SEC actions – Page 7 – Goode Trades

SEC Suspends trading in Force Energy $FNRG – First suspension of a Nasdaq stock

Yesterday the SEC suspended trading in Force Energy (FNRG), which is the first time I have ever seen a listed stock receive an SEC trading suspension. Listed stocks often get halted, delisted, and then suspended, but I have never seen one get suspended prior to the stock being delisted. The executive chairman of the board of directors, Richard St. Julien, was arrested over the weekend so perhaps that led to the extra quick action. The stock was halted by the Nasdaq on Monday, July 20th at 10:21:37 AM with a T12 halt code (additional information requested by Nasdaq). The SEC suspended trading in premarket the next day.

SEC Suspension notice (PDF)
SEC Suspension order (PDF)

The reason given for the suspension was:

due to concerns about the adequacy and accuracy of information available to investors concerning the funding of recent articles and promotions touting FNRG, including for example in articles published on December 9, 2014 and February 26, 2015. Questions have also arisen concerning potential manipulative activity of FNRG’s stock, including transactions between February 25 and April 2, 2015 and the funding of those transactions.

The press release by the Department of Justice contains more information about why St. Julien was arrested:

Through his scheme, St. Julien and his co-conspirators deceived the investing public by creating the appearance of genuine trading volume and interest in ForceField’s stock, and as a result, from approximately January 2014 to April 2015, the price of the stock rose from a low of $4.55 per share to a high of $7.82 per share.

FNRG’s stock price had dropped precipitously in the days prior to the halt thanks to a negative report by Mox Reports released on April 15th. That was an excellent (and timely) look at the comopany and it may even have caused the Feds to arrest St. Julien sooner than they had planned.

The promoter that was paid to promote FNRG has been identified as Big Investment Group LLC. See some screenshots of them promoting FNRG.

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

SEC Suspended trading in pump and dump Spriza $SPRZ on March 4th

On March 4th the SEC suspended trading in another landing page pump, Spriza (SPRZ). One key insider of Spriza was also involved in Telupay (TLPY) which likely explains why Stocktips.com abandoned that pump after only a week.

SEC Suspension notice (PDF)
SEC Suspension order (PDF)

The SEC was quite specific in explaining why it suspended trading in SPRZ:

The Commission temporarily suspended trading in Spriza, Inc. because of questions regarding the accuracy of assertions by Spriza, Inc., including assertions regarding business relationships in a company press release dated February 6, 2015, a Form 8-K and in a video created by the company.

The Commission acknowledges the assistance of FINRA and the Alberta Securities Commission’s assistance in this matter.

You can read the February 6th press release. The name dropping in the press release certainly didn’t help the company:

“We’re like the Google search engine of contests,” said Spriza’s CEO, Rob Danard, adding the Company which launched in May, 2014 has consolidated contests into one central portal. “How we distribute contests is very similar to how Pinterest or Flipboard displays their content.

Information on the pump is below:

I first received an email promoting SPRZ on February 9, 2015 from Marketing@insiderwealthalert.com and linking to the online promotion page http://streetreview.com/leading-social-networking-company-spriza-sprz-attracts-millions-of-users-with-innovative-search-technology/

Disclosed budget: $175,000
Promoter: Streetreview.com / Financial Times Publishing Corp, Ltd
Paying party: ?
Shares outstanding: 67,618,934
Previous closing price (day prior to trading suspension): $1.19
Market capitalization: $80 million

SPRZ 2015-3-20

Excerpt from disclaimer:

StreetReview.com (“SR”) is owned and operated by Financial Times Publishing Corp, Ltd.

…

SR and its affiliates have received or expects to receive and manage a total advertising budget of one hundred and seventy five thousand dollars for publishing this advertisement.

Full disclaimer:

Disclosure: These online reports, videos and other content on streetreveiw.com should be viewed as a paid advertisement (“content”). By viewing the content you agree and understand StreetReview.com (“SR”) is owned and operated by Financial Times Publishing Corp, Ltd. who is a publisher of financial news and opinions and not a securities broker/dealer or registered investment advisor. SR does not purport to provide any analysis of any published company’s or their financial position, operations or prospects and the information is often incomplete and should not to be construed as a recommendation of an offer or solicitation to buy or sell a security. While information contained in this advertisement is believed to be reliable, SR and its affiliates make no warranties as to the accuracy of any of the content herein and accept no liability for how readers may choose to utilize the opinions of SR. Further the reader agrees to indemnity SR to the fullest extent of the law in such reliance. It would be prudent for each reader to perform in-depth due diligence, including consulting with a licensed, qualified investment professional or analyst. Also independently verify all statements made in any special reports or other content. SR and its affiliates have received or expects to receive and manage a total advertising budget of one hundred and seventy five thousand dollars for publishing this advertisement. For more information about covered companies readers should complete their independent due diligence at the Securities and Exchange Commission website www.sec.gov and www.finra.org. Investing in securities is highly speculative and carries a great deal of risk especially as to new companies with limited operations and no history of earnings and should not be perused unless the investor is prepared to loose their entire investment. The information contained herein contains forward-looking information within the meaning of section 27a of the Securities Act of 1993, as amended, and section 21e of the Securities Exchange Act of 1934, as amended, including statements regarding expected growth of the advertised company. In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act, The Company and its affiliates note that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the Company’s actual results of operations. Factors that could cause actual results to differ include the size and growth of the market, the Company’s ability to fund its capital requirements in the near term and in the long term; regulatory, pricing pressures, technology issues and much more. Got to sec.gov for more information.

PDF copy of promotion page

SEC Suspends trading in recent pump ChitrChatr $CHICF

This morning prior to the market open the SEC suspended trading in recent online landing page pump and dump ChitrChatr (CHICF). ChitrChatr never got much volume which is why I had not previously blogged about the pump. Trading will resume at the market open on Friday, April 3rd.

SEC Suspension notice (PDF)
SEC Suspension order (PDF)

The reason given for the trading suspension:

The Commission temporarily suspended trading in CHICF due to questions regarding recent volatile trading activity and questions regarding the adequacy and accuracy of information in a company press release dated January 21, 2015 relating to the company’s financing and the source of that financing.

The SEC acknowledges the assistance of the Alberta Securities Commission and of FINRA in this matter.

CHICF received a cease trade order (CTO) from the Alberta Securities Commission on March 11th).

You can read the January 21st press release.

Information on the pump is below:

CHICF was first promoted back in April and May of 2014 and started getting repumped beginning on January 22nd, 2015. The landing page promoting CHICF is at http://www.yoursmarttrade.com/chicf.html

Disclosed budget: not disclosed ($5,000 to Intelligent Investor Report)
Promoter: Intelligent Investor Report
Paying party: TLC Communications
Shares outstanding: 31,450,000
Previous closing price: $1.88
Market capitalization: $59 million

Excerpt from disclaimer:

Intelligent Investor Report and TLC Communications (TLC) have used outside research and writers using public information to create the advertisement coming from (Intelligent Investor Report) about CHICF.

…

Intelligent Investor Report is paid five thousand dollars as an editorial fee from TLC and also expects to receive new subscriber as a result of this advertising effort

Full disclaimer:

CHICF_disclaimer

PDF copy of promotion page

Petroterra $PTRA is the new landing page pump and dump

This morning I received an email from email@investorsalley.messages4.com (an email list to which I subscribed) promoting Petroterra Corp (PTRA). Judging by the stock’s volume,this pump has begun only in the last week. The email links to an online promotional website: http://petroterracorpreports.com/

Disclosed budget: not disclosed ($5,000 to James Rapholz)
Promoter: James Rapholz dba Economic Advice
Paying party: Mass Peak Ltd
Shares outstanding: 65,626,364
Previous closing price: $1.00
Market capitalization: $65 million

Excerpt from disclaimer:

The publisher, James Rapholz dba Economic Advice, understands that in an effort to enhance public awareness of PetroTerra Corp. and its securities through the distribution of this advertisement, Mass Peak Ltd. paid all of the costs associated with creating, printing and distribution of this advertisement. The publisher was paid the sum of $5000 for his contributions.

Full disclaimer:

MPORTANT NOTICE AND DISCLAIMER: This stock profile should be viewed as a paid advertisement. The publisher, James Rapholz dba Economic Advice, understands that in an effort to enhance public awareness of PetroTerra Corp. and its securities through the distribution of this advertisement, Mass Peak Ltd. paid all of the costs associated with creating, printing and distribution of this advertisement. The publisher was paid the sum of $5000 for his contributions. If successful, this advertisement will increase investor and market awareness, which may result in increased numbers of shareholders owning and trading the common stock of PetroTerra Corp. , increased trading volumes, and possibly increased share price of the common stock of PetroTerra Corp. The publisher has not undertaken to determine if Mass Peak Ltd. is, or intends to be in the future, directly or indirectly, a shareholder of PetroTerra Corp. The publisher may receive revenue, the amount of which cannot be determined to any degree of certainty, as a result of this advertising effort and the accompanying subscription offer. This publication is not, and should not be construed to be, an offer to sell or a solicitation of an offer to buy any security. This publication, its publisher, and its editor do not purport to provide a complete analysis of any company’s financial position. The publisher and editor are not, and do not purport to be, broker-dealers or registered investment advisors. Any investment should be made only after consulting a professional investment advisor and only after reviewing the financial statements and other pertinent corporate information about the company. Further, readers are advised to read and carefully consider the Risk Factors identified and discussed in the advertised company’s SEC filings. Investing in securities, particularly micro cap securities such as PetroTerra Corp., is speculative and carries a high degree of risk. Past performance does not guarantee future results. This publication is based exclusively on information generally available to the public and does not contain any material, non-public information. The information on which it is based is believed to be reliable. Nevertheless, the publisher cannot guarantee the accuracy or completeness of the information. This publication contains forward-looking statements, including statements regarding expected continual growth of the featured company and/or industry. The publisher notes that statements contained herein that look forward in time, which include everything other than historical information, involve risks and uncertainties that may affect the company’s actual results of operations. Factors that could cause actual results to differ include the size and growth of the market for the company’s products and services, the ultimate degree of success in the company’s drilling excursions, the company’s ability to fund its capital requirements in the near term and long term, pricing pressures, etc. Economic Advice is a trademark of James Rapholz. All other trademarks used in this publication are the property of their respective trademark holders. Economic Advice and James Rapholz are not affiliated, connected, or associated with, and are not sponsored, approved, or originated by, the trademark holders unless otherwise stated. No claim is made by Economic Advice or James Rapholz to any rights in any third-party trademarks.

PDF copy of landing page

Disclaimer: I have no position in PTRA and will not trade it unless it gets significantly higher volume. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

How to make almost $30,000 in under 30 minutes of market time

Lots of people want to know the details on this trade I had on Telupay (TLPY):

The short answer is quite simple: TLPY was announced as the new Stocktips.com stock promotion Friday at 3:43pm. I was one of the very first to receive the promotional emails and Stocktips is currently the most effective stock promoter around (I would never buy most stock promotions — they are only good for shorting) so it was all but certain that the stock would spike, at least for the first 15 minutes or so. (If you sign up for Stocktips or any other promoter, do not ever pay them for anything — just get on their free email list. And never believe what they write — they are scheming scoundrels and pumped stocks inevitably dump big.)

There was a large element of luck to the trade in that sometimes I may be early to receive the emails and other times I may be late — any stock promoter with a big email list will have to use an email service or program to manage their email list and send the emails (in StockTips case it is Aweber). By necessity with a large email list the emails can’t be sent simultaneously so it can take a few minutes to send all of them.

So, knowing that lots of people would be trying to buy TLPY over the next 17 minutes it was an easy decision to buy and buy a lot of shares. Frankly, it was not my intention to take as large a position as I did, but with OTC stocks it is hard to get orders filled so in a situation like this where I expect the stock to quickly spike I put in as many orders as I can and I route those orders to different market makers to increase my chances of getting filled. I also alerted in TimAlerts chat that StockTips had just pumped TLPY:

MichaelGoode

TLPY stocktips pump

TimAlerts

Posted Mar 06, 3:43 PM

In this case almost all my orders filled and I ended up long 355,000 shares at about $0.16. I sold 85,500 prior to the close (at an average price of $0.216) and held the rest over the weekend, selling them into the predictable gap up on Monday at an average price of $0.252. (I traded around this initial position a lot, which is why my position size on the Profit.ly trade is so large; my position was never larger than 355,000 shares though.) The initial spike when an effective stock promoter promotes a new stock is by far the most predictable part of the promotion which is why I sold into the gap up — sometimes a stock will drop big after I sell like TLPY did but sometimes it will keep going up. But my goal is to make the easy, low-risk money.

While luck plays a part in trading, and I was certainly lucky to get the email early and get good fills, it is because I know Stocktips pumps well that I was able to send lots of buy orders without hesitation. It is because I am experienced at trading OTC stocks, had hot keys set up to send my orders quickly, and knew where to route my orders that my orders were filled.

While pump and dumps overall are less common and less successful now than they were a couple years ago there are still plenty of opportunities to make money trading them (especially by shorting). If you do trade TLPY or any other pump, just be aware of the risk of SEC trading suspensions (why I never hold a long position overnight after the first day of the pump) and remind yourself that these companies are worthless and will eventually drop big. Here, for example, is a chart of the prior Stocktips pump, ECRY:

Disclaimer: I have no net position in TLPY although I will likely trade it (short and long) after this is published. I have no relationship with any parties mentioned above. This blog has a terms of use that is incorporated by reference into this post; you can find all my disclaimers and disclosures there as well.

Belated Post: SEC Suspends trading in purported Ebola stocks

One thing I have noticed over the last seven years trading penny stocks is that penny stock scammers are quick to hop on any current investment theme. If oil is spiking, we will see a lot of shell companies quickly turn into oil exploration companies. If there is a spike in the price of rare earth elements, we will see a new crop of rare earth miners. Recently with the Ebola panic we had a bunch of penny stocks touting their connection to the disease. And the SEC was quick to act to suspend trading in some of the most egregious Ebola stocks.

See the chart of Lakeland Industries (LAKE) below to get a sense for the timeline over which the Ebola hype played out (LAKE is shown as it was one of the Ebola stocks that spiked the most; is a real company and was not implicated in anything):

lake

The peak of Ebola panic occurred around the 13th of October 2014. Just over a month later, on November 20th, the SEC suspended trading in four purported Ebola-related penny stocks. The four stocks that were suspended by the SEC were Bravo Enterprises Ltd. (OGNG), Immunotech Laboratories, Inc. (IMMB), Myriad Interactive Media, Inc. (MYRY), and Wholehealth Products, Inc. (GWPC).

SEC Suspension notice (PDF)
SEC Suspension order (PDF)

Stock promoter Eric Cusimano pleads guilty to conspiracy to commit stock fraud

Eric Cusimano, former owner of BestDamnPennystocks.com and related websites, pled guilty yesterday to conspiracy to commit securities fraud and to tax evasion. He could be sentenced to up to 10 years in prison. Sentencing is scheduled for March 26th. While I do think that Eric Cusimano is scum he did at least have the decency to insist that the government drop charges against his wife as part of his plea deal.

As part of the plea, Cusimano turned over over $1.2 million, two pieces of property in New York’s southern tier, a boat, several “valuable” pieces of jewelry, and $340,000 which he had stored in accounts in Panama and Belize

Of course the forfeiture is only a small portion of the over $7 million that investigators say Cusimano made over the four year period.

See these local news stories on the plea for more details:

Federal court seizes millions from former Jamestown man, sets record
Chautauqua County stockbroker pleads guilty to duping investors

I have written about Cusimano’s legal troubles a few times over the last several months:

Promoters Eric Cusimano & Jamie Boye indicted
Full text of the Bestdamnpennystocks.com Cusimano/Boye indictment
Update on USA v. Cusimano & Boye
Prosecutors close to plea deals with stock promoters Boye and Cusimano

Jamie Boye, a stock promoter who worked closely with Cusimano and who was also charged in this same case, remains in plea talks with prosecutors, and and in the mean time the trial has been adjourned until February 6th:

With respect to Defendant Boye, the parties have been actively discussing a pretrial resolution, and a draft plea agreement has been prepared and provided to the defendant for review. Additional time is necessary for defense counsel to review the draft plea with Defendant Boye and to finalize plea discussion with the
government. Therefore, the parties are requesting additional time to allow a change of plea and sentence to occur in the present case relating to Defendant Boye.

Recent court filings:

GOVERNMENT’S NOTICE OF THIRD MOTION FOR AN ADJOURNMENT OF THE RULE 48(b) DISMISSAL ORDER (12/18/2014)

ORDER FOR ADJOURNMENT (12/18/2014)

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

SEC Suspends trading in perennial pump Geo Finance Corp $GEFI

Three days ago the SEC suspended trading in Geo Finance Corp (GEFI). This stock has been pumped and dumped numerous times, most recently on December 9th to 11th by EpicStockPicks.com, StockoftheWeek.net, UnitedPenniesofAmerica.com, Pennypicks.net, DamnGoodPennyPicks.com, ImpressivePennystocks.com, TodaysPennyStocks.com and BeatPennyStocks.com.

See SEC suspension notice for GEFI (PDF)

The reason for the suspension was the usual boilerplate about innacurate information and potentially manipulative activity:

The Commission temporarily suspended trading in the securities of GEFI because of concerns regarding the accuracy and adequacy of information in the marketplace and potentially manipulative activity related to GEFI common stock.

The Commission acknowledges the assistance of FINRA in this matter

Continuing a recent trend of increased activity by FINRA, the SEC acknowledged FINRA’s assistance (above).

Coinciding with the recent pump the company put out two press releases on December 9th, which likely also played a part in the suspension:

GEO Finance Corp (OTC: GEFI) Gears Up To Provide First Set Of Evaluation Batteries For United AirlinesPR Newswire(Tue, Dec 9)
Geo Finance Corp Announces Move Into Manufacturing State of the Art Power SystemsPR Newswire(Tue, Dec 9)

Prosecutors close to plea deals with stock promoters Boye and Cusimano

See my most recent post on the case against stock promoters Eric Cusimano, his wife Jessica, and Jamie Boye.

Three days ago the trial against Boye and the Cusimanos was adjourned until December in anticipation of all defendants reaching plea deals:

Since the initial appearance, counsel for the government has spoken
extensively with all defense counsel, and anticipate that a pretrial resolution will be reached
in this case for the defendants. In the case of Defendant Eric Cusimano and Defendant
Jessica Cusimano, the parties have discussed the parameters of a potential plea, and have a
nearly finalized plea document. The parties need to clarify a few minor issues, at which
point the plea will be submitted for approval. In the case of Defendant Jamie Boye, the
parties have discussed the parameters of a potential plea, and additional discovery has been
provided to assist in evaluating the plea. For all of the defendants, the pre-indictment plea
process has been lengthy due to the complex issues regarding the plea, including loss
calculations for guidelines purposes, associated tax issues, and the forfeiture of assets that
will accompany the plea. Therefore, the parties are requesting additional time to allow a
change of plea and sentence to occur in the present case.

Current docket report:

1:14-mj-00069-HKS All Defendants USA v. Cusimano et al
Date filed: 05/19/2014
Date of last filing: 10/24/2014

History

Doc.
No.

Dates

Description

Filed & Entered:	10/24/2014
Terminated:	10/24/2014

Motion to Adjourn

Filed & Entered:

10/24/2014

Order on Motion to Adjourn

Filed & Entered:

09/22/2014

Oral Argument

Filed & Entered:

09/22/2014

Order on Motion for Reconsideration

Filed & Entered:

09/22/2014

Bond

Filed & Entered:

09/22/2014

Order Setting Conditions of Release

Filed & Entered:

09/16/2014

Order on Motion to Adjourn

Filed & Entered:	09/15/2014
Terminated:	09/16/2014

Motion to Adjourn

Filed & Entered:	09/12/2014
Terminated:	09/22/2014

Motion for Reconsideration

Filed & Entered:

09/11/2014

Order on Motion for Leave to Appear

Filed & Entered:

09/10/2014

Add and Terminate Attorneys

Filed & Entered:

09/05/2014

Writ of Habeas Corpus ad Prosequendum Executed

Filed & Entered:	09/05/2014
Terminated:	09/11/2014

Motion to Appear

Filed & Entered:

08/15/2014

Order

Filed:	08/13/2014
Entered:	08/14/2014

Warrant Returned Executed

Filed & Entered:

07/24/2014

Warrant Returned Executed

Filed & Entered:

07/24/2014

Warrant Returned Executed

Filed:	06/30/2014
Entered:	07/01/2014

Order to Continue – Ends of Justice

Filed:	06/30/2014
Entered:	07/01/2014

Order to Continue – Ends of Justice

Filed:	06/30/2014
Entered:	07/01/2014

Order to Continue – Ends of Justice

Filed & Entered:

06/26/2014

Notice of Attorney Appearance – Defendant

Filed & Entered:

06/24/2014

Initial Appearance

Filed & Entered:

06/20/2014

Initial Appearance

Filed & Entered:

06/20/2014

Order

Filed:	06/17/2014
Entered:	06/19/2014

Writ of Habeas Corpus ad Prosequendum Issued

Filed:	06/17/2014
Entered:	06/19/2014

Petition and Order for Writ of Habeas Corpus ad Prosequendum

Filed & Entered:

06/16/2014

Initial Appearance

Filed & Entered:

06/16/2014

Notice of Hearing

Filed & Entered:

06/16/2014

Rule 5(c)(3) Documents Received

Filed:	06/16/2014
Entered:	06/17/2014

Order Setting Conditions of Release

Filed:	05/19/2014
Entered:	06/12/2014

Complaint

Feds indict a bunch of stock promoters

I am a little slow to post this — these two separate cases were publicized last week. This looks like one more nail in the coffin of the biggest stock promotion scams. I have done little besides collect links to the best stories about the two different cases.

Titan Securities / IPC Corporate Securities / Legacy Global Markets / Robert Bandfield / Andrew Godfrey / Kelvin Leach / Rohn Knowles / Brian de Wit / Cem Can (Jim Can)

DoJ press release
Criminal indictment
SEC press release
SEC complaint
Promotion Stock Secrets case summary
Rise and fall of penny stock Cynk in Feds’ sights

Jay Fung / Eric Van Nguyen / Anthony Thompson / Hanna Schmeider / Kenneth Oxsalida / Joseph Dervali / Luz Rodriguez / Chrospher Balseiro

The first three names above should be familiar to long-time readers of this blog. Fung and Thompson were previously sued by the SEC back in May of 2012. Eric Van Nguyen worked with those two and had not been indicted or sued by the SEC. Eric also worked with John Babikian at least at first with the Awesomepennystocks websites (despite his claims to the contrary).

Manhattan Distract Attorney press release
Bloomberg article

One interesting tidbit from the Bloomberg article:

Many of the eight people whose indictment was announced today had never met each other and their only connection is that they had all worked with Sepe, Fritz said.

That leads me to believe that Sepe informed on the others. It will be interesting to see if that is the case.

Follow this case on New York’s court system website.

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