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Providence Media Strategies / Chuck Hughes: ECAU and STVF

Here is a daily candlestick chart of STVF, the previous Chuck Hughes / Providence Media Strategies LLC pump. If ECAU follows the same pattern then it has more downside today and a week of bouncing ahead of it. Of course, history never repeats exactly.

Providence Media Strategies LLC runs the following pump and dump websites (they have others as well that have been added since the STVF pump a year ago):

FiveStarEquities.com
BedfordReport.com
ParagonReport.com

In the last year Providence Media Strategies LLC has also pumped GRPH and ORYN with someone other than Chuck Hughes doing a mailer on each, both with less success than STVF or ECAU.

STVF pump chart (click to enlarge):

PDF copy of STVF pump website (currently online at STVFreport.com)

ECAU pump chart (click to enlarge):

PDF copy of ECAU pump website (currently online at ECAUreports.com)

Disclaimer: I have no position in any stock mentioned above, although I did short ECAU and cover prior to this post and look to reshort in the future. I have no relationship with any parties named above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Does Zouvas subpoena spell the end for the USGT pump and dump?

Yesterday, George Sharp sent out a press release stating that “Attorney Luke Zouvas has been subpoenaed to give testimony” in the anti-SPAM lawsuit Sharp filed against EMPM, BRND, IDOI, MSTG, and the promoters of those stocks. Per OTCMarkets.com, Zouvas is the legal counsel of USGT, which is not yet named in Sharp’s lawsuit even though it is currently being promoted by the same spam stock promoters. If Zouvas gives useful testimony, it is quite possible that could spell the end of the ongoing illegal spam pump and dump campaign on USGT. Below is the text of the press release, with emphasis added by me:

SAN DIEGO, Jan. 17, 2013 (GLOBE NEWSWIRE) — Private citizen George Sharp announced today that Attorney Luke Zouvas has been subpoenaed to give testimony regarding a civil action filed by Mr. Sharp for violations of California Business and Professions Codes 17529.5 (Anti-Spam) and the California Legal Remedies Act. Amongst the Defendants named are IDO Security, Inc., (OTCBB:IDOI), Empire Post Media, Inc (OTCBB:EMPM), Mustang Alliances, Inc. (OTCBB:MSTG) and Premier Brands, Inc (OTCBB:BRND). Mr. Sharp has identified the defendants as allegedly being involved in a scheme to disseminate spam emails in order to create a marketplace for the stock of those companies at artificially high prices. The Complaint was filed by George Sharp in the San Diego County Division of California Superior Court (Case No. 37-2012-00101057-CU-NP-CTL) on July 23, 2012.SAN DIEGO, Jan. 17, 2013 (GLOBE NEWSWIRE) — Private citizen George Sharp announced today that Attorney Luke Zouvas has been subpoenaed to give testimony regarding a civil action filed by Mr. Sharp for violations of California Business and Professions Codes 17529.5 (Anti-Spam) and the California Legal Remedies Act. Amongst the Defendants named are IDO Security, Inc., (OTCBB:IDOI), Empire Post Media, Inc (OTCBB:EMPM), Mustang Alliances, Inc. (OTCBB:MSTG) and Premier Brands, Inc (OTCBB:BRND). Mr. Sharp has identified the defendants as allegedly being involved in a scheme to disseminate spam emails in order to create a marketplace for the stock of those companies at artificially high prices. The Complaint was filed by George Sharp in the San Diego County Division of California Superior Court (Case No. 37-2012-00101057-CU-NP-CTL) on July 23, 2012.

Within his complaint, Mr. Sharp states that the Defendants deliberately hired offshore promoters and/or advertisers to disseminate newsletters through unsolicited emails under the identities Stock Castle, Wall Street Penny Stock Advisors, Hottest Penny Stocks, Magic Penny Stocks, Obscure Stocks, and Ultimate Penny Stock, imploring him to buy IDOI, EMPM, MSTG and BRND stock under what is known as a Pump & Dump campaign. In spite of multiple attempts by the Plaintiff to opt out of these emails, the spam continues to be received. Under BPC Section 17529.5, violators are subject to pay damages of up to $1,000 for each spam email to each recipient. Mr. Sharp is also seeking an injunction against the defendants in order to end the practice.

According to Mr. Sharp, Mr. Zouvas’ deposition will be the first of many towards identifying the operators of the newsletters. Mr. Sharp alleges that the mostly British Virgin Island contact addresses provided by these newsletters are invented, a violation of SEC Rule 17(b). According to Mr. Sharp, Mr. Zouvas contacted him on behalf of a client, in order to settle in advance any future claims that Mr. Sharp may have against that client. Just days after executing a Settlement Agreement and General Mutual Release, Mr. Zouvas’ client began a similar spam email campaign, still ongoing today.

Mr. Zouvas has expressed to Mr. Sharp his disinterest in being involved in schemes designed to defraud the public and has agreed to fully cooperate with the ongoing discovery process in hopes of identifying the operators of the spam email factory. As such, a subpoena of Mr. Zouvas’ client is imminent.

Mr. Sharp holds no interest in any of the stocks mentioned. Mr. Sharp invites those who have received unwanted emails from these alleged spammers to contact him. Updates to this litigation may be viewed by following Mr. Sharp’s tweets at www.twitter.com/goniffs. A copy of the complaint is available upon request.

Disclaimer: I am short USGT and may buy to cover the position or add to it at any time after 1/21/2013. I have no relationship with any parties named above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Has WDCO turned into a manipulative short seller? Level 2 video on USGT’s first dump day

Wilson Davis (market maker ID: WDCO) has acquired a reputation in penny stock land for posting large bids on big pump and dumps. See this Infitialis article on SeekingAlpha and this article on Pumpsanddumps.com. So it was certainly odd to see WDCO come out with huge size on the offer on USGT (a massive spam pump), driving the stock down with offer sizes up to 3 million shares. Are they broadening their horizons? Below is a video of the level 2 and time and sales of much of the USGT drop yesterday.

Note: None of this is to suggest that the firm approved of or ordered any trader to act in an unethical or illegal manner — all I know is that I have seen someone at WDCO posting large bids (and offers in this case).

Note — the music I was listening to at the time is recorded in the video. I made no commentary so mute the sound if you do not like the music.

Disclaimer: No positions in any stocks mentioned. I had shorted USGT but covered that short yesterday and this morning prior to writing this post. I have no relationship with any parties named above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

More stock promoter lies: SANP ass-rape edition

Santo Mining Corp (OTCBB: SANP) has been the pump and dump of one of the most successful stock promoters (in terms of bringing buying volume to stocks so that insiders can unload tens of millions of shares) over the last 1.5 years. Their websites (detailed below) promoted LEXG, RAYS, and SEFE. Buyers of SANP from the beginning have done poorly, particularly because this stock started at a higher price and with a higher market capitalization than their previous pumps. But as usual, stock promoters like to lie about why promoted stocks go down. They always blame short sellers. Below is a quote from the November 16th email from stockspecialists.com (bold added by me):

Fellow Penny Stock Investor:

SANP – Santo Mining Corp. Ticker (SANP) Last Trade $0.56 This stock is has been getting ass-raped since reaching it’s high on 1.44 on 11/13. In what could be described as measured steps accentuated by block trades setting lower price points, the stock has been cut severely in the three days of trading. We feel that the stock has become a victim of dubious short sellers pressing the security lower in the past three days of trading. The stock is a relatively new issue, and is thus quite susceptible to such nefarious behavior.

As usual, the stock promoters are half correct: investors in SANP have been getting raped. Of course, short sellers have nothing to do with it. There are two reasons, in order of importance: (1) the large shareholders or insiders who paid for the pump have been unloading millions of shares into the increased volume over the last six days and (2) investors and traders who bought in the first days of the pump were selling into the bounce to get out with smaller losses. SANP still has a $36m market cap and while the stock could easily bounce many times over the next couple months, it remains substantially worthless and will likely drop another 90% in the next couple months, just as their previous pumps SEFE and RAYS have dropped (LEXG has continued to drop but dropped more slowly).

RAYS

SEFE

SANP

The websites of the SANP stock promoter that I am familiar with are as follows:

TheStockDetective.com
StockmAuthority.com
SuperStockHunter.com
PennyStockWizard.com
StocksDigest.com
StockSpecialists.com

Disclaimer: No positions in any stocks mentioned. I have no relationship with any parties named above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Lube up! A sexy pump and dump of Empowered Products (EMPO)

Dislosure: I am short EMPO. See the full disclaimer at the bottom of this post for details.

I could write a lot of things about Empowered Products (Pinksheets: EMPO), but I will keep this post short. The company makes sex lubricants (competing with Johnson & Johnson’s KY) and while it has a real product and real sales, it is run by a stock promoter, has poor business prospects due to poor brand recognition and intense competition, and is undergoing a paid stock promotion (see: GrowthStockScreener.com). For future reference (after the stock promotion website is taken down in a few months or a year), I have saved a PDF copy of that web page. The bottom line is that investors in EMPO are going to need its products soon because they are about to get screwed hard.

Empowered Products’ website is geared more to selling stock than to selling sex accessories. The stock promoter Scott Fraser is the CEO and owns 40 million shares. With a recent price of $0.79 and 62.4 million shares outstanding, the company has a market cap of $49 million. The company has sales that have declined in the most recent quarter relative to a year ago and it continues to lose money. With a $3 million annual revenue run rate the company is valued at an absurd multiple of 15x sales.

While Empowered Products has put out press releases about its products being sold to Target.com (where I cannot find them one month later) as well as Walgreens (where they can be found at least online) and CVS (where they can be found online), I did not see their products at the one Walgreens I checked and there were few reviews of their products online (one proxy for popularity). A check on Drugstore.com showed that EMPO’s products were not reviewed a lot relative to other brands and they were not the best reviewed nor were they close to a top seller.

Here is the view of the lubricant section at my local Walgreens. Note the distinct lack of EMPO’s products (click images to enlarge):

Now for the more important picture:

and the disclaimer from the stock promotion website:

The Aggressive Growth-Stock Screener and www.GrowthStockScreener.com contains a featured stock report which is intended to be educational in nature, not an investment recommendation and should be viewed as an advertisement. Alpine View Media is providing a budget of $750,000.00 and this report to Crown Pacifica to coordinate the distribution of this featured report on Empowered Products Inc.

Further destruction is almost guaranteed with this pump and dump. Shareholders better lube up!

Disclaimer: I am short 3078 shares of EMPO and may buy to cover the position or add to it at any time after 11/16/2012. I have no relationship with any parties named above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

George Sharp wins libel suit agains AbuseofLaw.org / Michael Osborn

This news is over a week old and I retweeted Sharp’s tweet about this just over a week ago, but I thought it worthwhile to post the full order. What Sharp has posted on AbuseofLaw.org is not the actual order although he has presented it in that way.

George Sharp won his libel suit against Michael Osborn et al. involving allegations posted by Osborn on AbuseofLaw.org. The judge ordered:

(1) Defendants Michael Osborn aka Michael Osborn Ison, Illumination Fraud Foundation, and Abuse of Law Org [sic] (hereinafter “Defendants”) are ordered to transfer ownership and control of the domain names and underlying blogs for associated [sic] with victimsofgeorgesharp.com and abuseoflaw.org to Plaintiff; (2) once the transfer of the ownership and control to Plaintiff is completed, the substantive content currently contained on those websites and blogs is to be unpublished by the Plaintiff; (3) the Plaintiff shall not publish any statements about Defendant Michael Osborn on the website abuseoflaw.org; (4) Defendants, and all those acting in concert shall be ordered to remove and not to repost, copy, restate, duplicate, or republish the content, comments or allegations regarding the Plaintiff, including but not limited to republishing the content that was contained on the websites and associated blogs of victimsofgeorgesharp.com and abuseoflaw.com on any other sites or blogs; and (5) if any other website or blogs have already been established by the Defendants those websites and blogs shall be unpublished forthwith.

I have uploaded a copy of the decision (pdf). The decision does not affect Sharp’s website that criticizes Michael Osborn: http://www.michael-osborn.info/ and that website remains up.

George Sharp is known in the penny stock world as a litigious anti-pumper gadfly (and I don’t mean that in a bad way — we need more people to provoke and annoy stock promoters); he has sued companies involved in pump and dumps including Writers Film Group (WRIT) and companies being pumped by spam emails (EMPM, MSTG, IDOI and BRND most recently). I made some money selling short the BRND spam pump. Osborn had accused Sharp of being Leslie Howard and running Pumpsanddumps.com, and it is those accusations that led to Sharp’s libel suit (pdf). I previously blogged about Leslie Howard becoming a stock promoter.

Disclaimer: No relationship with any parties named above (except that I have emailed Sharp previously to obtain his court filings in the spam lawsuit) and no positions in any stocks 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.

My new venture: OTC MicroCap Research

While there are plenty of people who write about microcap securities fraud and pump and dump scams, too little of the research reaches the people who need it the most: the small investors who believe in the scams. To help them I have created a new website, OTCMicroCapResearch.com. The only thing on that website will be research reports on companies, mostly pump and dumps. I will take no positions in the stocks I analyze at that website, take no payment for articles (except from content syndication websites) and I will do my best to distribute my analyses so that the investing public can see it and learn to avoid pump and dump scams that way. I do not claim that there is anything particularly new about what I am doing, but it is something worth doing.

See my introductory post on why I created the new website.

My PacWest Equities (Pinksheets: PWEI) report published prior to the market open today (PWEI is now down over 75% from its open, although the Infitialis report had a lot to do with that).

Disclaimer: No positions in any stocks mentioned. The new website is owned by MorningLightMountain LLC, just like this website; I am the managing member of the company. 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.

My four monitor workspace: What I watch during the trading day

Below is a screenshot of my 4-monitor workspace with all the programs I normally use during the trading day. Click the image for a full-size screenshot. My middle two monitors are 22″ and have 1900 x 1200 resolution so this is a huge image. I describe what I have on each monitor going from top left to bottom right

Screenshot

Leftmost monitor: My trades at IB (Interactive Brokers) are at the top left, and to the right of that are a Speedtrader level 2 and time and sales window. Below the IB trades window is a 1m intraday chart of the same stock that is on the level 2 / time and sales. To the right of that is the old version of Tweetdeck.

Middle-left monitor: All these are Speedtrader Pro windows. The only window that might need some explanation is the top middle window, which is what I call the HOD list (high of day list) which shows every stock meeting certain criteria that is making or touching its high of the day.

Middle-right monitor: This has my Interactive Brokers Traders Workstation (TWS) with a large level 1 watchlist, and in the bottom right it has news on stocks I have a position in and the new “market signals” price scanner at IB. In the upper-right, mostly beneath the IB windows, is the free Prodigio RTS platform that I use for backup quotes. I also use this monitor for looking at my trade-tracking spreadsheet and the internet on Chrome or Firefox.

Rightmost monitor: The top left is Profit.ly chat, with a Speedtrader Time and Sales and Level 2 to its right, my email inbox at the far right, and IB’s top % gainers scanner (otcbb and pinksheet only) at the bottom left.

Disclaimer: No relationship with any parties named above (except that I am a user of and an affiliate seller of Profit.ly) and no positions in any stocks or funds mentioned (except for those positions showed on my screens, which I may no longer hold). 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.

Attempting to have some fun with a Craigslist scammer but mostly just wasting my time

If something seems too good to be true, it always is. I was trying to do like the 419 scammer baters, but a lack of time and wit has left me with no response. Please submit a suggestion for my next email in the comments.

Here is how it started, with me replying to a Craigslist ad (I realized only after I already had written the email that it was way too good of a deal to be real).

To whom it may concern:

I am highly interested in the 2004 Mazda6 sedan you posted on Craigslist today. Please send more pictures and any further details you have on the car. Assuming everything looks good I would be able to pay cash within a couple days. If you wouldn’t mind, I would like its VIN so I could run a Carfax report. Also, your contact information and your employer’s name / location would be great so I could see the car in person.

Sincerely,

Michael Goode

Hello,Thank you for your interest in purchased my 2004 Mazda MAZDA6 Sedan, I am selling this vehicle because I am in the military and my unit will be sent back to Afghanistan. I don’t want it get old in my garage. The price is low because I need to sell it before September 24th. The vehicle is in pristine condition, no accident history, clear title, no dents or dings and no scratches. Always adult driven and garaged, never abused or raced. If you are interested, it’s still available for sale and the price, as stated in the ad, is $2330. The vehicle is in Fort Belvoir,VA and in case it gets sold I will take care of delivery. Let me know if you are interested, email back.

Transmission: Automatic
Fuel type: Gasoline
Exterior color: Black

Interior color: Black
Mileage: 61,696 miles
Engine: 4 – Cyl

Thank you !
Corporal Lindsay Walton [ lindsaywalton81@gmail.com ]

Lindsay,I remain interested. Please give me the VIN number so I can run a carfax check and your bank account information so I can wire you money. Considering how great a deal it is I don’t need to see it in person.

Hi again,Right now I’m in a military base. We are training, getting ready for Afghanistan. I am only allowed to check my email twice a day.We have to stick to e-mail for now.Hope you can understand.Like I already said, the delivery process will be managed by me. I think I can have it there at your home address within 2-3 working days. It will come with a clear title and reg. I am a member of the eBay buyer protection program and using this service you will get a 7 days testing period after delivery. During that 7 days testing period I will not be getting any money. I need to know if you are interested so I can ask eBay to send you the details on this deal. If interested please include in your next email your contact info for eBay (full name, shipping address and phone number), so we can get the ball rolling.
Also I made a photo album with the car: http://s1262.photobucket.com/albums/ii615/2004Mazda6sedan/?albumview=slideshow
VIN 1YVFP80CX45N10681

Thank you.
Corporal Lindsay Walton

Lindsay,I am still interested. My full contact information is:
Michael Goode

[address redacted for privacy]

Ok thanks.I asked eBay to send you an invoice regarding the terms and conditions of this transaction.Normally it will take approx 30 minutes until you receive all the payment instructions.Please email me as soon as you receive it.

Thank you!

The fake eBay invoice suggested that I send the money via Western Union to a random guy in Dallas or Houston, Texas (I forget which). I forwarded that email to Western Union’s fraud department.

Did you received the invoice from eBay?They told me they already sent you.Also check your bulk email folder (junk,spam),as a filter may have prevented it from reaching your primary in-box.Please get back to me and let me know if you understood how this transaction works and if you can make the payment today as you probably noticed the price is for a fast sale and I need to know when to proceed with shipping.

Hope to finish this transaction soon.

Lindsay,

Is there any way I could use a bank wire transfer to send the money? My bank is a lot more convenient than the closest Western Union agent.

I had two potential buyers : one didn’t show up and the other mail me,saying he lost the money, so I can’t afford to wait more days, that is why I gave to a shipping company that will ship it to the next owner, so I’m trying to sell it on-line, and beside that I have the transaction under contract with eBay and I have to respect the terms from the contract.Unfortunately for me my I can’t do this transaction personally. I am a member of the eBay buyer protection program and using this service you will get a 7 days testing period after delivery.Thank you so much and I would really appreciate if we could finish this deal today so that the shipping may start sooner.So if you manage to complete the deal today please don’t forget to fax over the Western Union payment receipt to the fax# from the invoice.

Please keep me posted

Disclaimer: No relationship with any parties named above and no positions in any stocks or funds 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.

Lying stock promoters: Bullexchange.com & the FINRA short reports

One tactic that many stock promoters use over and over again to explain why their stock promotions are followed by large stock price declines is to blame it on the short sellers. Unfortunately, FINRA abets these lies by publishing without adequate explanation data required by the SEC’s Regulation SHO. This data provides information on every share sold each day. Time and and time again I have seen stock promoters use this data to ‘show’ that the stock they are promoting is getting attacked by short sellers.

See the text of the most recent email I received from the various Bullexchange.com websites (emphasis mine):

Valued Subscribers,
Welcome New Members,
VKMD experienced a fantastic start last Thursday where many of our subscribers secured substantial gains.

However, due to a major short attack, gains were quickly reversed. We believe this was deliberate, the Finra reg sho list http://regsho.finra.org/FORFshvol20120906.txt indicates nearly 11 million shares were shorted last Thursday.

Simply put, VKMD did not end the way we hoped despite great developments we hear may be announced in coming days.

In a recent email, we had mentioned we were under new management. Due to events of the past week, the new management team has been removed and we are back under the same great team that brought you the likes of ECIT and AGRT.

We are hard at work on our next pick, and we will see you some time in October!

Your Dedicated Team at TBX
http://bullexchange.com

Searching the large text file linked above yields the following information for VKMD for the given date (formatted by me to enhance legibility):

Date |Symbol |ShortVolume |ShortExemptVolume |TotalVolume |Market
20120906 |VKMD |10843159 |0 |37378406 |O

This data appears to show that out of 37,378,406 shares traded, 10,843,159 shares were sold short. This is not false, but it doesn’t mean that short sellers or market makers increased their net short position by 10 million shares. Rather, this shows all sales where the shares being sold were not already in the seller’s possession. This includes speculative short sellers, both retail traders and market makers. But far more important are market makers selling large blocks of stock. In those cases, a large shareholder might tell their broker to sell one million shares and then rather enter one big order, the broker will give the order to a market maker such as NITE to slowly sell the shares over the course of a day. The market maker sells the shares short and does not take possession of the shares it is selling until it has completed its share sales. For Reg SHO reporting purposes, these are short sales, but the market maker is not taking a speculative short position — at the end of the day the seller delivers the shares to the market maker who then delivers those shares to the buyers of the stock.

So the next time a stock promoter links to the FINRA Reg SHO short data to show that a stock dropped because of short sellers, you will know that they are lying. In fact, many times the large block sellers whose shares are sold in such a way to make them show up as ‘short sales’ in the FINRA data are the stock promoters or the people who pay for the stock promotion. So the promoters are not innocently wrong — they lie through their teeth even though they know better.

Read more about Bullexchange.com:
Awesomepennystocks.com sues Bullexchange
Awesomepennystocks.com drops lawsuit