Digital Gas, Inc.(fka DIGGQ)

[scion]

A Monmouth County Judge found that the owner, Brian Smith, had operated Digital Gas for seven years, with no known actual operations, and had defrauded investors of more than $5 million, using the investor funds for himself.

CONSUMER Wise
Division of Consumer Affairs
October/November 2009
http://www.state.nj.us/lps/ca/consumerwise.pdf

P s s s t , wanna buy a stock for a penny?

Investors are often attracted to “penny stocks” by the dream of over-sized returns, but these investors are frequently disappointed.

“Penny stocks” are investments in the stocks of small companies, frequently trading in the $1 per share price range on the “Over-the Counter” markets. Such stock usually has a lower trading volume, and is not listed or traded on the larger exchanges such as the New York Stock Exchange or the NASDAQ.

In the recent case of Digital Gas, a Spring Lake, NJ company, the stock was not worth even a penny! A Monmouth County Judge found that the owner, Brian Smith, had operated Digital Gas for seven years, with no known actual operations, and had defrauded investors of more than $5 million, using the investor funds for himself. Smith created false press releases to manipulate or “pump” investor interest in the stock, fraudulently issued stock certificates and
maintained a website that made other false claims about the company’s business.

In the end, Smith defrauded over 200 Digital Gas investors.

The New Jersey Bureau of Securities, an agency within the Division
of Consumer Affairs, is the New Jersey agency responsible for enforcing the securities laws. The Bureau obtained an order
freezing the assets of Digital Gas and of Brian Smith and his wife in October, 2006 after becoming aware of an investor complaint regarding the scheme. The Bureau pursued the case against Smith
which resulted in a recent judgment.

In September, 2009, Judge Thomas Cavanagh ordered Smith to pay more than $5 million in restitution and penalties. Judge Cavanagh also ordered Smith’s wife to disgorge more than $800,000 in funds
that she received from her husband’s scheme.

Investors who are considering investing in “penny stocks” or on the basis of “hot stock tips” should do their homework before handing over their savings. Attorney General Anne Milgram said that the Digital Gas case, “is another example of why investors need to carefully research company backgrounds before investing their
hard earned money.”

Information on securities, brokers,investment advisers and other investor information is readily available from the New Jersey Bureau of Securities at 973-504-3600 or 866-i-invest (toll-free within New Jersey) and on the Bureau website at www.NJSecurities.gov/.

http://www.state.nj.us/lps/ca/consumerwise.pdf