Big Bear: Vancouver stock promoter Shane Whittle says "Go f--- yourself"
By David Baines, Vancouver Sun May 14, 2010 1:33 PM Comments (18) http://www.vancouversun.com/business/Bear+Vancouver+stock+promoter+Shane+Whittle+says+yourself/3028689/story.html
Second of two parts
In Thursday's column, I reported that 34-year-old North Vancouver promoter Shane Whittle denied any involvement in setting up Big Bear Mining Corp., a Vancouver bulletin board company that has evolved into a horrendous U.S. penny stock promotion.
As earlier noted, Big Bear was a sham from the start. When it filed a registration statement with the U.S. Securities and Exchange Commission in 2006, it had a $1,000 mineral property, a nightclub bouncer as its president, and dummy shareholders who happily provided parking for the company's shares while they were being registered for resale.
In such deals, the game plan is not to find gold, but to get control of all the stock, which makes it very easy to control the share price. The net result is a publicly traded, tightly held shell company that's perfect for some future promotion.
Big Bear followed that pattern. One seed shareholder readily admitted to me that he acted only as a nominee. He said he neither paid for nor received his shares, he simply lent his name to affect a phoney distribution.
He also named Whittle as the person orchestrating the deal. Whittle adamantly denied this. "Go f---yourself," he said when I attempted to talk to him a few days ago.
Whoever was in charge, he or she didn't do anything to advance the company's exploration project. A full two and a half years after it filed its registration statement, the company hadn't spent a cent on exploration.
In September 2008, the person who was named as the company's president, Aaron Hall (a bouncer at the Stone Temple nightclub in downtown Vancouver), stepped down and was replaced by Dwayne Skellern.
Skellern was said to be a sales associate at Prudential Financial in Sherman Oaks, Calif. However, when I called that office this week, the receptionist said nobody by that name had worked there in the four years she had been there. But no matter. In March this year, Skellern was replaced by Steve Rix of Scottsdale, Ariz.
Rix is a financial motivational speaker who offers "practical solutions to experiencing greater professional achievement, financial success and personal fulfillment." Unfortunately, he does not practice what he preaches: A year ago, he declared bankruptcy with $5.8 million in liabilities against just $13,400 in assets.
According to company filings, Rix acquired Hall's controlling interest for $2,000. If true, that is an extremely cheap price for what appears to be a carefully groomed shell company. Before the financial meltdown, companies like this were selling for as much as $500,000 US each.
On April 6, Rix announced that Intosh Services Ltd. had agreed to buy $1.4 million worth of shares at 70 cents each over the next year. Proceeds would be used for property acquisitions. I have not been able to confirm that Intosh -- which is located in Mauritius, a well-known tax and secrecy haven in the Indian Ocean -- is a bona fide company.
Two days later, Rix announced that Big Bear had agreed to acquire an option on some mineral claims in Ontario's Red Lake district from a Manitoba property vendor named Perry English, who was acting on behalf of Vancouverbased Rubicon Minerals Corp.
It is interesting to note that two years ago, English, once again acting on behalf of Rubicon Minerals, vended some Ontario claims into Black Hawk Exploration Inc., a company closely associated with Whittle. I asked English whether Whittle was also involved in the Big Bear property deal, but he refused to answer any questions.
However they came about, these and other options in the Red Lake district that Big Bear acquired from English are now the basis of a ruthless stock promotion in the United States.
Last month, U.S. pen-for-hire James DiGeorgia, editor of the Gold & Energy Advisor newsletter, called Big Bear his "hottest stock pick in years ... I'm betting this $2 stock could hit $11 or more within just 60 days."
He said he was so convinced that Big Bear would be a winner that he was "sending out 1.5 million letters just like this one to investors all over the United States."
In a disclaimer at the bottom of his report, DiGeorgia disclosed that his newsletter is simply "paid advertising" and he received $10,000 as part of an overall fee of $900,000 paid by a private company, Treasure Cay Ltd., to cover the cost of creating and distributing the report. The disclaimer does not identify who owns Treasure Cay.
We have seen this sort of trash from DiGeorgia before, most notably in his promotion of another made-in-Vancouver bulletin board deal called Aberdene Mines Ltd. In that instance, he sprinkled his report with references to "rivers of molten gold" and gold nuggets "the size of potatoes." The company was later exposed as a scam.
Several days after DiGeorgia issued his report on Big Bear, credible news sources such as thestreetsweeper.organd Forbes magazine raised serious questions about Big Bear's veracity. ( Forbes wondered whether the company was selling fool's gold.)
Perhaps sensing regulatory repercussions, DiGeorgia reversed his "buy" to a "sell," but not before the stock roared from practically zero to a high of $1.75, giving it a total stock market value of $230 million US. (The stock has since slipped to 95 cents.)
Although control of Big Bear has officially passed to Rix, who lives in Arizona, the company still has ties to Vancouver. In a recent SEC filing, Big Bear's legal counsel was identified as Macdonald Tuskey, a Vancouver law firm that also acted for one of Whittle's bulletin board companies, Marley Coffee Inc. (Readers may also recall that Macdonald Tuskey acted for an unrelated Vancouver shell company called Trend Technology Corp., which earlier this year blossomed into a similar U.S. pump-and-dump scheme called Americas Energy Co.)
Meanwhile, Whittle floated a junior capital pool -- a kind of shell company -- called Big North Capital Inc. on the TSX Venture Exchange, along with two associates in his previous bulletin board deals, Garrett Ainsworth and Sterling McLeod. Controversial Howe Street promoter Frank Callaghan is also a director.
Big North has yet to acquire a business. TSXV officials would be well advised to monitor this company closely.