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Last Post: 9/25/2014 2:45:32 PM - Followers: 53 - Board type: Free - Posts Today: 0

SPPH crooks charged with securities fraud by the SEC:


U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22574 / December 17, 2012

Securities and Exchange Commission v. Spencer Pharmaceutical Inc., Jean-François Amyot, Maximilien Arella, Ian Morrice, IAB Media Inc., and Hilbroy Advisory Inc., Civil Action No. 1:12-cv-12334 (D. Mass.)

SEC Charges Company based in Massachusetts and Canada and Other Parties in Stock Pump-and-Dump Scheme Involving Fictitious Buyout Offer

The Securities and Exchange Commission filed an enforcement action on December 17, 2012, in federal court in Boston charging Spencer Pharmaceutical Inc., its officers, and several other parties for their roles in a "pump-and-dump" scheme involving Spencer's stock. The Commission's complaint alleges that Jean-François Amyot, a Canadian resident who controlled Spencer, orchestrated the scheme and worked with Maximilien Arella and Ian Morrice, Spencer's officers and directors, as well as IAB Media Inc. and Hilbroy Advisory Inc., two other companies controlled by Amyot, to create and disseminate false press releases, including press releases about a fictitious buyout offer for Spencer, and to otherwise promote Spencer's stock. The Commission alleges that the promotional campaign pumped up the price of Spencer's stock, and Amyot benefited by dumping his own Spencer stock at artificially inflated prices.

The Commission's complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that beginning in November 2010, Spencer, a purported pharmaceutical company with addresses in Boston, Massachusetts, and Canada, disseminated false and misleading press releases claiming that it had received an unsolicited buyout offer from a Mideast company for $245 million when, in fact, the purported buyout offer was not real. The complaint further alleges that Arella and Morrice worked with Amyot to create and disseminate the fraudulent press releases. According to the complaint, while Spencer was issuing the press releases, the defendants were conducting a promotional campaign using Internet websites and newsletters to tout Spencer's stock and the bogus buyout offer, and the false press releases and promotional campaign were successful in pumping up the price of Spencer's stock. For example, after Spencer publically announced that the Mideast company proposed to pay $245 million for Spencer, the price of Spencer stock more than doubled in two days - opening at $0.25 per share on November 10, 2010 and closing at $0.60 per share on November 12 - and the daily trading volume for Spencer's stock reached almost six million shares on November 11, compared to a daily average trading volume of less than 50,000 shares during the previous three months. During the time the buyout offer was being promoted, Amyot sold approximately 36 million Spencer shares for gross proceeds of approximately $5.8 million. Each of the defendants are charged by the Commission with violating various antifraud provisions of the federal securities laws. The complaint further charges Spencer, Amyot, and Arella with violating securities registration provisions of the securities laws. According to the complaint, Amyot and Arella were involved in a series of transfers involving 12 million Spencer shares that were done to evade the securities registration requirements and move the shares into an account controlled by Amyot.

The Commission also suspended trading in Spencer securities on December 17, 2012, 34-68447. Securities of Spencer were quoted on OTC Link operated by OTC Markets Group Inc.

The Commission alleges that Spencer, Amyot, Arella, and Morrice violated Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder; that IAB Media and Hilbroy violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c); and that Arella, Morrice, IAB Media, and Hilbroy aided and abetted the violations by Spencer of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. The Commission also alleges that Amyot is liable for Spencer's violations of Section 10(b) and Rule 10b-5 as the company's control person and that Spencer, Amyot, and Arella violated Sections 5(a) and 5(c) of the Securities Act. The Commission is seeking permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against Spencer, Amyot, Arella, Morrice, IAB Media, and Hilbroy. It also seeks an order prohibiting Amyot, Arella, and Morrice from serving as an officer or director of a public company and from participating in the offering of a penny stock.

The Commission acknowledges the assistance of the Quebec Autorité des Marchés Financiers in this matter.

Trading Suspension
http://www.sec.gov/litigation/suspensions/2012/34-68447.pdf

SEC Complaint
http://www.sec.gov/litigation/complaints/2012/comp22574.pdf

http://www.sec.gov/litigation/litreleases/2012/lr22574.htm




http://www.sec.gov/litigation/complaints/2012/comp22574.pdf
Spencer Pharmaceutical is listed on the US Pink Sheets, where it has the following warning  (updated from Pink Sheets Limited Information Logo ):

OTC Tiers - Pink Sheets Limited



Indicates companies that are not able or willing to provide disclosure to the public markets - either to a regulator, an exchange or OTC Markets Group. Companies in this category do not make Current Information available via the OTC Disclosure and News Service, or if they do, the available information is older than six months.

OTC Pink No Information® includes defunct companies that have ceased operations as well as 'dark' companies with questionable management and market disclosure practices. Publicly traded companies that are not willing to provide information to investors should be treated with suspicion and their securities should be considered highly risky.


 
  Because I have committed the awful crime of telling the truth about the scam that is Spencer Pharmaceuticals, I have received the following email from Spencer Pharma:

"WITHOUT PREJUDICE
12/13/10
Max Arella Max Arellaarellam@spencerpharmaceutical.com

Send email
Find email Add to contactsTo voldemort2001@hotmail.com, 'Ian Morrice', 'max arella'
From: Max Arella (arellam@spencerpharmaceutical.com)
Sent: Mon 12/13/10 10:30 AM
To: voldemort2001@hotmail.com
Cc: 'Ian Morrice' (icmorrice@gmail.com); 'max arella' (max.arella@hotmail.com)


Dear Sir,



We are writing further to your posts on the website Investorshub under your alias "SUNSPOTTER". Your posts are libelous and defamatory in nature and have cause tremendous damages to the company, its management and its partners. Your posts are in violations of the website rules and terms and conditions and do not provide accurate information and therefore your allegations are without basis.



We are requesting you immediately cease and desist your libelous and defamatory remarks and remove the posts that contain same, and provide the company with a written apology or we will be forced to take legal action against you.

Please acknowledge receipt of this email immediately and provide us with the coordinates of your legal counsel.


PLEASE GOVERN YOURSELF ACCORDINGLY


SPENCER PHARMACEUTICAL INC.


Per: Dr. Max Arella

President"

My reply:

I'd love to correspond with your attorneys, Dr. Arella.

Tell me who they are, and how mine can contact them, and I'm your man. I won't be replying to your email though from my own, or any other computer, for reasons I'm sure you can understand.

PS The truth is still a pretty good defense, and I think you'll find you have been neither libelled nor defamed. But I'm willing to leave that to a court to determine - but expect a counterclaim for malicious prosecution.


PPS You could use a spell checker. "Legal" letters without typos are more intimidating, I always think.

 

Spencer Pharmaceutical's PR from 11/9/2011 - a translation:

First off, this PR was not issued because SPPH's CEO has had a sudden inspiration to communicate more with his shareholders. It was written either because they have already had contact with SEC, such as a Wells Notice, or because their lawyers have told them to expect such contact.

Perhaps not entirely coincidentally, I have recently alerted SEC to the scienters that Dr. Arella has committed, and I suspect I'm not the only one to have done so.

Once a company knows it is the target of an SEC investigation, it will usually try to retrospectively cover its tracks by issuing a PR that "clarifies" its previous announcements, that is tries to amend its lies while not admitting that it did lie in the first place.

Here's a classic of its kind from another penny stock scam Green Energy Resources:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=51113013



Secondly, the timing is significant - one minute after market closing. SPPH knows full well that this disclosure that is essentially a shell operating on behalf of a small Canadian hedge fund (of which more later) will cause a significant sell-off of its equity, so it releases the PR when no one can react immediately by unloading. Some one was selling yesterday though - I wonder who that was?

Because he was challenged, Arella admits that the Boston "address" is in fact a shell, although he tries to maintain that there may be some work being done there:

"the management does not work out of this legal address"

thus implying that some SPPH staff do work out of that office. I'll bet a dollar to a cent that nobody works out of 8 Faneuil Hall Marketplace other than, just possibly,  a "receptionist" who answers the telephone on their behalf as a part-time role while doing the same thing for other shell companies.

As for the excuse that they need the US accommodation address for a US listing, why do they even need a US listing?

Both Canada and France, where they claim to have real operations, have perfectly good exchanges - perhaps the real reason is that the US Pink Sheets do not require any significant filings or disclosures, whereas the French and Canadian bourses do (again, see later). And of course, Pink Sheet shares are incredibly easy to manipulate, by, for example, pump and dump outfits.

I'm sure anybody visiting the University at Montreal will get a tour by perfectly pleasant people of some labs - lab rats (I know, because I used to be one) don't get out much, and welcome human contact. That doesn't mean that the $16,666 that each month SPPH pour lavishly (that's irony for anyone who was wondering) into R&D at that facility will transform SPPH into the Global Powerhouse that their previous PRS have implied they already are.

$50,000 per quarter is a derisory amount, particularly when you note that SPPH must be spending much more than that on banner ads on iHub alone. At the end of 2010, just about every iHub screen on every MB had a prominent banner advertising SPPH, in an obvious attempt to boost interest in buying its stock. Any company that spends more on pimping its stock than on R&D is almost always a scam.

That's doubly true when they're in default of their obligations to their other "partner", INSA:

"However, it should be noted that the partnership with INSA requires a payment of approximately $150,000 every quarter and the company has not yet provided the said payment and the partnership is on hold until such time as the payment can be made"

When discussing the Regulatory Approval Process, the PR conveniently omits to mention that previously they had claimed that commercialization of Met4 would commence in June 2011 in the US, Africa and various EU markets, and instead concentrates only on Canada, where , where it claims it will apply for a Special Access Program (SAP) from Health Canada for the fast-track approval of the MET4 product.

Incidentally, this is what a SAP actually is:

"What is the Special Access Programme?

The Special Access Programme (SAP) allows practitioners to request access to drugs that are unavailable for sale in Canada. This access is limited to patients with serious or life-threatening conditions on a compassionate or emergency basis when conventional therapies have failed, are unsuitable, or are unavailable."



http://www.hc-sc.gc.ca/dhp-mps/acces/drugs-drogues/sapfs_pasfd_2002-eng.php

In Health Canada's own words, you can see that the SAP has nothing to do with fast-track approval , in spite of Arella's claims. You can also see that there is literally no chance that yet another form of metformin will qualify in any way as providing something that any of the other modified release versions of metformin do not already offer.

What Arella wants you to believe is that Health Canada will approve a product - the combination of metformin with SPPH's super duper drug delivery technology - without that technology ever having been tested in humans. In reality because of the risk that the technology might not work in humans - it might dump an overdose, or it might not release enough active, its human pharmacokinetic and pharmacodynamic profile is completely unknown - that's simply never going to happen. Our friends north of the border may say "eh" a lot, but they're not dumb enough to allow some fly-by-night start-up company to experiment on their citizens by approving a drug which has never been near a human being.

And nor will any other regulatory agency anywhere in the world allow a product which is a combination of an established product such as metformin in an untested delivery mechanism such as SPPH's to be used without reasonably extensive human clinical studies.

Such studies will take more than a year from start to finish and will cost millions, maybe tens of millions of dollars.

Arella knows that, and he is deliberately trying to mislead you. Don't let him.

"The company is currently being funded by a small independent fund located in Canada."

You betcha. One of SPPH's loyal longs (if there actually are any real longs) needs to ask Dr. Arella if his new found love of transparency will let him divulge who this "small independent fund" actually is.


"The company has received an unsolicited all-cash offer on November 4, 2010 by a private equity fund. Although the offer is considerable, the company has opted to keep the information confidential until we receive further information from the purchasing party as well as retain an investment banking firm that can assist in said transaction. The company expects to release the information on the offer on or before November 12, 2010."

No reputable private equity company would think about buying any of the stock of a start-up outfit with negligible research, that issues false and misleading PRs, defaults on its payments to partners, pays for banner ads that cost more than their R&D, has supporters who are unable to perform any real DD to justify why this company is anything other than a pump and dump shell, with many of those supporters disclosing that they are paid to promote SPPH.

 

The so-called buyout was postponed until the end of Q2. And then it was called off for good.That kind of "bait and switch" is classic penny stock scam fare.

Caveat emptor!

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PostSubject
#7511   The Commission's action against Spencer, Amyot, and two scion 09/25/14 02:45:32 PM
#7510   Court Enters Final Judgments Against CEO and Executive scion 09/25/14 02:44:43 PM
#7509   09/12/2014 107 Assented to MOTION to Approve Consent scion 09/14/14 10:55:49 AM
#7508   Pacer update 12 Sep 14 - SEC v. scion 09/14/14 10:44:36 AM
#7507   More: sunspotter 09/10/14 06:26:46 AM
#7506   Not that mysterious, actually: sunspotter 09/10/14 06:25:38 AM
#7505   The Quebecois securities regulator the AMF has piled sunspotter 09/10/14 06:23:28 AM
#7504   Thanks so much for posting these. So I sunspotter 08/29/14 03:11:21 AM
#7503   08/26/2014 102 STATUS REPORT re: Order (Dkt # scion 08/27/14 06:30:35 AM
#7502   08/19/2014 99 Judge Indira Talwani: ORDER entered. MEMORANDUM scion 08/27/14 06:30:14 AM
#7501   Pacer update 26 Aug 14 - SEC v. scion 08/27/14 06:29:51 AM
#7500   07/15/2014 90 Proposed Document(s) submitted by Securities and scion 07/19/14 10:44:21 AM
#7499   SEC seeks up to $12.2-million (U.S.) from Amyot scion 07/19/14 10:38:35 AM
#7498   Pacer update 16 Jul 14 - SEC v. scion 07/19/14 10:37:07 AM
#7497   Amyot's NYC lawyers say ByeBye following in the Lexit 06/09/14 06:18:25 PM
#7496   "No mistake the ID comes from the AMF, sunspotter 05/21/14 12:55:09 PM
#7495   No mistake the ID comes from the AMF, Lexit 05/21/14 12:46:12 PM
#7494   Hi Lexit, MarioFoster 05/21/14 04:46:05 AM
#7493   Hi there, MarioFoster 05/21/14 04:44:50 AM
#7492   And the latest uppitidate on Hussain Al-Awaid Lexit 05/20/14 08:39:38 PM
#7491   It's begun to implode Lexit 05/20/14 07:11:27 PM
#7490   05/07/2014 69 MEMORANDUM in Support re 68 MOTION scion 05/20/14 07:03:17 PM
#7489   FYI - Amyot's partner in crime Hussain Al-Awaid Lexit 05/20/14 07:03:05 PM
#7488   05/07/2014 68 MOTION to Compel the Production of scion 05/20/14 07:00:22 PM
#7487   Pacer update 07 May 14 - SEC v. scion 05/20/14 06:57:35 PM
#7486   Anyone have any idea why is Spencer suing Lexit 05/20/14 06:55:25 PM
#7485   Yes, moving forward - News from La Presse Lexit 05/20/14 06:04:54 PM
#7484   REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE (LETTER ROGATORY) scion 04/04/14 02:01:26 PM
#7483   REQUEST FOR INTERNATIONAL JUDICIAL ASSISTANCE (LETTER ROGATORY) scion 04/04/14 01:53:47 PM
#7482   03/07/2014 66 LETTER ROGATORY issued as to the scion 04/04/14 01:42:59 PM
#7481   03/07/2014 65 LETTER ROGATORY issued as to the scion 04/04/14 01:41:18 PM
#7480   Pacer update 07 Mar 14 - SEC v. scion 04/04/14 01:37:47 PM
#7479   An ex-associate of the husband of Marois interested scion 04/02/14 10:59:11 AM
#7478   We've always known that Amyot has serious political sunspotter 04/02/14 10:41:13 AM
#7477   re: Amyot case samsamsamiam 04/02/14 10:30:41 AM
#7476   Pacer update 07 Jan 14 - SEC v. scion 01/10/14 09:55:23 AM
#7473   More specifically, with the consent of Jean-François Amyot scion 11/12/13 06:47:25 PM
#7472   Alleged Market Manipulation - Wanderport Corp. and Neuro-Biotech scion 11/12/13 06:45:14 PM
#7471   "135. The information upon which the SEC relies sunspotter 11/12/13 04:39:13 PM
#7470   133. Defendants are not subject to the jurisdiction scion 11/12/13 03:43:04 PM
#7469   so basically he is denying everything. samsamsamiam 11/12/13 03:39:10 PM
#7468   09/06/2013 48 ANSWER to 1 Complaint, with Jury scion 11/12/13 03:17:02 PM
#7467   Pacer update 06 Sep 13 - SEC v. scion 11/12/13 03:13:37 PM
#7466   Pacer update 23 Jul 13 - SEC v. scion 07/26/13 09:43:36 AM
#7465   From nodummy, an update on the SEC case sunspotter 07/26/13 04:55:23 AM
#7464   And to think I received an email threat frontloading 05/10/13 10:42:35 PM
#7463   Yes you did try to warn me, it diane1 04/17/13 10:22:17 AM
#7462   It means, I'm afraid, that your money has sunspotter 04/16/13 08:43:57 PM
#7461   So what does this all mean for those diane1 04/16/13 06:34:18 PM
#7460   04/16/2013 11 STATUS REPORT Regarding Service of Process scion 04/16/13 12:19:56 PM
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