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SHORT SELLING COMBINED WITH FRAUDULENT STOCK MANIPULATION
The criminals are short-selling bashers, and illegal stock manipulators, who repeatedly post outrageous known lies or distorted half-truths with a dogged determination and single-minded purpose – use any means possible to drive the stock price down.
In the small and micro cap market, most increases in value to a stock occur when more people buy more shares. Any such occurrence will automatically result in relentless postings that the company is a pump and dump scheme. The bashers will post as many as a dozen posts at a time under multiple aliases in order to dominate a chat board. On some message boards that give you the option, they continuously post under multiple aliases with a strong sell sentiment, even if they may only post about the weather or some other nonsense post, so that a person visiting that chat board would see an overwhelming majority of the posts and posters with a strong sell sentiment. They disparage the company’s products, employees, management, business plans, and anything else about the company so they can create serious doubt about the company in the minds of investors and potential investors. They post their opinions but make them appear to be facts. They make very slanted interpretations of anything the company does as if they were giving an expert analysis, with their conclusions always being the most negative they can be. When the company issues a positive press release, they state that the press release is all hype, released only to increase the stock price. If an insider makes a sale or exercises an option, they post false claims that management is dumping the stock because it is getting ready to drop. They ask questions about the company and its products such as: “What studies have they done to prove that their products are safe?” and “What’s to say that their products don’t cause cancer?” and “Don’t you think that the SEC should look into the way this company does business?” All comments made are negative or are cleverly and carefully worded posts intended to damage the company, by either giving people the idea that the company’s products are unsafe or cause cancer, that the company’s management is incompetent or dishonest, or to make people think that the company is doing something illegal and needs to be investigated by the SEC.
Honest investors, who happen upon the board, will often get buyers remorse from seeing an overwhelming negative sentiment and immediately “panic sell” the stock, which creates additional downward pressure and serves the criminal campaign well. Occasionally, an investor will attempt to say something positive about the company, but the resulting attacks on them will be vicious, thereby hurting their confidence in their investment decision and causing them to promptly abandon the board and usually the stock altogether. They simply do not realize that the bashers are on the board 24 by 7 because that is their job. That is how they earn their living. http://www.advancedsmallbusiness.org/positionpaper.htm
-------------------- All IMHO. Do not rely upon anything I post to base your financial decisions upon. Posts: 970 | From: Montana | Registered: Jul 2005
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Litigation Release No. 19466 / November 16, 2005
Securities and Exchange Commission v. James E. Franklin, et al., Civil Action No. 02CV0084 IEG (RBB) (S.D. Cal.)
JURY FINDS JAMES E. FRANKLIN AND SAMUEL WOLANYK LIABLE FOR SECURITIES FRAUD
On November 10, 2005, a federal jury in the Southern District of California found James E. Franklin and Samuel Wolanyk liable for securities fraud. The SEC had charged Franklin, Wolanyk, Dieter Raabe, and four entity defendants under their control, with operating a "pump and dump" scheme beginning in 1997 and continuing into 1998 that produced more than $4 million in profits. The SEC's complaint, filed January 14, 2002, alleged that Franklin set up an internet website, "Red Hot Stocks," to tout stocks that he would acquire cheaply (through private offerings, open market purchases and consulting fees). According to the complaint, Franklin then sold those shares after their price increased following overly optimistic and misleading "profiles" on the companies which appeared on the Red Hot Stocks website. The SEC's complaint alleged that Wolanyk operated Red Hot Stocks, authored and distributed the "profiles" and also owned and sold some of the stocks that were touted.
After a three-week trial presided over by U.S. District Judge Dana M. Sabraw, the jury found that Franklin violated the antifraud provisions of Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder with respect to seven stocks and Wolanyk violated these provisions with respect to 13 stocks. The jury also found that Franklin and Wolanyk violated the antitouting provision of Section 17(b) of the Securities Act. The jury further found Franklin liable for violations of the registration provisions of Section 5 of the Securities Act, and as a control person of two of the entity defendants.
Previously, on November 13, 2002, a final judgment of permanent injunction was entered against Raabe, who consented to the injunction, without admitting or denying the SEC's allegations. The court will determine the amount of Raabe's disgorgement and any civil money penalty following the resolution of the SEC's action against Franklin and Wolanyk. On March 13, 2003, a final default judgment was entered against one of the entity defendants, Vector Keel Ltd. On June 20, 2003, final default judgments were entered against the other three entity defendants, Avalon Trust, Initial Public Offering Consultants, Inc. and Net Income. In two related matters, Art H. Beroff, without admitting or denying the findings in the SEC's administrative order or the allegations in its complaint, consented to an order requiring him to cease and desist from committing or causing violations of Section 5 of the Securities Act and agreed to pay $50,000 civil penalty. For further information, please see Litigation Release No. 17311 (January 15, 2002), Litigation Release No. 17312 (January 15, 2002) and Administrative Proceeding File No. 33-8054 (January 14, 2002).
-------------------- All IMHO. Do not rely upon anything I post to base your financial decisions upon. Posts: 970 | From: Montana | Registered: Jul 2005
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