About the same time I purchased my first batch of Michelex shares, I invested in another beauty of a stock (yes, I am an idiot!). The name of the company at the time was Signalife and it went through a couple of name changes thereafter. I believe today it is known as Heart Tronics in the court filings.
At the time it looked like a very attractive stock. It was trading at a suppressed level due to some recent setbacks, but had announced some new direction and most importantly it announced it had orders which would be producing revenue.
Willie Gault, yes, Willie Gault, formerly the NFL's Fastest Man came aboard as co-CEO and seemed to add some legitimacy to the organization. I invested about $30K.
Soon, the stock started spiral downward. Those who began to raise questions about the legitimacy of some of the announcements were belittled on the message boards by those who were "in the know" and who had done their "due diligence". Even when the stock underwent a ridiculous reverse split to drive up the price and then tanked again, there was a core group still insisting that the stock was a pure winner.
However, those who were shunned, mocked and belittled, went to the authorities and low and behold, justice is being served.
Unfortunately for me, the parallels to MLXO are all too real.
For those of you who still think this current Board of Directors just ran into some bad luck, still needs more time and that this crew of individuals really has the best interests of shareholders in mind, please read the excerpts from today's press release.
"WASHINGTON – An attorney for a South Carolina health care device company, Signalife, was arrested on December 18, 2011, at Los Angeles International Airport on charges related to his alleged role in a multi-million dollar market manipulation fraud scheme, Assistant Attorney General Lanny A. Breuer of the Justice Department’s Criminal Division announced today.
An indictment unsealed yesterday in United States District Court for the Southern District of Florida charges attorney Mitchell J. Stein, 53, of Hidden Hills, Calif ., and Boca Raton, Fla ., with one count of conspiracy to commit mail fraud and wire fraud, three counts of mail fraud, three counts of wire fraud, three counts of securities fraud, three counts of money laundering and one count of conspiracy to obstruct justice. The indictment also seeks forfeiture of the proceeds of the offenses.
The indictment alleges that Stein engaged in a scheme to artificially inflate the stock price of Signalife Inc. by creating the false impression of sales activity for the company. Signalife, now known as Heart Tronics, was a publicly traded company that purportedly sold electronic heart monitoring devices. According to the indictment, Stein’s wife held approximately 85 percent of the shares of Signalife.
The indictment alleges that Stein and his co-conspirators created fake purchase orders and related documents from fictitious customers and then caused Signalife to issue press releases and file documents with the Securities and Exchange Commission (SEC) trumpeting these fictitious sales. The indictment also alleges that in a further effort to create the false appearance of sales activity, Stein arranged to have Signalife products shipped to and temporarily stored with an individual who had not purchased any products.
The indictment further alleges that Stein and his co-conspirators sold shares of Signalife stock at inflated prices, disguising the fact that they were doing so by placing the shares in purportedly blind trusts. In addition to selling shares in that manner, Stein and his co-conspirators allegedly also caused Signalife to issue additional shares to third parties so that those third parties could sell the shares and remit the proceeds of those sales to Stein and his co-conspirators. "
Does any of this sound familiar to anyone?
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