DD Support Board and Research Team

[janice shell]

In the last two years, it seems to have been fashionable to claim extravagant compensation. Usually they express it in the form of a "total budget", without making it clear exactly how the money is spent, or if, indeed, it is spent. Hard mailers have come back into style, and they're pricey. But sending email blasts isn't, so I'm not sure how they justify those amounts, unless it includes the cost of hiring people to wash trade.

I have no idea how all this gets reconciled with Uncle Sam at the end of the day, either. Of course many promoter work in groups. It seems that for some reason individual "newsletters", which in many cases are run by the same person or people, report the same compensation. Say you have a dozen "affilliates" covering the stock. They may all report $100K. Did each one get $100K? Who knows?

Until about three years ago, most promoters were paid in stock. Then the regulators made it less desirable for brokers to accept penny stock certs for deposit. The consequence was that for the most part they now demand--and get--cash.

HMNC is kind of unusual, in that it actually paid for its own "advertising". Some of the money went for IR services. That can be legitimate. But most of the time pumps are paid for by third parties. They may actually represent the company, or they may be people who got large amounts of stock from the company and want to sell it.

Either way, look out below.