After my last post regarding Home Solutions (HSOA) and Andrew Left’s (of Stocklemon.com) accusations against the company, I received the following comment:
August 3, 2007 at 4:46 pm || Crazy Bob said: So what you are saying is that Andrew Left contacted you and asked you to post this withouut doing any homework on his actual attacks of HSOA.Can you tell me why he changes his accusations, or why HSOA has not been targeted by SEC as a fraud?Was this hedge manager by chance also a contact of Andrew Left, who has managed to skirt the law but was stripped of his securities license for fraud, bankrupted the company he was CEO of prior to starting blogging and stole checks to begin Stock Lemon according to court filings.Just checking to see if you did your homework or if you are getting suckered in to make Andrew Left look good.
I have to say that I can’t imagine someone attacking me like this for pumping up a company and talking about how wonderful it is (by the way, Berkshire Hathaway is wonderful!). But if I bash a company that someone is in love with, well, that’s a different matter. All the great (Jim Chanos, Jesse Livermore) and not so great (Manuel P. Asensio, Andrew Left) short sellers get attacked and pilloried. Yet their job is one of the most important in a capitalist economy. They are the realists, the cynics, the skeptics that help to keep frauds from remaining in business and help to destroy companies that produce nothing but press releases.Andrew Left of StockLemon may or may not be a great guy. He may or may not embellish his reports. He may or not always be truthful. I am not one to know. But the man has successfully spotted and publicized many fraudulent companies. So if you are an investor in HSOA or any of the companies he has profiled, you should at least carefully examine his arguments.Below is my reply to the above comment on my previous post:
This is the type of comment that makes me tend to believe Andrew Left. It is the same type of comment that people made all these years against Manuel P. Asensio (an outspoken shorter of stocks). It involves hyperbole and innuendo and unproven assumptions.
I’ll address your comments:
1. Andrew Left has never contacted me. I contacted him because I wanted him to disclose his exact stake in HSOA. I believe that he should disclose more clearly when he is short a stock.
2. I have no opinion of whether HSOA is a fraud or not. Frankly, the only reason I am involved is because it is entertaining. If you rely upon the SEC to find fraud, then you, sir, are a fool. The SEC generally does not investigate until after fraudulent companies implode (cf. Enron, Xybernaut, etc.).
3. The hedge fund manager I mentioned is LONG the stock. She hates Stocklemon.
4. As far as homework, I did enough homework to find out that Left has prevailed in two libel lawsuits filed by companies he targeted. The outcome of one of those lawsuits (by Imergent) was not freely available and I paid the L.A. Superior Court to get a copy of the decision. Numerous companies he has targeted have deserved his ire and have since de-listed or gone bankrupt.
5. I have not seen any solid evidence that Left did anything besides run a company that failed (and that may be a different Andrew Left). Searching the SEC brings up no evidence of any actions against him or the StockLemon website. Searching the web likewise brings up no credible evidence for him losing his securities license.
Disclosure: I am long Berkshire Hathaway. I have no position in HSOA. My disclosure policy is rock solid.
http://www.skweezer.com/s.aspx/-/photos1~blogger~com/blogger/6051/3147/1600/Page1~1.jpg
http://www.jailbase.com/en/arrested/fl-pbso/2010-12-23/andrew-edward-left-201012230415043
No comment necessary, this says it all. Andrew Left attacked CCME on Jan. 30, 2011, at the start of Chinese New Year, (company closed) with lies and false and misleading information. This is not one of his typical penny stock companies and the auditor of China Media Express is Deloitte.
CCME was also pilloried by Muddy Waters. Furthermore, auditors are not paid to catch fraud. Regardless of what Left is alleged to have done, he is right far more often than the companies he attacks.
And let me also point out that I am not defending anything Left has done or has been alleged of doing. All I am pointing out is that he has a very good track record of being right.
How about this? What’s your take on his integrity?
http://www.nfa.futures.org/BasicNet/Case.aspx?entityid=0244735&case=95BCC00020&contrib=NFA
ANDREW LEFT –
THE PANEL FOUND THAT LEFT MADE FALSE AND MISLEADING STATEMENTS TO CHEAT, DEFRAUD OR DECEIVE A CUSTOMER IN VIOLATION OF NFA COMPLIANCE RULES 2-2(a) AND 2-29(a)(1). LEFT’S CONDUCT WAS INCONSISTENT WITH JUST AND EQUITABLE PRINCIPLES OF TRADE.
CONSEQUENTLY, THE PANEL BARRED LEFT FROM ASSOCIATION WITH AND FROM ACTING AS A PRINCIPAL OF ANY NFA MEMBER FOR THREE YEARS; ORDERED HIM TO TAKE AN ETHICS TRAINING COURSE; AND PLACED RESTRICTIONS ON HIS ACTIVITIES FOR TWO YEARS WHICH PREVENT HIM FROM SUPERVISING ANY AP AND REQUIRE HIM TO TAPE RECORD AND LOG ALL CONVERSATIONS WITH CURRENT AND POTENTIAL CUSTOMERS.
I am always amused by the people who are investors in the stocks Left has bashed who love to point out the things that are wrong with him. Would I do business with Left? Probably not. Also, if you looked at my other blog posts in this series, you would have seen that I mentioned that NFA order in part 3: http://www.goodevalue.com/2007/08/can-you-trust-the-stocklemon-part-3/
The fact of the matter is that Left’s investigative reports have been far more correct than incorrect. Just look at the number of companies that he has written about that have eventually proven to be frauds and the number of SEC lawsuits against and then settlements with companies and executives that have come a year or two after his articles.