Zenosense Inc (“Zenosense” or the “Company”). UVQ endorser David Katz received a fee of $1,500. UVQ also expects to receive new subscriber revenue, the amount which is unknown at this time, as a result of this advertising effort. UVQ does not perform any due diligence on the stocks and companies discussed herein. UVQ relies on generally available public information and representations made by Zenosense. UVQ does not purport to provide an analysis of any company’s financial position, operations, or prospects. This advertisement is not to be construed as a recommendation by UVQ, or an offer to sell or solicitation to buy or sell any security. Never invest in any advertised company unless you can afford to lose your entire investment. Zenosense, the Company featured in this issue, appears as paid advertising, paid by RMS to enhance public awareness for Zenosense. RMS is managing an online weekly advertising budget of up to $120,000 USD out of a total budget of $960,000 USD in an effort to build industry and investor awareness, paid to RMS from a shareholder(s) of Zenosense. These shareholder(s) hold a large amount of shares in ZENO and intend to sell those shares. Their sales of ZENO common stock will affect the value of your shares (negatively). This should be considered a direct conflict of interest. The payment is to cover costs associated with creating and distributing this report online and RMS will retain any excess funds as profit. Although the information contained in this advertisement is believed to be reliable, UVQ makes no warranties as to the accuracy of any of the content herein and accepts no liability for how readers may choose to utilize it. The information contained herein is based exclusively on information generally available to the public and does not contain any material, non-public information. Readers should perform their own due-diligence before investing in any security including consulting with a qualified investment advisor or analyst. Readers should independently verify all statements made in this advertisement and perform extensive due-diligence on this or any other advertised company. The feature Company’s financial position and all other information regarding the feature Company should be verified directly with the Company. UVQ nor any of their principals, officers, directors, partners, agents, or affiliates are not, nor do we represent ourselves to be, registered investment advisors, brokers, or dealers in securities. UVQ is not offering securities for sale. This mailing piece is not intended to be, nor should it be construed as, an offer to buy or sell, or a solicitation of an offer to buy or sell securities, or as a recommendation of the purchase of the feature Company’s securities. An offer to buy or sell can be made only with accompanying disclosure documents and only in the states and provinces for which they are approved. Research and any due diligence was conducted by an outside researcher for this advertisement. Further, specific financial information, filings and disclosures as well as general investor information about publicly listed companies and other investor resources can be found at the Securities and Exchange Commission website at www.sec.gov and www.nasd.com. Any investment should be made only after consulting with a qualified investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Many states have established rules requiring the approval of a security by a state security administrator. Check with www.nasaa.org or call your state security administrator to determine whether a particular security is licensed for sale in your state. This advertisement is not intended for readers in any jurisdiction where not permissible under local regulations and investors in those jurisdictions should disregard it. Investing in securities is highly speculative and carries a great deal of risk, which may result in investors losing all of their invested capital. Past performance does not guarantee future results. This advertisement contains forward-looking statements regarding Zenosense, its business and prospects. Such forward-looking statements and information are within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are intended to be covered by the safe harbor provisions created by these laws, The advertisement may include statements regarding expected continual growth of the featured company. Forward-looking statements are based upon expectations, estimates and projections at the time the statements are made and involve risks and uncertainties that could cause actual events to differ materially from those anticipated. Forward-looking statements may be identified through the use of words such as expects, will, anticipates, estimates, believes, or by statements indicating certain actions may, could, should, or might occur. Any statements that express or involve predictions, expectations, beliefs, plans, projections, objectives, goals or future events or performance may be forward-looking statements. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the publisher notes that statements contained herein that look forward in time, which include other than historical information, involve risks and uncertainties that may affect the company’s actual results of operations. Factors that could cause actual results to differ include, but are not limited to, the size and growth of the market for the company’s products and services, regulatory approvals, the Company’s ability to fund its capital requirements in the near term and the long term, pricing pressures and other risks detailed in the Company’s reports filed with the Securities and Exchange Commission. UVQ is a trademark of The UVQ newsletter. All other trademarks used in this publication are the property of their respective trademark holders. UVQ is not affiliated, connected, or associated with, and are not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by UVQ to any rights in any third-party trademarks. This advertisement may provide the addresses of or contain hyperlinks to outside or third-party websites, UVQ has not reviewed any such websites and takes no responsibility for the contents thereof or any possible effects resulting from accessing any such websites. The contents of any such websites do not in any way constitute a part of this advertisement. Accessing such websites or following any link shall be at your own risk.

Mining Minerals of Mexico $WIIM gets a landing page pump

Mining Minerals of Mexico (WIIM) had been promoted via email by crappy pumpers for awhile — my first emails were in premarket on April 1st, 2014 by Stockmister.com:

StockMister.com has been compensated Eighteen-Thousand Dollars Cash via Bank Wire Transfer by a third party (Speak Easy Media LLC) for a 1 Day Marketing Program regarding WIIM.

More recently I have received emails linking to a landing page: http://www2.untappedwealthonline.com/wiim/index.html

Disclosed budget: $400,000
Promoter: M3 Profit Accelerator and List Data Solutions
Paying party: Duvana Holdings
Shares outstanding: 108,403,327
Previous closing price: $0.346
Market capitalization: $37 million

PDF copy of landing page

Excerpt from disclaimer:

Mining Minerals of Mexico Corp.,(WIIM), the company featured in this issue, appears as paid advertising, paid by Duvana Holdings to provide public awareness for WIIM. Duvana Holdings has approved and signed off as “approved for public dissemination” all statements made herein regarding WIIM’s history, assets, technologies, current as well as prospective business operations and industry information. M3 Profit Accelerator and List Data Solutions (LDS) has used outside research and writers using public information to create the advertisement coming from M3 Profit Accelerator about WIIM.

…

LDS has received and managed a total production budget of $400,000 for this print advertising effort and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses,as a fee for its services. M3 Profit Accelerator is paid $2,500 as an editorial fee from LDS and also expects to receive new subscriber revenue as a result of this advertising effort.

Full disclaimer:

IMPORTANT NOTICE AND DISCLAIMER: This featured company sponsored advertising issue of M3 Profit Accelerator does not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as a recommendation by M3 Profit Accelerator or an offer or solicitation to buy or sell any security. Mining Minerals of Mexico Corp.,(WIIM), the company featured in this issue, appears as paid advertising, paid by Duvana Holdings to provide public awareness for WIIM. Duvana Holdings has approved and signed off as “approved for public dissemination” all statements made herein regarding WIIM’s history, assets, technologies, current as well as prospective business operations and industry information. M3 Profit Accelerator and List Data Solutions (LDS) has used outside research and writers using public information to create the advertisement coming from M3 Profit Accelerator about WIIM. Although the information contained in this advertisement is believed to be reliable, M3 Profit Accelerator and LDS makes no warranties as to the accuracy of any of the content here in and accepts no liability for how readers may choose to utilize the content. Readers should perform their own due-diligence, including consulting with a licensed, qualified investment professional or analyst. Further, readers are strongly urged to independently verify all statements made in this advertisement and perform extensive due diligence on this or any other advertised company. M3 Profit Accelerator is not offering securities for sale.An offer to buy or sell can be made only with accompanying disclosure documents and only in the states and provinces for which they are approved. Many states have established rules requiring the approval of a security by a state security administrator. Check with http://www.nasaa.org or call your state security administrator to determine whether a particular security is licensed for sale in your state. Many companies have information filed with state securities regulators and many will supply investors with additional information on request. LDS has received and managed a total production budget of $400,000 for this print advertising effort and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses,as a fee for its services. M3 Profit Accelerator is paid $2,500 as an editorial fee from LDS and also expects to receive new subscriber revenue as a result of this advertising effort. *More information can be received from WIIM’s investor relations firm.Further, specific financial information, filings and disclosures as well as general investor information about publicly traded companies like WIIM, advice to investors and other investor resources are available at the Securities and Exchange Commission website www.sec.gov and www.nasd.com. Any investment should be made only after consulting with a qualified investment advisor and after reviewing the publicly available financial statements of and other information about the company and verifying that the investment is appropriate and suitable. Investing in securities is highly speculative and carries a great deal of risk especially as to new companies with limited operations and no history of earnings. The information contained herein contains forward-looking information within the meaning of section 27a of the Securities Act of 1993, as amended, and section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding expected growth of the featured company. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act, WIIM notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the Company’s actual results of operations. Factors that could cause actual results to differ include the size and growth of the market, the Company’s ability to fund its capital requirements in the near term and in the long term; pricing pressures, technology issues etc.

SEC Suspends trading in Growlife $PHOT: Fifth marijuana stock suspension this year

This morning in premarket the SEC suspended trading in Growlife (PHOT). PHOT joins CDFT, PTOG, AVNE, and CANN on the list of marijuana stocks that have been suspended by the SEC over the last couple months. CANN reopened for tradingtoday and as I write this it is down 38% at $18.01. (I am currently short CANN.) PHOT will reopen for trading at the market open on Friday, April 25th.

SEC suspension press release (PDF)
SEC suspension order (PDF)

Unlike many of the so-called marijuana stocks PHOT has a real business with meaningful sales and assets and even gross profits (though net losses). This suspension will likely put a damper on marijuana stock hype for days if not weeks.

From the SEC press release:

The Commission temporarily suspended trading in the securities of PHOT because of questions that have been raised about the accuracy and adequacy of information in the marketplace and potentially manipulative transactions in PHOT’s common stock.

The Commission acknowledges FINRA’s assistance in this matter

Disclaimer: I am short 200 CANN and have an open order to short 300 more shares. This is a day-trade and I may close or add to the position at any time and will not update this disclaimer. No position in any other stock mentioned above. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Mammoth Energy $MMTE gets a crappy mailer pump

It is rare that I actually receive a hard mailer — for whatever reason I am not on the stock promoter mailing lists. But today I received a fold-out mailer promoting Mammoth Energy (MMTE). Judging by the volume and price action today was the second day of people receiving mailers. The stock offered no profit opportunity — just inexorable losses — to buyers. The flyer directs readers to visit MMTEthestock.com

Disclosed budget: $500,000
Promoter: Stock Traders Alerts
Paying party: SM Limited
Shares outstanding: 10,000,100 (as of last filed quarterly report — it must be higher now)
Previous closing price: $0.0205
Market capitalization: $205,000 (obviously this is cannot be current)

Scan of front of mailer:

PDF copy of mailer

Full disclosure (from website):

Stock Traders Alerts ( STA), does not purport to provide an analysis of any company’s financial position, operations or prospects and this is not to be construed as a recommendation by STA or an offer or solicitation to buy or sell any security. STA has used outside research and writers using public information to create the advertisement coming from STA about MMTE. Although the information contained in this advertisement is believed to be reliable, STA makes no warranties as to the accuracy of any of the content herein and accepts no liability for how readers may choose to utilize the content. The opinions expressed in this advertisement and special report are solely those of STA’s freelance writers, unless otherwise referenced. Readers should perform their own due-diligence, including consulting with a licensed, qualified investment professional or analyst. Further, readers are strongly urged to independently verify all statements made in this Special Report and perform extensive due diligence on this or any other mentioned company. STA or affiliates are not offering securities for sale. An offer to buy or sell can be made only with accompanying disclosure documents and only in the states and provinces for which they are approved. Many states have established rules requiring the approval of a security by a state security administrator. Check with http://www.nasaa.org or call your state security administrator to determine whether a particular security is licensed for sale in your state. Many companies have information filed with state securities regulators and many will supply investors with additional information on request. STA has received or expects to receive and manage a total production budget of five hundred thousand dollars from S.M. Limited. for this online advertising effort and will retain any amounts over and above the cost of production, copywriting services, list rental, online advertising, mailing and other distribution expenses, as a fee for its services. Advice to investors and other investor resources are available at the Securities and Exchange Commission website www.sec.gov and www.nasd.com. Any investment should be made only after consulting with a qualified investment advisor and after reviewing the publicly available financial statements of and other information about the company and verifying that the investment is appropriate and suitable. Investing in securities is highly speculative and carries a great deal of risk especially as to new companies with limited operations and no history of earnings. The information contained herein contains forward-looking information within the meaning of section 27a of the Securities Act of 1993, as amended, and section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding expected growth of the featured company. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act. Factors that could cause actual results to differ include the size and growth of the market, the Company’s ability to fund its capital requirements in the near term and in the long term; pricing pressures, technology issues etc.

Yet another worthless 3D printing pump & dump: 3D Pioneer $DPSM

I first received emails promoting 3D Pioneer (DPSM) prior to the market open yesterday. These emails linked to http://fmtpage.com/dpsm/

Disclosed budget: $475,000
Promoter: Forelink Technologies & Future Money Trends
Paying party:
Shares outstanding: 76,032,000
Previous closing price: $0.679
Market capitalization: $60 million

Screenshot of PBFI pump page:

Excerpt from disclaimer:

FT [Forelink Technologies] has managed a total production budget of up to four hundred and seventy five thousand dollars for advertising efforts and will retain any amounts over and above the cost of production, copywriting services, mailing and other distribution expenses, as a fee for its services. Future Money Trends is paid $14,500 as an editorial fee from FT and also expects to receive new subscriber revenue as a result of this advertising effort.

Full disclaimer:

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PDF copy of pump page

The World’s first blueberry pump & dump: Patriot Berry Farms $PBFI

I first received emails promoting Patriot Berry Farms (PBFI) yesterday prior to the market open. Some of these emails linked to the pump page at HealthyStockProfits.com. Yesterday is also the first day the stock attracted meaningful trading volume. This looks like a half-assed pump and I expect it to dump soon.

Disclosed budget: $175,000

Promoter: PigeonRock Media & Wall Street Revelator / Andy Carpenter
Paying party: affiliates of PigeonRock Media
Shares outstanding: 71,409,871
Previous closing price: $0.84
Market capitalization: $60 million

Considering the six-month price target is only $1.81, I think it likely that the stock will never make it to $1.00

Screenshot of PBFI pump page:

Excerpt from disclaimer:

PigeonRock Media has managed up to a $175,000 USD advertising production budget as of June 1, 2013 in an effort to build industry and investor awareness. Any funds leftover after expenses for research, overhead, advertising and public relations related to Patriot Berry Farms (ticker symbol PBFI) will be considered profit. Entities related to PigeonRock Media hold a large amount of shares in PBFI and intend to sell those shares. Their sales of PBFI common stock will affect the value of your shares (negatively). This should be considered a direct conflict of interest.

Full disclaimer:

DO NOT BASE ANY INVESTMENT DECISION UPON ANY MATERIALS FOUND IN THIS REPORT. This publication is distributed free of charge and does not provide an analysis of a company’s financial position. The information contained herein has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company, including Patriot Berry Farms, (PBFI. Patriot Berry Farms’ financial position and all other information regarding Patriot Berry Farms should be verified with the company. An individual should never invest in the securities of any company, including PBFI based solely on information contained in this advertisement. Information about many publicly traded companies, including Patriot Berry Farms, and other investor resources can be found at the Securities and Exchange Commission’s website at www.sec.gov. Investing in securities is speculative and carries risk. PBFI is a penny stock and subject to greater risk. It is recommended that any investment in any security should be made only after consulting with your investment advisor and only after reviewing all publicly available information, including the financial statements of the company. This mailing piece is not intended to be, nor should it be construed as, an offer to sell or a solicitation of an offer to buy securities, nor should it be construed as the provision of any investment- related advice or services tailored to any particular individual’s financial situation or investment objective(s). The Wall Street Revelator is a bona fide publication of general and regular circulation offering impersonalized investment-related research to readers and/or prospective readers and is not an investment adviser either with the U.S. Securities and Exchange Commission (SEC) or with any state securities regulatory authority. The Wall Street Revelator is neither licensed nor qualified to provide financial advice. As such, it relies upon the “publisher’s exclusion” as provided under Section 202(a)(11) of the Investment Advisers Act of 1940 and corresponding state securities laws. Investing in companies like Patriot Berry Farms carries a high degree of risk. Do not invest in this company unless you can afford to possibly lose your entire investment. Individuals should assume that all information contained herein about PBFI and other companies is not trustworthy unless verified by their own independent research. The Wall Street Revelator and/ or its publishers, Andrew & Lynn Carpenter has received a total amount of fifteen thousand dollars in cash compensation to assist in the writing of this Advertisement, as well as potential future subscription and advertising revenues, the amount of which is not known at this time with respect to the publication of this Advertisement and future publications. Andrew and Lynn Carpenter have never owned, and never will own, shares, options or warrants in PBFI. Third Party Advertiser/Advertising Agency IMPORTANT NOTICE AND DISCLAIMER. PigeonRock Media has managed up to a $175,000 USD advertising production budget as of June 1, 2013 in an effort to build industry and investor awareness. Any funds leftover after expenses for research, overhead, advertising and public relations related to Patriot Berry Farms (ticker symbol PBFI) will be considered profit. Entities related to PigeonRock Media hold a large amount of shares in PBFI and intend to sell those shares. Their sales of PBFI common stock will affect the value of your shares (negatively). This should be considered a direct conflict of interest. Please review all investment decisions with a licensed investment advisor. This report is a commercial advertisement and is for general information purposes only. PigeonRock Media are engaged in the business of marketing and advertising companies for monetary compensation. Never invest in any stock featured on this site or emails unless you can afford to lose your entire investment. This project currently does not contain any known proven or probable reserves under SEC reporting standards. The references in this advertisement to reserves or future revenue are a reference only to potential in-place reserves or future revenue. Investors are cautioned not to assume that these figures reflect economically and legally recoverable quantities of minerals or sales of products. Additionally, this advertisement includes forward-looking statements and information within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, including statements regarding expected growth of the featured company. 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PDF copy of pump page

A Rare manipulative trading win for the SEC

The SEC slaps the wrists of a couple brokers and a trader in a case that covered multiple charges, but the most interesting is the manipulative trading charge against Joseph Dondero. See the administrative proceeding (PDF).

Below is an excerpt that explains Dondero’s manipulative trading (emphasis mine):.

G. DONDERO’S MANIPULATIVE TRADING SCHEME

21. During the Relevant Period, Dondero repeatedly manipulated the markets of U.S.
listed and over-the-counter stocks by engaging in the practice of layering. Layering concerns
the use of non-bona fide orders, or orders that the trader does not intend to have executed, to
induce others to buy or sell the security at a price not representative of actual supply and
demand. More specifically, Dondero placed buy (or sell) orders that he intended to have
executed, and then immediately entered numerous non-bona fide sell (or buy) orders for the
purpose of attracting interest to the bona fide order. Dondero placed these non-bona fide orders
to induce, or trick, other market participants to execute against the initial, bona fide order.
Immediately after the execution against the bona fide order, Dondero cancelled the open,
non-bona fide orders. He typically then repeated this strategy on the opposite side of the
market to close out the position.

22. Using this strategy, Dondero induced other market participants to trade in a
particular security by placing and then cancelling layers of orders in that security, creating
fluctuations in the national best bid or offer of that security, increasing order book depth, and
using the non-bona fide orders to send false signals regarding the demand for such security,
which the other market participants misinterpreted as reflecting true demand. Dondero’s orders
were intended to deceive and did deceive other market participants into buying (or selling) stocks
from (or to) Dondero at prices that had been artificially raised (or lowered) by Dondero.

Example of Layering by Dondero

23. Dondero’s trading in the stock of First Capital, Inc. (FCAP) from 9:34:24 to
9:54:09 on May 8, 2009, illustrates his pattern of layering. At 9:34:25, Dondero placed an
order to buy 100 shares of FCAP at $16.20 per share. Prior to Dondero placing his order, the
inside bid was $14.01 and the inside ask was $17.00. Dondero’s buy order raised the National
Best Bid (“NBB”) from $14.01 to $16.20. At 9:34:29, Dondero placed an order to sell 2,000
shares of FCAP at $16.21 per share. This order did not change the National Best Offer
(“NBO”) because Dondero used an order type that allowed him to not display his order to other
market participants; thus, the NBO remained at $17.00.

24. At 9:34:31, Dondero placed two orders to buy a total of 1,000 shares of FCAP at
$16.20. He immediately cancelled these orders and placed another order at 9:34:35 to buy 100
shares of FCAP for $15.10. The NBB at this point was still $16.20, established by Dondero’s
open orders. At 9:36:49, Dondero again placed two orders to buy a total of 1,000 shares of
FCAP at $16.20 and then immediately cancelled those orders. At 9:36:51, Dondero placed an
order to buy 100 shares of FCAP at $16.10 and then cancelled his only other outstanding buy
order at $16.20. At this point, the NBB was $16.10, representing Dondero’s open orders.
Apparently realizing that his bona-fide sell order was not getting executed, he then cancelled his
outstanding sell order of 2,000 shares at $16.21. At 9:36:56, he placed a new non-displayed
order to sell 2,000 shares of FCAP for $16.11 per share, one cent higher than his current order to
buy. At 9:36:57, he placed four orders to buy a total of 2,000 shares of FCAP at $16.10,
cancelling one of those 500 share orders. At 9:36:59, 500 shares of Dondero’s outstanding sell
order were sold at $16.11 per share. At 9:37:00, he then placed three additional 500 share buy
orders at $16.10. At 9:37:01, 300 shares of his 2,000 share sell order were sold at $16.11. He
then proceeded to cancel most of his outstanding buy orders.

25. For twenty minutes, Dondero’s orders constituted the best bid, dropping it over
time to $16.00. He cancelled buy orders during this time, but always had at least one buy order
open. The purpose of maintaining an open bid appears to be that it prevents the best bid from
falling substantially. During this time, he placed non-displayed sell orders near the best bid in
the range of $16.01 to $16.21. He managed to sell 1,700 shares for an average price of $16.06.
He purchased no shares during this time. When Dondero cancelled all of his remaining buy
orders at 9:54:07, the NBB returned to $14.01. The best offer was $16.50 at this time. During
this time, Dondero placed 36 buy orders while only placing 9 sell orders. Dondero covered his
short position the next day yielding him approximately $2,919 in profits.

26. Dondero engaged in this manipulative strategy repeatedly, placing hundreds of
thousands of orders during the Relevant Period with the intent to change the NBB or NBO while
at times cancelling greater than 90 percent of his orders.

27. The manipulative trading comprised almost 100 percent of Dondero’s profitable
trading and resulted in profits of $984,398.

So what we have here is not a guy showing a large bid / offer a few times, but rather a person whose only real trading strategy involves placing scores of fake bids and offers, literally hundreds of thousands of orders. And what penalty does he pay?

M. Respondent Dondero shall, within (10) days of the entry of this Order, pay disgorgement of $1,102,999.96 plus prejudgment interest of $46,792 for a total of $1,149,791.96 to the United States Treasury. If timely payment is not made, additional interest shall accrue pursuant to SEC Rule of Practice 600.

Dondero pays back all his ill-gotten gains and a little bit extra to account for interest. That is barely a slap on the wrist.

Disclaimer: I have no position in any stock mentioned. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.