Bad Directors

Quick Take – Nanoviricides (NNVC)

Two great reads about reverse merger bio-turd Nanoviricides (NNVC).

First, check out Duff McDonald’s piece in the NY Observer, available here.

Then read these emails between NNVC CEO Eugene Seymour and some poor sap he is promising a seat on the BoD.

Finally, scratch your head as you try to contemplate just how monumentally stupid the investors in NNVC must be. Congratulations Dr. Seymour you found a group of morons even dumber than the GALE-eediots.

 

THE CONTENT CONTAINED IN THIS BLOG REPRESENTS ONLY THE OPINIONS OF THE AUTHOR. THE AUTHOR MAY HOLD EITHER LONG OR SHORT POSITIONS IN SECURITIES OF VARIOUS COMPANIES DISCUSSED IN THE BLOG. THIS COMMENTARY IN NO WAY CONSTITUTES INVESTMENT ADVICE, AND SHOULD NEVER BE RELIED ON IN MAKING AN INVESTMENT DECISION, EVER. THIS BLOG IS NOT A SOLICITATION OF BUSINESS: ALL INQUIRIES WILL BE IGNORED. THE CONTENT HEREIN IS INTENDED SOLELY FOR THE ENTERTAINMENT OF THE READER, AND THE AUTHOR.

 

Does crime pay? (NCTW, SEFE, Kerrs, Quiels, etc…)

Ever wonder about the finances of penny stock pushers like Steve M. Kerr or Michael L. Quiel? Here’s your chance to satisfy that curiosity, thanks to the PSRs recently released in the USA v Kerr case.

First take a look at Steve Kerr’s, page 18 is pretty telling, looks like over 4mm in profits for 2007′s p&ds:

KerrPSR

And then learn all about Quiel, who looks like he has a net worth of about $15mm:

QuielPSR

They each made quite a pretty penny, cannot wait to see Humble Harold’s P&L!

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Another Court Decision Against Fuqi (FUQI)

Ready for some reading? In a 45 page option, Sam Glasscock of the Delaware Chancery Court slams Chinese reverse-merger scam Fuqi International (FUQI) and its Board of Directors. Some choice tidbits:

Plaintiff has pled facts with particularity that show that the Fuqi board has abdicated its responsibilities because the investigation has been left in limbo, with no progress, for several months. Under that view of the facts, Fuqi management is not entitled to the business judgment rule’s protections. Beyond that, Fuqi management has refused to pay for the professional  advisors—including auditors and legal counsel—of the Audit Committee performing the investigation. This lack of payment has thwarted what efforts could have been taken by the Audit Committee to investigate. To make matters worse, the independent directors, who could have conducted a meaningful investigation on behalf of the company, have resigned from their posts. Thus, the Plaintiff has alleged with particularity that the board has not only failed to move the investigation forward, but has also impeded that investigation. Nor does the record indicate that the investigation continues. It has been abandoned.

And yet the SEC still lets it trade.

Read the full decision here.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

“Where Are They Now File” – SEFE Edition (SEFE, PTOO)

It was only a year ago when the Sefe, Inc. (SEFE) promotion was in full swing, and just weeks since Steve Kerr and Michael Quiel were convicted in case that illustrates how they used sham Swiss entities to mask share sales in their promotions.Shannon Kerr left the tattered remains of the company in March. But what has happened to the other players?

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Jonnie Williams, Stock Market Cicada? (SPTPQ, STSI)

While reading the series of stories in the Washington Post about the bribery scandal currently engulfing various Virginia politicians and shady Star Scientific (STSI), a documentary about a curious insect was playing on the television.

The North American cicada, Magicicada cassini, is famous for its distinctive chirp, and its life cycle, returning every 17 years. And so it is with some con men residing in the lower rungs of the stock market, reappearing every so often, and promoting their worthless shares with the same siren songs.

In January 1988 an article appeared in JAMA discussing Retin-A, a derivative of vitamin A, as a treatment for wrinkles. It set off an explosion in the use of Retin-A and a flurry of hype around some other, less well studied, products. The frenzy was so great that then-FDA commissioner Frank Young issued a warning to the public. An article in the LA Times, available here, explains:

Young said some unethical pharmacists, dermatologists and manufacturers were promoting and selling mixtures called Retin-A that actually contain different amounts of the active ingredient, retinoic acid.

Some manufacturers, he also said, are making bogus creams sold as Retin-A or as look-alike products that contain no retinoic acid…The FDA said it was “actively investigating a number of firms” promoting and selling wrinkle creams

Imagine the reaction at a small struggling firm in Massachusetts, called Spectra Pharmaceuticals (SPTPQ) when the JAMA article hit. For years Spectra, its Chairman and CEO, Dr. Al Maumanee of Johns Hopkins’ Wilmer Eye Institute, along with another scientist, Dr. Scheffer Tseng, had been studying their very own vitamin A derivative as an eye ointment first at Hopkins, and later at the Harvard-affiliated Massachusetts Eye and Ear Infirmary. But the studies were quite controversial.

According to a New York Times article, available here:

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Quick Take – Jury Deliberations to Begin (SEFE)

The Kerr/Quiel trial has moved to the next stage. The jury has been charged and will return to the courtroom in Phoenix on the 9th of April to begin deliberations. From the docket:

Minute Entry – for proceedings held before Senior Judge James A Teilborg: Jury Trial as to Stephen M Kerr (01) and Michael Quiel (02) held on 4/3/2013.The Court instructs the jury as to the applicable law. Four (4) alternate jurors are selected. Jury to deliberate. Two (2) jury questions discussed and written responses returned to them. Jury at recess until 8:00 a.m., 4/9/2013. (Court Reporter David German.) Hearing held 9:02 AM to 4:35 PM.

Amazingly enough, during this whole ordeal the boys, with Humble Harold‘s help, have had time to tee up their latest creation….more to come.

A Little More on Fuqi (FUQI)

As expected, FUQI is still unable to file a 10K. In an NT10K filing last night, available here, they admit that not only can the company not produce the required documents by the normal deadline, they already know they will miss the 15 day extension period:

the Registrant is unable to timely file its Annual Report on Form 10- K for the year ended December 31 , 201 2 .   The Registrant will file its Annual Report on Form 10- K for the year ended December 31 , 201 2 as soon as it is able; however, the Registrant is not able to provide a reasonable estimate as to such filing at this time, which will not occur within the fifteenth calendar day after the prescribed due date for such report.

There is also a fascinating lawsuit in California between a FUQI stuckholder, Michael Patrick Kelly, and a former FUQI director and head of its Audit Committee, Victor Hollander.

Hollander, a US resident, is likely the only person affiliated with FUQI that can be properly served. Victor might want to make sure FUQI has been keeping up its D&O insurance. Here is an excerpt from the latest court filings:

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Quick Take – Will Morgan Stanley Wake Up? (YONG)

From a press release dated May 31, 2011:

After extensive due diligence, we believe Yongye to be an exceptional company that has built significant brand recognition in China’s agriculture industry through its integrated marketing campaigns, distribution strategy and the benefits its Shengmingsu-branded products have brought to Chinese farmers,” stated Mr. Homer Sun, Managing Director of MSPE Asia.  “The Company’s core products address an important need for farmers to enhance yield for crops planted on soil that has become degraded by decades of over-fertilization.  In addition to product efficacy, we are impressed by the Company’s strategy and execution to develop an effective sales network directed at an underpenetrated segment of Chinese demand.  We look forward to being long-term shareholders and partners with Yongye and intend to provide our full support to Yongye with respect to operating strategies and the capital markets.”

In connection with this transaction, Mr. Sun is joining the Company’s board of directors.

From March 18, 2013:

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Peter Siris in the Mist (CCME, YUII, PUDA, etc)

China reverse merger apologist, fund manager, and NY Daily News columnist Peter Siris (remember him?) is finally no longer a stain upon the US markets. Early this morning the SEC issued an Initial Decision (read it here) banishing him from the securities industry.

IT IS ORDERED that, pursuant to Section 15(b) of the Securities Exchange Act of 1934, 15 U.S.C. § 78o(b), and Section 203(f) of the Investment Advisers Act of 1940, 15 U.S.C. § 80b-3(f), PETER SIRIS IS BARRED from associating with any broker, dealer, investment adviser, municipal securities dealer, municipal advisor, transfer agent, or nationally recognized statistical rating organization and from participating in an offering of penny stock.

Any chance he’ll autograph our office copy of his book, Guerilla Investing: Winning Strategies for Beating the Wall Street Professionals, available for $0.01 at Amazon?

UPDATE: Just ordered an office copy of his OTHER book, The Peking Mandate. Also available for $0.01 at Amazon.