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.
I warned about CDFT multiple times:
Maybe that absurd marijuana PR by $CDFT will finally attract the attention of the SEC and get the stock suspended. As pure a scam as can be
— Michael Goode (@goodetrades) March 4, 2014
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.
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.