Replies to post #19461 on China MediaExpress Holdings, Inc. (fka CCME)

[bogey999]

Just another Blogger, with no understanding of the way the market works, and attempting to blackmail the company into revealing privileged information.

[SaltyDawg]

Uh...this is a BLOG and differs immensely from an article.

A freind of a freind of a friend, YADA, YADA, YADA.
Some people.
BTW why didn't you mention it WAS YOUR Blog?

Clown!

[T-R1]

Short is expecting CCME to prove something to him personally?
I say he made up his "friend" and the rest is obvious.

[struftepete1]

Before I go to sleep here in Taiwan, I remember that in one of the video's posted by WCTBILLS we were able to see the L'Oreal ad!
May be somebody can dig it up?

[bUrRpPPP!]

Why the lies? Why do you call YOUR blog an article?

[RyanW439]

Another day, another assclown.. You could have at least tried to hide your identity on either I Hub or Seeking Alpha since you tried to put it on here as if it were some random article you came across..

[Traderfan]

Reader, do you believe this is a misunderstanding on either side or do you believe that Ping Luo would come out and state these things knowing that is a lie? That sounds hardly possible in my view. Pleae note that I'm not at all saying that you are making up this story but there has to be some explanation for this don't you think?

[bUrRpPPP!]

Nobody noticed your worthless swill from 5:30 am so you had to come here and pump your lies....no shame!

[chensiona]

Not a really good idea to be short here friend. Remember CCME use's advertising agencies and just because your 'friend' at L'Oreal doesn't have access to client information doesn't mean the company denied placing ads.

I suppose you had to try something though.

Disclosure: I hold a short position in CCME. I have other reasons to be doubtful about the company besides this latest discovery, on the basis of both widely published report and Chinese materials that I found which have not yet been discussed in English language forums. I have not written yet about those other discoveries because they are more in a gray area. They may cast doubt but would not necessarily prove things 100% one way or another. But this latest discovery is much more of a black-or-white issue. I am very confident about my source and felt this was important enough to be brought to the public's attention.

[Motor City Trader]

I remember the L'Oreal ads on WCTBills videos. So shorts are desperate again?

Yet another, faceless, nameless blogger touting privileged secret inside sources:

"My friend was checking for me as a favor. I can't release her contact info without a good reason."

And allegations of major fraud doesn't meet his/her criteria of "a good reason?"

[Wilde]

reader10q's friends leaked biz partner's information to an outsider? That seems to violate some kind of proper biz code. If Jacky Lam leaked this information to you, he violated proper biz code, too, or may even violate SEC regulations. Well, as you live in China, why don't you just take an inter-city bus and check it out personally, as WCT Bills has done. If you want to make money, don't rely on blogging articals only.

[JB3729]

I have a friend that has never heard of China. Jacky hasn't told me that there is a China. So, China doesn't exist.

JB

[joenatural]

Dude, you're beyond the status of "lemming." My goodness, can we sound just a little more desperate so we can cover our short positions without getting killed ? I can tell you right now that if you called Apple, they would tell you the same thing as far as not having ever heard of CCME. Now write these next two words down ...... Advertising Agency. Geez, some of you guys have been beat senseless with a stupid stick.

[gunnar]

reader10q - waiting on that retraction, here is video evidence of L'Oreal on a CCME monitor:

http://ccme-info.xanga.com/742157355/february-25th-2011--loreal-on-ccme/

[wctbills]

I have the L'Oreal ad. See the video on my blog which was posted over a week ago.

I'm surprised you didn't watch it...

If you're in Shanghai, go ride the buses and video it. See what else you can or cannot find.

I agree with Jacky 100% on this matter. CCME's partners and clients should not be revealed to the whole world. It's good business etiquette and good business ethics.

[JB3729]

Oh well, at least your blog gave the longs something to laugh about, right?

Now, please reveal the gray areas you alluded to. Then we can all laugh out loud.

Thanks,
JB

[Aggie9518]

Another Moron Short caught telling lies....WHERE IS THE RETRACTION BUD!!!!!!!!!

[SuperDrive]

Going short a stock, writing and publishing a (s)"hit piece" and seeing the stock still green must make you wanna throw up...

If I can do anything, just let me now... life sucks some times....

[martych]

Since you specifically posted your blog here, I'll post my reply here as well:

I find it quite interesting that you claim to be a securities attorney, you mistakenly characterize the interaction with Ping Luo as a violation of Reg FD and you cite Wikipedia when emailing a public company CFO.

The SEC in discussing this rule was quite concerned over individuals in situations like this using the rule to reduce information flows rather than increase the widespread dissemination of same. A section that discusses this follows:

Final Rule:
Selective Disclosure and Insider Trading

SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 240, 243, and 249
Release Nos. 33-7881, 34-43154, IC-24599, File No. S7-31-99
RIN 3235-AH82
Selective Disclosure and Insider Trading

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

SUMMARY: The Securities and Exchange Commission is adopting new rules to address three issues: the selective disclosure by issuers of material nonpublic information; when insider trading liability arises in connection with a trader's "use" or "knowing possession" of material nonpublic information; and when the breach of a family or other non-business relationship may give rise to liability under the misappropriation theory of insider trading. The rules are designed to promote the full and fair disclosure of information by issuers, and to clarify and enhance existing prohibitions against insider trading.

EFFECTIVE DATE: The new rules and amendments will take effect October 23, 2000.

FOR FURTHER INFORMATION CONTACT: Richard A. Levine, Sharon Zamore, or Jacob Lesser, Office of the General Counsel at [phone]; Amy Starr, Office of Chief Counsel, Division of Corporation Finance at [phone].

SUPPLEMENTARY INFORMATION: The Securities and Exchange Commission today is adopting new rules: Regulation FD,1 Rule 10b5-1,2 and Rule 10b5-2.3 Additionally, the Commission is adopting amendments to Form 8-K.4

I. Executive Summary

We are adopting new rules and amendments to address the selective disclosure of material nonpublic information by issuers and to clarify two issues under the law of insider trading. In response to the comments we received on the proposal, we have made several modifications, as discussed below, in the final rules.

Regulation FD (Fair Disclosure) is a new issuer disclosure rule that addresses selective disclosure. The regulation provides that when an issuer, or person acting on its behalf, discloses material nonpublic information to certain enumerated persons (in general, securities market professionals and holders of the issuer's securities who may well trade on the basis of the information), it must make public disclosure of that information. The timing of the required public disclosure depends on whether the selective disclosure was intentional or non-intentional; for an intentional selective disclosure, the issuer must make public disclosure simultaneously; for a non-intentional disclosure, the issuer must make public disclosure promptly. Under the regulation, the required public disclosure may be made by filing or furnishing a Form 8-K, or by another method or combination of methods that is reasonably designed to effect broad, non-exclusionary distribution of the information to the public.

Rule 10b5-1 addresses the issue of when insider trading liability arises in connection with a trader's "use" or "knowing possession" of material nonpublic information. This rule provides that a person trades "on the basis of" material nonpublic information when the person purchases or sells securities while aware of the information. However, the rule also sets forth several affirmative defenses, which we have modified in response to comments, to permit persons to trade in certain circumstances where it is clear that the information was not a factor in the decision to trade.

Rule 10b5-2 addresses the issue of when a breach of a family or other non-business relationship may give rise to liability under the misappropriation theory of insider trading. The rule sets forth three non-exclusive bases for determining that a duty of trust or confidence was owed by a person receiving information, and will provide greater certainty and clarity on this unsettled issue.

II. Selective Disclosure: Regulation FD

A. Background

As discussed in the Proposing Release,5 we have become increasingly concerned about the selective disclosure of material information by issuers. As reflected in recent publicized reports, many issuers are disclosing important nonpublic information, such as advance warnings of earnings results, to securities analysts or selected institutional investors or both, before making full disclosure of the same information to the general public. Where this has happened, those who were privy to the information beforehand were able to make a profit or avoid a loss at the expense of those kept in the dark.

We believe that the practice of selective disclosure leads to a loss of investor confidence in the integrity of our capital markets. Investors who see a security's price change dramatically and only later are given access to the information responsible for that move rightly question whether they are on a level playing field with market insiders.

Issuer selective disclosure bears a close resemblance in this regard to ordinary "tipping" and insider trading. In both cases, a privileged few gain an informational edge -- and the ability to use that edge to profit -- from their superior access to corporate insiders, rather than from their skill, acumen, or diligence. Likewise, selective disclosure has an adverse impact on market integrity that is similar to the adverse impact from illegal insider trading: investors lose confidence in the fairness of the markets when they know that other participants may exploit "unerodable informational advantages" derived not from hard work or insights, but from their access to corporate insiders.6 The economic effects of the two practices are essentially the same. Yet, as a result of judicial interpretations, tipping and insider trading can be severely punished under the antifraud provisions of the federal securities laws, whereas the status of issuer selective disclosure has been considerably less clear.7

Regulation FD is also designed to address another threat to the integrity of our markets: the potential for corporate management to treat material information as a commodity to be used to gain or maintain favor with particular analysts or investors. As noted in the Proposing Release, in the absence of a prohibition on selective disclosure, analysts may feel pressured to report favorably about a company or otherwise slant their analysis in order to have continued access to selectively disclosed information. We are concerned, in this regard, with reports that analysts who publish negative views of an issuer are sometimes excluded by that issuer from calls and meetings to which other analysts are invited.8

Finally, as we also observed in the Proposing Release, technological developments have made it much easier for issuers to disseminate information broadly. Whereas issuers once may have had to rely on analysts to serve as information intermediaries, issuers now can use a variety of methods to communicate directly with the market. In addition to press releases, these methods include, among others, Internet webcasting and teleconferencing. Accordingly, technological limitations no longer provide an excuse for abiding the threats to market integrity that selective disclosure represents.

To address the problem of selective disclosure, we proposed Regulation FD. It targets the practice by establishing new requirements for full and fair disclosure by public companies.

1. Breadth of Comment on the Proposal

The Proposing Release prompted an outpouring of public comment -- nearly 6,000 comment letters.9 The vast majority of these commenters consisted of individual investors, who urged -- almost uniformly -- that we adopt Regulation FD. Individual investors expressed frustration with the practice of selective disclosure, believing that it places them at a severe disadvantage in the market. Several cited personal experiences in which they believed they had been disadvantaged by the practice.10 Many felt that selective disclosure was indistinguishable from insider trading in its effect on the market and investors, and expressed surprise that existing law did not already prohibit this practice.

Other comments suggested that today's self-directed, online investors do not expect to rely exclusively on research and analysis performed by professionals, as was more common in the past. With advances in information technology, most notably the Internet, information can be communicated to shareholders directly and in real time, without the intervention of an intermediary. This online revolution has created a greater demand, expectation, and need for direct delivery of market information. As many individual commenters noted, under this paradigm, analysts still provide value for investors by using their education, judgment, and expertise to analyze information. On the other hand, investors are rightly concerned with the use of information gatekeepers who merely repeat information that has been selectively disclosed to them.

Noting that analysts predominantly issue "buy" recommendations on covered issuers, investors also made the point that current selective disclosure practices may create conflicts of interest; analysts have an incentive not to make negative statements about an issuer if they fear losing their access to selectively disclosed information. Thus, these commenters suggested that a rule against selective disclosure could lead to more objective and accurate analysis and recommendations from securities analysts.

We also received numerous comments from securities industry participants, issuers, lawyers, media representatives, and professional and trade associations. Almost all of these commenters agreed that selective disclosure of material nonpublic information was inappropriate and supported our goals of promoting broader and fairer disclosure by issuers. Some of these commenters believed the proposal was a generally appropriate way to address the problem of selective disclosure. Many others, however, expressed concerns about the approach of Regulation FD and suggested alternate methods for achieving our goals or recommended various changes to the proposal.

2. Need for Regulation

One fundamental issue raised by these commenters was whether Regulation FD is necessary. Some commenters stated that there is limited anecdotal evidence of selective disclosure. Others suggested that it appears that issuer disclosure practices are generally improving, so that we should refrain from rulemaking at this time, and instead permit practices to evolve and encourage voluntary adherence to "best practices" of disclosure. We do not agree with these views.

It is, of course, difficult to quantify precisely the amount of selective disclosure -- just as it is difficult to quantify precisely the amount of ordinary insider trading. Incidents of selective disclosure, like insider trading, by definition are not conducted openly and in public view. Nevertheless, we have noted numerous media reports in the past two years alleging selective, exclusionary disclosure practices.11 More generally, surveys of practices of issuer personnel indicate significant acknowledgement of the use of selective disclosure of material information.12 Based on these public reports, as well as our staff's experience, it is clear to us that the problem of selective disclosure is not limited, as some commenters have suggested, to just a few isolated incidents.

Some commenters cited a February 2000 NIRI survey suggesting an improvement in issuer disclosure practices, in that most issuers responding to the survey now are opening certain of their conference calls to individual investors.13 To the extent this demonstrates voluntary improvement in response to our efforts to focus attention on the problem,14 we believe this is a positive development. However, these voluntary steps, while laudable, have been far from fully effective. We note, for example, that all of the public reports of selective disclosure cited above occurred after the Commission had begun to focus public attention on issuer selective disclosure. Some occurred even after we proposed Regulation FD. This suggests that the problematic practices targeted by Regulation FD are continuing to occur. Finally, the overwhelming support from investors for Regulation FD demonstrates a strong perception among the investing public that selective disclosure is a significant problem, and shows a corresponding need to prohibit this practice in order to bolster investor confidence in the fairness of the disclosure process.

Some commenters contended that rulemaking on this topic was an inappropriately broad response to the issue.15 They suggested instead that we use existing tools (namely, the law of insider trading) to bring individual enforcement actions in those cases that appear to involve significant selective disclosures. While we have considered this approach -- and of course we remain free to bring such cases where a selective disclosure does violate insider trading laws -- we do not agree that this is the appropriate response to the legal uncertainties posed by current insider trading law. In other contexts, we have been criticized for attempting to "make new law" in an uncertain area by means of enforcement action and urged instead to seek to change the law through notice-and-comment rulemaking. We believe that this rulemaking is the more careful and considered response to the problem presented by selective disclosure.16

3. Effect of Regulation FD on Issuer Communications

One frequently expressed concern was that Regulation FD would not lead to broader dissemination of information, but would in fact have a "chilling effect" on the disclosure of information by issuers.17 In the view of these commenters, issuers would find it so difficult to determine when a disclosure of information would be "material" (and therefore subject to the regulation) that, rather than face potential liability and other consequences of violating Regulation FD, they would cease informal communications with the outside world altogether.18 Some of these commenters therefore recommended that the Commission not adopt any mandatory rule prohibiting selective disclosure, like Regulation FD, but instead pursue voluntary means of addressing the problem, such as interpretive guidance, or the promotion of a "blue ribbon" panel to develop best practices for issuer disclosure. Other commenters recommended various ways that Regulation FD could be made narrower or more well-defined, in order to ameliorate some of the concerns about chilling. Other commenters, however, took issue with the supposition that issuer disclosures would be chilled. As some commenters stated, the marketplace simply would not allow issuers to cease communications with analysts and security holders.19

We have considered these views carefully. As discussed in the Proposing Release, we are mindful of the concerns about chilling issuer disclosure; we agree that the market is best served by more, not less, disclosure of information by issuers. Because any potential "chill" is most likely to arise -- if at all -- from the fear of legal liability, we included in proposed Regulation FD significant safeguards against inappropriate liability. Most notably, we stated that the regulation would not provide a basis for private liability, and provided that in Commission enforcement actions under Regulation FD we would need to prove knowing or reckless conduct.

Later on they went on to state:
Fourth, we have made clear that where the regulation speaks of "knowing or reckless" conduct, liability will arise only when an issuer's personnel knows or is reckless in not knowing that the information selectively disclosed is both material and nonpublic. This will provide additional assurance that issuers will not be second-guessed on close materiality judgments. Neither will we, nor could we, bring enforcement actions under Regulation FD for mistaken materiality determinations that were not reckless.

Any informed individual would look at this situation and agree that the contact information was neither material nor nonpublic. This relationship is consistent with the company's earlier statements, therefore not "nonpublic". Also any suggestion that contact information for an individual working for a customer is "material" to the company's financial statements is ludicrous. It's not even clear that the revenue from this customer is significant enough to reach the level of materiality, not that it would matter in this case.

The suggestion that it does in your letter speaks volumes about your competence as a securities attorney.

http://www.sec.gov/rules/final/33-7881.htm
or if it's easier for you:
http://en.wikipedia.org/wiki/Regulation_Fair_Disclosure

[SaltyDawg]

Like just posted on your blog, really hope your second blog piece, whatever the subject, is researched a whole lot better than this one was.
Being shot full of holes and proven to be a liar (Publically I will add) in under 20 minutes has to be some sort or record in the blogosphere.
This is even though your blog, mean article, was posted at 525 am today, it was not viewed APPARENTLY enough, until AFTER you came here and posted that "this article disproving L'Oreal" was in the blogosphere.

BTW, bet cha won't do that again!

But as stated on your blog publically, its is still cheaper to be a rather crappy blogger than a shorter of CCME.
Even in your case, although me thinks you're pretty much screwed in both these instances today!

[jwangatusa]

Article about L'Oreal denying placing ads with CCME or on inter-city and airport buses, contrary to the Feb. 17 Global Hunter report.

Reader, you should try to do more DD on it, and plan to do a great all-in short after the earning is out than post this blog than. At this moment, after 3 short attack, the price is really in the middle, actually in the bottom of it. It is as if at least 1/2 of the ads company runs are just free ad anyway.

The 10k will give you about another 1 month to do more DD and liquid all the other money to prepare short on this stock.

Chance like this does not happen too often. You know long will get crazy after the 10k and will most likely over-price the value of the stock, they may accidently push it pass $70. Than even if they do have all the earning, the price will drop anyway.

If as you suspect, than the company will have difficulty to give out divident or substain it.

Why try to do more push at this moment? With the current price, you will need to prove all their ad are free in order to make a decent return. And after all the previously 3 short attacks get their point rebutted point by point?

The GH already say company deal mostly with local agent than 4A agency, you should be able to find out some and ask around.

If you accidently hold the bag for MW or Citron, that is too bad.

[Texbanker]

Amateur hour. How about this scenario. I'm a short on CCME, went so right about $12 as soon as I could after the Citron hit piece. Im underwater now and nothing seems to want to make this thing go down. Matter of fact Im staring down the gun of a possibly blowout 10K in a few weeks. I know what. I'll take a stab at a hit piece and post it on SA. If MW and AL can do it, why can't I. I'm a genius.

Close?

[forzagrifo]

This line by Business Economics Analyst is really really hilarious. I can't stop laughing at this:

"In fact, if you can believe this, CCME actually paid the bus companies money for providing the bus companies the service of installing the TVs and disk drives. I don't know about you, but if I am going to buy a bunch of tv screens and hard disks for a bus company and install them on the bus, i am going to ask to be paid. I am not going to pay them. That was really CCME's best chance by far to make any money. I don't think hardly anyone is going to pay them to play dvds or tapes with their ads on them. Nobody will watch. They will bring their own dvds and tapes and play them. They will turn off the tv or turn down the volume. And so on and so on."


It's like arguing with a guy who adamantly believes the earth is flat and the sun revolves around the earth.