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?

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.

What makes Fuqi so darn special? (FUQI)

Day after day FUQI shares trade, without the SEC doing a thing to protect investors from this long-running, obvious, Chinese con. Recall that FUQI has not filed a 10K since its 2008 report.

Yet the regulators are not always so reticent to act. In fact, the SEC has suspended trading in 13 companies since the beginning of 2013 due to “lack of current and accurate information.”

For example, on the first of March, the SEC halted trading in Southern USA Resources (SUSA):

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.

Shannon, We Hardly Knew Ye (SEFE)

It was just under a year ago when we started to examine the wretched Sefe, Inc. (SEFE), the nearly vacant office occupying plaything of the Kerr and Quiel families. New BuyersStrike! readers can catch up here, here, here, and here.

So there was great sadness when the most recent SEFE 8k (available here) crossed our desks. According to the filing:

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:

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 Douglas‘ Gordon 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.

Q: Which of these is not like the others? A: None. They are all the same (FSIN)

As of 5:00pm EDT on December 25, 2012 the over two year old Fushi Copperweld (FSIN) going private transaction has still not closed.

Perhaps one of the suckers buyers bothered to fire up the old Bloomberg and look at this screen?