PrimeGen Energy Corp. (PGNE)

[lucky, mydog]

nodummy Friday, October 07, 2011 3:28:46 PM
Re: None Post # of 16162

SEC settles with Wall Street Capital

2011-10-07 14:03 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-FDEI) Fidelis Energy Inc
Also Street Wire (U-PGNE) Primegen Energy Corp
Also Street Wire (U-SAEI) Supatcha Resources Inc
by Mike Caswell

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1888223&symbol=*SEC&news_region=C

The U.S. Securities and Exchange Commission has reached a $300,000 settlement with the principals of Wall Street Capital Funding LLC, a Florida touting firm that aided several questionable promotions. (All figures are in U.S. dollars.) The stocks named in the case included three with links to former Vancouver promoter William Scott Marshall. In proposed judgments filed in Miami on Thursday, Oct. 6, the firm and its principals agreed to the fines and to orders barring them from promoting stocks with market caps under $50-million.

The SEC claimed that Wall Street Capital regularly issued overly optimistic stock opinions for many companies, even when it knew the underlying promotions were dubious. In one case, it supported a "pure scam," the regulator said. The stocks that it promoted included PrimeGen Energy Corp. and Fidelis Energy Inc., which had Mr. Marshall as an officer in 2007. Another, Supatcha Resources Inc., listed him as a director in December, 2010. The SEC did not name Mr. Marshall in the case and it did not accuse him of any wrongdoing.

The settlements are contained in separate consent judgments against Wall Street Capital, its two owners and an employee. The two owners, Philip Cardwell and Roy Campbell, each agreed to pay $125,000 in disgorgement and civil penalties, while the employee, Aaron Hume, agreed to pay $50,000 in disgorgement. None of the men admitted to any wrongdoing in settling the case. The judge still must approve the settlements.

SEC's complaint

The case began on Feb. 7, 2011, when the SEC filed a civil complaint in the Southern District of Florida against Wall Street Capital and the three men. The suit claimed that Wall Street Capital, which did business as Wall Street News Alerts, knowingly aided in numerous penny stock penny stock scams over its 10-year existence.

One of the examples listed in the complaint was PrimeGen Energy, a New Jersey company that purportedly had oil and gas properties in Russia. The company claimed to have brought 12 wells into production and to have generated millions of dollars in revenue. According to the SEC, the company was a complete scam. Its corporate headquarters was a rented mail box in a UPS store and its phone line was unattended. Moreover, its website was a copy of another company's site.

Despite this, Wall Street Capital issued as many as 50 misleading investment opinions for the company, the SEC claimed. In a July 9, 2009, opinion it listed PrimeGen as a "stock to watch" along with three New York Stock Exchange listings, including Exxon Mobile Corp. Touting the company in this way created an "impression of substance," the SEC said.

The opinions also went out as spam e-mails, according to the complaint. The messages carried the typical headers found in such e-mails, such as "Revenues for PGNE to soar with newest 42 Well project" and "When PGNE explodes will you be there to enjoy the ride?" Wall Street Capital purchased mass e-mail lists from third parties, which contained as many as 52 million addresses, the SEC claimed.

The touting took place between April, 2009, and January, 2010. During that time, the stock had a low of 1.4 cents and a high of 38 cents.

The SEC said that the touting continued even as Wall Street Capital became aware that people were complaining about the accuracy of the news. Among other things, the firm received an e-mail on Sept. 17, 2009, which stated that there are "serious concerns that the above Co. is acting fraudulently." This did nothing to deter Wall Street Capital and its principals who, according to the SEC, would "close their eyes and publish."

While the complaint mostly described the PrimeGen promotion, it said that Wall Street Capital had disseminated misinformation for hundreds of penny stocks during its 10-year existence. Typically, the beneficiaries of these promotions were insiders of the companies, who dumped stock for a profit, the SEC claimed.

The SEC sought penny stock bans, disgorgement of ill-gotten gains and appropriate civil penalties.

Wall Street Capital's answer

Wall Street Capital and the other defendants denied any wrongdoing. In a joint answer filed on Feb. 28, 2011, they issued bare denials of the allegations, and sought a trial by jury.

While the answer contained few details, it did state that Wall Street Capital did not have a duty to investigate the stocks it promoted. As the defendants saw it, a reasonable investor would not have considered such an investigation important in making an investment decision. They attributed any losses that investors suffered to external market factors. The men also argued that if investors suffered any losses, the SEC failed to mitigate those losses by allowing the stocks to continue trading.

William Scott Marshall

While Mr. Marshall was not a defendant in the SEC case, he has was under investigation for the Silver Star Energy Inc. promotion. In 2004, the RCMP obtained a search warrant for the company's Vancouver office, claiming that he and five others had run it as a pump-and-dump. The search made many headlines but, ultimately, did not lead to any charges.

Mr. Marshall left Vancouver in 2007, after somebody shot at his Shaughnessy home.

http://www.stockwatch.com/News/Item.aspx?bid=Z-C:*SEC-1888223&symbol=*SEC&news_region=C