1. Longtime Petters Aide Sentenced to Prison in Big Ponzi Case
Deanna Coleman, the former vice president of operations for an investment firm owned by convicted Ponzi schemer Tom Petters, has been sentenced to one year in prison for her role in the $3.7 billion scam, the Associated Press reported. Coleman blew the whistle on Petters and played a key role in his conviction, the A.P. said, but a federal judge ruled that she should still serve jail time for assisting with the long-running scheme. “She was involved in this offense for a substantial period of time,” Judge Richard Kyle stated in the article. “She was not a minor player. She was the face of the operation in the company itself. Her criminal activity was extensive while she was there, and I don’t think that can be underplayed.” Although Coleman could have faced up to five years in prison on fraud-related charges, the A.P. noted, her attorney had hoped that – due to her extraordinary cooperation in the case – she might avoid any jail time at all. Coleman must surrender by Oct. 13, the A.P. said, while Petters himself is already serving a 50-year prison term for orchestrating the massive scam.
2. First United Funding Leader Pleads Guilty to Bank Fraud
Corey N. Johnston, the owner of Minnesota-based First United Funding, pleaded guilty this week to scamming banks through a multimillion-dollar Ponzi scheme, Dow Jones reported. Between 2005 and 2009, Dow Jones said, Johnston secured more than $79 million from 17 lenders by selling them loans that had already been sold to others. Johnston used the proceeds to repay other loans, Dow Jones said, and to cover his own personal expenses. He pleaded guilty on Thursday to bank fraud and tax violations, Dow Jones said, and could face up to 30 years in prison when he is formally sentenced for his crimes.
3. Tainted NJ Investment Adviser to Be Banned from the Industry
Sandra Venetis, the owner of New Jersey-based Systematic Financial Services, has settled fraud charges under a deal that will permanently bar her from future involvement in the investment industry, Dow Jones reported. According to the U.S. Securities and Exchange Commission, Dow Jones said, Venetis spent 13 years – and raised at least $11 million – selling bogus promissory notes to “retired or unsophisticated” investors. Venetis allegedly told her victims that they were funding loans to doctors backed by Medicare reimbursement payments, Dow Jones said, but used their money for personal expenses instead. The SEC is now seeking restitution and penalties from Venetis, Dow Jones said, who will no longer be allowed to participate in any investment-advising or broker-dealer activities. Because “Venetis abused her position of trust to target older investors who were the most vulnerable to her egregious lies and misrepresentations,” the SEC stated in the article, regulators will “ensure that she will never work in the securities industry again.”
4. BCI Leader Nailed for Allegedly Bilking Deaf Investors in Scam
The U.S. Commodity Futures Trading Commission has sanctioned Marvin Cooper and his Honolulu-based company, Billion Coupons Inc. (BCI), for allegedly bilking deaf investors through a multimillion-dollar Ponzi scheme. According to the CFTC, Cooper and his firm raised $4 million by promising investors generous returns on foreign currency and commodity trades and then used at least $1.4 million of that money on personal expenses – including flying lessons and a $1 million home – instead. Cooper, who is deaf himself, must now pay more than $6.2 million in restitution and penalties as a result of his alleged scam.
5. Convicted Securities Attorney Reportedly Hiding His Loot
David Gordon, a securities attorney facing a potential life sentence for his role in a massive pump-and-dump case, has been accused of stashing away his illicit gains in offshore bank accounts, StockWatch reported. According to government prosecutors, StockWatch said, Gordon wired money to his alleged co-conspirators – including a fugitive in the case – who control secret banking accounts in Canada, the Bahamas and the Turks and Caicos Islands. Prosecutors are seeking to derail Gordon’s efforts to regain his freedom while he appeals his recent conviction, StockWatch said, by portraying him as a potential fugitive himself. Gordon could be staring at the equivalent of a life sentence, StockWatch noted, after a jury found him guilty this April of participating in a $41.8 million pump-and-dump scam.
6. Pair Fined for Insider Trading ahead of Pharma Buyout Deal
The U.S. Securities and Exchange Commission has sanctioned Stephen R. Goldfield, a former hedge fund manager, and James W. Self Jr., an executive at a pharmaceutical firm, for allegedly violating insider trading laws ahead of a big pharma deal. According to the SEC, Goldfield received confidential information from Self about AstraZeneca’s (NYSE: AZN) planned acquisition of MedImmune several years ago. Goldfield then purchased MedImmune securities ahead of the deal, the SEC says, reaping almost $14 million in illicit profits when the acquisition was announced. The SEC has ordered Goldfield to pay $16.65 million in disgorgement and penalties, but has waived all but $600,000 of that sum due to his inability to pay. The agency has levied a $50,000 fine against Self, with that sum based on his own financial condition, as well.
7. SEC Cracks Down on Another Suspected Oil and Gas Scam
The U.S. Securities and Exchange Commission has filed charges against two Texas energy companies and their leaders for allegedly bilking investors through a multimillion-dollar scam. Between June 2007 and September 2009, the SEC says, Halek Energy and CBO Energy – led by Jason A. Halek and Christopher Chad Wilbourn respectively – convinced at least 300 investors to sink $22 million into oil-and-gas projects by promising them generous returns based upon unrealistic projections. Although the defendants portrayed their projects as safe ones destined for success, the SEC says, they were actually drilling so-called “wildcat” wells that faced a strong likelihood of failure instead. The SEC is now seeking full disgorgement, plus penalties and interest, from all four defendants in the case.
8. NJ Brokerage Firm Sanctioned for Poor Oversight of Agents
The Investment Center, a New Jersey-based brokerage firm, has been slapped with a $75,000 fine for allegedly failing to supervise a former office manager and sales agent suspected of securities fraud. While running a branch office for the brokerage firm, government authorities say, Dominic Vricella and his co-worker Anthony Faiola secretly doubled as principals of a company known as North Shore Investment Group. Vricella and Faiola allegedly sold investments in North Shore to their unsuspecting clients, who lost $1.6 million before discovering that the pair controlled the firm. State regulators have already fined Vricella and Faiola and banned them from the securities industry. Faiola has pleaded guilty to criminal charges stemming from the case as well.
9. Former Lucent Executive Inks Deal to Settle Old Fraud Case
Nina Aversano, a former corporate officer at Lucent Technologies (NYSE: LU), has agreed to settle civil fraud charges stemming from her alleged involvement in an earnings-manipulation scheme 10 years ago. According to the U.S. Securities and Exchange Commission, Aversano inked side agreements with Lucent distributors that led the company to improperly recognize revenue and overstate income back in the year 2000. Aversano must now pay a $100,000 fine, while refraining from serving as an officer or director of any publicly traded companies for a period of one year, in order to settle the SEC’s charges. She is the last of 11 defendants to ink a settlement in the long-running fraud case.
10. California Ponzi Schemer Hit with 70-Month Prison Term
Tarakeswar Chaudhary, a California man accused of fleecing fellow members of his state’s Indian community, has been sentenced to 70 months in prison for operating a multimillion-dollar Ponzi scheme, The Orange County Register reported. According to government authorities, the newspaper said, Chaudhary courted investors by promising them generous returns through his “special access” to stock offerings for various Fortune 500 companies – including Google (Nasdaq: GOOG), MasterCard (NYSE: MA) and Rio Tinto (NYSE: RTP) – when he enjoyed no such relationships and made no such investments at all. All told, the newspaper said, Chaudhary’s victims lost an estimated $9 million as a result of the financial scam. Formally sentenced on Monday, the newspaper noted, Chaudhary still faces another court hearing – which will determine his restitution payments – in November.
TheStreetSweeper in the News
Melissa Davis, senior editor of The Street Sweeper, poses with celebrity stock picker Jim Cramer after a recent taping of his "Mad Money" television show. Davis worked as an investigative reporter for TheStreet.com, where Cramer serves as chairman, before assuming her current role at The Street Sweeper.
Clicker 'Body-Slammed' after Tout by Pro Wrestler
by Melissa Davis, 8/30/2010 8:21:22 AM
Shawn Ambrosino may have retired from professional wrestling, but as a penny stock promoter – touting the likes of Clicker (OTC: CLKZ.OB), Clenergen (OTC: CRGE.OB) and Enhance Skin Products (OTC: EHSK.OB) – he can still inflict an awful lot of pain.
This month, Ambrosino delivered his latest knockout blow with a powerful recommendation of CLKZ that has since left investors reeling. With CLKZ sitting at $1 a share, Ambrosino urged investors to buy the stock before it surged past $20 as the company – a cash-poor outfit with just a handful of employees – conquered Craigslist to become the new heavyweight leader of the online classified advertising world. CLKZ did march higher on that paid tout, ultimately reaching $1.37 a share on Wednesday, but never approached even Ambrosino’s $5 short-term target before staging a remarkable collapse.
The stock, hammered by a sudden selling spree that began the same day it peaked, now fetches just 53 cents a share. Even at that lower price, however, CLKZ still boasts a market value of $31.2 million that looks rather lofty for a company that – just six weeks ago – cautioned that it lacked the funds necessary to finance its operations for more than 30 days.
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Local.com Rolls the Dice on Another Troubling Deal
by Melissa Davis, 8/10/2010 8:38:54 AM
Local.com (Nasdaq: LOCM) better hope that investors don’t start using Google (Nasdaq: GOOG), its far more powerful rival, to search for information about the last company it acquired.
Last month, Local agreed to pay $5 million -- plus another $5.9 million in potential earn-out bonuses -- for a startup technology company that provides “domain-based local advertising solutions” to small business customers. When announcing that transaction, which looks rather extravagant for a company that’s recorded net losses for the past five years, Local identified its buyout target as Octane360 and the firm’s leader as Adam Rioux. Local only later revealed in an official 8-K filing that it had actually purchased Simply Static, doing business as Octane360, a company co-founded by Rioux and a second man by the name of Mark Roah.
Local may have buried this information for a reason. In 2003, Roah agreed to plead guilty to criminal charges for artificially inflating the revenue at L90 – an Internet firm where he served as senior vice president of business development – and another web-based company called Homestore.com. According to Internet records, Roah received a one-year prison sentence, followed by three years of supervised release, as punishment for those crimes. A man with the same name and age as Roah served time in federal prison, an official database shows, regaining his freedom less than three years ago.
more...Tradeshow, Skymark Kicked off the Stage
by Melissa Davis, 8/30/2010 3:07:16 PM
Canadian regulators aren’t buying the story that Tradeshow Marketing (OTC: TSHO.PK) and Skymark Research – a paid promoter led by the son of TSHO’s founder – tried so hard to sell.
The Alberta Securities Commission has issued a cease-trading order for TSHO’s stock, while banning Skymark from trading or recommending any securities, after uncovering tell-tale signs of a classic pump-and-dump scheme. When explaining its move on Monday, the ASC cited concerns originally raised by TheStreetSweeper in a detailed investigative report almost six months ago. (Click here for the original story, complete with links to backup documents.)
Specifically, the ASC claimed that TSHO had soared on bullish Skymark forecasts secretly generated by relatives connected to the company. The ASC also noted that John Kirk, the sole director of Skymark and the son of TSHO’s founder, “held a significant number of shares” in the company – as did TSHO founder Bruce Kirk himself – at the time of the stock-boosting promotions. It pointed out that Ben Kirk, another son of the founder, worked for Skymark during the publicity campaign as well.
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LIqiudmetal: Keeping Mum about Apple and Far More
by Melissa Davis, 8/24/2010 11:09:15 AM
This year, Liquidmetal Technologies (OTC: LQMT.PK) has kept some telling – and arguably material – secrets from its investors.
Take LQMT’s recent deal with Apple (Nasdaq: AAPL) as an obvious example. In a cryptic 8-K filing on Aug. 9, LQMT suddenly announced a contract with Apple that – on the surface – seemed to warrant a full-blown press release. Specifically, LQMT revealed that it had signed a “master transaction agreement” that would allow Apple to commercialize its technology for future use in its consumer electronics products.
LQMT never disclosed the terms of that licensing contract, however, allowing hopeful speculation to fuel the company’s shares instead. LQMT’s stock, which fetched just 13 cents a share a month ago, rocketed to a multiyear high of $1.76 last week before swiftly crashing on the lack of details associated with that high-profile deal. The stock, down another 10.6% on Wednesday, has now lost most of its Apple-related gains and currently trades for just 76 cents a share.
This spring, in the months leading up to that dramatic deal, LQMT kept quiet about another important development as well. In an even shorter 8-K filing on March 8, LQMT quietly disclosed that longtime Chairman John Kang had left the company without giving any reason for his departure. One week earlier, Kang was convicted at trial on fraud charges – carrying a potential five-year prison sentence – for inflating the financial results of another company he had previously led.
more...Houston American: How Slick Can This Oil Company Be?
by Chris Carey, 6/30/2010 1:38:39 PM
An oilfield services company headed by one of Houston American's directors, John P. Boylan, also went under, in part because he took hundreds of thousands of dollars in loans from the business without the knowledge or consent of his partners.
A third member of Houston American's five-person board, Edwin C. Broun III, was described in court documents last year as suffering from alcohol-related brain damage that could affect his ability to "process information and make sound decisions." The filing, submitted in his defense, characterized him as a recluse who slept all day, drank all night and hadn't opened his mail in two years.
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| Stock Ticker | Article | Original Price | Price Today |
| CLKZ | Aug. 30 | $0.53 | Check |
| LQMT | Aug. 19 | $0.76 | Check |
| LOCM | Aug. 4 | $6.12 | Check |
| ESPH | June 25 | $1.49 | Check |
| APOL | June 15 | $47.60 | Check |
| BPI | June 15 | $19.63 | Check |
| SILA | May 27 | $1.14 | Check |
| FLPC | May 27 | $0.97 | Check |
| AMEL | May 27 | $1.05 | Check |
| STP | May 17 | $10.62 | Check |
| BGBR | April 26 | $1.21 | Check |
| NNLX | April 16 | $1.10 | Check |
| CHTL | April 9 | $0.74 | Check |
| AMLM | March 25 | $1.02 | Check |
| LTUM | March 25 | $1.25 | Check |
| TRGL | March 11 | $9.56 | Check |
| TSHO | Feb 24 | $1.16 | Check |
| CSKI | Feb 19 | $18.30 | Check |
| GXDX | Feb 15 | $31.69 | Check |
| JYHW | Jan 19 | $1.83 | Check |
| AENY | Jan 19 | $4.51 | Check |
| CLRH | Dec 08 | $1.35 | Check |
| NXTH | Dec 08 | $2.28 | Check |
| IMGG | Nov 22 | $1.39 | Check |
| MEVT | Nov 16 | $0.35 | Check |
| AWSL | Nov 16 | $3.29 | Check |
| FRPT | Oct 13 | $5.84 | Check |
Investors must be properly armed in order to protect themselves against the dangers of Wall Street. To help out, The Street Sweeper has mined the Internet for the most powerful weapons available to investors researching publicly traded companies. In our “Loaded Weapons” section, you’ll find direct links to corporate documents filed with the SEC, conference call transcripts published by Seeking Alpha, insider stock sales tracked by Insider-Monitor.com and popular investment tools offered by Yahoo! Finance. You can also identify the promoters behind current penny stock campaigns – and the compensation they are receiving – by connecting to StockPromoters.com. You can link to other websites that are conducting topnotch stock investigations as well. Click here now.
