Colourful South African penny stock boss Stephen Lumb is making waves in the risky world of tiny US public companies, or Pink Sheets. Lumb, or someone purporting to be him, was suspended from an online investing forum after his jousting with sceptical investors became a little too enthusiastic.
One cannot blame US investors for being sceptical of companies associated with Lumb: the man has a chequered history.
Lumb rose to notoriety in 2001 when he was CE of since-failed JSE-listed stock Igaming. He was wrapped on the knuckles after the company failed to comply with listing requirements.
Lumb went on to the UK where he was banned as a company director until 2010. His company Hanover Capital Group was booted off the UK's junior Alternative Investment Market after failing to comply with exchange rules and company law. Hanover was ostensibly a mining investment company.
Companies associated with Lumb have resurfaced in the US and, again, his recent actions are making him a poor ambassador for South Africa.
The same mining assets that were housed in Hanover group have been transferred from one Lumb-related company to another. This has left a bewildering trail of transactions that has not resulted in much tangible benefit to minority shareholders.
The latest scheme involves a company called Fortress Financial Group, currently quoted at five ten thousandths of a dollar ($0,0005) per share. This might sound cheap, but it is worth bearing in mind that the company has 35bn shares in issue.
There has been some hype created in the company regarding the announcement of an "extraordinary dividend" of $400m, which works out to $0,0124 per share, a tantalising offer to investors. However, the dividend will not be paid in cash, but in stock of a yet to be named company, known as "Goldco".
There has been much scepticism among investors on online investing forum Investors Hub. When he became aware of the pessimists, Lumb, or someone purporting to be him, felt obliged to respond. The exchange got heated and many of the posts were deleted and are no longer available. However, an observer says he "totally lost it in a posting rampage in support of Fortress Financial Group".
Contacted by Moneyweb, Lumb neither confirmed nor denied that he was responsible for the posts. "I have no comment to make; nor do I need to," he replied.
Moneyweb sent this article to Lumb ahead of publication. His response follows:
Your facts are incorrect. No surprise to me. I could care less what you publish, the more inaccurate, the better.
You have absolutely no clue as what I own, nor what I even do; that is obvious.
I am [not] even involved in any day to day dealings of that Company; that is the biggest joke of it all.
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