Month: March 2014

Mary Jo White on SEC trading suspensions on pump and dumps

Below is an excerpt from a speech by SEC chair Mary Jo White that was posted on the web today. It is nice to see her comments on the utility of trading suspensions and asset freezes.

We also rely on our temporary suspension authority to stop trading in securities that are the objects of pumps-and-dumps.  Just last month, we suspended trading in 255 companies, any one of which might have been the next vehicle for stock manipulators.[14]  There were more than 1,000 similar suspensions over the last two years.[15]  These trading suspensions perform a critical investor protection function—not only do they stop trading in the company’s stock for ten days, but they also have the effect of preventing market makers from displaying quotes in those securities until the company updates its public disclosures.  We also have been using our trading suspension authority more frequently to cut off trading while the pump-and-dump is in progress.

 

Disclaimer: 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.

A Brief recap of my trading in 2013

I have been working on finishing up my accounting for my taxes and the program I use to track my trades for tax purposes, Tradelog, also can put together some interesting and useful reports. Below are a couple of mine. Note: as with all trade data I provide here I believe these are correct but cannot guarantee that.

A few highlights: I traded 334 different stocks last year. Trades on just three stocks, FNMA, FMCC, and AAMRQ combined for $53,000 (about 1/6) of my profits. Every other stock on which I made more than $10,000 was a pump and dump of one sort or another: XUII, SWVI, PVEN (Awesomepennystocks pumps); TEWI (uncompensated Focus Media pump); OCTX and NAMG (mailer pumps); NNRX and GNIN (Brighton Markets pumps). Note that the largest loss by far was ($17,650) on TGRO — I ended up making over $16,000 net on that once 2014 trades are included (I am a mark-to-market trader so open positions at the end of each tax year are marked at the closing price of the stock).

Trade profits by ticker (PDF)

Weighted by shares (not by trade), 72% of my trades were winners. My total commission cost was $57,188.07. Not shown in any of these reports are my expenses: about $33,000, most of which was for short stock borrow fees.

2013 performance report (PDF)

profit chart

 

Disclaimer: I use Tradelog for tax preperation. I do not receive any benefit by referring people to it. 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.

 

SEC Suspends trading in fourth (and largest so far) pot stock $CANN Advanced Cannabis Solutions

This morning in premarket the SEC suspended trading in Advanced Cannabis Solutions (CANN). CANN joins CDFT, PTOG, and AVNE on the list of marijuana stocks that have been suspended by the SEC over the last month. PTOG reopens for trading tomorrow at the open.

SEC suspension press release
SEC suspension order

Unlike the other marijuana stocks that were suspended for questions over adequacy of disclosures, the SEC suspended trading in CANN because of alleged illegal sales of restricted shares. From the press release:

 

There are questions regarding whether certain undisclosed affiliates and shareholders of Advanced
Cannabis common stock engaged in an unlawful public distribution of securities. Advanced
Cannabis common stock is dually-quoted on the OTC Bulletin Board and OTC Link.

Trading in CANN will resume at the market open on April 10th, 2014.

cann

Disclaimer: 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.

Ener-Core Inc (ENCR) gets a sizable stock promotion

I first received emails promoting Ener-Core (ENCR) on March 14th prior to the market open from FreshBrewedMediaNews.com..

 

Disclosed budget: $500,000

Promoter: Champlain Media LLC and Capital Gains Alert
Paying party: Alliance Financial Media Inc
Shares outstanding: 71,054,173
Previous closing price: $0.77
Market capitalization: $54 million

 

Below is a screenshot of http://www.encrnews.org/

encr_screenshot

encr_chart

 

 

Excerpt from disclaimer:

CGA [Capital Gains Alert] has received ten thousand dollars for this and related marketing materials from Champlain Media LLC. Alliance Financial Media Inc. has agreed to pay five hundred thousand dollars to Champlain Media LLC …

Full disclaimer:

PDF copy of pump page

[Edit 2014-4-29] Tobin Smith has joined the pump at http://www.encrupdate.com/ and the original pump page has been replaced with Tobin Smith.

encr

PDF copy of pump page

New disclaimer:

disclaimer2

 

 

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.

Where in the world is John Babikian? Probably in the UAE

It is time for another John Babikian update. And as always we must ask, where in the world is he? Lebanon, UAE, and Russia are all possible. My current bet is the UAE (United Arab Emirates). I will explain why below.


It turns out that Babikian’s Seychelles shell company Middlebay Trade Ltd. had purchased a vineyard in The Dalles, Oregon. See coverage of this in The Oregonian and The Dalles Chronicle. The SEC obtained a writ of attachment for that vineyard and for Babikian’s houses in California so that those properties will not be sold. See the SEC’s complaint (pdf) against Babikian. Here is the SEC press release from March 13th about obtaining an asset freeze against Babikian.

SEC v. Babikian Doc 6 Filed 13 Mar 14 by scion_scion

By the way, follow Scion_scion on Scribd to see updates to the legal case against Babikian.

Today the SEC filed a detailed declaration (PDF) in seeking a temporary restraining order and asset freeze. This document (also shown below through Scribd) gives some details not previously disclosed. It also shows that the SEC has relied a lot on Babikian’s ex-wife’s lawsuits, which goes to show that Hell hath no fury like a woman scorned. Also, this document explicitly links Robert Kalfayan to Babikian — something that has been known by penny stock researchers for years but with the SEC stating it the odds increase that he will be named in a suit soon. It is also quite possible that he or others are cooperating with the SEC. Kalfayan’s company is directly linked to paying for some Awesomepennystocks.com (APS) emails (see page 6 of the declaration).

Other interesting tidbits include the fact that Babikian acquired his ASWR shares directly from the company in a PIPE and deposited them at John Thomas Financial and from there he transferred the shares to an account at Frankfurter Bank (Brown Brothers Harriman was the US custodian of the shares). On the day that AWSR was pumped he sold a number of shares from that account and also transferred some shares to an account held at Apex Clearing and sold some from that account. (On a side note, John Thomas Financial collapsed after being investigated by FINRA and the SEC for its involvement with AWSR.)

Getting back to the question in the title of this blog post, I believe that Babikian is in the UAE because NetJets recently agreed to repurchase the fractional jet ownership interest of Vertical International Relief Fund (Babikian’s front charity – see info PDF) for substantially below market cost. And:

Babikian has requested that NetJets wire the proceeds to an account in the name of “Elementos Ltd.” at a financial institution in the United Arab Emirates named Emirates NBD [page 17 of document below]

SEC v. Babikian Doc 15 Filed 21 Mar 14 by scion_scion

Disclaimer: No position in any stock mentioned above. I have no relationship with any parties mentioned above except that I am a paying subscriber of PromotionStockSecrets. 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.

SEC Suspends trading in third pot stock and perennial scam Citadel EFT $CDFT

Smart people have been saying for well over half a year that the SEC should do something about Citadel EFT. The stock almost never traded though until the company put out a press release three weeks ago announcing that the company was getting into the marijuana business.

SEC suspension press release
SEC suspension order

I warned about CDFT multiple times:

…


I shorted CDFT the day after the marijuana news came out and ended up getting squeezed badly. That is the problem with shorting scams, particularly in a bull market — the stock can go up a lot and squeeze you out before getting suspended by the SEC.

 

($2,713)lossCDFTShort Stock
IB batch import through 3/18/2014

Interactive Brokers

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

Unlike with most of its suspensions, the SEC was quite detailed in its reasoning for the trading suspension of CDFT:

The Commission temporarily suspended trading in the securities of Citadel because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the company’s business operations and assets. In particular, there are questions regarding the accuracy, completeness, and validity of Citadel’s several recent press releases, Form 8-Ks, and other public statements since January 2014 relating to transactions involving standby letters of credit (“SBLC’s”), see Prime Bank Instrument Fraud, TreasuryDirect.gov (U.S. Department of the Treasury), http://www.treasurydirect.gov/instit/statreg/fraud/fraud_primebank.htm (last visited Mar. 20, 2014) and Brazilian Letras Tesouro Nacional (“LTN’s”), see Frauds Related to Public Bonds, Tesouro Nacional (Brazil), https://www.tesouro.fazenda.gov.br/en/about-the-federal-publicdebt/ frauds-related-to-public-bonds (last visited Mar. 20, 2014). Citadel is a Wyoming corporation based in Oceanside, California. It is quoted on OTC Link under the symbol CDFT. This order was entered pursuant to Section 12(k) of the Securities Exchange Act of 1934 (Exchange Act).

The Brazilian bonds aren’t even the first fake bonds CDFT has been involved with: there were fake US bonds that they acquired last summer. Janice Shell’s expose of that led the company to threaten her and with a libel lawsuit. I love this quote from that PR:

Gary DeRoos, CEO, Citadel EFT, Inc., states, “The author, Janice Shell, who published batten falsehoods, undermines Citadel EFT, Inc.’s efforts to grow our company to our shareholders’ benefit. Our shareholders are quite perturbed with this website and its posting, and have been proactive in bringing attention to this matter. “

On a related note, George Sharp, the owner of Pumpsanddumps.com, sued CDFT and its CEO a year ago.

Disclaimer: 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.

American Heritage International $AHII hard mailer pump

I first received emails promoting American Heritage (AHII) on March 13th prior to the market open. As of yesterday people started reporting receiving hard mailers promoting AHII. See a scan of the front cover and disclaimer (pdf).

 

Disclosed budget: $1,643,756

Promoter: Rui Long International & NationalFutures.com
Paying party: Rui Long International
Shares outstanding: 99,000,000
Previous closing price: $1.56
Market capitalization: $154 million

 

Below is a screenshot of http://goldmanreport.com/
The content is identical at: http://bigchangeforbigtobacco.com/

ahii_screenshot

 

 

ahii

 

 

 

Excerpt from disclaimer:

NationalFutures.com received a twenty-five thousand dollar editorial fee

…

Rui Long International Inc has paid or expects to pay upwards of [$1,643,756] as a total production budget

Full disclaimer:

zdisc

PDF copy of pump page

Disclaimer from hard mailer:

ahii_disclaimer

 

Disclaimer: I am long 9900 shares of AHII in one account and short 9870 shares in another account. 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.

SEC Suspends trading in another pot stock: Petrotech Oil & Gas $PTOG

This morning the SEC suspended trading in former oil and gas stock and current me-too marijuana stock Petrotech Oil & Gas (PTOG). PTOG entered the marijuana business and put out a press release about that on February 19. PTOG has also been the subject of numerous email promotional campaigns since last May and continuing to this morning. Here is the disclaimer of one promoter that touted PTOG this morning at 7:53am:

AwesomeStocks.com is a web property owned by Empire Investment Group Ltd. AwesomeStocks.com has been compensated up to $10,000 for this profile of PTOG by a third party. .

The suspension of PTOG scared many traders of marijuana stocks and caused gaps down in TRTC and GRNH. Many traders I know were long PTOG overnight because of its strong close yesterday. PTOG will reopen for trading at market open on March 28th.

SEC suspension release (pdf)
SEC suspension order (pdf)

This is now the second suspension of a marijuana stock, following last week’s AVNE trading suspension. If this continues then the marijuana hype should die down.

The Commission temporarily suspended trading in the securities of PTOG because of questions that have been raised about the accuracy and adequacy of publicly disseminated information concerning, among other things, the company’s operations.

The Commission acknowledges FINRA’s assistance in this matter.

ptog

Disclaimer: I was long GRNH overnight and lost some money as it gapped down. I have no net position in TRTC at the moment but I am long 3183 shares in one account and short 3183 shares in another account. 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.

Be careful what you smoke: SEC Suspends trading in pot stock $AVNE

Two days ago the SEC suspended trading in Aventura Equities, Inc (AVNE). AVNE is one of a large number of penny stocks that have recently issued press releases stating that they are getting into the marijuana business. While there are a few real marijuana-related penny stock companies (all of which are horrible companies and have overvalued stocks), most of the companies recently issuing press releases are little more than shells.

SEC suspension release (pdf)
SEC suspension order (pdf)

The reasoning given for the trading suspension should strike fear in everyone trading these ‘wannabe’ marijuana stocks:

The Commission temporarily suspended trading in the securities of Aventura because of questions concerning the adequacy and accuracy of publicly available information about Aventura, including, among other things, its financial condition, the control of the company, its business operations, and trading in its securities.

The press release that the company issued to announce that it was entering the marijuana business was issued on February 26, 2014. The stock more than doubled and traded a decent number of shares in the weeks following that press release. Also of note is that AVNE is linked to the Jan / Hipple company iEquity, which is also linked to SKTO and AEGY (which have both entered the marijuana business recently as well). I would not be surprised to see those stocks get suspended soon. I previously wrote about why I thought SKTO was at risk of an SEC trading suspension, almost a year ago.

avne

Disclaimer: I have no position in any stocks 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.

SEC Suspends trading in three recent pump and dumps

Today the SEC suspended trading in Suburban Minerals Corp. (SUBB),  Global Earth Energy, Inc. (GLER), and Broadcast Live Digital Corp. (BFLD).

SUBB suspension release (pdf)
SUBB suspension order (pdf)

SUBB has been promoted since January 7th of this year by most of the promoters out there. It was suspended by the SEC because of

The Commission temporarily suspended trading in Suburban due to a lack of current and
accurate information concerning the securities of Suburban including questions regarding the
accuracy of publicly available information about the company’s operations.

The SEC acknowledges the assistance of the Alberta Securities Commission, Quebec Autorité
des Marchés Financiers, and the British Columbia Securities Commission in this matter.

That is of course the standard SEC boilerplate language, although the 2nd paragraph quoted above indicates that the Canadians alerted the SEC about the problems with SUBB.

subb

GLER suspension release (pdf)
GLER suspension order (pdf)

GLER was promoted back in May of 2013 and again in November 2013 by various promoters including VIPStockReports.com. The SEC was more specific in its language about why GLER was suspended:

The Commission temporarily suspended trading in the securities of Global Earth because, among
other things, of questions regarding the accuracy and completeness of Global Earth’s
representations to investors and prospective investors in Global Earth’s public filings with the
Commission and Global Earth’s publicly-available press releases and other public statements. In
particular, there are questions regarding the accuracy and completeness of Global Earth’s public
assertions relating to its business transactions with Hawk Manufacturing Corp.

gler

BFLD suspension release (pdf)
BFLD suspension order (pdf)

BFLD was promoted all throughout 2013 and even through this morning, by many different promoters. This morning it was promoted by PennyPicks.net, BreakoutBulls.com, and InvestmentNewsalert.com.

The reasons given for the suspension of BFLD are the standard boilerplate language the SEC uses:

The Commission temporarily suspended trading in BFLD due to a lack of current and accurate
information concerning the securities of BFLD because of questions regarding the accuracy of
publicly available information about the company’s operations. BFLD’s ticker symbol is BFLD.

bfld

Disclaimer: I have no position in any stocks 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.