DD Support Board and Research Team

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AAST - Pump & Dump alert

This one is ugly. It included lots of paid promotions which used false information to promote the stock. This one has been reported to the SEC and the main stream media is jumping on this one exposing the fraud. Here is a great article done by Len Boselovic of the Pittsburgh Post-Gazette today:

http://www.post-gazette.com/pg/11170/1154546-435-0.stm

Reports of takeovers may be greatly exaggerated
Sunday, June 19, 2011
By Len Boselovic, Pittsburgh Post-Gazette

Word that Australian mining giant BHP Billiton could be making a takeover offer of up to $50 per share for his company's $1-plus shares came as a surprise to Jes Black, chairman and CEO of Allied American Steel.

"It's news to me," said Mr. Black.

Mr. Black, a 35-year-old former foreign currency trader, also happens to be Allied American's chief financial officer, its only director and the owner of 4 percent of its 100 million freshly minted shares. He would probably be chairman of the board's audit company, except the company does not have one, according to its filings with the Securities and Exchange Commission.

Nevertheless, a BHP raid on Allied American is exactly what could happen "in six months or less," according to John Myers, a stock tip newsletter writer paid to pen very high opinions of very low-priced stocks. According to this month's edition of The Myers' Letter, BHP has "$147 billion in unspent takeover money burning a hole in its pocket."

"BHP could be about to scoop up $72.17 billion worth of iron ore for 5-cents on the dollar!" wrote Mr. Myers, who seems to be infatuated with exclamation points.

The iron ore is where Allied American, located 50 or so floors below U.S. Steel's top brass in the U.S. Steel Tower, Downtown, enters the picture.

The company was formed in April when it merged with Royal Union Holding, a company founded in 2007 to acquire, develop and manage real estate projects, according to a May 23 filing that Allied American made with the SEC. Royal Union did not have any revenue in 2009 or 2010.

But it did have something Allied American wanted: its status as a publicly traded company.

Following the merger, Allied American shares began trading under the ticker symbol AAST. They closed Friday at $1.67, up 35 cents for the week and up more than 60 percent this month.

Allied American doesn't have any revenue either. Its prospects hinge on its option to acquire a 60 percent interest in 6,700 Canadian acres of iron ore and other mineral reserves. According to a news release Allied American issued June 8, the property "represents an inferred resource" of 248 million tons, or 45.9 years worth or iron ore.

On Monday, Allied American announced it would hire a contractor within 30 days to "commence the next phase of advanced exploration" at the site. In an interview, Mr. Black mentioned promising results from a "magnetic airborne survey" of the property, good news that Mr. Myers also passed along.

Another version of Mr. Myers' report, located on a site called Best Penny Stock Broker, urges readers to buy Allied American shares "for under $1.50 before a BHP takeover at $50 or more a share!" The report features an image of BHP rail cars stuffed with money and a sign that reads "Next station: Allied American Steel."

Like the first version, there's an exhaustive disclosure revealing that Mr. Myers was paid $6,500 in cash by an company named Emerald Capital SA to produce the newsletter. According to the first version, Emerald paid unnamed vendors $250,000 to create and distribute Mr. Myers' report online. There is no mention of such a payment in the BHP rail car version.

Both include this statement: "John Myers has not independently confirmed the accuracy, correctness or truthfulness of the statements and opinions that the advertiser has expressed above."

That could be why a few of Mr. Myers' stock picks haven't panned out.

He promised a company called CrowdGather "could slingshot your wealth to dizzying heights" in early 2010, when the shares traded between $1.20 and $1.57. Today, they are priced at a dizzying 87 cents.

When Mr. Myers told readers that Kodiak Energy "could be my next thousand-percent winner!" in August 2009, the shares were priced between 60 and 75 cents. You would have paid 11 cents for one on Friday.

American Power shares traded between 97 cents and $2.14 in January when Mr. Myers told investors to jump in because "this $1.25 stock could easily fetch as much as $20 a share by the time giant [mining company] Rio Tinto makes its final offer!" You could have bought a share for 38 cents last week.

Mr. Myers is not the only paid provider who appreciates Allied American's possibilities. Duplicate reports from OTCStockExchange and Whisper From Wall Street Report say it is a company "with a projected annual revenue of $1.1 Billion!"

The fine print of both reports indicates WFWS Consulting was paid $25,000 in cash by Winning Media "for the purpose of increasing public awareness of AAST." The disclosures say the reports are paid advertising that "does not purport to provide an analysis of the featured company's financial position, operations or prospects."

On Friday, Allied American said in an SEC filing that it had not commissioned or authorized the newsletters and did not know the authors. It said the claims of at least one newsletter that Allied American had proven reserves are wrong and that it was not aware of any proposed takeover.

Regulators are constantly warning investors about pump-and-dump schemes, which typically involve closely held companies that do not have to report to the SEC. The companies hire promoters to pump the stock by issuing news releases and newsletters, manipulate trading to increase the share price and volume of trading, and then dump their shares once the price is inflated.

Allied American does have to report to the SEC. So investors who take time to read the ponderous, exclamation-point free prose in the company's filings can determine for themselves whether there's any there there.

And as always, be careful out there.
Len Boselovic: [e-mail].

Read more: http://www.post-gazette.com/pg/11170/1154546-435-0.stm#ixzz1Pk5iRfy8


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Here is the SEC filing done by AAST on Friday condemning the paid promotions and the false information including within those paid promotions:

http://www.sec.gov/Archives/edgar/data/1404212/000114420411036288/v226274_8k.htm

It has come to the attention of the Company that several newsletters have been recently circulated which contain information respecting the Company. Company shareholders and prospective investors in the Company’s common stock should be aware that the Company has not commissioned, authorized or approved any of such newsletters and cautions anyone from relying on the information or advice contained therein. The Company has no relationship with and does not personally know the authors of such newsletters. Persons wishing information on the Company should rely solely on the information contained in the Company’s filings with the SEC including, but not limited, to the Company’s Current Report on Form 8-K dated May 27, 2011 and filed on June 3, 2011 which describes the extent of the Company’s interest in the Mineral Claims.

The Company has not yet engaged in any exploration or development activities with respect to the property on which such Mineral Claims are located (the “Property”). The Company intends to make the CDN $1,548,346 (approximately US $1,574,109) in expenditures necessary for the exercise of the option it holds on 60% of the Property, including expenditures which would be dedicated to exploration and development activities. Assuming it does so, there can be no assurance as to the outcome of any such exploration and development activities. As disclosed in the May 27, 2011 Form 8-K, North American Iron Ore, Inc., the assignor under the May 27, 2011 Assignment and Sale Agreement (the “Agreement”), made CDN $451,654 (approximately US $458,858) in Property expenditures prior to entering into the Agreement.

At least one of the newsletters has indicated that the Property contains proven reserves. This is not the case. Proven reserves are reserves claimed to have a reasonable certainty of being recoverable under existing economic and political conditions, with existing technology. The mineral resources associated with the Property are best described as prospective resources which are those quantities of mineral resources estimated, as of a given date, to be potentially recoverable from undiscovered accumulations by application of future development projects.

At least one of the newsletters has also indicated that the Company is a prime takeover candidate and has taken to the spreading of a specific takeover rumor. The Company is not aware of any proposed takeover of it and has not engaged in discussions with any persons in this regard.



AAST's last 10Q showed $25 cash an no revenues:

http://www.sec.gov/Archives/edgar/data/1404212/000114420411031785/v223727_10q.htm

On March 24, 2011, Jes Black loaned the Company $25 to open up a new checking account. This loan is non-interest bearing and due on demand.


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Who is responsible for using a fake buyout offer to promote AAST?

The main newsletter created by "John Meyers" touting the fake buyout offer can be found here:

http://aasteelinfo.com/index.html

This newsletter has circulated amongst many paid promoters.

John Myers is receiving a fee of $6,500 in USD, from Emerald Capital SA

Domain Name: AASTEELINFO.COM
Created on: 28-Apr-11
Registered by: Private Proxy

Emerald Capital SA paid two hundred fifty thousand dollars to marketing vendors to pay for all the costs of creating and distributing this report online.


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The promoter responsible for making up the fake revenue projection of 1.1 billion dollars is WFWS Consulting Inc.

WFWS Consulting Inc. ran a paid promo using this false information on two of their websites:

Whispers From Wall Street:

http://whisperfromwallstreet.com/whisperfromwallstreet-aast-alert/

OTC Stock Exchange:

http://otcstockexchange.com/otcstockexchange-aast-alert/

WFWS Consulting Inc. has been paid $25,000 cash by Winning Media for the purpose of increasing public awareness of AAST.


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Who is responsible for funding most of these paid promotions?

Winning Media paid for most of the paid promotions.

Winning Media has been involved with paying for lots of shady stock promotions. They were very involved in promoting HHWW and ALZM. They have also been very active in paying IAB Media for stock promotions in the past.

I'm sure somebody is funding Winning Media and then Winning Media is in turn paying for the promotions. Time for the SEC to start shaking information from companies like Winning Media.

Perhaps Emerald Capital SA who paid two hundred fifty thousand dollars to marketing vendors to pay for all the costs of creating and distributing this report online.

Could this be the same Winning Media?

http://www.winningmedia.com.au/

Phil Winning
Director, Winning Media.
Ph. 617 3216 0220
[e-mail]

http://au.linkedin.com/pub/philip-winning/7/284/a93


That phone number is shared with

Cellartags
po box 112, Ashgrove, QLD 4060
Brisbane City North
f: [phone]

http://www.cellartags.com.au


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Other stocks promotion companies involved in pumping AAST last week included:

IPR Agency LLC through two websites:

Top Gun Stock Picks:

AAST thirty thousand dollars to conduct two days of invstor relations marketing for AAST by a third party, Winning Media.

The Stock Pyscho:

http://pennystockalerts.com/aast-special-situation-hot-stock-pick-for-early-birds/

We expect to be compensated thirty thousand dollars to conduct two days of invstor relations marketing for AAST by the same third party, Winning Media.

IPR Agency LLC also got paid by Winning Media to pump ALZM


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Best Penny Stock Broker (using the John Meyer Newsletter)

http://www.bestpennystockbroker.com/read_email.php?email_id=4345

Pick Penny Stocks (using the John Meyer Newsletter) did a spam mailer promo from Michael Stone


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David Cohen of Research Driven Investors

twenty two thousand five hundred cash by a third party Abacus investor relations, LLC to profile AAST for one day investor relations


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PennyAuthority.com

$50,000 from Winning Media


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Elite Penny Stock

$50,000 from Winning Media


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ChartPoppers Newsletter

$9,000 from unknown


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Newsi.es Newsletter Team

$9,000 from Winning Media


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Most of these pumps have already expired and with the 8K filing by the company on Friday condemning the promotions and calling the information in the promotions false a big dump could be on the way.

The big question is where does the SEC draw the line? Pump and dumps using paid promotions are one thing, but when these kinds of blatant lies are put in print to pump a stock somebody needs to end up behind bars. An example needs to be made.


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Side note: Jes Black, the CEO of AAST has gotten into trouble in the past for business misconduct:

Here is Jes Black's bio from the AAST filings:

Jes Black has years of experience as a director of numerous early-stage companies since 2006, where he helped raise over $15 million in new project finance, and was recently published by Aspatore Books for his contribution to “Venture Capital Exit Strategies.” From 2001 to 2004, Mr. Black developed a strong education in finance and securities while working as a Senior Currency Strategist for MG Financial Group, where he analyzed global currency markets for London operations in New York and was quoted extensively by the Wall Street Journal, Barrons, Financial Times and Reuters. From 2004 to 2007, Mr. Black gained significant management experience serving as the Managing Director of an alternative asset management company, BF Capital, where he managed foreign exchange (currency) positions for individual and corporate accounts. In 2008, after closing the alternative asset management company, Mr. Black’s exit audit was referred to the Business Conduct Committee of the National Futures Association (NFA) for certain omissions relating to compliance standards enforced by the NFA, a self-regulatory body. Mr. Black did not intend to reestablish the company and settled with the NFA by agreeing to not apply for reinstatement for a period of 30 months. Mr. Black was appointed as the Company’s sole officer and director due to his extensive experience as a manager and former director as well as in-depth knowledge of business and finance.

Here is the actual litigation filing related to this matter. Black was charged with 10 counts of business misconduct:

http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=1329

The matter was settled on February 13, 2008 with Jes Black agreeing to withdraw from NFA membership and associate membership, respectively, for a period of thirty months.

http://www.nfa.futures.org/basicnet/CaseDocument.aspx?seqnum=1503