Replies to post #11603 on Petro America - Kansas Corporation

[Old Hillbilly]

Pryme Thursday, September 09, 2010 9:45:08 PM #6791
Re: None
Question: What makes some apparently reputable business people, or just knowledgeable in general, get involved with Owen/Petro?

cnncit says he is currency/stock trader. There are supposed savvy investors with lots of money put in, I mean just real business people. What are they being shown or told that makes them get involved? Do none of these people do/get any DD?

This thing is so thinly veiled, what is it?

1manband Thursday, September 09, 2010 10:06:58 PM
Re: Pryme post# 6791 Post #6793 of 11628
I have been following stock promotions and stock frauds for almost 25 years, and a hallmark of similar types is that there are actually very few knowledgeable people who get caught is this type of promotion. The few that do are usually guilty of failing to conduct even rudimentary due diligence. They turn over money in haste or are simply greedy. Then, when it becomes clear that they have been snared, they will often involve themselves even deeper, either thinking that they can perhaps find a way to extricate themselves whole, or are simply unwilling to admit their mistake and "lose face". Also, many successful people have little knowledge of capital markets. Someway may be a successful businessperson or professional but that does not make them an expert in the stock market (i.e., medical doctors are often prime targets for stock scammers - plenty of money but with little time and knowledge about the inner workings of the financial markets. Same is true of many small business owners).

Since this stock was primarily flogged through churches and MLM channels, I think it is safe to assume that very few saavy financial "experts" involved.

Pryme Thursday, September 09, 2010 10:31:06 PM
Re: 1manband post# 6793 Post #6795 of 11628
Granted, doctors, actors etc. lots of money, and little time or inclination to understand investing and markets. Also a given, that there are a ton of unsophisticated investors(I'm involved with several). But actual business people? Gotta be something else.

As a businessman myself, my first few questions would be, what does it do, where is it located, how long, annual revenues, growth strategy short and long term, other funding sources, what's the capital stucture look like, who's the management team, and their backgrounds, etc, etc, etc. and this is before I even ask for any paperwork. ANY good business person would want to know this, and this is irrespective of anything to do with the stock market. So if they couldn't answer these relatively simple questions, why even go forward?

These are the people I'm talking about. Why would THEY get involved? It's pretty easy to see the emperor has no clothes.

1manband Friday, September 10, 2010 1:09:50 AM
Re: Pryme post# 6795 Post #6808 of 11628
I wish that all business people were as prepared to perform due diligence as you are, but it is certainly not the case.

Some of it is certainly greed - they are blinded by the assurances of the promoter that the deal is a sure thing and they will make lots of money. Many are swayed by the promoter's sales pitch, and there is usually a prepared answer for each pointed question. For instance, regarding the financial questions, they might say that the audit is being performed now, but once the numbers are in, the price will skyrocket and it will be too late. A surprising number of people will buy that.

Many of these people have very little knowledge of how the markets actually work. For instance, take Petro's July 23rd 2009 news release after the 10-day trading suspension expired. The release is full of untruths, but most people cannot and will not recognize them. As an example, the statement "Naturally we are excited that the SEC found no wrong doing...." and "Hawkins was confirmed correct in his assessment when the SEC lifted the suspension and allowed for trading to resume". The SEC's never "lifted the suspension" or "allowed trading to resume" as the SEC has no choice - they are limited by the courts to 1 10-day suspension, and trading automatically resumes. Additionally, the statement that they found no wrong doing is comical. But, if people don't have experience in penny stocks and SEC suspensions, they are likely to actually believe that. The same is true for many other statements. These people may be great at tops in their fields, but when it comes to investing in penny stocks, they are in entirely unfamiliar territory.

Pryme Tuesday, November 30, 2010 10:17:25 PM Post #9613
It's an audit. In an audit you contact the people verifying the asset, not the people who own it, as they are not impartial parties since they own it, and are likely not qualified anyway.

When my company is being audited, the auditors look at our books and see what we are valuing our accounts receivable at(what we say our customers owe us), they then contact a sample of those customers to verify what our books show.

Inventory works the same, only they physically count our inventory to prove what we say on our books matches what we actually have.

The mine owners could say whatever they want, and have whatever docs they want to prove what they say, but if it's not from an accredited third party source, then it isn't worth the air to say it, or the paper it's printed on.

1manband Wednesday, December 01, 2010 1:25:12 AM
Re: Pryme post# 9613 Post # 9618 of 11656

The mine owners could say whatever they want, and have whatever docs they want to prove what they say, but if it's not from an accredited third party source, then it isn't worth the air to say it, or the paper it's printed on

That is right, but even more so, the studies have to meet industry standards to be considered valid. There are 3 groups which define what a company can claim for mineral resources. The first is the geological professional societies, whose rules govern the professional behavior of geologists. The second is the SEC, which govern the behavior of companies, and the 3rd is the PCAOB, which governs the professional services of accountants. Petro's claims fail on all 3 counts. The claim of assets valued at $280+ billion fail all 3 professional standards and regulations.

There are a lot of third party geologists and assayers out there, but some of them will pretty much write what ever you want them to for a little cash. When you see those reports, it takes someone who knows the regulations about 30 seconds to identify a non-conforming report. The claim of $280 billion in asset value alone tells you these reports are non-conforming. From the affidavit, it looks like Petro paid a 96-year old man (Gus Meade) a few thousand dollars to write up non-conforming reports which Petro could show around to fool the inexperienced. Clearly, it worked - for awhile.

BTW, note the affidavit does not say that Gus Meade is or is not a geologist. I would be interested in finding out exactly what Mr. Meade is and what credentials he has, if any.

Thanks for sharing your expertise with us guys. I have learned a lot from your posts.