FINRA Fines BNP Paribas Securities $15 million, in part for penny stock failings

On October 23, 2019 BNP Paribas Securities Corp. agreed to a $15 million fine and censure from FINRA for failings relating in part to accepting penny stock shares for deposit and liquidation. The 13-page Acceptance, Waiver, and Consent (AWC) (pdf) makes for some fun reading. Readers of this blog will be used to reports of fines from FINRA and the SEC for brokers that fail to do proper due diligence before allowing the liquidation of large blocks of shares of penny stocks or fail to file Suspicious Activity Reports (SARs), but the failings outlined in this AWC are among the worst I have seen in recent memory.

Following are excerpts from the AWC showing BNP Paribus’ failings with regard to penny stocks:

… BNP did not implement any systems or written procedures (“WSPs”) to determine whether resales of securities complied with Section 5’s registration requirements, even though a substantial portion of its business involved liquidating restricted shares of penny stocks deposited in certificated form.

As a result, BNP allowed the deposit of nearly 31 billion shares of penny stocks, with a notional value of approximately $338 million, without any review to determine whether the shares were restricted, qualified for an exemption from registration, held by control persons of the issuer, or otherwise eligible for re-sale. BNP also facilitated the removal of restrictive legends from 33.5 million shares of securities, with a total notional value of approximately $12.5 million, without conducting any review to determine whether the legends were eligible for removal.

It isn’t just that the review prior to removal of restricted legends was inadequate but that there was no review! Likewise, surveillance of penny stock transactions was not just inadequate — for a long time, there was no surveillance:

It did not conduct any surveillance targeting penny stock transactions, or transactions in securities trading outside of the traditional exchanges, until early 2016

Next, take a look at BNP’s failures to identify red flags that might have triggered the filing of SARs:

Because of these deficiencies in its AML Program, BNP did not identify red flags of potentially suspicious activity that may have required the filing of a suspicious activity report (“SAR”). For example, during the Relevant Period, BNP:
• did not identify 14 customer accounts that executed zero buy transactions while selling approximately 1 billion shares of low priced securities for proceeds of approximately $3.5 million;
• did not identify multiple accounts in which known toxic debt financiers engaged in sales of penny stocks representing more than 20% to 80% of the trading volume on the sale dates and involving securities that were the subject of negative news or suspicious promotional campaigns; and
• did not review at least 3,448 foreign currency wires representing a total value of more than $2.5 billion USD to determine whether they involved high-risk entities or jurisdictions, or represented the proceeds of potentially suspicious trading activity.

A retroactive review of penny stock transactions from April 2013 to April 2016 “identified more than one hundred instances where BNP did not reasonably detect and investigate potentially suspicious penny stock transactions that may have required the filing of a SAR.”

The AWC gives examples of suspicious wire transfer patterns that BNP did not review:

34 customer accounts that, during the period of February 2013 to May 2015, received more than 18 billion restricted shares of penny stocks and incoming wires totaling $40,344, while sending 220 outgoing wires that totaled more than $62 million during a 23-month period; and
• 44 customer accounts that, during the same period, executed zero buy transactions while depositing more than 17.8 billion shares of penny stock and wiring out more than $69 million in sale proceeds.

BNP Paribus was also slow to fix its problems even after they were identified internally:

In January 2014, the head of BNP’s Trading Operations advised senior management that BNP was “an outlier in the industry” in terms of its surveillance of microcap securities and recommended that BNP develop and implement specific policies, procedures and controls for penny stocks. In February 2014, BNP personnel raised additional concerns with BNP’s penny stock business and due diligence process after reviewing recent AML regulatory actions.

BNP did not act in a timely manner to address the deficiencies its personnel identified. BNP did not implement procedures relating to penny stocks or enhanced due diligence for physical certificates until March 2015, more than one year after the head of its Trading Operations identified the need.

In addition to the fine, BNP Paribus Securities Corp also consented to the imposition of a censure and a requirement to get its procedures up to an acceptable level within 90 days. I am actually a little surprised that BNP Paribus Securities Corp did not also exit the penny stock deposit business like Cor Clearing did in the wake of an SEC settlement a year ago.

Disclaimer: No position in any company mentioned and no relationship with any person or entity mentioned. 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.

Criminal charges filed against Michael Starkweather, former CEO of penny stock Andiamo Corp

On October 21, 2019 a criminal complaint (pdf) against Michael Starkweather, former CEO of Andiamo Corp (OTC: ANDI), was unsealed in US District Court for the Eastern District of New York. The case is United States v. Starkweather (1:19-mj-00911). See the case docket. I previously reported on the SEC’s lawsuit against Starkweather and predicted criminal charges were coming. As the case has just been filed these are only allegations and have not been proven in a court of law.

Mike Caswell of StockWatch already wrote a good summary of the charges (though without linking to the complaint).

Starkweather was arrested in Ohio (see the Ohio case docket).

Excerpt from complaint / affidavit (do note that I had to OCR the complaint so that may have introduced errors):

I . The Defendant, the Publicly-Traded Company and Co-Conspirators
4. The defendant MICHAEL STARKWEATHER was a United States citizen who resided in North Ridgeville. Ohio. In or about and between November 2017 and September 2018. STARKWEATHER was Chief Executive Officer (“CEO”) of the Andiamo Corporation.
5. The Andiamo Corporation was a microcap or penny stock company whose shares traded publicly on the over-the-counter exchange under the ticker symbol ANDI (“ANDI”). In public statements that it issued at various times, ANDI purported to be involved in various businesses, as described in part below:
(a) In or about and between April 2016 and September 2016, ANDI purportedly entered into a joint venture with Peppermint Jim. a company in the business of marketing pure mint and essential oils, to help Peppermint Jim expand its business.
(b) In or about and between November 2016 and March 2017, ANDI purported to enter into the energy sector, whereby ANDI would create an on-demand hydrogen-producing unit designed to increase performance, reduce emissions and lower the cost of operations for vehicles.
(c) In or about and between November 2017 and June 2018, ANDI, through a merger with Utopya Innovations. Inc., purportedly began to develop a smartphone cellular device.
6. Cooperating Witness #1 (“CW #1”) was a stock promoter. In May 2016. CW # 1 pled guilty to conspiracy to commit securities fraud, in violation of Title 18. United States Code, Section 1349. pursuant to a cooperation agreement with the government.
7. Co-Conspirator # 1 (“CC #1”) was a former ANDI executive. Subsequent to the events described in this complaint. Co-Conspirator # 1 pled guilty to conspiracy to commit securities fraud, in violation of Title 18, United States Code, Section 371. pursuant to a cooperation agreement with the government.

Yet again we see the importance of cooperating witnesses in white collar criminal cases and here we have two cooperating witnesses (Co-Conspirator #1 and Cooperating Witness #1).

Further excerpt from the complaint:

17. In or about June 2018, STARKWEATHER met with C’C # 1 in Ohio to discuss the smartphone and STARKWEATHER told C’C # 1 that there was currently no smartphone.
18. In approximately November 2018, after the defendant MICHAEL STARKWEATIIER stepped down as CEO of ANDI, CC # 1 became CEO of ANDI. At that time, CC # 1 confirmed that no Utopya or Andiamo smartphone existed.
19. On February 28. 2019. the defendant MICHAEL STARKWEATHER met with CC # 1. The meeting was consensually recorded by CC # 1. During this meeting, CC # 1 told STARKWEATHER, “There is no phone there is no physical phones [sic] that I can sell right now.” STARKWEATHER replied: “There never was. What there was the ability for you to place an order for them [Utopya] to be the middleman. It always was a middleman scenario with software, but the software never got built. We paid Cycloids [the software company] and they never did anything. They never built anything…. They never built anything for us.” During that same conversation. CC # 1 stated. “I need a real phone that can be sold.” STARKWEATHER replied: “You’re not going to get one because it doesn’t exist until somebody puts in an order…. You have to put in an order before a real phone exists…. [T]hey [Utopya] have no money to pay for them to do the chip change over there, for the radio. They don’t have the money to pay for the radio….”
B. The Defendant MICHAEL STARKWEATHER received kickbacks from the purported sales of ANDI stock at artificially inflated prices
20. On or about January 18. 2018. the defendant MICHAEL STARKWEATHER met with CW # 1. The meeting had been arranged by CC # 1. and was consensually recorded by CW # 1. During the meeting, CW # 1 stated that he wanted to convert his ANDI notes into ANDI shares of common stock, and that STARKWEATHER needed to approve the conversion. STARKWEATHER told CW # 1 that if he sold such shares “profitably,” STARKWEATHER wanted “some sort of kickback” in return. STARKWEATHER later added that he wanted 50% of CW # 1’s profits and that STARKWEATHER could then “keep this thing [ANDI’s stock price] moving or at least hovering where it is now.

Disclaimer: No position in any company mentioned. 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 Sues Andiamo Corp and two former CEOs

On August 22, 2019 the SEC filed suit against William White, former CEO of Andiamo Corp’s (OTC: ANDI) for allegedly arranging for a stock promoter to receive discounted shares in exchange for a kickback. On September 30, 2019 the SEC filed suit against Michael J. Starkweather and Andiamo Corporation or issuing an allegedly false press release and receiving a kickback from a stock promoter. The SEC put out a press release about the suits last week. For a good overview of the second case, read Mike Caswell’s article on Stockwatch (free registration required to view the whole article).

Both cases are in the Eastern District of New York. The case dockets are below:

Securities and Exchange Commission v. White (2:19-cv-04825)
Complaint (pdf)

Securities and Exchange Commission v. Starkweather (1:19-cv-05528)
Complaint (pdf)

The White complaint (pdf) alleges misdeeds that happened between June and November 2016, when William White was CEO of Andiamo Corp. From the SEC complaint:

1. From at least June through November 2016 (the “Relevant Period”), White—then
the chief executive officer of Andiamo Corporation (“Andiamo”), a penny stock issuer—arranged for a stock promoter (the “Promoter”) to obtain millions of shares of Andiamo stock at a large discount so that the Promoter could make lucrative, manipulative trades and kick back a substantial portion of the profits to White.

2. Specifically, from June through October 2016, after the Promoter told White he planned to engage in pre-arranged matched trading with a buyer (the “Matched Buyer”) and agreed to give White half of the Promoter’s profits from those trades, White arranged for the Promoter to obtain at least 66 million shares of Andiamo common stock at a significant discount from the market price.

3. From July through November 2016, the Promoter engaged in eleven matched trades to sell over two million of these Andiamo shares to the Matched Buyer in pre-arranged transactions that created the false appearance of high-volume trading at inflated prices.

4. In exchange for White’s assistance, the Promoter paid White a significant portion of the Promoter’s profits from his matched trades.

Besides the Promoter and White, the complaint against White also mentions a “Matched Buyer” who worked with the Promoter to manipulate the stock using matched trades.

The more recent complaint (pdf) against Michael J. Starkweather and Andiamo Corporation alleges that they put out a false press release in April 2018. It was easy enough at the time to spot the problems with the press release and the company; see for example this insanely detailed research posted on the InvestorsHub message board on April 6, 2018 by pseudonymous researcher NoDummy. According to the SEC complaint:

The press release announced the “unveiling” of a smartphone Andiamo had purportedly developed, touted the phone’s technical features, and claimed that the phone was “available” for distribution. In reality, as Starkweather knew and later admitted, the purported smartphone did not exist: Andiamo had not actually had any such smartphone manufactured.

2. In the months leading up to this false press release, Starkweather and Andiamo issued four press releases touting the purported smartphone’s development in order to pique investor interest in Andiamo and its purportedly forthcoming smartphone. During this prior press release campaign, Starkweather sought and received “kickbacks,” as he called them, totaling over $15,000 from a stock promoter. These kickbacks supposedly represented a portion of the stock promoter’s profits from selling Andiamo shares during this press release campaign.

3. The false press release, which was the culmination of the preceding press release campaign, caused the volume of trading in Andiamo stock to triple and the stock price to increase.

The allegedly false press release gave many details about the phone:

The Utopya Odyssey is the first smartphone to be unveiled in the Company’s product lineup. This 4G smartphone features an incredible 4950 mAh battery, a beautiful 6″ FHD 18:9 display, dual SIM card functionality, up to 192 GB storage capacity, a 16 MP rear camera and 16 MP front camera, and 4 GB of RAM. The Androidbased Device also comes equipped with facial unlock technology and a fingerprint sensor for added user security.

Starkweather would later reveal to the subsequent CEO of Andiamo Corp, “There is no phone—there is no physical phones [sic] that I can sell right now .”

I believe there is a possibility that criminal complaints may yet be filed against the above-named defendants, considering that the SEC thanked the US Attorney’s Office from EDNY and the FBI in the press release about the lawsuits (“The SEC appreciates the assistance of the United States Attorney’s Office for the Eastern District of New York and the FBI.”). Of course it is also possible that the USAO and FBI investigated but decided that only civil charges were warranted. It is possible that the promoter mentioned in the complaints has been acting as a cooperating witness for the FBI in other cases and then gave the FBI information about Andiamo that was then forwarded to the SEC. This would also explain why the promoter was not charged in these cases. One last note — there is no information in the SEC press release or in the complaints that indicates whether the stock promoter in each case was the same or if they were different people.

Stock chart (daily candlesticks) of Andiamo Corp. ANDI

Disclaimer: No position in any company mentioned. 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.

OTC Markets’ Caveat Emptor designation keeps killing pumps

I will eschew the background info in this post — if you need to get up to date, read my previous posts on OTC Markets Caveat Emptor designation and how it has affected promoted stocks:

OTC Markets Kills a couple more pumps with caveat emptor designation ☠

OTCMarkets continues handing out Caveat Emptor ☠ designations like candy: VCEX, BETW, and ELGL

LifeQuest World Corp (LQWC) is the newest 7Stocks stock promotion & just got ☠

OTCMarkets Group brings the ☠ hurt to some high-profile pump & dumps

The most recent batch of promoted stocks to get the Caveat Emptor designation includes ESYL and PXPP on 10/7:

ESYL (Easylink Solutions Corp) was an uncompensated promotion by numerous promoters including MJ Capital (MomentumOTC.com), James Connelly (PennyStockProphet.com), Stock News Wire LLC (SmallCapFirm.com / FierceInvestor.com / StockWireNews.net), and likely others that I did not see.

PXPP (Phoenix Apps inc) was a promotion by a group connected to the defunct AwesomePennyStocks, referrred to as the “Tier 1” group by OTC Market Research. As you can tell from the chart below, the stock has continued to climb after being designated Caveat Emptor. They are the only promoters in the last year whose pumps have not all dropped following Caveat Emptor designation. They have been advertising aggressively recently; this promotion was via an older website, not the ones they are currently advertising.

Two other relatively recent stocks to be gifted the Caveat Emptor designation were HPMM (Hemp Naturals Inc) and SMPP (Strategic Management & Opportunity Corp).

HPMM closed at $0.20 just prior to it being designated Caveat Emptor on 8/26. The next day it closed at $0.13125.

SMPP gapped down from $0.712 to $0.53 and then closed at $0.25 on 8/7 the day after it was designated Caveat Emptor:

Disclaimer: No position in any company mentioned. 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.

When the wrong security spikes on news: Celgene CVR edition

One of my favorite trades is shorting a stock when the stock spikes on news from a similarly-named company. This is a rare event, but it is quite enjoyable and I have written about it when it happened to Riviera Tool Corp and Jetcom / Jet.com. A couple similar situations were Nestor Therapeutics / Nest Inc and Tweeter / Twitter. However, this is usually something that happens to illiquid OTC stocks. It appears that something like this just happened with a Nasdaq-traded contingent value right (CVR) relating to Celgene.

Basically, a CVR is a security issued by a company that is acquiring another company (usually a biotech) that will pay out if something good happens (usually drug approval). In this case, Charley Grant wrote a column for The Wall Street Journal that was bullish on a certain Celgene CVR that would pay out if three of its drugs in late-stage development got approved. That CVR was not yet assigned a ticker. Instead, a different CVR with the ticker CELGZ relating to Abraxane (from the merger of Abraxis and Celgene years ago) spiked 100% in two days starting the day the column was published and on the third day it lost all those gains.

The spike in CELGZ didn’t take it to an absurd value — it was higher back in March — but considering the timing and the volume it is almost certain that people bought the wrong CVR in response to Grant’s column. I checked Google News and I found no news for Abraxane around September 24th. Unfortunately, I did not trade CELGZ (even though it was available to short for about $0.006 per share at Centerpoint Securities on the day it dropped big). Oops.

CELGZ seven month daily candlestick chart
CELGZ one month daily candlestick chart

Once again, thanks to Twitter and one of the smart traders I follow on Twitter for pointing all this out, as shown in the tweets below:

Charley Grant tweet:

Here was the response from a trader I respect and follow:

There are a lot of smart traders on Twitter and one of the best ways to find them is to look at who the smart people follow. Start by seeing who I follow:

https://twitter.com/goodetrades/following

Disclaimer: No position in any company mentioned. 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.

Archived post: Inside the Pump Factory, Part 1: The Aristocrat Group Pump and Dump

Seven years ago I thought to put out more detailed research on certain pump and dump scams on a separate blog at OTCMicrocapResearch.com. After a handful of highly-researched posts I got distracted and stopped. I am now giving up that domain name and shutting down that website. Below is a copy of one of those posts. The article below was originally published on 19 December 2012.

This is the first article in a series I am calling “Inside the Pump Factory.” These articles will show how a series of companies have been promoted in a way that appears to me to require the complicity of company executives. For this reason I am initiating coverage on Aristocrat Group Corp. (and will soon initiate coverage on other companies promoted by the same stock promoters). My rating on Aristocrat Group is Strong Sell and I have a medium-term (over the next few months but within a year) price target of $0.10, although the stock should eventually go much lower.
I believe that Aristocrat Group is being promoted by the same stock promoters that promoted First Titan Energy (OTCBB: FTTN), GTSO Resources (OTCBB: GTSO) and Rainbow Biosciences (OTCBB: RBCC).  After a brief review of Aristocrat Group’s fundamentals and a description of the current stock promotion on it, I will return to prove the connection between these companies.

As far as any fundamental analysis of Aristocrat Group goes, it is pitifully easy. With 62,250,000 shares outstanding and a recent stock price of $1.50, the company has a market capitatlization of $93 million. The company has total assets of $1,243 as of July 31st (per their recent 10-K) and liabilities of $9,118. I know high school students with more impressive balance sheets. What is the company doing with its pitifully small amount of money? At first, it looks like it must be buying advertisements on Yahoo! Below is a screenshot of an advertisement I saw for it today.

(highlighting of the ASCC advertisement added by me; click image to enlarge)

The link takes you to the company’s investor relations page, or more specifically, http://www.luxuriabrands.com/investors?utm_source=MSN&utm_medium=CPC&utm_term=Company&utm_content=NewsAd122&utm_campaign=ASCC.

Unlike most online stock promotion advertisements, the link does not take you to a stock promoter’s website but rather to the company’s website. So this is why it seems that the company is paying for the stock promotion ads.
The Luxuria Brands website is very slick and very promotional. Take a look at this image below that I took from the website’s Investors page:

ascc_price_target

I have seen companies pay for stock promotion campaigns before, and I have seen stock promoters paid by companies issue outrageous price targets. But I cannot remember ever having seen a company touting itself so blatantly on its own website.

From the same page:

ASCC’s Proprietary Formula Could Turn $5000 into $50,000  ASCC is on target to producing smooth, unflavored vodka that uses domestically-grown potatoes as its main ingredient—integral in appealing to consumers with allergies to certain grains. The market demand for our gluten-free vodka could boost investor gains by 400% or more!
Luxuria Brands is working to promote national market modernization trends in product branding beginning with an American-made premium vodka line, while helping to spur economic prosperity within the U.S. ASCC will expand into the music industry, branding in-demand products on a global scale!
As vodka’s popularity continues to spike, consumers and investors are likely to reap very high ROIs in the first few months of production.

marketshare

While all companies like to accentuate the positive, I must repeat that I have not previously seen such direct references to the stock price (rather than the actual business). What is worse is that the company makes specific predictions about their stock price (“… could boost investor gains by 400% or more”), and about their business performance (saying that they are “poised to capture 3-5%” of the vodka market, an outrageous prediction).

Even PacWest Equities, which rightly drew my ire for many failings, did not make specific and absurd predictions about market share that they would take and price gains that the stock would see. But all this, while highly irregular and inappropriate, misses the more important point. That point is that the company cannot be paying for these ads — it does not have enough cash and has disclosed nothing in its filings about paying for “investor relations” or “stock promotion” services. A quick search of Aristocrat Group’s most recent 10-K revealed no usage of either phrase. Furthermore, the recent 10-K shows that all expenses were under “general and administrative” expenses; stock promotion would not be considered a G&A expense. That brings me to a sinister conclusion: the company is acting in concert with the stock promoters. There is no other logical conclusion that I can think of, especially considering that the company’s two websites are on the same server as the websites of other companies pumped via the same method that I mentioned above (search the YouGetSignal reverse IP tool for the company’s luxuriabrands.com and aristocratgroupcorp.com websites and you find that they are hosted on the same server as the corporate websites of RBCC and FTTN and GTSO and many other penny stock companies).

See this screenshot:

yougetsignal

As mentioned above, First Titan Energy and Rainbow Biosciences have been promoted in the same manner, via online ads. At least one of the companies, Rainbow Biosciences (OTCBB: RBCC) is still being promoted in the same fashion. I cannot confirm that the other companies whose websites show up above were promoted in the same manner but I believe that to be the case. (One important aside: large websites like bhphotovideo.com, nextag.com, shopzilla.com, and bizrate.com are often hosted across many different servers and IPs, and I can safely state that they have no relationship with the other websites shown above.) Below is a screenshot of a search on Bing that yielded a Rainbow Biosciences advertisement:

(highlighting of the RBCC advertisement added by me; click image to enlarge)

I find this direct link between all these companies’ official websites and online stock promotion ads to be quite disturbing. Are the executives of all these companies cooperating with the stock promoters? Are all these companies put together and run from behind the scenes by a small cabal of deal-makers and promoters for the sole purpose of being pumped and dumped? While I believe one of these explanations must be true, extraordinary claims demand extraordinary evidence, which I will aim to provide in future articles in this series. In the meantime, I recommend that investors steer clear of all of these promoted, worthless companies.

Disclosure: It is the policy of MorningLightMountain LLC for no authors of articles nor anyone connected to the company or their immediate relatives to have positions in any stocks covered on the OTCMicroCapResearch.com website, from the time coverage is initiated until coverage of a company is officially dropped. This ensures that there will be no bias nor conflicts of interest for the authors of articles on this website. Furthermore, information about upcoming research reports will not be given to anyone prior to public notice being given via this website’s Twitter account or on this website itself (this report was published on Wednesday, December 19th, at 1:58pm EST). OTCMicroCapResearch.com never gets paid to analyze companies.

Archived post: Another K. Hill Livestock press release from PacWest Equities

Seven years ago I thought to put out more detailed research on certain pump and dump scams on a separate blog at OTCMicrocapResearch.com. After a handful of highly-researched posts I got distracted and stopped. I am now giving up that domain name and shutting down that website. Below is a copy of one of those posts. The article below was originally published on 12 November 2012.

PacWest Equiteis (Pinksheets: PWEID) released yet another press release today, this time about a distribution agreement its World Eco Source subsidiary has with K. Hill Livestock. There are still no details on K. Hill Livestock and none of the press releases have had a quote from anyone at K. Hill Livestock. Does the company exist? I do not believe so, as I stated in my second report on PacWest Equities — there is no evidence that K. Hill Livestock exists outside of PacWest Equities’ press releases. Like I said before, I could be wrong, but considering everything else that is sketchy about the company (that I detailed in that report), I believe nothing they say unless there is proof. Below is the full press release (except for the legal boilerplate):

November 12, 2012 10:10 ET
PacWest Equities, Inc. to Team With K. Hill Livestock for Distribution Rights for Hawaii in a Deal Worth up to $12 Million US in Annual Sales
LAS VEGAS, NV–(Marketwire – Nov 12, 2012) –  PacWest Equities, Inc. (PINKSHEETS: PWEID) through its subsidiary, World Eco Source Corp. (“WES”), announced today the signing of a Teaming Agreement with K. Hill Livestock as an exclusive dealer for the state of Hawaii for WES’ proprietary MobileFeed® and MobileFood® units. Both parties involved recognize the demand for a sustainable economical and reliable feed source for not only livestock, but also for human inhabitants on the under developed areas of rural Hawaii. The units will be shipped to Kawaihae Harbor and distributed from Kailua-Kona, HI. “We see tremendous growth potential throughout all of the Pacific Islands including US territories of Samoa and Saipan, where populations and livestock are heavily dependent on import of goods,” stated Mr. Geoffrey Bagatelos, President of PacWest Equities, Inc. He added, “Hawaii has limited resources available for large scale feeding operations that force the import of expensive feed stock, and this agreement will allow for ample amount of feed to supply a large herd and stabilize fluctuating expenses of import due to volatile fuel costs.”
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock based consumables or human based protein and vegetable consumables. The MobileFeed® units are truly a sustainable green life cycle farming system. Using solar powered and water conservation growing systems, one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption, lowering feed costs by 200% while producing Certified Organic, Grass Fed livestock, increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Growing tilapia side by side with vegetables, and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.

And as usual with PacWest Equities’ press releases, the above release has no details about anything else — price, where the units were manufactured, what kind of inventory K. Hill will hold, what kind of vendor financing may be provided to buyers, etc. I am very skeptical of everything PacWest Equities says. I continue to have a strong sell rating on the stock with a sub-penny target price.

Disclosure: It is the policy of MorningLightMountain LLC for no authors of articles nor anyone connected to the company or their immediate relatives to have positions in any stocks covered on the OTCMicroCapResearch.com website, from the time coverage is initiated until coverage of a company is officially dropped. This ensures that there will be no bias nor conflicts of interest for the authors of articles on this website. Furthermore, information about upcoming research reports will not be given to anyone prior to public notice being given via this website’s Twitter account or on this website itself (this report was published on Wednesday, November 12th, at 11:43am EST). OTCMicroCapResearch.com never gets paid to analyze companies.

Archived post: More contempt for the investing public from PacWest Equities (Pinksheets: PWEID)

Seven years ago I thought to put out more detailed research on certain pump and dump scams on a separate blog at OTCMicrocapResearch.com. After a handful of highly-researched posts I got distracted and stopped. I am now giving up that domain name and shutting down that website. Below is a copy of one of those posts. The article below was originally published on 7 November 2012.

On Monday night PacWest Equities (Pinksheets: PWEID) released a press release touting the great sales gains made by their PurGro Electronics subsidiary. The company continues to show a complete and utter disregard for investors by publishing only the most positive information and failing to give out any other information. The press release states in part:

3rd Quarter Sales for its wholly owned subsidiary, PurGro Electronics, showed a 430% increase in sales over 3rd quarter results for 2011, following the consistent sales growth trends set in the previous two quarters.

What were the sales? What were the prior months’ sales? How many shares were issued to purchase PurGro Electronics LLC? We have no clue — yet still the stock goes up. At a recent price of $0.68 that gives the company a $1.3 billion market cap (using my estimate of 500,000,000 post-split shares issued to pay for PurGro).
The stock promotion of PacWest Equities has grown larger — I received an email this morning from “The Penny Stock Pillager,” which has published pump mailers for past pump and dumps, disclosing $300,000 in compensation to promote PacWest Equities. See the disclaimer online here or below:

Read my prior articles on PacWest Equities:
Is PacWest Equities (Pinksheets: PWEID) a bona fide company? Or is it being run for the purpose of selling shares?
Coverage initiated on PacWest Equities (OTCBB: PWEI) — Strong sell, price target $0.06

Disclosure: It is the policy of MorningLightMountain LLC for no authors of articles nor anyone connected to the company or their immediate relatives to have positions in any stocks covered on the OTCMicroCapResearch.com website, from the time coverage is initiated until coverage of a company is officially dropped. This ensures that there will be no bias nor conflicts of interest for the authors of articles on this website. Furthermore, information about upcoming research reports will not be given to anyone prior to public notice being given via this website’s Twitter account or on this website itself (this report was published on Wednesday, November 5th, at 1:34pm EST). OTCMicroCapResearch.com never gets paid to analyze companies. 

Archived Post: Is PacWest Equities (Pinksheets: PWEID) a bona fide company? Or is it being run for the purpose of selling shares?

Seven years ago I thought to put out more detailed research on certain pump and dump scams on a separate blog at OTCMicrocapResearch.com. After a handful of highly-researched posts I got distracted and stopped. I am now giving up that domain name and shutting down that website. Below is a copy of one of those posts. The article below was originally published on 5 November 2012.

PacWest Equities (Pinksheets: PWEID) is a wildly-overvalued, promoted company with little in the way of a real business, destined to fall 95% once the stock promotion ends (as I argued in my first report on the company). But far more importantly and more sinisterly, I believe that the company is being operated for the purpose of promoting itself and helping insiders (specifically, the former owners of PacWest Equities’ subsidiary World Eco Source) sell tens of millions of shares, rather than being operated as a bona fide company with the goal to make products, sell them, and eventually make profit that can be distributed to shareholders. Anyone who owns shares of PacWest Equities as an investment is a fool and deserves to lose their investment. Any traders who cynically play the stock promotion game and bought shares have made a great trade the last two weeks, but many of those traders will lose not only their gains but also their principal when the stock craters in the near future. As per the policy of this website, I do not have any position in PacWest Equities; I also am not aware of anyone who is short the stock at the moment. Note that as of the day this article is published (November 5th, 2012), PacWest Equities (Pinksheets: PWEID) has just completed a 3 for 1 forward split and will trade as PWEID for the next two weeks (it will then revert to PWEI).

All share prices and share counts in this article have been adjusted to account for the split. Articles and filings I link to in this article all use pre-split prices and share counts.
Before I lay out my case against PacWest Equities, let us review what happened after my first report on PacWest Equities was published. That report was posted on this website on October 16th prior to the market open, following which the stock opened at $0.22 then hit a high of $0.243 before dropping to a low $0.0467 and closing at $0.0598. While I would love to take credit for causing the drop, the stock was ripe for a fall and tweets (at 10:17am EST) followed by a reportby Infitialis on SeekingAlpha accusing the company of illegally registering 465,000,000 shares for sale (155,000,000 shares pre-split) certainly helped to drive the stock lower. In light of its quick drop I decreased my technical price targets for the stock the next day; in hindsight, that was woefully wrong, as the stock bounced all the way back and closed at $0.3467 on Friday. But it is truly rare to see a pump and dump recover from such a steep drop on such serious accusations, and while my near-term price predictions were wrong, all my fundamental criticisms of PacWest Equities remain valid.

I believe Infitialis’ accusations to be credible, and while I am far from a securities law expert, even a small possibility of their accusations being correct makes me drop my estimation of the fundamental value of PacWest to $1,500,000; two-thirds of that value is due to the company being listed on the Pinksheets (rather than being a private company); the remaining $500,000 in value is attributable to the newly-acquired PurGro business (valuing it at one-third of sales). I now believe that all the existing ‘businesses’ owned by PacWest Equities other than PurGro are essentially worthless. I have thus reduced my fundamental price target on PWEI to $0.001 (one-tenth of a cent). Also, Infitialis was not the only person to argue that those shares were illegally issued: “Nodummy” of PromotionStockSecrets.com wrote, “I don’t even think that 155,000,000 newly issued shares [465,000,000 post-split shares] can be free trading throwing up a major red flag.”

After publishing my first report on PacWest I found more a lot negative information about the company: enough to convince me that World Eco Source Corp., the PacWest Equities subsidiary that is the subject of recent press releases and whose former owners owned 465,000,000 shares of PacWest just a month ago (155,000,000 pre-split shares), is not being operated as a bona fide business with the goal of making sales and profits but is simply being operated so as to generate hype that can be used to sell those 465,000,000 shares to naive individual investors. Let me be clear that I do not have evidence that proves that the company is lying in its press releases and it may be telling the truth — but I strongly believe that the company is not being operated with earnest intent to make a profit (utilizing the second definition of bona fide according to Merriam Webster). In the rest of this article I will present a large array of evidence that backs up my belief.

Registered Trademarks?

One thing I noticed is that while the company indicates by using the ® symbol that it has registered trademarks on the terms “MobileFeed” and “MobileFood”, those are not registered trademarks in the United States. Here is an excerpt from the company’s October 25th press release:

 PacWest Equities, Inc. (PINKSHEETS: PWEI) through its subsidiary World Eco Source Corp. announces plans for the initial filing for a U.S. Patent on its highly-advanced MobileFeed® and MobileFood® systems “Feed Tube”, a revolutionary cylinder used to maximize production in their proprietary systems, which would replace the international market’s current use of highly-inefficient tray systems.

A search of the U.S. Patent and Trademark Office records shows no trademarks or servicemarks for “MobileFeed”, “Mobile Feed”, “MobileFood”, or “Mobile Food”. Specifically, I searched those words/phrases in the ‘combined word mark’ field, requiring that all search terms be in the word mark. It is illegal to use the “®” symbol on a mark that is not a registered trademark, although it is acceptable to use that symbol if the trademark is registered in a foreign country. World Eco Source is based in Belize so it is possible that it has registered those trademarks in Belize (I could not find a way to search Belize trademarks online). But as its prior press release announced, it has done business in Hawaii, so to not have registered its trademarks in the United States is at the very least quite stupid. For comparison, I registered the service mark of “Everyday Investor” (the name of my defunct value-investing newsletter) back in 2006 without the aid of an attorney; it only took me a few hours of work and a nominal fee.

Stock Promoters Got the News First

Another thing I noticed about PacWest Equities is that the timing of its first recent press release (as I mentioned in my initial report, this press release was the first time PacWest named the company it had acquired for 465,000,000 shares — 155,000,000 pre-split shares — in April). The press release was issued at 4pm EDT on October 9th. However, the stock promotion emails that I received at 9:30am EDT that same day said the following (bold added by me):

Hi Everyone,
It’s taken some time but we are ready to announce our BRAND NEW HUGE pick. Our past picks have shown our subscribers gains of over 1000% and we believe that this one will blow everyone away. Our new pick is:
PWEI – PacWest Equities Inc.
PacWest Equities Inc. may soon be known as one of the leaders in green technology. PWEI specializes in working with companies to bring together resources needed so they are able to reach the next level.
World EcoSource Corp., a PacWest Equities Inc. company, is a technology based company which has developed the MobileFeed and MobileFood systems helping offset deficient worldwide food production for both animals and humans.
Each system provides turnkey solutions for either the production of fodder for livestock or protein and vegetables for humans.
In recent years due to the global warming, many countries have been affected by water shortages, drought and adverse climatic conditions.
It is estimated that $40 Billion dollars annually is spent on rotating livestock from summer to winter pastures. The MobileFeed system could essentially eliminate this expense completely!
On the human side of things, aquaponic systems are an economical, efficient, and environmentally friendly way to harvest large amounts of vegetables and high-protein fish for healthy dining and nutrition.
The MobileFood system combines the latest technology with the finest in hydroponic growing techniques to bring Organic Vitamin Rich Proteins and Vegetables into a portable trailer.
Keep in mind that we’ve waited a long time to bring you this gem. Our team is dedicated to our subscribers and is committed to bringing winners every time we send a pick!
We are asking all subscribers to put PWEI on your radar immediately and be on the lookout for more exciting updates!
Happy Trading!
The PennyStockHeroes Team

This shows that the stock promoters knew the news about the acquisition before it was officially announced in the press release or in any sort of filing with OTCMarkets.com. This is obviously another huge red flag and it leads me to believe that the former owners of World Eco Source are behind the stock promotion.

Either Nonsensical or Highly-Dilutive Acquisition Payment

I want to return to one of the problems I noted in my last report: the acquisition of PurGro Electronics LLC. PacWest issued a press release announcing that the purchase of PurGro has been completed (here is the earlier press release). Below is the full text of the press release (except for the descriptions of PacWest and World Eco Source and the legal boilerplate):

LAS VEGAS, NV–(Marketwire – Oct 15, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that, through its wholly owned subsidiary, World EcoSource Corp., it has completed the acquisition of PurGro Electronics, LLC in exchange for cash and stock in a deal valued at US$15 Million in annual sales, along with the rights to 5 projected international patents in China, and 11 projected patents to file in the US. Included in the sale is PurGro Electronics’ current sales volumes, customers, and revenue streams, along with the projected revenue from the US and International patents, which could possibly exceed $50 Million in annual sales.
This purchase could propel World EcoSource to quickly become the leader of technology-based Organic Food Production companies. With unique MobileFeed® and MobileFood® systems for year round organic food production, even in the harshest of climates, the acquisition of PurGro’s technological advances in the automation of hydroponic growing systems make sense in this key acquisition.
PurGro’s proprietary, automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programming. Any variations in the preset optimum growing environment cause the system to immediately send out text and email alerts to prevent a disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and profitable.

PurGro, unlike World Eco Source, appears to have a real business. But I doubt the business will become more than a niche business. The company has $1.5m in annual sales (reported in the initial press release about the acquisition). Their products actually look useful to me — but being purchased by a glorified shell company with no assets is not the way to improve distribution and greatly grow sales. And PacWest Equities still has not given any details on how many shares were issued to pay for the company nor how much cash was used (if any — as I noted before, PacWest Equities had zero cash and zero current assets on their balance sheet in their most recent filing with OTCMarkets.com, so despite saying that they paid with “cash and stock” they must have paid solely with shares). In an email, I asked PurGro’s Presidentorganizer (pdf) of the company (see its filings with the State of Georgia), and presumable owner, Greg Richter, if he could give any details on the purchase consideration, but he understandably declined to comment on those details.

Considering PacWest Equities’ lack of cash or other current assets, I have to assume that the entire purchase price of PurGro was in restricted shares. The press releases indicated that the deal was valued at $15 million, and the first press release about the purchase was on October 10th. Assuming that the company valued its stock at the prior day’s closing price of $0.0706 ($0.2118 pre-split), a $15m valuation implies that 212,464,587 shares (70,821,529 shares pre-split) were issued to purchase PurGro. That would mean an increase of 15% in PacWest Equities’ share count. Considering that PacWest Equities’ stock had barely traded prior to one day before the acquisition was announced, I believe it much more likely that the payment for PurGro is closer to 500,000,000 shares, somewhat more shares than were issued for the company’s previous acquisitions earlier this year (which had no sales and minimal assets). This would fit with PacWest Equities having increased its authorized share count to 2,000,000,000 shares on October 19th. So I estimate that 500,000,000 shares were issued to pay for PurGro, giving PacWest Equities 1,914,680,429 shares outstanding, resulting in the company having a $663 million market cap as of Friday’s close at $0.3467 ($1.04 pre-split).

Besides the problem of PacWest Equities not disclosing the payment for PurGro, they also added the silly and misleading statement that the acquisition came “along with the rights to 5 projected international patents in China, and 11 projected patents to file in the US”. This is actually less clear than the first press release about the earlier press release about the acquisition that stated that PurGro had “5 international patents pending in China and 11 patents to be filed in the US.” It is just dumb to describe patent applications that have not even been submitted to the USPTO, as I describe below.

Immaterial and Stupid Patent Press Release

PacWest Equities’ press release at 3:06pm EST on October 25th announced plans for filing a patent on its “Feed Tube” (entire press release except for the standard legal boilerplate is quoted below; emphasis added by me):

PacWest Equities, Inc. Announces Plans for Filing for a US Patent on Its MobileFeed® and MobileFood® Systems “Feed Tube” LAS VEGAS, NV–(Marketwire – Oct 25, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) through its subsidiary World Eco Source Corp. announces plans for the initial filing for a U.S. Patent on its highly-advanced MobileFeed® and MobileFood® systems “Feed Tube”, a revolutionary cylinder used to maximize production in their proprietary systems, which would replace the international market’s current use of highly-inefficient tray systems.
World Eco Source Corp. is expected to quickly become the leader of technology-based Organic Food Production companies. With a unique mobile Live Food and Live Fodder solutions for year round Organic Food Production, even in the harshest of climates, the technological advances of the Feed Tube and the automation of hydroponic growing systems should propel them out front in the $50 Billion Organic world food production race.
World Eco Source’s proprietary automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programing. Any variations in the preset optimum growing environment causes the system to immediately send out text and email alerts to prevent a disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and highly profitable.

The two statements I highlighted in bold are both mind-bogglingly stupid. First, a plan to file for a patent is not material news. A company that wants to keep its investors well-informed would not bother to issue a press release about that — it takes substantial time and money to put together a patent application that is to have any hope of succeeding, so the intent to file a patent application is not worthy of a press release (the submission of a patent application could be material). Even once a patent application has been completed, it can take years for it to be reviewed, revised, and finally accepted. So this press release has little substance but lots of hype — the word ‘patent’ sounds great, even if the company never gets around to filing that patent application.

The second statement that I boldfaced, at the end of the press release, is even more outlandish. The company asserts that its systems are highly profitable, and yet there is no data anywhere on their website or in their filings with OTCMarkets.com about tests of their technology including energy / water inputs and crop yield outputs, information that would be necessary to evaluate the potential profitability of their product. In fact, there are no details anywhere on their MobileFeed / MobileFood  product — all that exists on their website and in their press releases are vague generalities. As I stated in my first report on the company, they have precious few assets, so I have to wonder whether they even have a functional prototype of their product, let alone tests that would demonstrate its economics. In the absence of evidence to the contrary, I do not even believe that their MobileFeed/MobileFood product exists (except perhaps on paper in technical specifications).

No Evidence that Their Sole Customer Exists

As I wrote in my previous report, I could find no evidence that the one customer World Eco Source has actually exists. I researched further and I still have not found any evidence that “K. Hill Livestock” exists on the Big Island of Hawaii. I also sent an email to the company asking for contact information for K. Hill Livestock on October 22 and no one responded to my email. Below I detail how I searched for information on K. Hill Livestock.

First, I performed Google searches. A search for (“K. Hill Livestock” Hawaii -Pacwest) yielded no results. Removing the word “Hawaii” still gave me no results. There were 2000 results if I did not exclude results with “Pacwest” in them. So all the web pages with “K. Hill Livestock” as World Eco Source’s press release spelled the name, also mention PacWest. In other words, they just republished the press release. Next, I looked for ranching industry associations in Hawaii and found two. The Hawaii Cattleman’s Council does not have online information listing the names of members and they did not respond to an email requesting contact info on “K. Hill Livestock”. A website listing producers of grass-fed beef did not list K. Hill Livestock or anything that could reasonably be confused with that name (I searched for grass-fed beef because of this line from the press release: “one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption”). The Hawaii Cattle Producers Cooperative Association, which has 50 members who own 58% of the state’s cows and heifers lists its members on its website but does not list any member with a name similar to “K. Hill Livestock.”

Next, I checked out the Hawaii Secretary of State’s business name search and searched for any business with the word “Livestock” in its name (here are all the results). This search finds corporations, LLCs, and trade names. Yet there is nothing with “Hill” and “Livestock” in the name that is registered with the Hawaii Secretary of State. It is possible that “K. Hill Livestock” is not a registered name and instead “K. Hill” is just the owner’s legal name. In this case registration may not be necessary (I am not sure).
It is possible that “K. Hill Livestock” exists and that they ordered five MobileFeed units. But I have found no evidence that they exist and when considering the other evidence that I summarize below that raises significant doubts about World Eco Source, I do not believe that they exist.
All the Red Flags in a Pretty, Numbered List

  1. Two anonymous but highly-respected microcap researchers have alleged that the 465,000,000 free-trading shares (155,000,000 pre-split shares) issued for the acquisition of World Eco Source Corp were illegally issued. “Nodummy” of PromotionStockSecrets.com wrote, “I don’t even think that 155,000,000 [465,000,000 post-split] newly issued shares can be free trading throwing up a major red flag.” On SeekingAlpha.com, “Infitialis” wrote, “we believe that every single free trading share in circulation has been illegally issued.” I find their arguments to be highly persuasive.
  2. There is a massive stock promotion (pump and dump) campaign underway, touting the stock of PacWest Equities (Pinksheets: PWEI). This stock promotion is run by a Belize-based company that discloses that it was paid $500,000 to promote the stock. I discussed the promotion in detail in my first report on PWEI.
  3. PacWest Equities trades on the Pinksheets and does not report to the SEC. This means that it is not required to file timely, audited financial statements. It only reports limited information to OTCMarkets.com and none of its recent financial statements has been audited.
  4. PacWest Equities took six months to issue a press release or even name the company that it acquired with 465,000,000 shares (155,000,000 pre-split shares) back in April 2012. The first mention of what the company acquired with those shares was in a press release on October 9th, 2012. This is for a transaction that grew the company’s share count by 48%.
  5. PacWest issued no press releases for months prior to its stock promotion, despite having acquired World Eco Source (the subject of many of its press releases) in April. Yet since the stock promotion began on the morning of October 9th, the company has issued ten press releases in under four weeks.
  6. The stock promoter Victory Mark Corp. Ltd. touted the news announced in the company’s October 9th press release prior to that news being released by the company in a press release at the end of the day.
  7. There are no details on the company’s website nor in its press release about its MobileFeed / MobileFood products. Only vague generalities are given. Despite this, the company strongly asserts, “When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and highly profitable.”
  8. PacWest Equities had negligible assets prior to the World Eco Source acquisition and showed few assets after that acquisition, which means that World Eco Source has few assets.
  9. PacWest Equities has not had any cash or current assets on its balance sheet in the last two quarters, yet it stated in the press release announcing the acquisition of PurGro Electronics LLC that the deal was “in exchange for cash and stock.”
  10. The company has repeatedly issued press releases that lack substance and contain only hype. Good examples of this hype without substance are in the press release announcing the plan to file a patent application and in the description of the “projected patents” that its recent acquisition PurGro Electronics LLC is looking to file in China and in the USA. Speaking of patents, in its November 2nd press release, PacWest Equities refers to its “Patented GroBot Evolution” buts its October 10th press release refers only to “patents pending in China and 11 patents to be filed in the US,” not mentioning any actual US patents.
  11. The one sale reported by PacWest Equities, which is not even a completed sale but rather an “initial purchase order,” is to a company (K. Hill Livestock which is located on “the Big Island of Hawaii”) for which I can find no evidence that it exists. Furthermore, PacWest Equities did not respond to an email I sent on October 22nd asking for contact details for K. Hill Livestock.
  12. PacWest Equities did not give any information on how many shares it issued to pay for the acquisition of PurGro Electronics LLC. This means that there is no way for shareholders to know how dilutive this acquisition is. Meanwhile, PacWest Equities has issued three press releases about the acquisition of PurGro (PR 1PR 2PR 3) and how it will integrate PurGro’s products into its MobileFeed / MobileFood products.
  13. At a recent price of $0.3467 per share ($1.04 pre-split) and with 1,414,680,429 post-split shares disclosed as outstanding (as I state above, I believe that 500,000,000 shares were issued to purchase PurGro Electronics LLC), PacWest Equities has at least a $490 million market capitalization and more likely a $663 million market cap. This is despite the company having negligible assets and only $1.5 million in annual revenues (all sales coming from the recently-acquired PurGro Electronics LLC).
  14. World Eco Source has not registered any of its purported trademarks in the United States, despite using the “®” registered trademark symbol. If the company has not registered its “MobileFeed” and “MobileFood” trademarks in another country then it is violating US law by using that symbol. At best, the company was utterly stupid for not registering the trademarks in the USA.
  15. Essentially all the free-trading shares of PacWest Equities were issued to the prior owners of World Eco Source in the acquisition. According to the company’s initial company information and disclosure statement for the quarter ending September 30, 2012 (filed November 1st), there were 468,090,279 free trading shares outstanding (156,030,093 pre-split shares). So all but 3,090,279 of the free-trading shares (1,030,093 pre-split) were issued to the prior owners of World Eco Source. Considering that PacWest Equities’ stock has traded well over 300,000,000 shares (100,000,000 pre-split) over the last month, the prior owners of World Eco Source must be selling a large portion of their shares. Consequently, they must also be the ones who have paid for the stock promotion.

Conclusions

The facts above paint to me a very clear picture of a massive pump and dump that was not simply put together to help some investor in the company sell their shares. Rather, the stock promotion was paid for by company insiders (the former owners of World Eco Source) who timed the promotion to begin at the same time as the company began issuing a flurry of press releases hyping up their business prospects.

Who is selling stock? It has to be the former owners of World Eco Source Corp. There is no other possibility: they are the only ones who own enough free-trading shares. Who paid the promoters? It would only make sense for the people selling shares (the former owners of World Eco Source Corp.) to pay for a stock promotion. What subsidiary company has been the subject of the many of the hyped-up press releases put out by PacWest Equities? World Eco Source Corp.

Has the management of World Eco Source Corp (and PacWest Equities, since the acquisition) run the company in a manner that would be expected to maximize earnings or maximize sales? I believe that the answer to that question is clearly no. Time and again the companies have acted in ways that are not compatible with sensible business practices. There is no detailed information about the MobileFeed / MobileFood system on the company’s website, which would be useful to acquire customers (compare the World Eco Source website with the new subsidiary, PurGro, which has a very detailed website). There are no significant assets that would be necessary to produce any sort of product, let alone produce prototypes and run studies to determine the economic feasibility of their product. There are no booked sales — only one “initial purchase order” from a company that I cannot verify even exists. The company has repeatedly failed to disclose material information to investors (i.e., disclosing the acquisition of World Eco Source in a press release over five months after it occurred and failing to disclose the number of shares issued to pay for the acquisition of PurGro Electronics LLC). Yet PacWest Equities has had no problem issuing ten press releases in four weeks — an action that I believe clearly shows the company is trying to promote its stock rather than its products.

PacWest Equities’ stock will fall over 99% from its current price over the next few months. At that point, some of the investors who believe in the company will complain, asking how the SEC could let something like this happen. The fact of the matter is that it is quite possible that nothing illegal has happened or will happen. While PacWest Equities has failed to disclose useful information, they are not required to because they do not file reports with the SEC. The most important information — the lack of assets and sales — has been disclosed. As long as the company has not lied in its press releases, they have not violated the law. And the former owners of World Eco Source will have enriched themselves by over $30 million (assuming that they sell all 465 million shares at an average price of $0.0667) and they will laugh all the way to the bank.
 
Disclosure: It is the policy of MorningLightMountain LLC for no authors of articles nor anyone connected to the company or their immediate relatives to have positions in any stocks covered on the OTCMicroCapResearch.com website, from the time coverage is initiated until coverage of a company is officially dropped. This ensures that there will be no bias nor conflicts of interest for the authors of articles on this website. Furthermore, information about upcoming research reports will not be given to anyone prior to public notice being given via this website’s Twitter account or on this website itself (this report was announced on Twitter on October 26th after the market close and was published on Monday, November 5th, prior to the market open). OTCMicroCapResearch.com never gets paid to analyze companies. 

As of the time this article was published the author was not aware of any of his acquaintances or people in stock chatrooms he participates in having positions long or short in PWEID (he was notified immediately after this article was published by one person in the TimAlerts chatroom he moderates that that person is short PWEID). No member of MorningLightMountain LLC has any relationship with PromotionStockSecrets.com or Infitialis.

Archived post: For the archives: PacWest Equities’ press releases

Seven years ago I thought to put out more detailed research on certain pump and dump scams on a separate blog at OTCMicrocapResearch.com. After a handful of highly-researched posts I got distracted and stopped. I am now giving up that domain name and shutting down that website. Below is a copy of one of those posts. The article below was originally published on 4 November 2012.

October 9, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 09, 2012 16:00 ET
PacWest Equities, Inc. Acquires World Eco Source Corp.
LAS VEGAS, NV–(Marketwire – Oct 9, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that it has acquired World Eco Source Corp. of Belize City, Belize. The stock symbol of PWEI will not be changed. World Eco Source Corp. is a technology-based company which has developed the MobileFeed® and MobileFood® systems helping offset deficient, worldwide food production for both animals and humans.
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock-based consumables or human-based protein and vegetable consumables. The MobileFeed® units are truly a global sustainable, green life cycle farming system. Using both solar power and water conserving growing systems, one trailer can produce 1,500 pounds daily of organically grown grass for year round livestock consumption, thus lowering feed costs by 80% while producing Certified Organic, Grass Fed livestock and increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified, organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice-verse. Raising Tilapia side-by-side with vegetables and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with under performing companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not, undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 10, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 10, 2012 09:00 ET
PacWest Equities, Inc. Announces Letter of Intent to Acquire PurGro Electronics, LLC for Cash and Stock Valued at US$15M
LAS VEGAS, NV–(Marketwire – Oct 10, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that it has entered into a Letter of Intent to purchase PurGro Electronics, LLC in exchange for cash and stock, in a deal valued at US$15M. Included in the proposed transaction are PurGro’s current sales volume of $1.5M annually along with 5 international patents pending in China and 11 patents to be filed in the US.
This acquisition could propel the Company and its wholly owned subsidiary, World Eco Source Corp., to quickly become the leader of technology-based Organic Food Production companies. When coupled with World Eco Source’s unique MobileFeed® and MobileFood® systems for year round organic food production, even in the harshest of climates, PurGro’s technological advances in the automation of hydroponic growing systems make sense in this key acquisition.
PurGro’s proprietary, automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programming. Any variations in the preset optimum growing environment cause the system to immediately send out text and email alerts to prevent a disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and profitable.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with under performing companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
About World Eco Source Corp.
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock-based consumables or human-based protein and vegetable consumables. The MobileFeed® units are truly a global sustainable, green life cycle farming system. Using both solar power and water conserving growing systems, one trailer can produce 1,500 pounds daily of organically grown grass for year round livestock consumption, thus lowering feed costs by 80% while producing Certified Organic, Grass Fed livestock and increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified, organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Raising Tilapia side-by-side with vegetables and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not, undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 11, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 11, 2012 13:35 ET
PacWest Equities, Inc. Announces Its Entry Into the $50 Billion a Year Organic Food Production Market Through Its Wholly Owned Subsidiary, World Eco Source Corp.
LAS VEGAS, NV–(Marketwire – Oct 11, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced its entry into the $50 Billion a year Organic Food Production market with an initial purchase order for 5 units of its wholly owned subsidiary World Eco Source Corp.’s MobileFeed® trailers to be delivered on the Big Island of Hawaii for K. Hill Livestock, a family-owned cattle and swine operation. “Today signals our first foray into this exciting, worldwide market, as we are now able to bridge the large gap between ‘Organic’ and ‘Grass-fed’ beef, finally giving consumers what they want, organically grown, grass fed livestock delivered to their dinner table in an economical fashion,” stated CEO Geoffrey Bagatelos.
With the purchase of the units, K. Hill Livestock will now supply a self- sustainable feed supply to hobby animals as well as livestock for consumption. Hawaii has limited resources available for large scale feeding operations that force the import of expensive feed stock, and this agreement will allow for ample amount of feed to supply a large herd and stabilize fluctuating expenses of import due to volatile fuel costs, a problem faced by most of the worldwide market in today’s economy.
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock-based consumables or human-based protein and vegetable consumables, in even the harshest growing environments. The MobileFeed® units are truly a sustainable green life cycle farming system using solar powered and water conservation growing systems.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with under performing companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
About World Eco Source Corp.
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock-based consumables or human-based protein and vegetable consumables. The MobileFeed® units are truly a global sustainable, green life cycle farming system. Using both solar power and water conserving growing systems, one trailer can produce 1,500 pounds daily of organically grown grass for year round livestock consumption, thus lowering feed costs by 80% while producing Certified Organic, Grass Fed livestock and increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified, organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Raising Tilapia side-by-side with vegetables and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not, undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 15, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 15, 2012 17:54 ET
PacWest Equities, Inc. Completes Acquisition of PurGro Electronics, LLC Including Approximately US$15 Million in Annual Sales and 11 Potential Revolutionary US Patents
LAS VEGAS, NV–(Marketwire – Oct 15, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that, through its wholly owned subsidiary, World EcoSource Corp., it has completed the acquisition of PurGro Electronics, LLC in exchange for cash and stock in a deal valued at US$15 Million in annual sales, along with the rights to 5 projected international patents in China, and 11 projected patents to file in the US. Included in the sale is PurGro Electronics’ current sales volumes, customers, and revenue streams, along with the projected revenue from the US and International patents, which could possibly exceed $50 Million in annual sales.
This purchase could propel World EcoSource to quickly become the leader of technology-based Organic Food Production companies. With unique MobileFeed® and MobileFood® systems for year round organic food production, even in the harshest of climates, the acquisition of PurGro’s technological advances in the automation of hydroponic growing systems make sense in this key acquisition.
PurGro’s proprietary, automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programming. Any variations in the preset optimum growing environment cause the system to immediately send out text and email alerts to prevent a disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and profitable.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with underperforming companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
About World Eco Source Corp.
World EcoSource Corp. is a technology-based company which has developed the MobileFeed® and MobileFood® systems helping offset deficient worldwide food production for both animals and humans.
The World EcoSource MobileFeed® and MobileFood® systems provide turnkey systems for either the production of livestock-based consumables or human-based protein and vegetable consumables. The MobileFeed® units are truly a global sustainable, green life cycle farming system. Using both solar power and water conserving growing systems, one trailer can produce 1,500 pounds daily of organically grown grass for year round livestock consumption, thus lowering feed costs by 80% while producing Certified Organic, Grass Fed livestock and increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified, organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Raising Tilapia side-by-side with vegetables and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not, undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 19, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 19, 2012 11:31 ET
World Eco Source Foods Corp. Unit of PacWest Equities, Inc. Announces Initial Purchase Order for up to 5 MobileFeed® Trailers in a Deal Worth Almost $1 Million USD
LAS VEGAS, NV–(Marketwire – Oct 19, 2012) –  PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that its subsidiary, World Eco Source Corp., has received an initial purchase order for 5 units of its proprietary MobileFeed® trailers to be delivered on the Big Island of Hawaii for K. Hill Livestock, a family cattle and swine operation. With the purchase of the units, K. Hill Livestock will now supply a self- sustainable feed supply to hobby animals as well as livestock for consumption. Hawaii has limited resources available for large scale feeding operations that force the import of expensive feed stock, and this agreement will allow for ample amount of feed to supply a large herd and stabilize fluctuating expenses of import due to volatile fuel costs.
The World Eco Source MobileFeed® and MobileFood® units provide turnkey systems for either the production of livestock based consumables or human based protein and vegetable consumables. The MobileFeed® units are truly a sustainable green life cycle farming system. Using solar powered and water conservation growing systems, one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption, lowering feed costs by 200% while producing Certified Organic, Grass Fed livestock, increasing profitability of the final product.
The MobileFood® units enable the rapid production of certified organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Growing tilapia side by side with vegetables and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World EcoSource patented technologies, the outputs have finally become commercially feasible.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with underperforming companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
About World Eco Source Corp.
World Eco Source Foods has developed an environmentally conscious, Certified Organic, Mobile Food and Feed Solutions system to help offset the growing problem of worldwide food production, using a fraction of the water of typical crops in a hydroponic, solar powered environment to create a truly sustainable green life cycle farming system. Using solar powered water conservation growing systems, one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption, lowering feed costs by 200% while producing Certified Organic, Grass Fed livestock, increasing profitability of the final product. The Certified Organic Hydroponic Human Food Systems enable the rapid production of vegetables and proteins through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 22, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 22, 2012 14:00 ET
PacWest Equities, Inc. Proposes 3-for-1 Forward Split
LAS VEGAS, NV–(Marketwire – Oct 22, 2012) –  PacWest Equities, Inc. (PINKSHEETS: PWEI) today announced that it has filed with the Financial Industry Regulatory Authority, Inc. (“FINRA”) a request for a 3-for-1 forward split of its Common Stock. When approved by FINRA, the forward split will have a record date of October 18, 2012.
About PacWest Equities, Inc.
PacWest Equities, Inc. specializes in working with under performing companies and bringing together the resources needed for them to attain financial stability and growth. Our focus is on companies showing a positive upside while struggling to bring new bio-technologies and unique products to market.
About World Eco Source Corp.
World Eco Source Corp., a wholly owned subsidiary of PacWest Equities, has developed an environmentally conscious, Certified Organic, Mobile Food and Feed Solutions system to help offset the growing problem of worldwide food production, using a fraction of the water of typical crops in a hydroponic, solar powered environment to create a truly sustainable green life cycle farming system. Using solar powered water conservation growing systems, one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption, lowering feed costs by 200% while producing Certified Organic, grass-fed livestock, increasing profitability of the final product. The Certified Organic Hydroponic Human Food Systems enable the rapid production of vegetables and proteins through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 23, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 23, 2012 08:00 ET
PacWest Equities, Inc. Provides Additional Details Pertaining to Recently Announced Dividend
LAS VEGAS, NV–(Marketwire – Oct 23, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) (the “Company”) is pleased to provide further details pertaining to the recently announced dividend (a/k/a forward split) to shareholders of its common stock.
The Company has set the record date for the dividend as at October 18, 2012. However, the dividend does not become effective until such time as approved by FINRA. In the meantime, the Company’s shares of common stock will continue to trade on a pre-dividend basis.
On the date that the dividend is declared effective by FINRA, each shareholder of record will be entitled to exchange their existing shares for three new shares. As the dividend shares are payable upon surrender, it is anticipated that registered brokerage firms will have the dividend transaction processed automatically in customer accounts shortly after FINRA declares the dividend effective. Shareholders holding physical certificates representing their shares are NOT required to submit their certificates for exchange to receive full credit for dividend shares. Physical certificate holders may contact the Company’s transfer agent, First American Stock Transfer Inc., to facilitate the exchange of their old certificates for post-dividend shares should they wish to do so.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to’” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

October 25, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
October 25, 2012 15:06 ET
PacWest Equities, Inc. Announces Plans for Filing for a US Patent on Its MobileFeed® and MobileFood® Systems “Feed Tube”
LAS VEGAS, NV–(Marketwire – Oct 25, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) through its subsidiary World Eco Source Corp. announces plans for the initial filing for a U.S. Patent on its highly-advanced MobileFeed® and MobileFood® systems “Feed Tube”, a revolutionary cylinder used to maximize production in their proprietary systems, which would replace the international market’s current use of highly-inefficient tray systems.
World Eco Source Corp. is expected to quickly become the leader of technology-based Organic Food Production companies. With a unique mobile Live Food and Live Fodder solutions for year round Organic Food Production, even in the harshest of climates, the technological advances of the Feed Tube and the automation of hydroponic growing systems should propel them out front in the $50 Billion Organic world food production race.
World Eco Source’s proprietary automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programing. Any variations in the preset optimum growing environment causes the system to immediately send out text and email alerts to prevent a disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems sustainable and highly profitable.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to’” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

November 2, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
November 02, 2012 11:40 ET
PacWest Equities, Inc. Announces Integration of Its Patented GroBot Evolution With Web Server, Wi-Fi Hotspot and Wireless Interface for Its Advanced MobileFeed® and MobileFood® Systems
LAS VEGAS, NV–(Marketwire – Nov 2, 2012) – PacWest Equities, Inc. (PINKSHEETS: PWEI) announced today the integration of its Patented GroBot Evolution, a completely automated computerized growing controller, with integrated Web Server, Wi-Fi Hotspot and Wireless Interface, in all of World Eco Source’s MobileFeed® and MobileFood® trailer system applications. “Being able to completely automate our already advanced growing environment will not only greatly reduce the labor factor in growing operations worldwide, but it will dramatically reduce the element of human error from the growing cycle, making for more consistent yields,” stated Geoffrey Bagatelos, President of PacWest Equities, Inc.
World Eco Source’s proprietary automated growing solutions virtually eliminate the need for human interaction in the growing cycle, with automatic temperature, humidity, and watering programming. Any variations in the preset optimum growing environment causes the system to immediately send out text and email alerts to prevent and disruption in the growing cycle. When combined with World Eco Source’s proprietary water and electrical conservation techniques, the economic gains make the MobileFeed® and MobileFood® systems trailers even more sustainable and profitable.
About World Eco Source Corp.
World Eco Source Corp., a wholly owned subsidiary of PacWest Equities, Inc., is a technology-based company which has developed the MobileFeed® and MobileFood® systems helping offset deficient worldwide food production for both animals and humans.
The World Eco Source MobileFeed® and MobileFood® systems provide turnkey systems for either the production of livestock based consumables or human based protein and vegetable consumables. The MobileFeed® system for animals is a truly sustainable green life cycle farming system. Using solar powered water conservation growing systems, one trailer can produce 1500 pounds daily of organically grown grass for year round livestock consumption, lowering feed costs by 200% while producing certified organic, grass fed livestock, increasing profitability of the final product.
The MobileFood® system for humans enables the rapid production of certified organic vegetables and proteins for humans through life cycle harmonic integration of fish farms and hydroponic vegetables, with one half of the system feeding/fertilizing the other half, and vice versa. Growing tilapia side by side with vegetables, and using the same water from the fish to fertilize the greens is not something new, but by combining the hydroponic know-how with World Eco Source patented technologies, the outputs have finally become commercially feasible.
World Eco Source Corp. is expected to quickly become the leader of technology-based Organic Food Production companies. With a unique mobile Live Food and Live Fodder solutions for year round Organic Food Production, even in the harshest of climates, the technological advances of the Feed Tube and the automation of hydroponic growing systems should propel them out front in the $50 Billion Organic world food production race.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. The words or phrases “would be,” “would allow,” “intends to’” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

November 2, 2012 (on MarketWire)

SOURCE: PacWest Equities, Inc.
November 02, 2012 17:45 ET
PacWest Equities, Inc. Announces Effectiveness of Forward Split/Dividend of Its Common Stock
LAS VEGAS, NV–(Marketwire – Nov 2, 2012) –  PacWest Equities, Inc. (PINKSHEETS: PWEI) (the “Company”) is pleased to provide further details pertaining to the recently announced 3-for-1 dividend (a/k/a forward split) to shareholders of its common stock.
The Financial Industry Regulatory Authority, Inc. (“FINRA”) has approved this action effective the opening of trading November 5, 2012. The stock will trade under the temporary symbol “PWEID” for a period of 20 business days after which it will revert to the symbol “PWEI”.
Although the Company previously set the record date for the dividend as at October 18, 2012, the payment date as declared by FINRA has been for the close of business today, November 2, 2012. All shareholders owning shares at the close of business today, November 2, 2012, will be eligible to receive the dividend.
As the dividend shares are payable upon surrender, it is anticipated that registered brokerage firms will have the dividend transaction processed automatically in customer accounts shortly after FINRA declares the dividend effective. Shareholders holding physical certificates representing their shares are NOT required to submit their certificates for exchange to receive full credit for dividend shares. Physical certificate holders may contact the Company’s transfer agent, First American Stock Transfer Inc., to facilitate the exchange of their old certificates for post-dividend shares should they wish to do so.
This announcement is neither an offer to sell nor a solicitation of an offer to buy any of these securities.
Safe Harbor
This news release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995.The words or phrases “would be,” “would allow,” “intends to,” “will likely result,” “are expected to,” “will continue,” “anticipate,” “expect,” “estimate,” “project,” “indicate,” “could,” “potentially,” “should,” “believe,” “considers,” or similar expressions are intended to identify “forward-looking statements.” Actual results could differ materially from those projected in the forward-looking statements as a result of a number of risks and uncertainties. These include the Company’s historic lack of profitability, end user customer acceptance and actual demand, which may differ significantly from expectations, the need for the Company to manage its growth, the need to raise funds for operations and other risks within the regulation of the industry. Statements made herein are as of the date of this press release and should not be relied upon as of any subsequent date. The Company’s past performance is not necessarily indicative of its future performance. The Company does not undertake, and the Company specifically disclaims any obligation, to update any forward-looking statements to reflect occurrences, developments, events or circumstances after the date of such statement.

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