Legend Oil And Gas: Why The SEC Should Halt This Stock
Mar. 1, 2012 11:51 AM ET|24 comments| About: Legend Oil and Gas, Ltd (LOGL)
Isaac Silbermann
Isaac Silbermann
Long/short equity, long-term horizon, growth at reasonable price
(679 followers)
In the first 2 articles of my series on Legend Oil and Gas (OTCPK:LOGL), available here and here, I argued that the men leading Legend are corrupt individuals concerned not with enhancing shareholder value but with lining their own pockets. This was supported by substantial evidence of management's previous involvement in 4 separate Pump and Dump schemes utilizing numerous paid stock touts. In all 4 cases, these companies stood at between 87-95% below the peak prices realized during the "Pump" stage of the schemes.
Part 3 of the series focused on Legend Oil itself, how management created millions of dollars on paper for themselves via slick corporate transactions and how they continue to use the public entity, LOGL, like an ATM machine: extracting unreasonable salaries and "consulting fees" with no real oversight from the board of directors - which consisted only of management. Part 3 also provided a detailed examination of Legend Oil's marginal business activities and illustrated that the intrinsic value of Legend Oil is approximately $0.20 per share and falling due to continued extraction of cash by management and steadily declining production from their recently acquired properties. For those who are unfamiliar with the arguments contained in my original articles I strongly suggest reading them as the fundamental situation at Legend remains substantially unchanged in the 3 months that have passed since the articles were released.
This article will examine a number of until-now unexplored supporting evidence that Legend Oil is the subject of a Pump and Dump scheme, a scheme that has recently been aggressively re-activated and continues to lure in unsuspecting investors with the promise of quick riches. I contend that Legend Oil's management is directly involved in this scheme, and will illustrate that they are fraudulently misleading investors through a series of false press releases and deliberate material misstatements about business activities to the SEC. Furthermore, if the past is any guide, the corporate malfeasance at Legend Oil to date is sufficient to warrant an SEC trading halt or suit against company management.
Additional, Aggressive Paid Stock Promotion Following the Release of Initial Articles Exposing the Company
In the months following my original articles examining Legend in depth, the individuals involved in touting Legend's stock have responded by releasing additional paid promotional pieces. Paid stock promoter Don McShane has been a key figure in this campaign, releasing a number of promotional pieces which openly admit in fine-print disclaimers that they are paid-advertisements for Legend's stock. These pieces read like high pressure sales pitches with claims such as buying Legend's shares "could quickly double, even triple your money!" Important to note is the information contained disclaimer of the most recent such piece available here:
