Those of you who read this blog probably know about Andrew Left. He is a well-known short seller of penny stocks who has successfully identified multiple frauds. I admire his thorough research although I do not always approve of the inflammatory language he uses (and I certainly do not approve of the garish design of his website).
To those who criticize him and bash short sellers in general, I would like to point out that the SEC today brought a case against Global Development and Environmental Resources, a company that Left accused of fraud three years ago. (See the press release and the full complaint). The company’s stock price climbed rapidly early in 2005 as a result of several positive press releases it put out. At the time the company had no audited financial statements and was trading on the Pink Sheets. Besides revealing the shady backrounds of multiple executives involved in the company, Left also criticized press releases that the company had put out, saying:
“Stocklemon has not been able to independently confirm even one of these to be true. More importantly, Stocklemon spoke to Robert Sullivan – Senior Vice President of Investor Relations and Capital Markets from Land America and he is not aware of any contract with Global Environmental and never authorized the release above.” [emphasis in original]
Evidently the SEC has come to agree with Left, stating the following in its press release:
“The complaint further alleges that the defendants then engaged in a “pump-and-dump” scheme by arranging for Global to issue numerous press releases that contained false and misleading information relating to Global’s purported clients, pending contracts and revenue projections. According to the complaint, at least one entity defendant Mrakuzic controlled sold illegally issued Global shares into an artificially inflated market generating profits of approximately $1.2 million. In addition, defendant Panella sold illegally issued Global shares for profits of nearly $1.1 million.”
While it is good that the SEC is acting on this matter, it is a little slow. The alleged events took place back in 2005. One thing is certain: investors in Global Development and Environmental Resources have done poorly over the last three years.
For More Information
Previous Articles about Andrew Left
Home Solutions of America vs. StockLemon
Home Solutions of America vs. StockLemon Part 2
Can You Trust the StockLemon: Part 1
Can You Trust the StockLemon: Part 2
Can You Trust the StockLemon: Part 3
Can You Trust the StockLemon: Part 4
Welcome to the Remote MDX Shorting Party, Andrew Left
Disclosure: I have no position in any company mentioned above, long or short. I have a disclosure policy. I have no connection to or contact with Andrew Left besides reading his blog.