The pump and dump du jour, Sunpeaks Ventures (SNPK)

Sunpeaks Ventures (SNPK), with a share price of $1.96 and 420.5 million shares outstanding, currently has a market capitalization of $820 million. With one overpriced multivitamin product (Clotamin) that has plenty of competition, very little in the way of operating history, and a massive stock promotion campaign, it is certain that this stock will soon fall. I believe that will occur within a week, but it could take a month. I am sure that within two months, SNPK stock will be down over 90%.  A couple different penny stock journalists have done some great investigative research on Sunpeaks already, so I don’t have to. Below are the relevant links:

David Baines of the Vancouver (B.C.) Sun
America’s hottest penny stock has links to controversial Osoyoos family
Sunpeaks stock soars higher still
Sunpeaks Ventures went public with cheap shares in offshore accounts
Sunpeaks Ventures’ share price reaching ignition point

Janice Shell of The Street Sweeper
Sunpeaks (SNPK): Will This Hot Stock Go up in Flames? (Full report, as PDF)

Disclaimer: I have 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.

SEC sues AutoChina executives for manipulative trading

See the SEC litigation release. Below is an excerpt:

According to the SEC’s complaint filed in the U.S. District Court for the District of Massachusetts, AutoChina senior executive and director Hui Kai Yan, a former AutoChina manager, and others fraudulently traded AutoChina’s stock to boost its daily trading volume. Starting in October 2010, the defendants and others deposited more than $60 million into U.S.-based brokerage accounts and engaged in hundreds of fraudulent trades over the next three months through these accounts and accounts with a Hong Kong-based broker-dealer. The fraudulent trades included matched orders, where one account sold shares to another account at the same time and for the same price, and wash trades, which resulted in no change of beneficial ownership of the shares. According to the complaint, AutoChina and the other defendants engaged in the scheme after lenders offered AutoChina unfavorable terms for a stock-backed loan due to low trading volume in its stock.

It is very rare for executives (or anyone, for that matter) to be sued by the SEC for alleged manipulative trading in a listed stock. But manipulative trading is quite common in the penny stock world and few of the people who engage in it ever get sued by the SEC. So when you see an OTCBB or pinksheet stock with little prior trading start to attract a lot of volume, there are good odds that it is manipulative wash-sale trading rather than real people buying the stock.

Disclaimer: I am not a lawyer or legal expert. I have 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.

Tim Sykes looks to sue stock promoter Stock Psycho for Libel

Tim Sykes is looking to sue the owner of PennyStockAlerts.com for libel; that stock promoter has written several negative articles about Sykes that appear very high in the search results when searching for “Timothy Sykes” and related searches on Google.

http://pennystockalerts.com/timothy-sykes/
http://pennystockalerts.com/penny-stock-millionaire/
http://pennystockalerts.com/stock-psycho-busts-timothy-sykes-promoting-penny-stocks-for-pay/

Sykes wrote a blog post responding to the second of the above posts last June, entitled Refuting 8 Lies About My Being A Penny Stock Promoter & A Scam, Excuse Me For Only Being Up 1,458%.

It was Tim Sykes who alerted me (and his other Pennystocking Silver subscribers) to this matter via a Profiding alert (link for subscribers only) in which he linked to this brief article on Domain Name Wire that describes his lawsuit (PDF) against Domain name registrar Moniker Online Services LLC  in Florida. The case is 0:12-cv-60515-JIC in the Southern Florida district of U.S. District Court, and the complaint was just filed by Sykes and entered into the court docket yesterday. Excerpted from the complaint below is the information pertaining to Sykes’ complaint against PennyStockAlerts.com:

7.   Upon information and belief, the registrant for pennystocksalerts.com uses the alias “Stock Psycho” (“Stock Psycho”).
8.   Stock Psycho has engaged in unlawful activities, including without limitation defamation, trade libel and other related torts, and has caused Plaintiff damage by reason thereof.
9.   After exhaustive investigation, Stock Psycho’s true identity is unknown to Plaintiff.

The weird thing about this is that it is not hard to find Stock Psycho’s true identity. While the domain name is registered privately via Moniker (see whois search or check out my screenshot of a whois search I ran today), the disclaimer page at http://pennystockalerts.com/disclaimer/ (see screenshot taken today) states:

Pennystockalerts.com is owned and operated by IPR Agency LLC, a California company.  For purposes of this disclaimer, IPR Agency LLC and Pennystockalerts.com are to be understood as the same entity.  All references to “we”, “our”, etc, refer to IPR Agency LLC and its wholly owned website PennyStockAlerts.com

California has an online business entity search. A quick search for “IPR Agency LLC” brought up the following info (see full screenshot):

So the website that Sykes alleges has defamed him clearly states that it is owned by a Californian LLC by the name of IPR Agency LLC, for which Ryan Franks is the registered agent. I do not understand why Sykes’ lawyer bothered to sue Moniker when the PennyStockAlerts.com website indicates that it is owned by a Californian LLC that exists and that can thus be served with a lawsuit.

I should add that the same person and LLC that runs PennyStockAlerts.com also runs DailyPennyStocks.com under the alias “Darth Trader”. The indications that DailyPennyStocks.com is run by IPR Agency LLC are less obvious — at the current time that is not mentioned on the disclaimer page but is mentioned in the copyright and in the emails (see these screenshots).

[Edit 12/7/2012] – The lawsuit against Moniker was dismissed without prejudice (pdf). I believe that Sykes is pursuing the matter in another venue though.

A web search yielded the following classified legal ad in the Los Angeles Times:

Legal Notices: NOTICE OF ACTION CONSTRUCTIVE SERVICE IN THE CIRCUIT COURT OF THE ELEVENTH JUDICIAL CIRCUIT OF FLORIDA, IN AND FOR MIAMI-DADE COUNTY. CIVIL ACTION NO. 12-33962 CA 25 IN RE: TIMOTHY SYKES vs. RYAN FRANKS AND IPR AGENCY, LLC, NOTICE BY PUBLICATION TO: RYAN FRANKS AND IPR AGENCY, LLC YOU ARE HEREBY NOTIFIED that an action for legal and equitable relief has been filed against you and you are required to serve a copy of your written defense, if any to it on Karen Cohen, Esq., attorney for Timothy Sykes whose address is Law Offices of Karen Cohen, PLLC, 1041 Ives Dairy Rd., Suite 236, Miami, FL 33179 and file the original with the Clerk of the above styled court on or before January 2, 2013; otherwise a default will be entered against you for the relief prayed for in the complaint or petition. WITNESS my hand and the seal of said court at Miami-Dade, Florida on this 16th day of November. Clerk Name: Harvey Ruvin As clerk, Circuit Court Miami-Dade – County, Florida By Barbara Rodriguez As Deputy Clerk (Circuit Court Seal)

This appears to indicate that Sykes and his lawyer have not been able to locate Ryan Franks or IPR Agency LLC in order to serve them with the lawsuit.

[Edit 3/15/2013]: Stock Psycho / Darth Trader now discloses that the websites are owned by Focus Media.

Disclaimer: I am not a lawyer or legal expert. I have no positions in any stocks mentioned. I have multiple business relationships with Timothy Sykes — please see my terms of use for details. 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.

FBI / DOJ catch alleged Swiss pump & dumper in sting

See the full article in the New York Post.

An alleged pump-and-dump artist and a cohort were arrested on a Midtown Manhattan street last week in a case that resembled an international cat-and-mouse game that could have been ripped from a spy thriller. An undercover FBI agent, posing as a middleman with access to crooked stock brokers, coaxed the alleged pump-and-dump financier, Jean-Pierre Neuhaus, from his home in Switzerland to the Big Apple to finalize the deal, The Post has learned.

…

Neuhaus’ reluctance to travel to the US appears to be related to a 2000 incident in which he was forced to pay the Securities and Exchange Commission more than $570,000 for an earlier shady stock deal.

 

Disclosure: No positions in any stocks mentioned and no relationships with any people or companies 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.

The websites of stock promoter Sherwood Ventures LLC (f/k/a Blue Wave Advisors LLC)

One well-known stock promoter is Sherwood Ventures LLC, formerly known as, or whose websites were formerly owned by, Blue Wave Advisors, LLC (see their website). It is a good stock promoter to analyze because unlike some other promoters, they do not change their address and legal entity every year or two. This makes finding their various websites rather easy. The rest of this post below was written before Bluewave changed to Sherwood. To my knowledge all the websites remain under common ownership.

One of the more common mistakes that new penny stock traders make is that they look on websites like StockPromoters.com or HotStocked.com or StockReads.com and then see that (for example) 20 different newsletters are promoting one stock. What matters is not the number of newsletters but how many separate promoters pump the stock and what the reach of those promoters is. (Of course, the most common mistake new penny stock traders make is believing that buying promoted penny stocks is a good idea — most of the time that leads to losses; there is a reason why I started trading penny stocks solely by short selling them and even now I sell short much more often than I buy.)

Following are excerpts from emails I received today promoting PBIO, first from BeaconEquity.com:

BeaconEquity.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From StockPreacher.com:

StockPreacher.com is a wholly-owned subsidiary of BlueWave Advisor,BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From MicroStockProfit.com:

Microstockprofit.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services

From TheLightningPicks.com:

TheLightningPicks.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From TheHotPennyStocks.com:

TheHotPennyStocks.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From StockRoach.com:

BlueWave Advisors, LLC owns seventy five percent of the outstanding membership interests of StockHideout LLC. Stock_Analyzer owns twenty five percent of the outstanding membership interests of StockHideout, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From StockHideout.com:

BlueWave Advisors, LLC owns seventy five percent of the outstanding membership interests of StockHideout LLC. Stock_Analyzer owns twenty five percent of the outstanding membership interests of StockHideout, LLC.BlueWave Advisors has been compensated thirty five thousand dollars from Equities Awareness Group (a non-controlling third party shareholder) for PBIO advertising and promotional services.

From InvestorSoup.com (on 3/15 — I did not see an email from them today promoting PBIO):

Investorsoup.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.Currently BlueWave Advisors has been compensated sixty thousand dollars from Ouisache Advisors (a non-controlling 3rd party) for BARZ advertising and promotion.BlueWave Advisors has been compensated 750,000 Restricted Rule 144 shares from the company for PSID advertising and promotion. BlueWave Advisors has been compensated seventy five thousand dollars from Ouisache Advisors (a non-controlling 3rd party) for VGTL advertising and promotion

From PennyStockCraze.com (on 3/15 — I did not see an email from them today promoting PBIO):

PennyStockCraze.com is a wholly-owned subsidiary of BlueWave Advisors, LLC.Currently BlueWave Advisors has been compensated sixty thousand dollars from Ouisache Advisors (a non-controlling 3rd party) for BARZ advertising and promotion.BlueWave Advisors has been compensated 750,000 Restricted Rule 144 shares from the company for PSID advertising and promotion. BlueWave Advisors has been compensated seventy five thousand dollars from Ouisache Advisors (a non-controlling 3rd party) for VGTL advertising and promotion.

[Edit 4/5/2012 to add the Tech24.org website]

I just learned about another pump website owned by Blue Wave Advisors, LLC —   Tech24.org. See: http://www.tech24.org/disclaimer:

Tech24.org is a wholly-owned by BlueWave Advisors, LLC. BlueWave Advisors, LLC is a financial public relations company that is compensated by many of the companies profiled.

One interesting fact about Blue Wave Advisors, LLC is that the company owns and runs two paid subscription stock alerts services. Those services are TopStockPicks.com / SuperNovaAlerts and JasonBondPicks.

From TopStockPicks.com disclaimer:

TopStockPicks.com is a wholly-owned by BlueWave Advisors, LLC. While BlueWave Advisors, LLC is a compensated investor relations firm, TopStockPicks.com and its newsletter are unbiased.

From JasonBondPicks.com disclaimer:

JasonBondPicks.com is wholly-owned by BlueWave Advisors, LLC (BWA). BWA is a compensated investor relations firm. JasonBondPicks.com (JBP) offers a monthly, paid membership stock alert newsletter. These stock picks are one hundred percent unbiased and JBP is never compensated for them. JBP also runs a free newsletter, which will occasionally send out stock ideas which BWA may receive compensation for.

From a business perspective, it is a great idea for a stock promoter to have separate paid alerts services so that they can earn money in multiple ways (and they have a captive audience of people on their free stock promotion email lists to upsell their paid services to). That being said, I do not like the situation from the perspective of the guru, because the relationship, while it certainly leads to increased sales, can taint the guru, especially in a situation like with JasonBondPicks.com where Blue Wave sends paid stock promotions to people on his free email list.

[Edit 2013-6-10]: Both JasonBondPicks.com and TopStockPicks.com now disclose ownership by “Patriot Publishing.” Perhaps the negative publicity of their ownership by a stock promotion company led to the spinoff. In all likelihood the owners of Patriot Publishing likely remain the same people who own and control Sherwood Ventures.

Disclaimer: No positions in any stocks mentioned. I have multiple business relationships with Timothy Sykes, co-owner of Profit.ly, which currently provides the platform for JasonBondPicks.com and TopStockPicks.com [update 3/20/2012 – Apparently those newsletters are no longer on Profit.ly or at least are not being sold through Profit.ly — see http://profit.ly/sales/gurus] — please see my terms of use for details. 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.

Robert Green on taxes for traders (70 minute video)

This 70-minute video presentation was recorded in December by Robert Green, CPA and founder of the CPA firm that I use to prepare my taxes. He address new developments in tax law over the last year as well as fundamentals of trader tax status. I have written about taxes previously and I recommend Green’s book.

 

 

 

Disclaimer:  I am not a CPA or a tax expert! Please consult your CPA or tax lawyer for tax advice. I use Green’s accounting firm to prepare my taxes.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..

On Timothy Sykes becoming a stock promoter and promoting IRYS

In case you missed it, Timothy Sykes promoted IRYS this morning in an email to those who signed up to his free promotional email list for the re-launch of his longer-term penny stock trading newsletter. See the email online here. The disclaimer from his email is as follows (bold added by me):

DISCLAIMER: This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Millionaire Media, LLC and Market Authority, LLC, have been compensated one hundred thousand dollars for the distribution of this particular email. Any future email regarding a specific company will be the result of an advertising and promotional campaign for which Millionaire Media, LLC and Market Authority receives compensation. This compensation constitutes a conflict of interest, as to our ability to remain objective in our communication regarding the profiled company. Because of this conflict, individuals are strongly encouraged to not use this newsletter as the basis for any investment decision. Millionaire Media and Market Authority do not hold positions in the covered company.

While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.Market Authority is also not a registered investment adviser. We do not and will not provide personalized investment advice. Market Authority publishes opinionated information about finance and trading that we believe our subscribers may be interested in. Click here to view our entire dilsclaimer.

Past performance is not indicative of future results.

[Update 3/5/2011 – See Tim’s blog post about this]

I have to acknowledge my failure in this situation. Tim asked my opinion on him doing an ‘ethical’ stock promotion some time ago. I was vehemently against the idea of him doing that — I felt that he would take a huge hit to his reputation even in a best-case scenario. If the pump were to bomb and his subscribers lost money the hit to his reputation would be huge, I thought. I feel now that I failed and I should have been more against it — I should have said that I would cease working with/for Tim if he did ever get paid to promote a stock.

The fact of the matter is that it is hard if not impossible to have a successful stock promotion without blatantly lying. The whole point of stock promotion is to get suckers to invest in worthless companies so that insiders or other large shareholders can sell their shares. If mostly day-traders buy a promoted stock, then they will buy from the promoters at first but then their sells later in the day will crowd out the sells of the promoters. Longer-term investors will buy and hold for days or weeks or months or years and thus not compete with the promoters to sell stock.

By promoting a stock while not actually hyping it up, the promoter will get fewer buyers (mostly day-traders) and the promotion will do poorly. I believe we are already seeing this in IRYS, where there was a bunch of buying in the first 15 minutes after the open, sending it up from its .755 open to a brief high of .83, before it started fading. The current price action does not bode well for the stock.

If you look at Tim’s email you will see that he didn’t put absurd price targets in it nor did he hype up the company. That makes his stock promotion less unethical than others. It still leaves a sour taste in my mouth and I know more than a few of his subscribers are unhappy with Tim for engaging in any stock promotion.

As to what I did with IRYS, I bought 21,000 shares at the open and sold almost all those shares in the first 15 minutes (I sold my last shares at $0.801 at 10:54 AM EST) . I have no position remaining and I netted just over $870 in profits. I did not mention my buys in Tim’s chat but said I would not discuss my trading of the stock; as with all pumps, I urged everyone to be careful and not to chase the stock. I did alert when I had sold most of my shares and when I sold the last of my shares so that people in chat would think twice before buying it at the elevated prices it was at (over 80 cents). I no longer have a position in IRYS and I will not buy it again (I may short it in the future). I always strive to maintain the highest levels of ethical behavior and I believe that I acted in such a way as to minimize not just any conflict of interest but even the appearance thereof. That being said, I am a trader first and a blogger and chat moderator second — I was not going to avoid trading IRYS just because Tim Sykes was the one pumping it.

Disclaimer: No positions in any stocks mentioned. I have multiple business relationships with Timothy Sykes — please see my terms of use for details. 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.

Leap day fools!

I always thought April Fool’s Day was a bit silly — it is hard to pull off a good hoax when everyone expects it. This should serve as a reminder that unlike some people in penny stock land, neither the SEC nor the FBI has any interest in me nor should they.

This post will self-destruct in 19 hours.

Disclaimer: 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..