Southridge Enterprises Inc (SRGE)

[nodummy]

Old leader back again?

This company was using the same virtual office address and phone number back in 2006 when Alex Smid was the CEO and they were pumping the stock with ethanol as their pitch:


Southridge Enterprises Inc.
Alex Smid, President and Director
3625 N. Hall Street, Suite 900
Dallas Texas 75219-5106
Tel: [phone]
www.southridgeethanol.com


Alex Smid is from out of Canada:
435-1027 Davie Street
Vancouver BC V6E-4L2



After Alex Smid left in 2007 they switched to a different address:

Ken Milken
President and Chief Executive Officer
14785 Preston Rd, Dallas, Texas 75254



Seems Alex may be back behind the scenes again as suggested by this author:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=57775074

Arrest warrants? Russian mafia ties? Believe it or not that all makes sense if you know a little bit about SAEI too.


Here is another interesting article about a promotional scam run by this company back in 2006 under Alex Smid's leadership during the ethanol days:

http://www.guardian.co.uk/technology/2006/nov/04/news.money

It's the name on everyone's screen. But is Southridge Ethanol really such a hot stock?

Pushing little-known shares is becoming big business. Tony Levene explains why

Saturday 4 November 2006

Chances are, this time last week you would never have heard of Southridge Ethanol. This week, by contrast, millions know the name as emails lauding it as the next hot stock market phenomenon that you can't afford to miss have poured into computer inboxes across Britain.

Share-pushing emails, telling the public to "get on the train before it leaves" (usually appearing in email boxes simply as "Fwd:" or "Re:") are cleverly bypassing spam filters. Anti-spam programs have largely eradicated common nuisance emails such as those for Viagra or penis enlargement but they are failing to catch the share-pushers.

On paper Southridge Ethanol, the company bombarding email boxes last week, has no product let alone a profit, yet it was worth an amazing £6bn - or more than the current market worth of Alliance & Leicester.

And if you missed Southridge? Don't worry - there will be another super hot one along next week. Already, the spammers are deluging inboxes with the delights of Global IT Holdings, which, despite its world-encompassing name, is so small it does not even file accounts with US regulators.

Southridge Ethanol, Global IT Holdings and many other "micro-caps" - a US phrase for a small, start-up company - are all part of a network of firms, "public relations agencies" and spammers, all designed to boost the share price.

They form a never-ending circle where PR companies promote their clients, and the clients, in turn, boast of the articles appearing on websites - only disclosing in the tiny print that the companies themselves (or their agents) have been paid in cash or shares for placing the articles.

Guardian Money decided to take a closer look at Southridge. It has a website, but that gives little clue to its real value. It is a legally formed entity in the US, but that again does not mean it is suitable for investors.

We emailed and called the company but got nothing. What we have discovered is that Southridge Ethanol is a subsidiary of Southridge Enterprises, a firm based in Dallas, Texas, whose shares are quoted on the US's unregulated over the counter stock market.

It says it is "a renewable energy company with a mission to become the ethanol producer of choice in the south-eastern US." But the company itself concedes that ethanol production - let alone ethanol sales - will not start until next June.

The Southridge spam campaign relies on that most basic investment rule - if there are more buyers than sellers then the price of the share goes up.

Here the hope of Southridge's promoters is that some of the millions who receive this email will buy.

The Southridge email is a share pushing classic. It tells readers of a "massive pr campaign" that is "sure to be seen by millions of investors".

The clear implication is that any delay as the share price moves to the $4 three-day target will lose you money.

The email says Add "SORD" (its stock market ticker symbol) to your radar on Monday Oct 30."

One essential phrase is: "Get on the train before it leaves" - if you don't, it suggests, you'll be a loser. But the "analyst report" comes not from a Wall Street investment bank but from IPOdesktop in Los Angeles. This company was paid $8,500 for preparing the analysis - largely material from Southridge itself.

SmallCapStockAnalyst.com is another "breaking news" site to feature Southridge. It was paid $7,500.

Wall Street News Alert links Southridge with Bill Gates, Wal-Mart and Richard Branson, earning $14,000 for this unusual connection.

Linking all these paid for "public relations" sites together is yet another company, Equity Alliance International, which paid out the dollars but received shares from Southridge. Equity Alliance says it "creates investor awareness and investor activity for growth stocks." It promises companies an email database of "12 million active subscribers".

Is Southridge a growth stock? What does it own? And how strong is its balance sheet? So far, other than PR, Southridge has paid a Canadian company a $20,000 deposit on an ethanol plant - with a balance due of $632,500.

There is no final date for this although Southridge says it will complete "due diligence" by December 11.

It has bought a second hand factory it intends to convert to ethanol production in Mississippi. And it has arranged a line of credit of up to $10m with Uniform Ventures Ltd by mortgaging the facilities it has yet to purchase fully. It can use its shares, rather than cash, to repay the sum borrowed.

Ethanol is a new interest at Southridge. A document filed in May said the company was involved in gold exploration in British Columbia - small scale as the filing records a $3,000 deal.

Guardian Money put a number of questions to both Alex Smid, the current chief executive of Southridge and to its US investor relations company Catalyst Communications.

In particular we asked whether Southridge had been approached by anyone offering to help "increase investor awareness"; whether it was aware of the spam campaign; why it had not warned investors of the mass emailing if it knew about it; where Uniform Ventures was based; and whether it was happy with the way the spam was sent out or if it was going to complain to the authorities.

We sent emails to the two; and then repeated them. We received no response. We then phoned a number said to be that of Alex Smid. It turned out to be a non-geographic number used by Catalyst. A Catalyst operator claimed the email had not arrived. When asked for Smid's number and whether the operator could help with answers to our questions, he said: "You're wasting my time. Goodbye," before terminating the call. A website, Spamnation, also tried contacting the company with questions. It too received no reply.

Finally, did the share hit the forecast $4 in three days from October 30 as promised in the email?

No. If you got on this train, you would have found the share price falling back more than 20% to $1.50. And who knows when it will hit the buffers.

How they make money: just pump'n'dump

Share spam is big business. It accounts for nearly a quarter of all unwanted emails - eclipsing dodgy loans and porn.

But how do the spammers, and those they work for, make their money? Here's Guardian Money's guide to turning a tiny company into one with a paper value of millions, if not billions.

First find a company. The US is littered with tens of thousands of unsuccessful tiny start-up firms which can be purchased for peanuts and potentially turned into the latest "hot stock". Then come up with a "sexy" product, something potential investors will not know much about. Technology, mineral exploration, oil and gas all fit the bill - industries away from the public gaze offering huge gains.

Now find a marketing company to organise the spamming and publicity campaign. They're not difficult to hunt out. One offers to "increase the price up to 200-250% in two to three weeks". And it's no gain, no fee. Some publicity sites take their payment in shares, which they then have to sell on to innocent punters.

It helps if the company involved buys an option for a few thousand dollars to buy a piece of land with mineral possibilities, or if it puts a deposit on some machinery - anything to create an excuse for a "news story". The company will issue literally billions of shares at a tenth of a cent a time - the "par value" to insiders who establish a floor value, usually around $1, by offering to buy a few shares at that price. This will be the only trading in the - at that point - totally unpublicised shares. From then on, it is called "pump'n'dump".

According to US watchdog, Securities and Exchange Commission, this involves "touting of a stock through false and misleading information. They often occur on the internet where it is common to see messages that urge readers to buy a stock quickly". There is also a UK warning on pump'n'dump on the Financial Services Authority website.

The pumping is when the share price is pushed up by a series of spam messages designed to make recipients think that unless they buy now, they will miss out on the biggest investment of their lives.

Then comes the dumping of the stock at high, and totally unrealistic, prices to the punters. After that, there is no one left to buy, so the investors are stuck with unsellable shares. And just to rub salt into the wound, most pump'n'dump stocks are sold under "regulation S" - a US restriction which prevents reselling the shares, without the company's permission, for at least a year.

Squeezing through a filter

Spam filters are supposed to catch nuisance emails. So how do the share pushers get their message through to millions of potential victims?

"When you have a filter, it analyses every email to see if it is wanted at the gateway to your machine. There are thousands of ways this can be done, and every software firm in the business has its own methods. The trick of the spammer is to find a way past the gateway and fool the filter," says Graham Cluley at Sophos, which produces programs against spam, viruses and other computer-harmful "malware".

One method - used in the Southridge spam received at the Guardian - is to put the message in an image such as a jpeg or other graphcial form. "The graphic is attractive to the human eye, but much too difficult for most filters. It's simply too costly in time and power to convert the image into something the filter can cope with, so it gets through," says Mr Cluley.

But Sophos is working on filters that would detect the low-resolution graphics these messages often use. "A low pixel image, with a few paragraphs of text, is very unusual. If you send a picture to your friend, it has loads more pixels. But it's difficult to send millions of emails with a high resolution big pixel image," he adds.

Some spammers try to fool the filter with random words or sentences. "It can read like James Joyce on acid. Alternatively, they simply steal real press releases - one share spam this week had an entire KFC statement," he adds.

Spammers build "zombie networks" of innocent, but compromised, computers around the world using viruses. These unwittingly transmit the spam.

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