I am "very tired" of this fiasco
It was a fiasco from the very beginning starting with him becoming a plaintiff.
In fact, every penny stock that squid and slurp touch turned into a fiasco. How many insiders of those stocks have been, or will be indicted? Hughes was the first of many.
Not to mention the two of them hyped the bejesus out of Brent Pierce's promotion of GMXX also.
SEC files second case against Pierce for Lexington
2010-06-10 14:16 ET - Street Wire
Also Street Wire (U-*SEC) U.S. Securities and Exchange Commission
Also Street Wire (U-LXRS) Lexington Resources Inc
by Mike Caswell
The U.S. Securities and Exchange Commission has launched another administrative case against Vancouver promoter Gordon Brent Pierce for the Lexington Resources Inc. promotion, seeking to recover an additional $7.7-million in illicit profits from the scheme. (All figures are in U.S. dollars.) The SEC claims that Mr. Pierce sold 1.6 million Lexington shares through offshore accounts as he co-ordinated a spam-fuelled promotion in 2004.
The case marks the second time that the SEC has filed an enforcement action against Mr. Pierce over Lexington. The regulator previously won an order directing him to pay $2.04-million in illicit profits after a judge found that he pumped the stock to $7.50 through spam and newsletters and then sold 300,000 shares.
The current case cites the same promotion, but it seeks money the SEC was not aware of when it filed the initial action. This time the regulator is asking for the proceeds of sales made through accounts held in the names of two companies that Mr. Pierce controlled, Newport Capital Corp. and Jenirob Company Ltd. The companies held accounts at Hypo Bank, which operates in Liechtenstein, a small country that values privacy laws. The SEC had previously been unable to determine the beneficial owner of the shares.
The second Lexington case
The second case came in the form of an order instituting proceedings filed on June 8, 2010. The nine-page document mostly repeats the allegations set forth in the initial case. According to the SEC, the scheme began in October, 2003, when Lexington's predecessor, Intergold Corp., entered the oil and gas business by conducting a reverse merger with a private company called Lexington Oil and Gas LLC. As part of the transaction, Mr. Pierce and an associate received 3.2 million free-trading shares.
The men then embarked on a promotional campaign that pushed the stock from $3 to $7.50, according to the SEC. The regulator says that a publishing company Mr. Pierce controlled sent millions of spam e-mails and newsletters, which coincided with a flurry of optimistic news releases from the company. From February to June, 2004, the stock's daily volume rose from 1,000 shares to a peak of more than one million shares.
At the same time, Mr. Pierce sold 300,000 shares through his personal account and transferred 1.6 million shares to Newport and Jenirob's accounts at Hypo Bank. The bank, which also held stock owned by Mr. Pierce's associate, sold 2.5 million Lexington shares, the SEC claims. Proceeds from the sales totalled $13-million, including $8-million in June, 2004, alone.
The SEC says it took a lengthy period of time to determine the beneficial owner of the 1.6 million shares because Mr. Pierce not only refused to co-operate, he filed appeals in Liechtenstein that delayed the SEC's efforts to uncover the true ownership. It is not clear how the SEC eventually learned that Mr. Pierce was the beneficial owner of the shares. The order simply states that the "Division received additional documents" that allowed it to trace the ownership to Mr. Pierce.
The SEC has not yet set a date for a hearing.
The case against Mr. Pierce is not the first time that regulators have been interested in Hypo Bank. On May 28, 2008, the B.C. Securities Commission issued a cease trade order against it, stating that the bank was a conduit for suspicious trading. The bank had refused to disclose the identities of clients who had sold $165-million worth of stock in several pink sheets and OTC Bulletin Board companies, citing privacy laws in Liechtenstein.
The first Lexington case
The first Lexington case named Mr. Pierce and another Vancouver promoter, Grant Atkins, as respondents. Mr. Atkins settled without a hearing on Nov. 26, 2008, agreeing to an order barring future violations of the U.S. Securities Act. He did not admit to any wrongdoing.
Mr. Pierce did not settle, so the SEC convened a three-day hearing in Seattle on Feb. 2, 2009, before an administrative law judge. Mr. Pierce did not personally attend, instead sending his lawyer. He said he was concerned that he could be arrested if he entered the United States because prosecutors were investigating his role with another company, CellCyte Genetics Corp.
Judge Carol Foelak issued a decision on June 5, 2009, in which she ordered Mr. Pierce to pay $2.04-million. She said that his failure to appear in person was unexpected, and she was entitled to draw an adverse inference from it. He did not provide any assurances that he would not commit any future violations, nor did he recognize the "wrongful nature" of his conduct.
The judge also noted that Mr. Pierce took active steps to avoid reporting himself as a shareholder of Lexington, transferring stock between himself and his companies so that he did not surpass the 10-per-cent reporting threshold. In addition to the $2.04-million financial penalty, she entered an order preventing future violations of the U.S. Securities Act.
BCSC banned Pierce
The SEC cases are not the first regulatory actions Mr. Pierce has faced. On June 8, 1993, the BCSC banned him for 15 years after he improperly received money from Bu-Max Gold Corp., a former Vancouver Stock Exchange listing. In an agreed statement of facts, Mr. Pierce admitted that the company raised $210,000 (Canadian) in May, 1989, for exploration, and then paid $100,000 (Canadian) of the money to a private company he controlled "for purposes which did not benefit Bu-Max." In addition to the 15-year ban (which expired on June 8, 2008), Mr. Pierce agreed to pay a $15,000 (Canadian) fine.
A West Vancouver home
The SEC says it will attempt to serve its most recent action on Mr. Pierce by sending it through the Office of International Affairs, and by sending it directly to Mr. Pierce at his home. It lists his address as 124 31st St. in West Vancouver, a house that is listed for sale for $9.98-million (Canadian). According to real estate advertising, the house is on a waterfront lot overlooking Vancouver's inner harbour. The 7,000-square-foot, five-bedroom home has a full gym, three-car garage, hot tub, outdoor pool, tiled waterslide, movie theater and a separate guest suite. Property records show that Mr. Pierce and his wife Dana purchased it on Aug. 15, 2007, for $10.4-million (Canadian).
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