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PDFTradeshow, 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.
In addition, the ASC cited Skymark for the following potential violations of Alberta securities laws: portraying itself as an “independent” research firm when it actually received payments, from unidentified sources, for its TSHO recommendations; using fine print to disclose that compensation when it chose to report the payments at all; failing to state material risks associated with investing in TSHO’s stock; and issuing unfounded predictions that TSHO was “on the verge of a major breakout in the very near future” that could deliver “massive returns” to investors.
As previously noted by TheStreetSweeper, TSHO fetched mere pennies on light volume until Skymark initiated bullish coverage of the stock. After that, however, TSHO soared past $1.50 a share – with millions of shares changing hands – earlier this year. The stock peaked at $1.62 in February, triggering an in-depth story by TheStreetSweeper a few weeks later, and has since plummeted to less than a quarter a share. The stock, still trading here in the U.S., tumbled another 30% to 16 cents a share on Tuesday followings news of the regulatory setback.
Ironically, one of Skymark’s loudest fans issued a ringing endorsement of TSHO that – in hindsight – now looks like a prescient warning instead.
“We have a real company working on a real project with a potential revenue source that makes sense (for) its stock price,” he insisted at the time. “Promotion equals exposure.
“And that’s a good thing,” he added, “just so long as promotion isn’t the only thing supporting a company’s stock price.”
All told, Factiva’s extensive news database shows, Skymark issued hundreds of press releases – many of them on speculative penny stocks – since the firm first registered its website about 14 months ago. (Notably, Factiva records show, Skymark chose to kick off its promotions with “complimentary” research coverage of SpongeTech (OTC: SPNG.PK) – a company since hit with criminal charges for allegedly orchestrating its own pump-and-dump scheme – during the trading frenzy that led up to that stock’s looming halt.) That number excludes any companies, such as TSHO, that Skymark chose to tout through paid mailers instead.
Two in a Row
The ASC crackdown on Skymark comes less than two months after regulators took aim at another stock promoter exposed by TheStreetSweeper.
In late June, the U.S. Securities and Exchange Commission filed charges against PennyStockChaser and its owners for allegedly “selling millions of shares” in the same stocks that it was urging investors to buy. In total, the SEC estimated, the defendants pocketed at least $2.4 million from their so-called stock-scalping scheme.
When TheStreetSweeper originally examined PennyStockChaser back in November, it calculated that the website had already received almost 200 million free trading shares – after just seven months of operation – in the companies it was paid to tout. As it turns out, however, the firm apparently received even more stock than it actually disclosed.
The SEC now claims that PennyStockChaser collected far more shares of Atlantic Wind & Solar (OTC: AWSL.PK) and MSE Enviro-Tech (OTC: MEVT.PK) – the very companies scrutinized in TheStreetSweeper’s past coverage of the website – than it reported to the public. Through related entities, the SEC says, PennyStockChaser sold almost 900,000 shares in the two companies while promoting those same stocks.
AWSL, which peaked near $5 on that paid publicity, now fetches just $1.55 a share. MEVT has fared even worse, plummeting from $1.30 to just 7 cents and sometimes barely trading at all.
PennyStockChaser apparently scored big gains on those two stocks before they crashed back to earth. Of the $2.4 million that the firm allegedly generated from its scalping scheme, SEC figures indicate, roughly $1 million came from sales of AWSL and MEVT alone.
The SEC has since frozen PennyStockChaser’s assets, however, and is seeking full disgorgement of any ill-gotten returns. It plans to secure penny-stock bars against the firm – which liked to promote itself as the most popular website for “hot penny stock tips” – and its owners as well.
* To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
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LIqiudmetal: Keeping Mum about Apple and Far More
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.
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Based on public records and news stories gathered by TheStreetSweeper, supplemented with a 63-page personal background report, the CEO and the ex-con look very much the same. The names and birth dates match. The names of multiple relatives come up as matches, too. Other key identifying traits – including addresses, business ties and even partial social security numbers – correspond as well.
McGuire’s original corporate bio, published in regulatory filings, hints at further parallels. That bio begins when McGuire graduated from community college in 1974 and, following a long and unexplained hole, picks up in detail when he invented his first cleaning technology (armed with a mere associate’s degree) more than 15 years later. The mysterious gap in between corresponds with the very period when the convicted McGuire operated a drug business, news reports show, and twice served time in jail.
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Maybe Ecosphere Technologies (OTC: ESPH.OB) should have added Kevin Costner, the celebrity backer of a competing water-treatment device, to its star-studded team.
Despite ringing endorsements from its own superstars – including a big-name environmentalist and two retired professional athletes – ESPH has so far failed to secure an order from BP (NYSE: BP) for machines that, it says, can effectively address the company’s massive oil spill. Costner’s company, Ocean Therapy Solutions, fielded an order from BP for 32 of its machines almost two full weeks ago. ESPH is still waiting on an order, however, even though the company claims that it offers a superior device.
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After all, GeoXplor has sold mineral claims to several other microcap companies that met with rather ugly fates. Even worse, government records show, GeoXplor founder Clive Ashworth has been previously banned from the securities industry for an alleged scam – which resulted in criminal convictions for two stock promoters – involving yet another resource company.
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Big Bear Mining (OTC: BGBR.OB) has scared off one of its most powerful fans.
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“Based on new information I received in the last 24 hours that I was not presented with when I initially reviewed and recommended the stock, I believe it would be in the best interest of any investors holding shares in this company to sell them,” DiGeorgia stated in an official press release on Tuesday. “It doesn’t matter if you’ve made money or lost money holding BGBR.OB. Everyone who has based their purchase of shares on my recommendation should sell their shares.”
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Tobin Smith, co-star of Fox News Channel’s popular “Bulls & Bears” investment show, recently declared a challenging new “mission in life.” In an upbeat message to his 2,700-plus followers on Twitter last week, Smith promised to helpChina Tel Group (OTC: CHTL.OB) – a penny stock company he has been touting for months – secure the financing it needs in order to survive.
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When that video first surfaced in the fall of 2007, NNLX was still focused on increasing hydrogen production with the help of grape juice while allowing Nutra Pharma (OTC: NPHC.OB) – the company’s former partner – to pursuebreakthroughs in its current business of diagnostic technology. (NPHC’s own volatile rally, staged late last year, has already come to an end.) Back then, NNLX’s stock had almost doubled in a month but still fetched only 15 cents a share. Since moving into the medical arena and converting a barn-like structure into a “clean room” for producing diagnostic testing kits (with the construction project captured in yet another YouTube video), however, NNLX has seen its stock rocket more than 200% in recent weeks to pass $1 a share.
Even Bret Barnhizer – NanoLogix’s own CEO – cannot explain that move.
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A year ago, AWSL supposedly acquired a 47.5% stake in Hybridyne Power Systems – later touting Hybridyne’s “best-in-class” technology and its access to an expansive research team – for $2 million worth of its own stock. After publicizing a string of stock-boosting projects secured by Hybridyne, however, AWSL suddenly announced this month that it had canceled its acquisition of the company due to an “unfortunate default by the vendor” that rendered the transaction “null and void.”
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* Click here to start/join a discussion of this article or send tips for future news stories.
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TSHO can thank SkyMark Research – a promotional firm operated by the apparent son of TSHO’s own founder – for reshaping its public image. For years, TSHO looked like a failed business with limited appeal to even speculative investors willing to place bets on high-risk penny stocks. After SkyMark launched favorable coverage of TSHO late last year, however, the company saw interest in its long-overlooked stock suddenly skyrocket. more...
AENY: Look What's Hiding beneath that Former Shell
* Click here to start/join a discussion of this article or send tips for future news stories.
Americas Energy Company (AENY.OB) exposed some ugly flaws when it emerged from its corporate shell.
Following its heavily hyped reverse merger, AENY now counts CEO Christopher Headrick – a longtime dealmaker with a history of failure – as its sole officer, director and member of its staff. Although AENY has announced plans to expand its senior management team, the company aims to do so by hiring leaders who have benefited handsomely from a series of generous related-party deals. One of those potential executives, already identified as a company vice president in the past, has agreed to plead guilty to felony tax evasion charges and could face up to five years in prison for his crime. more...
IMGG Fails to Paint a Pretty Picture for Investors
* Click here to start/join a discussion of this article or send tips for future news stories.
The picture at Imaging3 (IMGG.OB) just got a whole lot uglier.
IMGG dropped a bombshell on investors this week, when it revealed a major setback in its lengthy battle to secure regulatory approval of its Dominion 3-D scanning device. For months, IMGG has indicated that the company simply needed to resolve one minor issue – involving the Dominion’s label – in order to satisfy reviewers at the U.S. Food and Drug Administration. During a conference call with shareholders on Tuesday, however, IMGG reported that it has now fielded more than a dozen questions from FDA staffers who are evaluating the company’s device. more...
PennyStockChaser Hides Profits, Secrets from Investors
* Click here to start/join a discussion on this article or supply tips for future news stories.
This June, shortly after PennyStockChaser announced that it had become the most popular website for “hot penny stock tips” in the business, the Internet-based tout sheet began dropping a familiar name that once carried considerable weight on Wall Street.
It listed Mike Schonberg – a name formerly attached to such legendary investment firms as Dreyfus and UBS – as its official contact person. Keeping with its secretive nature, however, the website stopped well short of offering any details about Schonberg’s professional background. more...
Convicted Swindler Touts Risky Penny Stocks
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In 2003, just 16 months after his release from jail, Roon quietly established a consulting business that targets obscure microcap companies desperate for publicity. Roon’s firm, known as Oceanic Consulting, aggressively promotes penny stocks on its OTC Reporter website in exchange for shares of the companies being touted. Over the years, Oceanic Consulting has collected – and promptly sold – billions of free shares of penny stocks that have lost money for average investors. more...
