Fail

Notes from the Kerr/Quiel Trial – (SEFE, VOC)

The court documents for the tax fraud trial of SEFE ringleaders Stephen Kerr and Michael Quiel, are becoming available. One, available here, indicates that Kerr and Quiel dealt with Adam Benowitz’s (here’s a pic) Vision Opportunity Capital Partners vehicle.

Vision is well known for its pumping of Chinese reverse merger junk, as well as for stuffing their listed vehicle, Vision Opportunity China Fund Ltd. (VOC on the AIM exchange, the UK’s answer to the Pink Sheets, now in liquidation) full of dreadful Chinese names. And known for being the subject of various probes. But who knew Adam and partner Randy Cohen, were also involved with the likes of Kerr and Quiel? Or K and Q with them? Small world indeed.

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.

Roles of a Lifetime: Carl Fox, Jed Bartlet, Stock Tout – FARE

Everyone agrees that Oliver Stone’s Wall Street is a film classic, and who can forget Martin Sheen‘s performance? He played Carl Fox, the hardscrabble mechanics union leader who railed against the greed of Michael DouglasGordon Gekko and even that of his own son, Bud, played by Charlie Sheen.

One of Martin’s most memorable scenes in the film was an exchange between his character and Gordon Gekko:

Carl: “There came into Egypt a Pharaoh who did not know.”

Gekko: I beg your pardon, is that a proverb?

Carl: No, a prophecy. The rich have been doing it to the poor since the beginning of time. The only difference between the Pyramids and the Empire State Building is the Egyptians didn’t allow unions. I know what this guy is all about, greed. He don’t give a damn about Bluestar or the unions. He’s in and out for the buck and he don’t take prisoners.

Imagine our surprise to see a curious press release from from pump and dump penny stock fraud World Moto (FARE) that was issued after the close of trading yesterday (a day on which FARE shares almost doubled):

FARE US: Shortlisted To Appear On Martin Sheen’s “In Focus”
2013-01-23 21:25:51.983 GMT

World Moto, Inc. (“World Moto” or the “Company”) is pleased to announce that “In Focus” has contacted the management of World Moto. The Company has been selected as the potential participant in an upcoming documentary on Business Technology hosted by Martin Sheen for CNN and various public access channels. The documentary will be aired in 43 different countries and in 14 different languages.

“In Focus” is an award-winning series that benefits from strategic partnerships with Public Television and a variety of nationally recognized content providers. These relationships, coupled with their commitment to production excellence, have placed “In Focus” in a unique position in the educational television industry. The “In Focus” series is hosted by television and feature film icon, Martin Sheen.

What this press release fails to mention is that In Focus is essentially an infomercial. Neither CNN nor PBS are involved in the production. Only thanks to the embarrassing presence of Martin Sheen is it even marginally classier than Donald A. Baillargeon’s MoneyTV. Baillargeon’s previous stock touting TV show, the Emerging Stock Report, was sanctioned by the SEC in 1998. The FARE release continues:

World Moto’s CEO Paul Giles stated, “We are honored that In Focus has given World Moto the opportunity to participate.”

This should be translated as “We sent in a check, and if it does not bounce, we’ll actually get an ad for our junk stock on the air.”

And as for Martin Sheen, associating himself with such an outfit, one can only suppose the paycheck is making it worthwhile. Your author wonders, though, what would Carl Fox say about it? What would Sheen’s character, President Jed Bartlet, from the sanctimonious Aaron Sorkin‘s West Wing, think?

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.

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.

The shameless, moronic, Patrick Cox – (STSI)

Act quickly, before this amazing web page (see it here) presented by moron stock tout Patrick Cox (see an awesome pic of Patrick here) is changed, and before the “deal” he is offering expires.

The web page is a breathless, and shameless, tout piece on Star Scientific (STSI), and offers a deal that expires on November 31, 2012. Pity November only has 30 days. Of course, that speaks to the level of due diligence performed by the likes of Mr. Cox. Here is the misdated “offer”:

(more…)

Quick Take – ChinaCast Reopens For Trading (CAST)

After being halted for months, shares of ChinaCast Education (CAST) a filthy Chinese reverse-merger company, finally reopened for trading. The shares promptly lost over 80% of their value.

After the bell, the firm put out an 8k filing, available here,  which contained this priceless paragraph:

On June 19, 2012, the Company and several of its subsidiaries filed an application with the High Court of the Hong Kong Special Administrative Region, Court of First Instance (the “Hong Kong Court”), alleging that former chairman and chief executive officer Ron Chan Tze Ngon, former chief financial officer Antonio Sena, former chief accounting officer Jim Ma, and former president-China Jiang Xiangyuan had committed tortious wrongs against the Company and violated their fiduciary duties and service contracts by individually and in conspiracy using their positions at the Company to further their own businesses, dissipating Company assets through unauthorized borrowings and cash pledges, and converting the Company’s cash and assets (including two and possibly all three of the Company’s private colleges). As part of the application, the Company also sought an injunctive order to freeze the assets of these executives that are located in Hong Kong, and filed a lawsuit against them seeking damages and an accounting of the property which the defendants’ have taken away from the Company as well as interest and legal costs. On June 19, 2012, the Hong Kong Court granted the Company’s application with respect to the injunction, restricting the defendants from removing their assets from Hong Kong, up to a value of Rmb800 million. The defendants have not yet responded to the injunctive order and, to date, have not acknowledged service of the proceedings against them. The Hong Kong Court has scheduled a hearing for July 6, 2012, to consider continuing the injunction.

Notwithstanding the fact that today is the 25th of June, and the company could have disclosed this information on the 19th of June, thus letting some of its stupider stuckholders know exactly WHY the shares were about to plunge, it really should be no surprise.

Unless of course, you are a brilliant investors like Ned Sherwood, who waged a proxy fight all last year with the company. Ned was seemingly completely unaware that there was actually nothing to fight over. The assets were plundered, and company management just walked away.

Poor delusional Ned. He reminds your author of an older “Beijing Jesse”. He seems so puzzled by the actions of CAST management, and so willing to believe the short sellers were wrong.

In one of his 13D filings from last fall Ned states:

As a Board member and independent outside director, I have become uncomfortable with many of the recent actions of senior management, the Company’s legal counsel and several members of the Board. Having been on the Board now for two years, I am impressed with CAST’s business model and its future prospects and potential. But I believe that the current corporate and legal governance issues are undermining the Company’s shareholder value.

I have demonstrated my support of and faith in ChinaCast by investing a substantial amount of money in its common shares. In the past year alone, I, on behalf of entities that I control, have purchased more than 3,140,000 of the Company’s common shares at a time when CAST was the subject of unjustified attacks by short sellers. Almost all of these purchases were made at prices that exceed the now current market share price. During this same period of time, CAST senior management has not purchased a single share of ChinaCast common stock.

Ned, allow me to explain what happened. That “business model” you were so impressed with is called “stealing.” You were suffering from cognitive dissonance. Even though you clearly realized that something is not right with the company, with its top management, and with top notch outside counsel from Loeb & Loeb, you still continued to pour your investors’ money into CAST. You scoffed at the warnings of short-sellers. You had drunk the CAST Kool-Aid, and today dawn finally broke. Wake up and smell the coffee…..you have been conned.

If you don’t know who the mark is Ned, it is you.

But don’t worry, you are not alone. Even Dealbook‘s Steven Davidoff, in a piece that reveals some of the shenanigans the company pulled last fall, available here, failed to understand that the most likely, and simplest, explanation was that CAST management and the coterie of advisors around them were (and are) just thugs out to steal whatever they can.

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.

More on the Kerr family connections – SEFE

One of the SEFE directors stands out from the rest, thirty year old Shannon Kerr. There are were some wonderful pictures of Shannon and her friends in London, in Las Vegas, and elsewhere on her Facebook page (UPDATE: No longer available, but it was here). One can see that Shannon is an attractive, and now, thanks to her SEFE shares, a wealthy young woman. But she has seen some tragedy in her life as well, including her father’s arrest in January of this year and her husband’s unfortunate passing in 2011. Still, it does appear that SEFE stock should have made her a millionaire many times over.

Just for fun, lets take a closer look at her resume. Here is the one from the most recent SEFE 10K filing:

(more…)