Hemisphere hires accused Caprice-Greystoke manipulator
2007-02-09 15:18 ET - Street Wire
by Mike Caswell
When Howe Street brokers get in trouble and leave their jobs it is not always clear where they go. Some, like Canaccord's John Pryde, get out of the industry and take on clerical employment. Others, like criminally convicted Union broker Trevor Koenig, slip from view, never holding a market-related title again. Then there are those who avoid serious penalties and openly accept a stock-related job, perhaps hoping their prior transgressions have been forgotten.
Such appears to be the case with Barry Reagh, a former Yorkton Securities Inc. broker fired in 1992 and accused of deceptive trading. He was part of the Caprice-Greystoke Enterprises Ltd. market manipulation, helping the company's president hide 11 months of manipulative trades.
Caprice-Greystoke was a well-organized rig job, according to a hearing notice from the time. The company's absurdly combative president, John Spector, allegedly set up nominee accounts through Mr. Reagh and a former Pacific International Securities Inc. broker, Andrew Katz. Evidently they used his accounts to trade large blocks of the company, giving the impression of substantial market interest.
The trading came to an end when the B.C. Securities Commission halted the company, alleging illegal insider trading. The Vancouver Stock Exchange took the matter seriously enough to schedule a hearing, claiming Mr. Katz and Mr. Reagh either knowingly helped Mr. Spector or ought to have known what he was doing.
Yorkton said it fired Mr. Reagh in 1992, and he appeared to have left the industry for good. The VSE never followed up its allegations against him, but he would likely face a significant challenge if he reapplied to be a broker. His alleged accomplice, Mr. Katz, was fined $350,000, the largest amount a Canadian regulator had ever penalized a broker at the time.
It seems Mr. Reagh has a new job these days, working as an investor contact for Hemisphere Gold Inc., a pink sheets mining junior with a spam problem.
Hemisphere started trading last month. The company issued its first news release on Jan. 29, and it placed Mr. Reagh's name at the bottom as an investor contact.
Spammers started touting the company almost immediately, saying it could break $3 on "something huge."
The stock has since traded as high as $1.81, with the company acquiring a prospect in South America and the spammers lauding its potential. Little public information is available on Hemisphere, because it trades on the pink sheets where regulatory filings are very rare.
Such filings could reveal its true financial state and give investors something more than spam and news releases on which to base an investment decision. They could reveal how many shares it has outstanding, something the company has not disclosed.
Mr. Reagh also shows up as the investor contact for two other pink sheets spam stocks, Gaming Transactions Inc. and L International Computers Inc.
Like Hemisphere, both those stocks were aggressively touted by e-mail, are listed on the pink sheets and have never reported audited financial results.
Gaming Transactions went to 47 cents last March as junk e-mails lauded its deal for the website Online Casino | www.keno.com | Play at our Online Casino, Bet on Sports & Internet Horse Racing., named after the well-known draw. It last traded under a penny.
L International went to $1.85 last August and is still a spam favourite. It last changed hands for 45 cents.
The pink sheets cautions investors both could be questionable investments, "as companies that engage in promotional activities without supplying adequate current information are often the subject of fraudulent activity." The warning, which the pink sheets generally issues for all spam stocks without current financials, has not been issued for Hemisphere yet.
Mr. Reagh denies knowing anything about the spam. "Where they're coming from is a mystery," he says. He says he may not have worked at the companies when the e-mails were sent and was only hired to answer the phones and prepare brochures.
Mr. Reagh has forgotten about the market manipulation allegations from his Yorkton days. "It's been 17 years, I don't recall that," he says. After some reminding, he points out the matter never went to a hearing.
He also disputes that Yorkton fired him. As he recalls, he had a dispute with a director of the firm and left of his own accord. "I chose to step aside," he says.
Meanwhile spammers continue to tout Hemisphere, which closed Thursday at $1.33, down two cents.
