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CAJT pink sheet stock has been advertising incessantly for the last couple of weeks. This piece probably destroys CAJT:
http://www.charterx.com/resources/article.aspx?id=2946
Online Air Charter 'Broker' Connect-A-Jet Makes Wild Claims
13-Sep-2007
By Karen Di Piazza [CharterX Exclusive]
Texas-based Connect-A-Jet Inc., a Web-based air charter broker, says its new business is aimed "to eliminate the world of private jet charter brokers," and to provide the public with direct access to aircraft operators through one online portal--CAJ. Through numerous press releases and postings on its website, the company presents itself as the world's charter czar, professing it has affiliations with known companies for flight tracking services, aviation safety oversight, etc. CharterX has interviewed several companies named on CAJ's website or mentioned in press releases that disapprove of the broker's tactics.
CAJ Pink Sheets
CAJ says it will "single-handedly revolutionize the way the entire world travels by private aircraft." Martin Cantu, CEO of CAJ, stated in a press release, the "entire public" would have access "to every aircraft, within every fleet, of every charter company in the nation." On Aug. 23, CAJ announced it began trading under the symbol CAJT.PK (Pink Sheets). According to Investopedia, companies on the Pink Sheets are not required to meet minimum requirements or file with the U.S. Securities and Exchange Commission (SEC), which Congress created in order to regulate the securities markets and protect investors.
On Sept 4, CAJ started advertising its broker services on CNBC and in major newspapers, stating it received more than 250 charter requests. Each press release is followed by the company's alleged millions of dollars worth in aircraft inventory, and to accommodate the growing number of charter requests, now in the thousands, a significant number of charter representatives have been hired to handle the growing demand.
CharterX called Cantu several times for a response, but calls were not returned. Making every attempt to get through to this company, CharterX also called its reservation charter department; however, a recording said, "mailbox full, goodbye." CAJ's website does not provide anyone's name or company bio; Cantu's name was found on a press release.
CAJ's press releases provide contact information to its "investor relations," David Donlin. Several calls were made to Donlin, which CharterX discovered led to The Cervelle Group, LLC, in Altamonte Springs, Fla. A woman, only willing to give her first name, Jen, assured that Donlin would return calls within the hour; however, she declined to verify what Donlin's position was at TCG. After 16 hours passed, there was still no word from Donlin. TCG's website is absent of anyone's name or corporate bio; it states it handles financial relations counsel, public relations campaigns and other marketing services.
Where is CAJ getting its money, and what exactly do investors believe they're buying? Operators that CharterX talked to said CAJ's pitch is that operators are not charged to join; CAJ would make money selling charter flights receiving a commission.
CAJ's press releases promote that charter requests are real-time applications; within seconds, a customer can book a flight, pay and show up at the tarmac. As of going to press, the company's a real-time booking system doesn't exist; it's a manual, slow process. Its website says it plans to release its real-time booking platform in December. To test its current charter platform, this journalist requested an empty leg (a one-way flight) on a Gulfstream V, from Denver to Sacramento. An assuring email arrived saying a charter representative would be in contact--shortly. More than four hours went by; no one called. CAJ's press releases continue to state tremendous charter requests; however, the numbers of actual flights flown are not disclosed.
Aviation Companies Warn CAJ To Stop Putting Out False Claims
In another press release, CAJ said it launched its worldwide sales program, and began pre-contracting charter operators around the globe; it claimed it was negotiating an affiliate partnership with Scottsdale, Ariz.-based Aero Jet Services, LLC, a FAR Part 135 air carrier. On Sept.5, CAJ said Aero Jet joined its charter program, adding $40 million in aircraft inventory. Aero Jet President Mike Aaby told CharterX, "I have never had a conversation with Cantu and never gave CAJ permission to use Aero Jet's name in print. I'm sending a letter to this company telling them to stop using my name; we are not doing business with them."
After CAJ released a press release on Sept 6, stating it submitted a letter of intent to engage in a charter partnership with NetJets Inc., a Berkshire Hathaway company, Maryann Aarseth, vice president of corporate communications, told CharterX, "Our legal department has sent them a letter; we are not engaging in any partnership with this company."
Upon clicking CAJ's "track a flight," it claims one of its many benefits for private charter is its "affiliation" with FlightAware. That's news to Daniel Baker, founder and CEO of Houston, Texas-based FlightAware, who told CharterX he's never heard of CAJ.
"FlightAware has no affiliation whatsoever with this company," Baker said. "I'm stunned. I had no idea they were using our company's name--misspelled at that--and making all these claims about having a relationship with us. It's one thing to link to a company as an industry courtesy link; it's another thing to write all this stuff without our permission." FA's flight tracking services of both private and commercial air traffic in the U.S., free to the public, said its platform of flight arrival/departure algorithms is proprietary. Baker said he intends to have a letter sent to CAJ telling them to pull false information about his company from its website.
Cincinnati, Ohio-based Aviation Research Group /U.S. warns CAJ to stop using its name under the heading "safety." CAJ's website makes the claim that "all operators affiliated with CAJ are reviewed by ARG/US."
Joe Moeggenberg, founder and president of ARG/US, told CharterX, "We have absolutely nothing to do with this company; our legal department sent a letter to this company last week, warning it to remove all references about ARG/US from its website. I've received calls from concerned charter operators about CAJ's claims." He added that without permission, CAJ "copied and pasted information" from ARG/US' website.
CAJ's Claim To Eliminate The World Of Private Jet Charter Brokers
After being in business for a month or so, CAJ's claim that air charter brokers take up to four days to get back to a charter customer, only to tell them there is no aircraft available, is laughable at best. Maybe CAJ should reconsider its own operation and timely response to charter requests.
It's difficult to imagine that the British Royal Family would stop using UK-based Air Partner's exclusive, private jet travel service. Air Partner, which also has a strong U.S. presence, is a publicly traded company on the London Stock Exchange, and has been arranging private air charter for corporations, governments and individuals around the globe since 1961. The company has 210 aviation professionals located in 20 offices across four continents.
David McCown, vice president of marketing and business development of Air Partner, says, "We welcome companies that can truly bring value-added innovation to the air charter industry. Air Partner always stresses the importance of performing due diligence prior to doing business with any new company, which is applicable for the entire aviation industry."
It's also a stretch to imagine that CAJ could eliminate U.S.-based Air Royale International, established in 1994, with offices in New York, London, Hong Kong and Dubai--with clients such as CNN, Warner Brothers, Paramount Pictures and Fortune 500 companies.
"Reputable air charter brokers will always be in business; they have relationships with their customers as well as with air carriers; it's a team effort," says Wayne J. Rizzi, founder and CEO of Air Royale. "Air charter passengers want to deal with honest air charter brokers who have a proven track record of arranging safe, secure chartered flights. I know there are brokers out there that may not be what they claim to be, but I also know plenty who serve the aviation industry with integrity. This is a people business and it requires aviation expertise and customer follow-up."
Please email your feedback, news tips or press releases to CharterX news editor Karen@CharterX.com.
Current market cap approximately $750 million?
That is generally the method by which a business becomes publicly traded on pink sheets.
The company or its owners purchase all or most of the stock of a public company that has no operations (shell) and merge the business into that shell.
Researching 'reverse merger' will provide plenty of examples.
I'm no supporter of a pink sheet stock such as this, but I wouldn't say that Riverside is 'associated' with AXTG. It appears it was used as a merger shell and there is no actual association with the former business, or its owners or manager.
Are you using facts? I suppose you like facts! Well let me tell you something, facts are for bashers!
I neglected to post the link to that quote.
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20070913/BUSINESS01/709130374/1003/BUSIN...
Probably not much, altho Anderson as a repeat offender may get hit with some jail time.
It's very difficult to prosecute these crimes, though. Especially if there's a jury trial.
Usually the authorities just don't think it's worth the effort and are quick to settle.
There are so many scams out there - my basic belief is that society doesn't think they are a real bad thing. Sort of a buyer beware attitude.
"The Securities and Exchange Commission noted that it's hard to pinpoint how much money investors are losing to spam e-mail and Web site fraud. But estimates range in the hundreds of millions of dollars"
http://www.courierpostonline.com/apps/pbcs.dll/article?AID=/20070913/BUSINESS01/709130374/1003/BUSIN...
Revealing facts:
In its 3rd quarter, OCTL spent $600,000 on investor relations (aka pumping) and $240,000 on R&D.
Now we see that family member insiders are selling $30 million worth of stock.
To me that says it all.
Investors may spot the skull and crossbones sign as a warning posted next to some specific stocks on the Pink Sheets Web site, which lists over-the-counter securities. The message is: Don't buy these stocks. Run for cover instead.
"These are complete pirates. They're the worst of the worst. They're just bad people," said Cromwell Coulson, chairman and chief executive officer of Pink Sheets LLC, a privately owned New York company that publishes price quotes for thinly traded stocks on the over-the-counter market.
75,240,000 shares of $0.001 par value Common Stock issued and outstanding as of September 10, 2007.
Total assets $2.8 million
Total liabilities $2.6 million
Mkt Cap / Book Value = $75,000,000 / $250,000 = 300x
It's a miracle.
Where do you come up with that figure? I think it is significantly higher.
"In order to enhance public awareness of Fox Petroleum and its securities through the distribution of this report, Montrey international Ventures paid the publisher, Nat-Con Publishing, the sum of $900,000.”
"In order to enhance public awareness of Fox Petroleum and its securities through the distribution of this report, Montrey International Ventures paid the publisher, Nat-Con Publishing, the sum of $450,000.”
http://siliconinvestor.advfn.com/subject.aspx?subjectid=56743
The point is that they are putting a hell of a lot of money into promoting their stock - and seem to be more focused on stock promotion than business.
Or perhaps stock promotion IS their business...
You think I am spamming? Not sure what you are saying.
http://www.kiplinger.com/columns/picks/archive/2007/pick0911.htm
Beware the Penny Stock Hype
Don't be swayed by slick ads in national publications touting risky companies.
By Thomas M. Anderson
September 11, 2007
Maybe you've noticed a new trend in national business magazines and major newspapers: ads for penny stocks. Have these low-priced shares of usually dubious companies finally gone upscale? Well, their marketing has, but otherwise it's still the same hype designed to separate investors from their money.
Traditional penny stock campaigns follow a simple formula. Promoters and insiders use these advertising campaigns to increase the price of stock they own, then often sell shares at pumped-up prices. So even though these ad campaigns can cost hundreds of thousands of dollars and the companies they promote are weak or broke, those behind the hype still can make a killing.
How closely do these high-priced penny stock promotions follow the formula? You be the judge.
Consider the stock of Raven Gold. An outfit called the Stock Trend Report placed ads in The New York Times and USA Today in early July that told investors to prepare for the "next gold rush" by buying shares of the company (RVNG.OB). In a veritable media blitz, ads also ran on CNBC in some parts of the country, and glossy mailings were sent to potential investors. The Canadian company says on its Web site and in its press releases that it owns properties in Mexico that are capable of producing gold and silver. That factoid was grist for the promotion campaigns published by the Stock Trend Report.
Those ads push stock in a company that, by its own admission, has no revenue and slim prospects. Since it started in February of 2005 as Riverbank Resources, Raven Gold has lost $212,788, according to Securities and Exchange Commission filings. In its latest quarterly report, filed with the SEC on August 14, the company states that "We have no known mineral resources and if we cannot find any mineral recourses [sic], we may have to cease operations."
Plus, Raven Gold hasn't filed the independent technical reports required by Canadian law when a mining company buys mineral rights material to its finances. The British Columbia Securities Commission suspended the trading of Raven Gold's stock on August 1 because these reports were lacking. However, U.S. investors aren't helped much by the Canadian suspension because the stock is quoted on the U.S.-based OTC Bulletin Board. Repeated calls and e-mails to Raven Gold representatives and the Stock Trend Report were not returned.
The stock, which has a market capitalization (price per share times shares outstanding) of $78 million, is wildly overpriced by any measure. And once the ad campaign slowed down, the stock sagged. The shares, which closed at $1.04 on September 11, have fallen 30% since the ads ran in USA Today on July 9 and The New York Times on July 10.
Tip of the iceberg. Raven Gold is only the poster boy for the "tiny companies, high-priced hype" trend. This first came to our attention in May, when we noticed misleading ads appearing for the stock of a small Chinese cellphone retailer, Guangzhou Global Telecom, in national business magazines, including BusinessWeek, Forbes, Fortune, Money and SmartMoney as well as the Investors Business Daily newspaper.
During the hype campaign, the stock peaked at $2.65 a share on May 31 (the day before we wrote about the scheme) and traded millions of shares daily. The stock closed at 72 cents on September 11.
This advertising trend is a new and improved version of stock-touting ads that flooded print publications during the late 1980s, the heyday of pump-and-dump boiler rooms. That waned after regulators cracked down on unscrupulous brokers in the early 1990s. Penny-stock hucksters then turned to e-mail and Internet message boards.
Why have companies and promoters chosen now to go glossy with penny stock ad campaigns, and what's being done about it? The short answer to those two questions seems to be: because they can get away with it, and not much.
Lax standards. Kiplinger's Personal Finance magazine has refused to run such ads, but the industry standard is lax. The New York Times, for example, says that if a stock is listed and registered with the Securities and Exchange Commission, it will run an ad promoting it. Says Abbe Serphos, spokeswoman for The New York Times. "Since the SEC is the regulatory body that oversees such stocks, we believe that the listing or delisting of these stocks gives us an indication of whether to accept these advertisements."
A reason so many prestigious publications accept such ads may be because times are tough in the publishing business. Maria Terrell, an associate director with the International Newspaper Marketing Association, says this is the first time that newspapers have seen an advertising decline in a growing economy. Members are debating whether to run ads from escort services, makers of herbal products to treat erectile dysfunction and penny-stock promoters that they wouldn't have considered in boom times, she says.
Enforcement challenges. U.S. securities regulators have been mum on the recent boom in mainstream penny-stock promotion. The SEC doesn't comment about companies until the agency has filed complaints against them. Plus, securities-law enforcement takes time. On September 6, the SEC settled a complaint against two Arizona penny-stock traders engaged in a pump-and-dump spam scheme that allegedly netted them $3 million. That case began four years ago.
The current batch of penny-stock hype presents enforcement challenges for the SEC. The ads and mailers walk the line between misleading and fraudulent, which makes them difficult to prosecute, says Pat Huddleston, a former SEC enforcement official who worked on penny-stock scam cases in the 1990s. Huddleston now runs Atlanta-based Investor's Watchdog, a private firm that vets investment opportunities for clients. The fact that penny-stock promoters advertise in major publications is a sign they aren't worried that their campaigns will draw scrutiny from the SEC, says Georgetown University finance professor James Angel.
The SEC needs to step up penny-stock enforcement to stem the tide of fraud, says Cromwell Couslon, chief executive of the Pink Sheets, a private quotation service that lists thousands of penny stocks. "The only organization that can stop trading is a regulator," he says. "We need the regulators to aggressively suspend and it's a role only a regulator can do."
Canada seems to have reined in such promotions. The free-wheeling Vancouver Stock Exchange was long home to many penny stocks that were subject to pump-and-dump schemes. But in the late 1990s, Canadian regulators began requiring executives and promoters of small-company stocks to register their promotional activities and submit to background checks. As a result, Canada eliminated the most egregious hype. But many of those companies and their promoters moved to the U.S.
More hype. And speaking of egregious, take Fox Petroleum of London. The company wants to be a wildcat driller but needs to raise money to explore the properties on which it holds leases. Its stock (FXPE.OB), which is quoted on the OTC BB, traded for $2.50 on September 11.
Fox's stock price had doubled between early July and mid August but had begun to slip. The company bought ads in the September 17 issue of Fortune and the August 27 issue of Barron's, among other publications. The ads describe the potential oil production from leases Fox owns and drop the names of major oil producers, such as BP, Chevron and Exxon Mobil.
But you wouldn't learn from the advertisements that the company lacks any active production sites, has few employees and needs to raise millions before it can start drilling, according to SEC filings. Fox spent $300,000 on advertising in various publications, says Alexander Craven, the company's vice president of finance, treasurer, secretary and one of three full-time employees. "We felt the expenditure was important to promote awareness both for the company and for our investors," Craven says.
One has to wonder why Fox spent thousands on magazine and newspaper advertising for investors to check out a stock when it needs millions for drilling operations. Fox has only $1.7 million of cash on hand, according to its most recent quarterly report filed with the SEC.
In addition to the promotion in the Fox-paid ads, an online publisher, Contrarian Press, began pushing Fox shares on June 11. Contrarian is run by Scott Fraser, who has had a run-in with regulators. The SEC issued a cease-and-desist order in September 2003 claiming that Fraser made false and misleading statements relating to the past performance of stock recommendations in his Natural Contrarian newsletter. But that hasn't stopped Fraser from saying on his network of Web sites that he's "Profit-Proven Master of Contrarian Strategies."
He boasted of his skills in a full-page ad in the September 2007 issue of Kiplinger's Personal Finance -- mea culpa -- as well as in Forbes and Barron's. Editors at Kiplinger's refused to accept a full-page ad in the October issue because it hyped companies with no ongoing businesses or revenues. Fraser wouldn't return calls and e-mails seeking comment, so we don't know his motives for recommending Fox and similar stocks. Craven says Fox executives are not involved with any stock promoters.
Another oil company is following the Fox Petroleum model. Sun Cal Energy is a Canadian company that converted in November 2006 from a mining company with no revenue to an oil business with no revenue. The company had $267,817 in cash on hand as of March 31, according to an SEC filing. Yet it took out an ad in the September 3 issue of Forbes that neglects to mention the company doesn't have any active production sites. The ad only describes the potential profits from unexplored oil and gas leases that Sun Cal owns in Southern California.
George Drazenovic, Sun Cal's chief financial officer, treasurer and secretary (and one of two full-time employees), says that the company has a duty to keep shareholders informed and that 90% of Sun Cal's funds go into developing its leases. But despite what Drazenovic says, Sun Cal hasn't even begun developing those leases, according to its latest SEC filing.
Sun Cal stock (SCEY.OB) could certainly use some help. After trading above $3 a share through mid summer, it plunged steadily during August and closed at $1.26 on September 11, on the OTC BB.
Bottom line: Don't let the prestige of these national publications cause you to suspend disbelief. Before investing in any OTC Bulletin Board stock, go to the SEC's Web site and look at its most recent 10-K annual report and 10-Q quarterly report and closely examine its revenues and assets and disclaimers. That precaution alone could prevent your being sucked into a costly and embarrassing ripoff.
Don't they need to file quarterly financials and other information before moving off the pinks? Or do you mean they might get de-listed from the pinks?
http://www.kiplinger.com/columns/picks/archive/2007/pick0911.htm
More hype. And speaking of egregious, take Fox Petroleum of London. The company wants to be a wildcat driller but needs to raise money to explore the properties on which it holds leases. Its stock (FXPE.OB), which is quoted on the OTC BB, traded for $2.50 on September 11.
Fox's stock price had doubled between early July and mid August but had begun to slip. The company bought ads in the September 17 issue of Fortune and the August 27 issue of Barron's, among other publications. The ads describe the potential oil production from leases Fox owns and drop the names of major oil producers, such as BP, Chevron and Exxon Mobil.
But you wouldn't learn from the advertisements that the company lacks any active production sites, has few employees and needs to raise millions before it can start drilling, according to SEC filings. Fox spent $300,000 on advertising in various publications, says Alexander Craven, the company's vice president of finance, treasurer, secretary and one of three full-time employees. "We felt the expenditure was important to promote awareness both for the company and for our investors," Craven says.
One has to wonder why Fox spent thousands on magazine and newspaper advertising for investors to check out a stock when it needs millions for drilling operations. Fox has only $1.7 million of cash on hand, according to its most recent quarterly report filed with the SEC.
In addition to the promotion in the Fox-paid ads, an online publisher, Contrarian Press, began pushing Fox shares on June 11. Contrarian is run by Scott Fraser, who has had a run-in with regulators. The SEC issued a cease-and-desist order in September 2003 claiming that Fraser made false and misleading statements relating to the past performance of stock recommendations in his Natural Contrarian newsletter. But that hasn't stopped Fraser from saying on his network of Web sites that he's "Profit-Proven Master of Contrarian Strategies."
He boasted of his skills in a full-page ad in the September 2007 issue of Kiplinger's Personal Finance -- mea culpa -- as well as in Forbes and Barron's. Editors at Kiplinger's refused to accept a full-page ad in the October issue because it hyped companies with no ongoing businesses or revenues. Fraser wouldn't return calls and e-mails seeking comment, so we don't know his motives for recommending Fox and similar stocks. Craven says Fox executives are not involved with any stock promoters.
http://www.kiplinger.com/columns/picks/archive/2007/pick0911.htm
Consider the stock of Raven Gold. An outfit called the Stock Trend Report placed ads in The New York Times and USA Today in early July that told investors to prepare for the "next gold rush" by buying shares of the company (RVNG.OB). In a veritable media blitz, ads also ran on CNBC in some parts of the country, and glossy mailings were sent to potential investors. The Canadian company says on its Web site and in its press releases that it owns properties in Mexico that are capable of producing gold and silver. That factoid was grist for the promotion campaigns published by the Stock Trend Report.
Those ads push stock in a company that, by its own admission, has no revenue and slim prospects. Since it started in February of 2005 as Riverbank Resources, Raven Gold has lost $212,788, according to Securities and Exchange Commission filings. In its latest quarterly report, filed with the SEC on August 14, the company states that "We have no known mineral resources and if we cannot find any mineral recourses [sic], we may have to cease operations."
Plus, Raven Gold hasn't filed the independent technical reports required by Canadian law when a mining company buys mineral rights material to its finances. The British Columbia Securities Commission suspended the trading of Raven Gold's stock on August 1 because these reports were lacking. However, U.S. investors aren't helped much by the Canadian suspension because the stock is quoted on the U.S.-based OTC Bulletin Board. Repeated calls and e-mails to Raven Gold representatives and the Stock Trend Report were not returned.
The stock, which has a market capitalization (price per share times shares outstanding) of $78 million, is wildly overpriced by any measure. And once the ad campaign slowed down, the stock sagged. The shares, which closed at $1.04 on September 11, have fallen 30% since the ads ran in USA Today on July 9 and The New York Times on July 10.
I received an email promotion for AXTG today - not spam - a site I signed up for. Wild Bill's The Capital Report i think it is called.
An advertisement?
That looks like him.
Seems he is now CEO of two public companies - IENI and OCTL.
Impressive!!! not
Oh yes, it's definitely moving to Nazdaq. Just as soon as pinksheets.com approves quoting it again!!
CAJT — ConnectAJet.com, Inc.
Com ($0.001)
Primary Venue: Pink Sheets
Pink Sheets has discontinued the display of quotes on pinksheets.com for this security because it has been labeled Caveat Emptor (Buyer Beware) and because adequate current information has not been made available by the issuer of the securities. It has been labeled Caveat Emptor for one of the following reasons
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=cajt
They may as well just label it SCAM.
Hmmm, he was just appointed CEO of another company on August 28. What's up with that?
Mr. Nicholas S. Cucinelli Appointed as President of International Energy's Wholly Owned Subsidiary
Tuesday August 28, 12:58 pm ET
VANCOUVER, British Columbia--(BUSINESS WIRE)--International Energy, Inc. (OTCBB:IENI - News), today announced the appointment of Mr. Nicholas S. Cucinelli as President and CEO of International Energy Corp., a wholly-owned subsidiary of the Company
blog on OCTL
Stay Away From Octillion
posted on: September 05, 2007 | about stocks: OCTL.OB
Admitted Stock Manipulator at the Helm
First, see David Phillips’ article on the company’s CEO, Harmel S. Rayat, and his other failed companies.
http://seekingalpha.com/article/46455-stay-away-from-octillion
An article in the New York Times yesterday about stock promotion via paid advertising in newspapers such as USA Today, Barrons, and even, yes, the NY Times.
Does anyone know of a website or blog that tracks and posts these paid stock promotions. I do a thread on SI about promotions I receive via US Post, and email spam is tracked in various spots. I sure would like to see one tracking periodical advertisements.
Thanks, Peter
Breathless Pitches for Penny Stocks, Now in Newspapers
http://www.nytimes.com/2007/09/05/business/media/05adco.html
By LYNNLEY BROWNING
Published: September 5, 2007
CHECK your e-mail, and chances are it holds several get-rich-quick offers to buy a hot stock in a tiny, unknown company.
Open up a major newspaper, including USA Today and The New York Times, and you could see full-page advertisements with the same solicitations, all hyperventilating with “insider” tips on the next big investment.
The promotion of penny stocks, for years a staple of Internet spam and “boiler rooms” running illegal pump-and-dump schemes, has recently burst forth in splashy full-page ads in major daily newspapers. Not even the recent market turbulence has deterred the marketers of these penny stocks, which are traded in over-the-counter markets and have long been a magnet for fraud.
Penny stocks are volatile, risky, thinly traded securities issued by minuscule companies that are disproportionately known for having big losses, meager sales, cozy insider management and scant or unverifiable financial data. Unscrupulous promoters typically work by “blast” faxing or flooding the Internet with press releases so that investors will read the dubious news and bid up the hyped shares. Then the promoters can cash in by selling the stock, typically in huge volume.
There is a certain formula to these advertisements: breathless claims for a miraculous-sounding product or trove of commodities, comparisons to well-respected brands, and an exhortation to the reader to get in on the ground floor by investing in the unknown company. •
“How much would you pay to slow or stop the aging process?” asks one ad from the Aug. 24 issue of USA Today for a company called MitoPharm, which makes what it calls a “true anti-aging drink” called Restorade. “This industry is making smart investors overnight millionaires,” the ad states, citing Coca-Cola’s purchase of Glaceau. “The buying frenzy is likely to continue,” and, the ad concludes, “MTPM could be the hottest story to hit Wall Street this year!”
R. Cromwell Coulson, chief executive of the Pink Sheets, an unregulated over-the-counter market, said that such ads offer plenty of obvious reasons to beware. “If it’s being hyped like this, it’s probably worthy of cynicism,” he said. “If it’s a small company, why are they spending so much on touting their stock?”
There is no indication that the recent ads have broken any securities laws, and newspapers, which are facing declining ad revenues, are not required to vouch for the veracity of the claims. Maria Terrell, a spokeswoman for the International Newspaper Marketing Association, said that “it’s not a newspaper’s responsibility to verify the facts of an ad being placed.” But she added that the recent ads, for newspapers and investors alike, were “definitely something to pay attention to.”
Last April, a small unknown company called Nano Chemical Systems Holdings bought a full-page ad in the business section of The New York Times, replete with frothy lines like “Don’t miss this incredible investment opportunity!”
In the ad, Nano Chemical Systems Holdings of Seaford, Del., a former publisher of history textbooks, described its plans to become a leading biofuel maker and compared itself to Intel and Microsoft. “These two industry giants made early investors rich beyond their wildest dreams,“ reads the copy, adding that in “in much the same way, Nano Chemical Systems Holdings is positioning itself as one of the companies that can help make the Alternative Energy revolution possible!”
Neither the ad nor Nano Chemical’s Web site discloses that the company’s main business is manufacturing industrial waxes and lubricants. And there were other gaps. The ad made no mention of the fact that in January 2006, the Securities and Exchange Commission issued subpoenas to Nano Chemical related to its issuance of press releases, among other things. The company has said it is cooperating with the S.E.C.’s investigation.
The fine print at the bottom of the Nano Chemical Systems Holdings ad did disclose that a company named GIA Consulting had been paid over $232,000 by an unnamed third party to prepare and place the ad as well as “other informational advertisements.” While the ad said that GIA Consulting did not own any shares in Nano Chemical Systems Holdings, it gave no contact details for GIA Consulting or specific mention of the third party.
Alex H. Edwards III, the interim chief executive of Nano Chemical Systems Holdings, said he thought GIA Consulting was “a shareholder who placed the ad because they thought the company was undervalued.” He said he did not know where GIA Consulting was based or that the ad was coming out. Attempts to locate GIA Consulting were unsuccessful.
Page 2 of 2)
Asked about the ad, Abbe R. Serphos, a spokeswoman for The Times, said that “it has been the longstanding policy of The New York Times to accept advertisements that promote stocks or securities as long as those securities are registered with the Securities and Exchange Commission or the attorney general of New York State.” She added: “In a few rare instances companies with unregulated securities have managed to place ads in the paper. When we learned of them, we took steps to make sure their ads do not appear in the paper again.”
Nano Chemical Systems had registered its securities offerings, according to filings; the stock trades on the Pink Sheets for around 5 cents a share.
Pat Huddleston, a former enforcement official with the S.E.C. who now runs Investor’s Watchdog, a consumer advocacy organization, said that “it’s a sign of how optimistic of success these scam artists are that they are turning to papers like The New York Times.”
By May, other tiny, unknown companies, among them USA Superior Energy (an oil company), Trend Exploration (mining) and BioStem Inc. (stem cell storage), were subjects of full-page ads, some in color, in USA Today, the nation’s largest-circulation daily newspaper.
The ad for BioStem, for example, said that the firm was “capitalizing on the new cord blood stem cell industry with its potentially life-saving medical applications.”
Those are high ambitions for a company formerly known as National Parking Systems, and whose main business today is still running parking lots and “vehicle immobilization services” in Atlanta, where it is based. None of that information is disclosed in the ad.
Neither is BioStem’s previous incarnations as the Web Views Corporation (an Internet company) and the Cascade Mountain Mining Corporation.
Neither does the ad give any indication of BioStem’s shaky financial position, including accumulated losses of more than $15.5 million, according to S.E.C. filings.
The ad says that BioStem will be acquired by Cryobanks International Inc., a private, untraded company based in Altamonte Springs, Fla., that is “a leader in the collection, processing and banking of stem cells.”
But the USA Today ad omits mention of the suspected role of Cryobanks in a Ghana-based money-laundering scheme.
That role is described in an amended lawsuit filed by federal prosecutors in Federal District Court in Brooklyn in August 2004 against Shankar’s Emporium and various related participants and bank accounts.
The civil complaint contends that in early 2004, at least $59,800 obtained in connection with the scheme was placed in Cryobanks International by Kazi Management VI Inc., a firm incorporated in the United States Virgin Islands.
•
Kazi Management and its related entities are owned or controlled by Zubair Kazi, who is the chairman of Cryobanks International and, through a Kazi Management entity, a major investor in Cryobanks. Mr. Kazi is also the second-largest KFC franchisee in the United States, according to the Cryobanks Web site. Calls to Mr. Kazi in Studio City, Calif., were not returned.
In November 2005, the Shankar entities settled the case for $1.3 million without admitting wrongdoing. Alan Burger, a lawyer for Cryobanks in the case, declined to comment.
When asked about the BioStem ad, a spokeswoman for USA Today said: “Advertisers are responsible for the content of their ads, as well as for complying with any legal obligations associated with those ads. USA Today does occasionally review ads on an as-needed basis.”
To be sure, the fine print in the newspaper ads reveals more than the typical Internet-based solicitation.
For example, in its USA Today ad, BioStem discloses that a firm called ATN Enterprises L.L.C. prepared the ad and paid a second firm, Discovery Stocks, $37,500 to place it. The ad also discloses that ATN “has been hired by third-party consultants and is contracted to receive” one million “free-trading shares” of BTEM, and thus has an inherent conflict of interest in promoting BioStem. It also says that Discovery Stocks can trade in the shares. Calls to ATN’s head, Roy Campbell, in Miami Springs, Fla., were not returned.
Steve Clark, the head of Discovery Stocks, said: “I’m not promoting the stock. It’s essentially a direct-response advertisement. We’re seeing a lot more of it now.” He said he had recently placed similar ads in newspapers in Seattle and Tampa, among other cities.
http://www.pinksheets.com/pink/quote/quote.jsp?symbol=cajt
Pink Sheets has discontinued the display of quotes on pinksheets.com for this security because it has been labeled Caveat Emptor (Buyer Beware) and because adequate current information has not been made available by the issuer of the securities. It has been labeled Caveat Emptor for one of the following reasons.
The security is being promoted to the public, but adequate current information about the issuer has not been made available to the public;
The security has been quoted on an unsolicited basis since it entered the public markets and the issuer has not made adequate current information available to the public; or
The security is the subject of a spam promotion having the effect of encouraging trading of the issuer's securities, or represents, in Pink Sheets view, a public interest concern.
Consequently, Pink Sheets has removed the quotes from this website until adequate current information is made available by the issuer pursuant to Pink Sheets Guidelines for Providing Adequate Current Information (PDF) and until Pink Sheets believes there is no longer a public interest concern. Investors are encouraged to use care and due diligence in their investment decisions. Please read our Investor Protection page for more information.
Bravo ibreken - I couldn't say it any better.
the real world outside the warped sense of ethics that exist in many of the areas here on ihub ...... Isn't it normal to expose liars and fraudsters and con artists for what they are? Isn't it normal to try to counter obvious misleading statements
That's interesting. I'm going to try to confirm what you have said about Fraser and Ultra Petroleum. I'll let you know what my research shows.
Meanwhile, FXPE had a half page or so advertisement in Barron's yesterday. Why are they advertising their stock? Is that good for current investors or bad?
You can get a look at Fraser's and Nat-Con's history re mailers here. They are purely promotional and, for the most part, the stocks most definitely drop in the months after the mailer.
http://siliconinvestor.advfn.com/subject.aspx?subjectid=56743
no buyers and no sellers - i suspect that all those who were posting here have sold and moved on
I have mentioned a few reasons why people should sell FXPE stock...so let's hear the counter-argument.
What are the positive points about FXPE stock? Why should anyone buy it?
In that case the market cap ought to be approximately what they paid for the drilling rights, leases, etc., plus what they have invested in development.
It's over valued by a factor of 50x.
Who is Alexander James Craven's father? How did Mr. Craven, the younger, come to be CEO of this company? Who is behind EuroEnergy Growth?
Why has more been spent on payments to Nat-Con for stock promotion than has been invested in oil & gas activities?
So many mysteries.
hahahahahahaha
solid investment
hahahahahahaha
51,186,792 shares of common stock issued and outstanding as of July 20, 2007....market cap approximately $125 million.
Total Assets: $2,043,806
solid investment, hahahahahahaha
Is this board about PetroSouth Energy or Public Services Enterprise?
http://investorshub.advfn.com/boards/quotes.asp?ticker=OCTL&qm_page=24556&qm_symbol=OCTL
see, no bid ask except one market maker..... with a huge spread
I'm confused as to what market OCTL is trading on.
Yahoo quotes indicate that it's BB, but the normal bid/ask does not appear in any of my quote setups. Is there something odd going on?
Have you seen the financials?
A big $37,000 of total assets. 24mm shares outstanding for a market cap of $36 million.
In July 2007, the Company conducted a private placement offering whereby it sold 90,000 units at a price of $0.40 per unit
Double from how much to how much? That critical information is omitted.
This company is most amusing. Love that PR:
Sebastian River Holding's Inc. Announces Currency Dividend, Possibly Worth $1USD Per Share
Wednesday August 8, 2:26 pm ET
SEBASTIAN, Fla.--(BUSINESS WIRE)--Sebastian River Holding's Inc. (Pink Sheets: SBRV - News), Today announced that the board of directors have approved a Iraq Dinar dividend for all shareholders of record on September 14, 2007 with a payout date of September 28, 2007. Shareholders of record on the dividend record date will receive 1 Iraq Dinar for every one share of Sebastian River Holding's Inc. owned, payable in lots of 1000 shares equals 1000 Iraq Dinar currency Note.
ADVERTISEMENT
"We are getting the shareholders involved", stated Daniel Duffy President and CEO of Sebastian River Holding's Inc. "Now all of our shareholders can own a piece of history, by receiving actual Iraq money in the form of the Dinar."
The Company feels that the Iraq government must revalue their currency to give all Iraq citizens purchasing power and a new way of living. The company currently holds 135,000,000 dinar and every $1 USD upward movement in the price of the Iraq Dinar gives the company a profit of 134,900,000 USD or roughly an EPS of $2.73 and would make this dividend worth $1 USD per share cash dividend.
The Company would like to inform all shareholders that Sebastian River Holding's Inc. will be purchasing new Iraq Dinar currency for this dividend. This dividend will not affect the Company's holdings of 135,000,000 Iraq Dinar.
Sebastian River Holding's Inc. plans to give dividends of all foreign currencies the company currently holds now and in the future. The Company believes to give back to the shareholders and get them as much involved as possible.
Sebastian River Holding's Inc. is a holding company of profitable private companies, with a foreign currency division and two pending acquisitions with Pelican Capital Mortgage Lending Inc and TCI Electronics, Inc. The foreign currency division currently holds 1,000,000,000 Vietnamese Dong and 135,000,000 Iraq Dinar.
Forward-Looking Statement
This Press release may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements are based on the Company's current expectations as to future events. The forward-looking events and circumstances discussed in this press release might not occur, and actual results could differ materially from those anticipated or implied in the forward-looking statements.
Contact:
For more information:
Investor Relations
Sebastian River Holdings, Inc.
Bob Green, 1-800-295-8512
Well, it's hard to know who is selling but the fact that HPRD just sold a bunch of shares at $0.25 to an accredited investor, accompanied by a paid mailer pump, suggests that that accredited investor may be selling at a handsome profit.