Under SurveillanceTradeshow, Skymark Kicked off the Stage
by Melissa Davis - 8/24/2010 10:58:18 AM
Canadian regulators aren’t buying the story that Tradeshow Marketing (OTC: TSHO.PK) and Skymark Research – a paid promoter led by the son of TSHO’s founder – tried so hard to sell.
The Alberta Securities Commission has issued a cease-trading order for TSHO’s stock, while banning Skymark from trading or recommending any securities, after uncovering tell-tale signs of a classic pump-and-dump scheme. When explaining its move on Monday, the ASC cited concerns originally raised by TheStreetSweeper in a detailed investigative report almost six months ago. (Click here for the original story, complete with links to backup documents.)
Specifically, the ASC claimed that TSHO had soared on bullish Skymark forecasts secretly generated by relatives connected to the company. The ASC also noted that John Kirk, the sole director of Skymark and the son of TSHO’s founder, “held a significant number of shares” in the company – as did TSHO founder Bruce Kirk himself – at the time of the stock-boosting promotions. It pointed out that Ben Kirk, another son of the founder, worked for Skymark during the publicity campaign as well.
In addition, the ASC cited Skymark for the following potential violations of Alberta securities laws: portraying itself as an “independent” research firm when it actually received payments, from unidentified sources, for its TSHO recommendations; using fine print to disclose that compensation when it chose to report the payments at all; failing to state material risks associated with investing in TSHO’s stock; and issuing unfounded predictions that TSHO was “on the verge of a major breakout in the very near future” that could deliver “massive returns” to investors.
As previously noted by TheStreetSweeper, TSHO fetched mere pennies on light volume until Skymark initiated bullish coverage of the stock. After that, however, TSHO soared past $1.50 a share – with millions of shares changing hands – earlier this year. The stock peaked at $1.62 in February, triggering an in-depth story by TheStreetSweeper a few weeks later, and has since plummeted to less than a quarter a share. The stock, still trading here in the U.S., tumbled another 30% to 16 cents a share on Tuesday followings news of the regulatory setback.
Ironically, one of Skymark’s loudest fans issued a ringing endorsement of TSHO that – in hindsight – now looks like a prescient warning instead.
“We have a real company working on a real project with a potential revenue source that makes sense (for) its stock price,” he insisted at the time. “Promotion equals exposure.
“And that’s a good thing,” he added, “just so long as promotion isn’t the only thing supporting a company’s stock price.”
All told, Factiva’s extensive news database shows, Skymark issued hundreds of press releases – many of them on speculative penny stocks – since the firm first registered its website about 14 months ago. (Notably, Factiva records show, Skymark chose to kick off its promotions with “complimentary” research coverage of SpongeTech (OTC: SPNG.PK) – a company since hit with criminal charges for allegedly orchestrating its own pump-and-dump scheme – during the trading frenzy that led up to that stock’s looming halt.) That number excludes any companies, such as TSHO, that Skymark chose to tout through paid mailers instead.
