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Thursday, 10/28/2004 10:47:20 PM

Thursday, October 28, 2004 10:47:20 PM

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THE MYSTERY MAN WHO RUNS CDC-SYSTEMS

By CHRISTOPHER BYRON
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October 21, 2004 -- Who is actually speaking for Wall Street mystery stock CDC-Systems Inc.?

That's the newest question involving this Bloomfield, N.M.-based natural gas compressor company. CDC's stock recently soared more than 1,000 percent on Wall Street's largely unregulated penny-stock market, only to collapse amid doubts about the accuracy of its press releases.

Now, even the identity of the company's chief executive is in question.

CDC's Web site says the company's president is an individual named Shelby Ball, and a man claiming to be that person has recently given interviews to investors and reporters inquiring about CDC and its dizzy stock rise. One such investor, Richard Weatherstoon, says the man he spoke to sounded to be in his late 50s or 60s.

Yet efforts to locate such a person revealed only a 33-year-old man named Shelby Ball, living in Dallas, and sharing an address in Bloomfield with David E. Ball, 60, and his wife, Paulette. A CDC spokesperson now confirms that David Ball is Shelby's father.

Two weeks ago, a source told The Post the real person in charge at CDC is in fact David Ball, who has been trying to "stay in the background" because he is about to retire from another company and doesn't want to put his pension at risk.

Nonetheless, Ball has now emerged anyway. This happened late last week when a Houston, Tex. stock promoter named Patrick Arnett issued a press release claiming that the company has hired a man named "David Ball" to become its "VP of Operations," effective early next month.

The release, which omitted any mention of the father-son relationship between David and Shelby Ball, asserted that David Ball is "well known and respected" in the natural gas business, but listed none of his prior employers.

Other press releases from Arnett have made similar claims regarding CDC that have proved unverifiable. After press stories pointed out that CDC has no address except a post office box in Bloomfield, Arnett issued a press release claiming that a local real estate agent named David Harris had been retained by CDC to find property for a corporate headquarters.




But Harris says he knows nothing about the matter, and directed the inquiry to his partner, Chuck Hagen, who says he's never heard of CDC or anyone associated with it either.

On Tuesday, a former Securities and Exchange Commission lawyer named Ronald Kaufman, now in private practice in Oklahoma, told The Post that he represents a Houston stock promoter named Charles Bingham, who conducts business under the name Stockcomm.com and has no business ties of any sort with Arnett.

According to Kaufman, Bingham has instructed Arnett to cease sending out press releases that improperly identify Arnett as a Stockcomm official, but Arnett has continued to do so anyway.

Arnett did not return several phone calls for comment.

Since Monday of this week, roughly 2 million shares of unregistered CDC stock have changed hands, adding to market value losses that now appear to top $600 million.

Experts in securities law say any brokers or dealers who sold CDC shares on behalf of company insiders may be guilty of participating in an illegal underwriting of shares, exposing them to a variety of civil and criminal penalties.



http://www.nypost.com/business/32315.htm


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