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Convicted Swindler Touts Risky Penny Stocks

by Melissa Davis - 10/12/2009 2:37:08 PM

Rich Roon had already served time in prison for swindling investors when he decided to reenter the securities business as a penny stock promoter.

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.

“I wanted to start a web-based advertising and marketing company,” Roon says of his decision to launch OTC Reporter after serving time for committing mail fraud. “I was always interested in the stock market and believed that I could raise awareness for small and microcap companies.”

OTC Reporter has raised – and then dashed – the hopes of ordinary investors in the process. Wooed by frenzied promotional campaigns, investors have piled into risky penny stocks and only later realized that they own shares in failing companies.

In one of its latest publicity campaigns, OTC Reporter joined a slew of other penny stock promoters – including several that hyped Genova (GVBP.OB) before its recent trading halt – in touting a tiny mining outfit known as Rostock Ventures (ROSV.OB). When issuing a bullish trade alert on Rostock last month, OTC Reporter highlighted the company’s expanding hunt for valuable resources and management’s growing excitement about its prospects. But Rostock’s official regulatory filings told a far less promising story.

For starters, Rostock listed just $1,515 in total assets on its latest balance sheet. Moreover, the company spent no money whatsoever on exploration activities during the first half of this year. It has generated no revenue to date and lacks the resources to generate any without raising further capital and, in all likelihood, diluting current shareholders in the process.

Rostock’s professional staff – composed entirely of two part-time executives with no mining experience – fails to inspire much confidence, either. Collin Sinclair, Rostock’s top officer and sole director, is an electrician who spends just 15 hours a week working on company business from his 200-square-foot home office. Dana Kopecka, Rostock’s vice president, is a medical student in the Czech Republic who dedicates a mere two hours a week to company activities.

Nevertheless, Rostock boasted a market value of $21.5 million at the height of last month’s stock-promotion campaign. The company’s market capitalization, while arguably still generous, has fallen by almost two-thirds since that time.

Meanwhile, Roon’s firm has already cashed in and moved on. Together with another New Jersey corporation, which co-owns OTC Reporter, Oceanic Consulting collected $40,000 in cash and 200,000 free shares of Rostock stock – worth more than $100,000 at its peak – for promoting the bleeding exploration company. Within two weeks of launching its Rostock campaign, Oceanic Consulting had dumped every one of its shares.

“Sometimes OTC Reporter begins selling shares shortly after our receipt of the stock, and other times we have held on to some stock for six months or longer,” Roon explains. “What is important is that we always disclose how much stock and/or compensation we received, the source of the stock and/or compensation and whether we are currently selling our position.

“Full disclosure to our subscribers is essential in order to comply with the rules and regulations governing the securities industry.”

StockPromoters.com, a firm that currently monitors the performance of almost 1,000 stock promoters and touts microcap stocks itself, nevertheless blew the whistle on OTC Reporter earlier this year. After fielding dozens of complaints, many of them coming from companies Roon was hired to promote, StockPromoters officially placed OTC Reporter on its dreaded “Promoters to Avoid” list this summer.

In an interview with The Street Sweeper last month, StockPromoters owner Ryan Mattera criticized OTC Reporter’s performance and portrayed its stock promotions as classic “pump-and-dump” campaigns. Nevertheless, StockPromoters suddenly removed OTC Reporter from its special list just ahead of this article.

“We had a dispute with StockPromoters.com but have since resolved it,” Roon explains. “In fact, we are now featured on StockPromoters.com’s front page, we are no longer on its ‘Promoters to Avoid’ list, and we’ve agreed to work together in the future.”

StockPromoters did not respond to messages from The Street Sweeper seeking information about the recent changes.

Track Record

A few years ago, Factiva’s news database shows, StockPromoters held OTC Reporter in fairly high regard. Starting in the summer of 2006, in fact, StockPromoters began to occasionally include promotions by OTC Reporter on its list of effective stock campaigns. By mid-2007, however, StockPromoters had stopped highlighting OTC Reporter’s promotions – which usually boosted a stock’s trading volume far more than its share price – in its news alerts altogether.

Even the campaigns once heralded by StockPromoters, arguably among OTC Reporter’s best, delivered few if any lasting winners for investors in the end. All 10 of the stocks featured in those highlighted campaigns have long since suffered massive dives in volume. Moreover, most of those stocks now fetch less than a nickel apiece – and some fetch less than a penny – if they even trade at all.

Based on its own financial disclosures, which run for seven full pages despite their fine print, OTC Reporter has so far touted nearly 200 different penny stocks. The firm received – and then sold – loads of free trading shares in more than half of those companies. It pocketed cash, sometimes in addition to free stock, for promoting most of the rest.

While touted by the OTC Reporter, most of those stocks do not actually trade on the OTC Bulletin Board at all. They tend to trade on the Pink Sheets -- where financial statements are optional -- instead. Many of them provide limited, if any, financial information to investors. Some carry dire warnings – and no price quotes – because they fail to meet even the Pink Sheets’ lenient listing standards.

“Investors should never buy stock in companies that don’t have published financial statements,” cautions Hartley Bernstein, a New York-based securities attorney whose StockPatrol website gained widespread attention for exposing CMKM Diamonds – a notorious pump-and-dump scheme – while hunting for penny stock fraud. “And there are tons of those companies out there.”

From the start, OTC Reporter has touted companies that carry plenty of risks for investors. In its first-ever stock alert issued over the newswires, according to Factiva’s database, OTC Reporter hyped the future prospects – and the recent stock performance – of a bleeding Internet telecommunications outfit known as VoIP. At the time of that news release, published in early 2006, VoIP was riding high on grandiose plans to compete with the likes of Vonage for customers seeking Internet-based telephone services.

The penny stock rallied hard for a while, the trade publication FierceVoIP noted, with the shares soaring past $8 before ultimately collapsing and leaving long-term investors empty-handed in the end. By the time the Securities and Exchange Commission belatedly stepped in this year, revoking VoIP’s trading privileges and accusing the company of overstating its already modest revenue, VoIP had long since ceased the majority of its operations. Meanwhile, OTC Reporter had moved on with enthusiastic campaigns for dozens of other – sometimes equally risky – penny stocks.

OTC Reporter did adopt one telling change, however. Back when it originally touted VoIP in that first-ever press release, OTC Reporter openly named Roon as its principal officer and primary contact. Based on a review of Factiva’s comprehensive news database, however, OTC Reporter never once mentioned Roon’s name again.

Years earlier, Roon had made news in other ways. In late 2000, USA Today exposed Roon’s checkered background in a detailed article that appeared on the cover of its “Money” section. At the time, USA Today reported, Roon had just been sentenced to a year in prison for spending nearly $2 million that investors had placed in his money-losing hedge fund. Even back then, the newspaper revealed, Roon was keeping secrets about his past.

“There were issues Roon had avoided mentioning,” USA Today wrote. For example, “He started his investment career at First Jersey Securities – the once notorious and now defunct company that pushed investments in penny stocks.”

Government officials cracked down on First Jersey for hyping worthless penny stocks decades ago and ultimately sent its founder, Robert Brennan, off to jail. According to the website operated by the Federal Bureau of Prisons, Brennan remains behind bars to this day.

Alarm Bells

Meanwhile, eight years after his own release from prison, Roon has rebuilt his securities career.

For a professional stock promoter, however, Roon looks oddly publicity-shy. Neither Oceanic Consulting nor OTC Reporter mentions Roon’s name – let alone his track record – on their respective websites. Investors must search hard, seeking out obscure information such as domain name registrations, in order to make that connection. They must go a step further – and actually pay a fee – to find out that one of Roon’s firms, Oceanic Consulting, lost its corporate status last fall after failing to file its annual report for two years in a row.

Even so, Roon claims that he has nothing to hide.

“If any contact or client asks about my past, I am more than open and honest,” he says. “I explain that, over 10 years ago, I pleaded guilty to two counts of mail fraud and served my sentence. I accepted full responsibility for my actions and have committed to never breaking the law again.”

Still, some of Roon’s clients have clearly felt shortchanged. When StockPromoters first placed OTC Reporter on its “Promoters to Avoid” list, in fact, several of Roon’s clients posted scathing reviews of his performance.

The first of those reviews, dated on June 6 of this year, concluded with this stark warning: “I would urge any public company CEO/CFO/COO, third-party shareholder – or ANYONE – interested in doing business with Rich Roon, Oceanic Consulting, OTCReporter.com or Todd Costello (who’s identified as Roon’s former second-in-command) to thoroughly reconsider.”

Less than a week after StockPromoters published those complaints, Factiva records show, OTC Reporter issued its final stock alert over the newswires. It touted the performance of OneFi Technology (ONFI.PK), its headline shouting that the stock had just posted a gain of more than 1,500% on strong trading volume. The stock, which began the day trading for just over a penny a share, had managed to hit an intraday high approaching a whopping 17 cents. The stock has since tumbled below its original price.

Roon’s firm received 9 million free trading shares for that particular promotion, and it has already sold every one.

Four months later, OTC Reporter continues to celebrate OneFi’s fleeting 1,500% stock gain on its web site. It still touts the temporary spikes of other penny stocks that it has already sold as well.

Meanwhile, ordinary investors – eager to score a quick buck – have paid the price.

“Investors should start with the premise that most penny stocks are, one way or another, just scams,” Bernstein says. “Regulators know this, but they’re underfinanced and undermanned.

“They had enough information 10 years ago to put Bernie Madoff away, and they ignored it,” he adds. “So at the end of the day, investors have to look out for themselves.”
 
Note: The Street Sweeper hired an independent fact checker to verify the accuracy of this story. Whenever possible, it has also included links within the story to supporting documents used for its research. To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.


 

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JAMN Finally Spills the Beans -- And It's an Ugly Mess

* Editor's Note: Readers can access links to additional backup documents for this story by clicking here for TheStreetSweeper's original investigative report on this company.

Late Tuesday afternoon, after missing earlier deadlines, Jammin Java (OTC: JAMN.OB) filed a long-awaited annual report packed with enough eye-opening news to keep investors up all night. That mandatory filing, unaccompanied with a cheerful press release heralding its arrival, served as a painful wake-up call to shareholders already burned by a rapid plunge in the company’s stock price.

To be sure, the 10-K offered investors little reason to sing. For starters, the filing reveals, this once-hot “coffee company” sells no coffee of its own at all. JAMN relies on a supplier based in frigid Canada – far away from the tropical Jamaican home of its co-founder Rohan Marley – to provide the company with an actual product to sell to its customers instead.

Back in April of 2010, JAMN inked a “supply and toll agreement” with Canterbury Coffee of British Columbia that gave it access to some brew. According to that agreement, JAMN relies on Canterbury to fulfill every role – save a minor one – normally satisfied by a firm that classifies itself as a coffee company. Canterbury purchases the coffee beans. It roasts them. And it then packages them in bags supplied by JAMN – the company’s only real product – for sale to the public.

JAMN signed this deal more than a year ago, right before Shane Whittle – a notorious Vancouver stock promoter – officially resigned as CEO of the company. But the company never mentioned that agreement, seemingly material enough to warrant at least a quiet 8-K report, in a single regulatory filing until now.   

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Jammin Java (JAMN): Hot Stock ... Bitter Aftertaste?

It’s time to wake up and smell the coffee! That’s exactly what Jammin Java (OTC: JAMN.OB), a heavily promotedcoffee company, and – for very different reasons – TheStreetSweeper would like investors to do.

Since the beginning of the year, JAMN has miraculously risen from the ashes of the “Grey Market” graveyard to become one of the liveliest – and richest – stocks in the entire microcap arena. JAMN has seen its stock shoot straight toward heaven, soaring from 55 cents to peak above $6 a share on massive daily volume, with its market value nowtopping $355 million despite the company’s limited resources and operating history. (As covered in more detail below, two of the Internet tout sheets pushing JAMN the hardest effectively vanished -- disabled by their Internet servers -- on the day the stock’s trading volume exploded past 20 million shares.) 

JAMN stands out for its powerful connections, the first loudly celebrated by the company and the second – involving a notorious stock promoter – carefully hidden from view.


 

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Powerful Warrior Joins Fight against Fraud

TheStreetSweeper is proud to formally introduce Janice Shell, one of the most experienced – and feared – investigators of penny-stock fraud in the country, as the newest member of its decorated editorial team. Shell most recently worked for StockWatch, where she focused on covering dubious microcap companies with ties to Canada: a notorious haven for shady stock promoters.

Heralded as “the unofficial queen of cybervigilantes” by Fortune magazine more than a decade ago, Shell boasts a long and impressive record of exposing fly-by-night microcap companies – and warning investors away from their stocks – well before their shares ultimately collapse. She has attracted a devoted group of followers, which includes some topnotch financial journalists, along the way.

“It wasn’t called ‘Internet sleuthing’ when Janice and a small band of colleagues at Silicon Investors invented it,” saysRoddy Boyd, a former stock-market reporter for both the New York Post and Fortune who now runs a hard-hittinginvestigative news site of his own. “Yet, starting in the ‘90s, Janice and her cyber-partners did what the SEC, the FBI and frankly the media could not or would not do: They asked questions. They dug into files, found the forgotten postings and buried press releases and, slowly but surely, began to nail one fraud and witless promotion after another.

“In a just society, Janice and her partners would get medals,” Boyd adds. “We don’t live in a just society. But thankfully, Janice has found a roost at TheStreetSweeper to deliver well-reported, crisply written justice upon the sundry sleazebags of the capital markets.”

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LEXG: The Biggest Snow Job of the Year?

With oil prices on the rise worldwide, and nuclear reactors leaking in Japan, alternative energy stocks continue to soar, especially in Pennyland. Green may be good, but many of the “green” companies trading in the microcap arena – particularly highflying Lithium Exploration Group (OTC: LEXG.OB) – could burn investors if they run out of fuel and crash.


They can still be promoted and played, of course, as veterans of the shady penny-stock world well know. And companies promising to search for lithium, which powers the batteries used in new and increasingly popular electric cars, rank among the clear favorites in this risky space.

Today, LEXG stands out as the biggest star by far. The company generates no revenue, corporate filings show, and will likely need years to do so if it manages to survive that long. It had no cash on hand at the end of 2010, either, and it managed to raise a mere $250,000 through a private placement deal earlier this year. But thanks to a $3.3 millionpublicity campaign – possibly record-breaking in price – LEXG has skyrocketed from 12 cents to almost $4 a share in barely a month and now boasts a market value that’s approaching $200 million. 

If history serves as any guide, however, LEXG will fail to hold onto even a fraction of those remarkable gains. A year ago, TheStreetSweeper scrutinized three similar companies in a detailed report entitled “Can the Batteries Last on Overcharged Lithium Stocks?” That question has long since been answered, alas, with all three stocks sinking from impressive highs to increasingly miserable lows.

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HHWW: Another Hyped-Up Stock That's Dressed to Kill?

The corporate headquarters for Horiyoshi Worldwide (OTC: HHWW.OB), located within blocks of several Los Angeles homeless shelters servicing Skid Row, looks rather modest for a high-end fashion company that recently sported a market value approaching $200 million.

Earlier this month, TheStreetSweeper sent some locals to HHWW’s home office after watching the company’s stock rocket from $1 to $3 a share on a blizzard of paid promotions. They found a tiny operation, manned by a single staffer (focused on investor relations), that housed little more than two clothing racks containing about 20 T-shirts apiece.

Based on prices supplied in HHWW’s regulatory filings, those T-shirts represent an estimated $6,000 worth of inventory for the company. While meager, that figure nevertheless eclipses the $912 in total sales reported by HHWWfor the second quarter of this year.

To be fair, HHWW has yet to release third-quarter results that might reflect an uptick in sales following the company’s adoption of an aggressive growth strategy. Still, corporate filings show, HHWW actually saw its quarterly revenue plummet – sinking from $152,175 to less than $1,000 – in the months leading up to that grand plan. 

Even so, stock promoters – paid huge sums to tout HHWW – have painted an incredibly rosy picture of the company. Last month, for example, Eric Dickson of Breakaway Stocks predicted that HHWW could soar more than 4,500% by the end of this year. The stock, currently trading at $1.63, must somehow find a way to reach $45.38 a share over the next few days for that wild forecast to come true

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Regulators Turn up the Heat on Alternate Energy

Two months after TheStreetSweeper began sounding alarms about Alternate Energy (OTC: AEHI.PK), federal regulators have officially filed charges against the company and two of its officers for allegedly fleecing investors through a long-running pump-and-dump scheme.

In a formal complaint this week, issued just days after halting AEHI’s stock, the U.S. Securities and Exchange Commission flatly accused the company and two senior executives – CEO Donald Gillispie and his girlfriend Vice President Jennifer Ransom – of scamming investors while secretly enriching themselves. Since it went public four years ago, the SEC says, AEHI has raised millions of dollars by promising to build a nuclear power plant even though the company has “no realistic possibility” of ever achieving that goal. Meanwhile, the SEC says, AEHI insiders have quietly dumped big chunks of stock while publicly expressing strong confidence in the company.

“The company has made multiple misrepresentations, including claims that its executives had such confidence in AEHI that they had not sold a single share of company stock,” the SEC stated on Thursday. However, “records obtained by the SEC show that Gillispie and Ransom have instead secretly unloaded extensive stock holdings and funneled the money back to Gillispie.”

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HHWW: Another Hyped-Up Stock That's Dressed to Kill?

The corporate headquarters for Horiyoshi Worldwide (OTC: HHWW.OB), located within blocks of several Los Angeles homeless shelters servicing Skid Row, looks rather modest for a high-end fashion company that recently sported a market value approaching $200 million.

Earlier this month, TheStreetSweeper sent some locals to HHWW’s home office after watching the company’s stock rocket from $1 to $3 a share on a blizzard of paid promotions. They found a tiny operation, manned by a single staffer (focused on investor relations), that housed little more than two clothing racks containing about 20 T-shirts apiece.

Based on prices supplied in HHWW’s regulatory filings, those T-shirts represent an estimated $6,000 worth of inventory for the company. While meager, that figure nevertheless eclipses the $912 in total sales reported by HHWWfor the second quarter of this year.

To be fair, HHWW has yet to release third-quarter results that might reflect an uptick in sales following the company’s adoption of an aggressive growth strategy. Still, corporate filings show, HHWW actually saw its quarterly revenue plummet – sinking from $152,175 to less than $1,000 – in the months leading up to that grand plan. 

Even so, stock promoters – paid huge sums to tout HHWW – have painted an incredibly rosy picture of the company. Last month, for example, Eric Dickson of Breakaway Stocks predicted that HHWW could soar more than 4,500% by the end of this year. The stock, currently trading at $1.63, must somehow find a way to reach $45.38 a share over the next few days for that wild forecast to come true.

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Regulators Pull the Plug on Alternate Energy

Four years after Alternate Energy (OTC: AEHI.PK) went public, courting investors with grand plans to build a multibillion-dollar nuclear power plant, the U.S. Securities and Exchange Commission has finally suspended trading in the controversial penny stock.

This week, the SEC halted AEHI due to questions about “the accuracy and adequacy of publicly disseminated information” about the company. When cracking down on AEHI, the SEC cited concerns about several issues – including company finances, executive compensation and insider sales – examined by TheStreetSweeper in its recent coverage of the company. (Click on these three links to access those stories and the backup documents used to prepare them.)

AEHI critics, who have been sounding alarms about the company for years, expressed clear relief at the long-awaited news.

“It was a scam from the beginning,” declared Joe Weatherby, a former planning and zoning commissioner in AEHI’s home base of Idaho. “This has been a long time in coming.

“I didn’t think it was ever going to happen,” he added. “So it was a great Christmas present.” 

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Alternate Energy: Another Radioactive Stock Pick?

Alternate Energy (OTC: AEHI.PK) investors might want to take a closer look at some of the outfits that have embraced the company’s stock.

Just last month, two different firms – both known for risky microcap picks -- rushed to defend AEHI with bullishrecommendations after TheStreetSweeper raised legitimate concerns about the company. The first one, Pinnacle Digest, owns AEHI’s stock and admitted in a disclaimer that it plans to “sell every share” for its own profit without advance notice to its followers. The second one, WallStreetCorner.com, regularly collects cash and/or stock from the companies it endorses and has directed investors into some notorious losers along the way.

Years ago, for example, WallStreetCorner’s Larry Oakley touted a company known as Accident Prevention Plus that served as the vehicle for an illegal pump-and-dump scheme. The so-called “mastermind” behind that scam wound up sentenced to 10 years in prison last month – just three days before Oakley issued his ringing endorsement of AEHI – as punishment for his crimes.

Oakley has embraced other ill-fated stocks, such as eMax Holdings (OTC: EMXC.PK) and Hathaway Corporation, as well. In certain ways, AEHI now resembles both of those doomed companies.

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AEHI: The Story, the Holes and the Secrets They Hide

Alternate Energy (OTC: AEHI.PK) has spent the past four years selling investors an incredible – if incomplete – story.

The basic plotline goes something like this: AEHI will somehow secure the funding and approval necessary to build a multibillion-dollar nuclear power plant in Idaho that’s virtually guaranteed to deliver eye-popping profits for investors. That version of the story contains some gaping holes, however, filled with pesky secrets that threaten to ruin this fairy-tale ending.

Take the first chapter in this ongoing saga, just for starters. Initially, AEHI CEO Donald Gillispie said the company would build its nuclear power plant in Owyhee County – touting a deal inked with “prominent Idaho landowner and businessman” James Hilliard -- and spent the next year portraying that site as a suitable location for such a project. In the spring of 2008, however, AEHI suddenly announced that it had abandoned that site due to troubling fault lines and shifted the project to nearby Elmore County instead.

In a sworn deposition that surfaced last month, however, Gillispie offered far different reasons for that abrupt change of plans.

“There were two things going on,” he states in that document. “First of all, we had not received funding because we lost our silent partner there … The other thing going on was that Hilliard would not – he had been extending the contract whenever it came up, like a six-month contract – and in early ’08, he didn’t extend it.”

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Alternate Energy: Power Stock or Toxic Waste?

Four years ago, Alternate Energy (OTC: AEHI.PKCEO Donald Gillispie arrived in one of the poorest counties in Idaho and began selling company stock to local investors impressed by his grand plans.

Although AEHI had spent just $1,000 on research and development during the previous two years, regulatory filings show, the company boasted all sorts of remarkable inventions. AEHI claimed that it had developed a breakthrough fuel additive that could slash the costs of natural gas-powered electricity, for example, and that it was also creating mini reactors that would “revolutionize nuclear power in an urban setting.” Even better, the company said that it was poised to become “the first company to harness the natural energy delivered in a bolt of lightning” – a goal later portrayed as “hopeless” by a national lightning expert interviewed by The New York Times.

While ambitious, however, those projects ranked as mere side shows for the young public company. If possible, AEHI had even bigger plans. Despite its minimal resources, skeptics say, AEHI promised to build a multibillion-dollar nuclear power plant – the first project of its kind for decades -- in a rural Idaho desert that lacked the vast water supply and available transmission lines normally required to make such projects work.

“They have no money; they have no plans,” a county commissioner told the local Owyhee Avalanche newspaper at the time. “Most (locals) think that it’s … a daydream or a fairy tale.” 

Since then, records show, AEHI has announced funding deals with at least three obscure financial firms – including one whose leader would later be charged with alleged securities fraud – but still lacks the money required for even the equivalent of a down payment on a nuclear power plant. AEHI also keeps changing the planned location for its proposed plant, local news coverage reveals, currently settling on an Idaho county already ruled out by Warren Buffett’s MidAmerican Nuclear Energy because it made no economic sense.

Nevertheless, AEHI has still managed to sell its own investors on the massive project. The company’s volatile stock, which once fetched mere penniescurrently trades for 87 cents a share. With a share count of 320 million, up from about 40 million a few years ago, AEHI now boasts a market value of $280 million.

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RMCP: The Tiny Syringe Maker Stings Investors Again

Less than four years after changing its name in an effort to put its checkered past behind it, Revolutions Medical (OTC:RMCP.OB) is suspected of engaging in the same sort of stock-boosting activities that led regulators to crack down on the company in the first place.

Ever since RMCP filed the paperwork last month to clear the way for massive sales of its stock, the company has been issuing a flurry of press releases containing increasingly upbeat news. RMCP kicked things off with a couple of announcements about its MRI technology in mid-August, which proved effective enough to push the company’s stockfrom 28 cents to 40 cents a share. When RMCP shifted its attention to the company’s new “safety syringes,” however, the stock really started to fly. By Sept. 13 – less than a month after RMCP began churning out its steady stream of good news – the briskly trading stock had soared to an all-time high of $1.74 a share.

Three announcements, issued over a one-week span this month, fueled most of that surge.

The first two celebrated a manufacturing deal, calling for the production of 5 million safety syringes, inked with an obscure firm led by an apparent insider of the company itself. (As noted in more detail below, that firm does not seem to exist.) The third, even more powerful, announcement hinted at a looming syringe order from none other than the federal government.

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Clicker 'Body-Slammed' after Tout by Pro Wrestler

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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Tradeshow, Skymark Kicked off the Stage

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

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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Ecosphere: A Clean Energy Company with a Dirty CEO?

Either Ecosphere Technology (OTC: ESPH.OBCEO Dennis E. McGuire simply shares a lot in common with a twice-convicted drug felon – a coincidence of remarkable proportions – or he is the former jailbird himself.

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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Why Can't Ecosphere Score a Deal with BP?

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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Junior Mining Companies and the 'Temple of Doom'

Ever since AmeriLithium (OTC: AMEL.OB) purchased some mining assets from GeoXplor -- a Vancouver outfit led by the so-called “Indiana Jones” of the lithium trade -- the company has taken investors on a wild and, at times, thrilling ride. If history repeats itself, however, AMEL investors better not count on a happy ending to their journey.

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.

Nevertheless, Ashworth continues to win over junior mining companies and those who promote their risky stocks alike

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Putting Together the Puzzle at Big Bear Mining

If Big Bear Mining (OTC: BGBR.OB) would risk hiring a bankrupt CEO with a checkered past to serve as the “public face” of the company – and essentially give him $30 million worth of stock for the favor – then investors might want to search for even darker secrets that the junior gold miner is still trying to keep.

They could start by examining BGBR’s original address. That address, listed in past BGBR regulatory filings as 1728 Yew St. in Vancouver, shows up in filings for several other penny stock outfits as well. Those companies share at least one glaring trait: They count Shane Whittle, a busy Vancouver stock promoter, among their top executives.

Armed with credible outside leads about Whittle’s connection to BGBR, TheStreetSweeper decided to call him and politely ask about his ties to the company. Whittle’s response came across as nothing short of violent.

He immediately claimed “no involvement” with BGBR and then warned of possible legal action for the “harassing” phone call. Specifically asked if he was making a threat, he replied with this: “Yeah, 100% … Take your phone call and shove it up your ass.” 

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Fearing Risks, Big Bear Promoter Tells Investors to Flee

Big Bear Mining (OTC: BGBR.OB) has scared off one of its most powerful fans.

James DiGeorgia, editor of the Gold and Energy Advisor newsletter, this week suddenly reversed his “strong buy” recommendation on BGBR and started urging his followers to sell the stock instead. His abrupt about-face came just one day after The Street Sweeper raised serious questions about BGBR’s true value and the paid promoters – including DiGeorgia himself – who have been touting the heavily traded stock.

“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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With China Tel, Has Tobin Smith Been 'Outfoxed' Again?

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.

To be sure, CHTL could use some assistance. More than a year ago, CHTL agreed to pay $195 million for a 49% stake in Chinacomm – an Asian broadband wireless company that ranks as its primary asset – but it still lacks the money required to actually pay for that deal. Although CHTL has inked plenty of financing agreements in the meantime, most recently with two mysterious firms known as Excel Era and the Isaac Organization, the company never seems to collect promised cash from those backers in the end.

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Does the NanoLogix Rally Make Any Sense?

The NanoLogix (OTC: NNLX.PK) stock chart featured on a YouTube video – set to the catchy “Money Song” tune from Monty Python – looks rather outdated following this spring’s incredible, if inexplicable, spike in the company’s share price.

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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Has Atlantic Wind and Solar Been Fueled by Hot Air?

Atlantic Wind and Solar (OTC: AWSL.PK) is suspected of blowing a lot of hot air in an effort to inflate the company’s stock price.

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.”  

Notably, Hybridyne itself now claims that the acquisition never took place at all.

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Can the Batteries Last on Overcharged Lithium Stocks?

Lithium Corporation (OTC: LTUM.OB) sure looks a whole lot prettier in paid tout sheets than it does in its regulatory filings.

In recent months, stock promoters have treated LTUM – a company with no revenue and just $855 in the bank – like a surefire winner that’s poised to supply giant automakers with the lithium they will need to power tomorrow’s battery-operated cars. The promoters offer similar reasons for their incredible confidence, led by soaring demand for lithium and LTUM’s ready access to lithium mines, while carefully excluding their compensation for touting the stock from its list of key attractions.

To some, however, even LTUM’s most “legitimate” selling points look suspect. They point to a recent article in The New York Times, entitled “The Lithium Chase,” as evidence.

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Is IMGG's CEO Pulling the Plug on His Company?

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To some, Imaging3 (OTC: IMGG.OB) CEO Dean Janes appears to be giving up on his own company.

On Feb. 11, exactly one month after IMGG announced the latest in a series of regulatory setbacks, Janes reportedly began pitching a new investment opportunity to his 1,000-plus “friends” on Facebook. In his biggest insider transaction on record, Janes then sold 2.6 million shares of IMGG stock the very next day. more...



Tradeshow Marketing Knows How to Sell Its Stock

Give Tradeshow Marketing (OTC: TSHO.PK) some credit. For a company riddled with so many ugly conflicts, TSHO sure knows how to put on a pretty face for investors.

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

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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

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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

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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...