Replies to post #10713 on DD Support Board and Research Team

[scion]

The Microcap Fraud Working Group is a joint initiative of the SEC’s Division of Enforcement and Office of Compliance Inspections and Examinations.

The Working Group is pursuing a strategic approach to combating microcap fraud by focusing on recidivists and insiders, and on the attorneys, auditors, broker-dealers, transfer agents and other gatekeepers that facilitate a large volume of the fraud in this sector.

The Working Group is comprised of staff from the SEC’s headquarters in Washington D.C., each of its 11 regional offices, and from the Office of Market Intelligence, Division of Corporation Finance, Division of Risk, Strategy, and Financial Innovation, Office of General Counsel, Division of Trading and Markets, and the Division of Investment Management.

http://www.sec.gov/news/press/2011/2011-120.htm

[TheFinalCD]

SEC June 9, 2011 Litigation Release




http://www.sec.gov/litigation/litreleases/2011/lr21995.htm

No. 21995 / Securities and Exchange Commission v. Copper King Mining Corp, Alexander Lindale, LLC., Mark D. Dotson, Wilford R. Blum and Stephen G. Bennett, Civil No. 2:11-cv-00526-SA (USDC Utah, filed June 9, 2011)
The Securities and Exchange Commission announced the filing of a complaint in federal district court against Copper King Mining Corp. (Copper King), Alexander Lindale, LLC (Alexander Lindale), Mark D. Dotson (Dotson), Wilford R. Blum (Blum) and Stephen G. Bennett (Bennett). The complaint alleges that Copper King and its prior President and CEO, Dotson, authored and distributed false and misleading information on Copper King’s Internet website regarding the company’s ability to produce revenue, its ability to extract significant amounts of copper and other metals, its receipt of an irrevocable purchase order for its copper, and its receipt of a firm funding commitment for $100 million to pay for operations and build an ore processing mill.

The complaint further alleges that Dotson knowingly allowed Alexander Lindale and Blum, a Salt Lake City stock promoter, to issue additional false press releases and conduct an unregistered offer and distribution of Copper King stock. Alexander Lindale and Blum were assisted by Bennett, a disbarred Utah attorney, who authored bogus stock tradability opinion letters when he was not properly licensed to issue such opinions. Bennett’s stock tradability opinion letters were used as the legal authority that enabled Copper King’s stock transfer agent to issue and distribute the company’s stock pursuant to Blum’s instructions.

The complaint also alleges that Alexander Lindale and Blum raised an approximate $12,280,419 in proceeds from Blum’s improper sales Copper King stock from 2008 through 2010. Blum provided Copper King with approximately $9,063,567 in cash or services while Alexander Lindale received approximately $3,291,352 from Blum’s sales Copper King stock. The complaint alleges that Alexander Lindale and Blum also operated as unregistered brokers or dealers.

The Commission’s complaint charges Copper King, Dotson and Bennett with violations of Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder. The complaint charges Alexander Lindale and Blum with violations of Section 5(a) and 5(c) of the Securities Act and Section 15(a) of the Exchange Act. The complaint seeks injunctive relief, disgorgement, civil penalties and penny stock bars from defendants.



The Commission acknowledges the assistance of the United States Attorney’s Office for the District of Utah, the Salt Lake Office of the Federal Bureau of Investigation, the Criminal Division of the Internal Revenue Service, Salt Lake Office, and the Bureau of Land Management, Arizona State Office, St. George Field Office, and Salt Lake City, Field Office.

SEC Complaint http://www.sec.gov/litigation/complaints/2011/comp21995.pdf

[Renee]

On June 7th the SEC suspended 17 companies in a " proactive effort to combat microcap stock fraud. " In actuality the SEC was reactive. To be " proactive " the SEC needs to fix the existing system that permits endemic corruption.

Although the suspended companies do not report to the SEC some of the companies were suspended for questions ( meaning suspicions ) about the accuracy and adequacy of Financials that had been released to OTC Pink Sheets, as well as questions / suspicions about news releases and stock promotion for the nefarious purposes of selling stock.

Even though an OTC company's Financials are not required to be SEC or Sarbanes Oxley compliant to yearly audits and quarterly audit reviews an OTC's Financials to OTC Pink Sheets are still subject to SEC scrutiny as noted by the 17 suspensions on June 7th. Permitting a non-filer to not even file to the OTC for several years before the SEC intervenes should be radically changed to enforced, timely filing of Financials to OTC.

With the upcoming SEC / Finra Roundtable discussions on fixing the corrupt practices that flourish on the OTC Pink Sheets it would be rather simple to stipulate that companies must submit timely Financials including complete Share Structures to OTC or be removed from quotations until they do file, either by a new designation on Grey Sheets until the offending company complies or a new tier for non-quotations. By forcing OTC companies to file for each quarter and yearly at least the SEC could scrutinize those Financials to assess the adequacy and accuracy of those Financials.

Secondly, the SEC / Finra Roundtable should immediately implement enforced transparency upon ALL Transfer Agents for an OTC company's entire Share Structure as of any enquiry date. Failure to comply should also relegate a company's stock to a non-quotation tier until the T/A can or will release the entire share structure. Gagged Transfer Agents should be forbidden toute-de-suite.

Corrupt OTC companies would still be corrupt but would be vulnerable to quicker SEC interventions and non-quotation designation for non-transparency until remedied to the required transparency.

The SEC and FINRA have the power. It's time they got " proactive " on ALL OTC Pink Sheet stocks.

[Tavycal]

Any info available on David Patch lawsuit against Heller? Patch hasnt posted since May.