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Alternate Energy: Power Stock or Toxic Waste?

by Melissa Davis - 10/21/2010 1:10:42 PM

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.

“I’ve thought about this a lot,” says Joe Weatherby, a former planning and zoning commissioner in the first Idaho county that AEHI targeted for its plant. “If I were going to design the perfect scam, what elements I would include?

“Gillispie has preyed on ignorance and greed. He has preyed on every little thing that might make people tick.”

Pitching Stock

Weatherby was busy preparing a long-term energy plan for Owyhee County, a region where 17.5% of the population lives below the poverty rate, when Gillispie suddenly burst onto the scene. The plan, which originally excluded high-priced nuclear power (favoring the county’s abundant wind resources instead), began attracting some unexpected resistance from locals at that point. 

“I found out that Gillispie had hired a hay broker who traveled all over the county and knew all of the farmers around here,” Weatherby states. “This hay broker would offer contracts to farmers and ranchers promising them power at 1.5 cents to 1.7 cents a kilowatt hour (10 times cheaper than most nuclear power) if they bought the company’s stock.

“He actually solicited his drivers to help him sell the stock,” Weatherby continues. “So a lot of locals already owned the stock by the time we started our hearings on the energy plan.”

Weatherby identified the hay broker as Jason Sells, who shows up in AEHI filings as a major stockholder himself. In anInternet bio, Sells portrays himself as a successful entrepreneur who “was a licensed commodity broker in the state of Idaho.” Even if he remains licensed to sell commodities in his home state, however, he would still need a separate “Series 7” license in order to legally sell stock.

In a recent telephone interview, Gillispie described Sells as an AEHI fan who bought the company’s stock and voluntarily promoted it to others in the local community. However, Gillispie said, the company – rather than Sells – actually sold that stock. Moreover, he added, the company took steps to make sure that it sold no stock to those who lacked the means (either $1 million in assets, excluding primary residence, or $250,000 in annual income) that would qualify them as suitable investors.

“We’re not supposed to,” Gillispie explained. “But we really can’t know … They put down what they’re worth, (and) we have to trust them.”

Despite those restrictions, AEHI found plenty of investors in one of the poorest states in the nation. All told, Gillispie estimates, almost half of AEHI’s stockholders reside in Idaho.

Bruce Day, a former securities commissioner for the state of Oklahoma who previously worked for the U.S. Securities and Exchange Commission as well, sensed possible reason for alarm.

“I would absolutely look into this,” says Day, who now serves as a partner for a major securities law firm based in Oklahoma City. “I would be shocked if Idaho regulators haven’t done that already.”

Marilyn Chastain, chief of the securities bureau for the Idaho Department of Finance, confirmed that her agency has fielded complaints about AEHI. She could not comment on the nature of those complaints, however, or discuss what actions – if any – her agency has taken in response.

Meanwhile, AEHI has long since abandoned its plans to build a nuclear power plant in Owyhee County. About two years ago, the local Mountain Home News reported, AEHI suddenly discovered fault lines – present for an estimated 500,000 years – on its proposed site and shifted its plans to nearby Elmore County instead.

Potential Conflicts

There, AEHI would face an even bigger showdown.

This time, records show, AEHI tapped Jim Tibbs – a retired Boise police officer and current member of the Boise City Council – to moderate the company’s public hearings. His appointment caught the attention of John Weber, a board member for a local environmental group known as the Snake River Alliance, who worried about possible conflicts and wanted to make sure that Tibbs could be trusted to be fair.

“All I do is run the meeting,” Tibbs assured Weber in an email ahead of the first hearing. “I don’t take sides.”

Even with Tibbs in charge, the Mountain Home News noted, that meeting proved to be explosive. Police officers arrested a prominent nuclear activist and led him away in handcuffs, the newspaper reported, triggering outrage from other environmentalists in the crowd. Skeptics also raised questions about Gillispie’s credentials, which turned out to be less impressive than they first seemed.

In its original regulatory filings, AEHI claimed that Gillispie held an MBA from the Massachusetts Institute of Technology. After Weatherby secured a fax from MIT stating that Gillispie had never earned an actual degree from the school, however, AEHI revised his bio to state that he simply “completed the senior executive program” – a short, non-degree offering – at MIT instead.

(On another note, filings show, Gillispie also claimed that he operated a firm called Grace Glens Consulting – which provided advisory services to senior nuclear executives – beginning in 2002. According to Internet records, however, Gillispie never even incorporated that firm until 2005.)

Meanwhile, Weatherby came under attack following that contentious hearing. In a letter to the editor of the Mountain Home News, James E. Cooper -- identified by Weatherby as an area stockbroker and the son of a major AEHI shareholder -- portrayed Weatherby as a conflicted activist involved in “a very large wind farm business venture (with) over 5,000 windmills.” At the same time, Cooper reported no connection to the company. 

For his part, Weatherby has dismissed Cooper’s claims as ludicrous. He denies any financial conflicts, while pointing out that a 5,000-turbine wind farm would eclipse the record-breaking 2,000-turbine project once planned by legendary oilman T. Boone Pickens and therefore rank as the largest wind farm in the entire world.

To critics, AEHI supporters look like the conflicted ones instead. For example, they note, Tibbs -- the so-called “independent” moderator – wound up owning stock in the controversial company after all.

According to a company filing, Tibbs received 15,000 shares of AEHI stock a month after that heated mid-2008 meeting. That filing, which surfaced about three months after the hearing, indicates that Tibbs paid 10 cents a share – or about one-third of the market price at the time – for that stock. However, his comments suggest that he may have never paid for the stock at all.

“I was compensated by AEHI for being the moderator,” Tibbs explained in a November 2008 email to Weber. “I did not go out and purchase the stock on my own.” 

Printing Press

Tibbs shows up (along with other locals) on a long list of investors who received unregistered AEHI stock – often deeply discounted and sometimes totally free – during the company’s first few years of operation.

By September of 2008, regulatory filings show, AEHI had issued almost 75 million shares of unregistered stock – or half of its authorized shares – through such transactions. Gillispie and his family received more than one-third of those shares. AEHI Vice President/Secretary Jennifer Ransom, a former insurance agent described by locals as Gillispie’s girlfriend (30 years his junior), picked up millions of shares as well.

Since then, AEHI has issued even more company stock – much of it to insiders -- and dramatically increased both its authorized and outstanding shares. In January of this year, for example, AEHI awarded Gillispie and Ransom a combined 11 million shares of stock even as the company approached its new 250-million share limit. AEHI then doubled its authorized share count to 500 million the following month, filings show, and awarded Gillispie and Ransomanother 12 million shares a couple of days later.

According to regulatory filings, AEHI covers "living expenses" for Gillispie as well.

“Last summer, Gillispie started driving around in a Porsche 911 twin turbo that costs around $150,000,” Weber says. “And he still has his Maserati parked out in front of the company’s office.”

At first, regulatory filings show, AEHI operated out of Gillispie’s home in Virginia before leasing a small office in Idaho. Back then, AEHI employed Gillispie’s young daughter – whose thin work experience included a stint as an undergraduate college tutor and a job as a pharmacy technician – to serve as secretary of the nuclear power company. Ransom officially assumed that post in May of 2008, company records show, quickly scoring 3.5 million AEHI shares for the favor.

At that point, AEHI had already inked at least two financing deals for its ambitious project. In mid-2007, AEHIsuddenly announced that an outfit known as Cobblestone Financial Group had agreed to secure a handsome $3.5 billion for the company’s nuclear power plant. Within weeks of that news, however, the Associated Press had raised questionsabout Cobblestone – which normally caters to small operations like bars and gas stations – and its ability to fund such a deal.

Later that year, AEHI announced a more modest $150 million funding deal with a firm called SilverLeaf Capital Partners. This spring, records show, SilverLeaf Capital President Shane Baldwin wound up charged with securities fraud for alleged misconduct related to a separate investment deal. (Baldwin managed to escape jail time, The Salt Lake Tribune reported, by repaying his alleged victims in full.)

Meanwhile, local news coverage reveals, AEHI went on to ink yet another financing deal. In mid-2008, the Idaho Business Review reported, AEHI tapped a mysterious firm known only as “Powered Corporation” as its new financing partner. Powered had completed no other projects at that point, the newspaper noted, and had seen its previous multibillion-dollar deal – calling for five nuclear power plants in Yemen – killed by allegations of corruption.

The Snake River Alliance predicted, quite correctly, that the new deal would end in failure as well.

“AEHI’s latest pronouncement of financial support for this power project should be treated with the credibility it deserves – none,” the group stated in the article. “Powered Corporation’s financial health seems to be on par with AEHI’s … The fact is there’s still no money in this project, and for good reason.”

Less than a year later, The Oregonian reported, Powered quietly disclosed that it was “winding up” its business and disappeared from the scene.

Act Three

By then, the local Times-News reported, Elmore County zoning officials had already rejected AEHI’s plans for its nuclear power plant. If the Elmore County commissioners followed suit, AEHI warned in the article, the company would abandon Idaho and take its project to another state.

As it turns out, however, AEHI simply shifted its project to yet another Idaho county instead. (While most states employ a strict review process, experts say, Idaho can approve a proposed nuclear power plant with favorable votes from just two county commissioners.) This time, AEHI chose tiny Payette County – the same county Warren Buffett’s company had ruled out for economic reasons, the Snake River Alliance noted, after spending millions on a detailed study the previous year.

“He just did the math on it, and he couldn’t make it work,” Weber says. “And the economics have gotten even worse since that time.”

Specifically, Weber says, nuclear projects need help from three absent forces – carbon taxes, high natural gas prices and a booming economy – in order to succeed. AEHI’s own project in Payette County faces even more formidable challenges, he says, due to limited water supplies, constrained transmission lines and an obvious lack of financing. (Arjun Makhijani, president of the Institute for Energy and Environmental Research, has issued a detailed report challenging the economic viability of AEHI’s proposed nuclear plant as well.)

For his part, Gillispie strongly disputes such arguments. He says that AEHI will have access to a nearby river with a “gazillion” gallons of water and will simply connect its power plant to a new transmission line that’s currently being built. He also claims that “mistakes” – rather than economics – drove Buffett’s firm away. As evidence, he points out that Buffett is now investigating the possibility of building a nuclear power plant in Iowa. (While true, an industry report reveals, Buffett’s firm actually owns a utility in Iowa, and that state – unlike Idaho – uses nuclear-generated power already.)

“Economics was just a smokescreen for the media,” Gillispie insists. “He’s an ‘economic guy.’ What else is he going to say?”

Regardless, AEHI critics continue to cast doubt on the company’s grand plans. If anything, they state, AEHI’s planned project looks less attractive now than it did when the company first arrived in Idaho several years ago. 

From the start, they note, AEHI has touted generous federal loan guarantees promised for the first nuclear power plants built under a new government program. But AEHI has failed to clear any major hurdles since that time, they say, so the company has yet to even secure a place – behind much larger players – in that growing line. Moreover, they add, the company still faces a national application process that literally takes years to complete.

“The actual likelihood of that reactor being built is incredibly low,” says Liz Woodruff, an energy policy analyst for the Snake River Alliance. “AEHI has been successful in polishing the edges to make itself look more appealing to investors. But the company remains financially in trouble, with a project that’s unviable, so people should steer clear.”

Exit Strategy

By issuing 132.9 million shares of discounted stock (and essentially selling one-third of the company -- now valued at $280 million -- for less than $10 million), filings show, AEHI has at least managed to put a decent chunk of change in the bank this year. For example, records show, AEHI sold 50 million shares of 10-cent stock in April and May alone. While that deal cushioned AEHI’s bank account, however, it could also hurt investors who’ve been paying market rates for the company’s stock.

Based on current prices, investors who bought that cheap stock in early April (and have now held it for the mandatory six months) could start selling their stake – for a hefty 770% gain -- and put serious pressure on the shares. 

For his part, Gillispie says that he has no plans to sell any AEHI stock himself. Although he filed paperwork in Augustsignaling the possible sale of 3 million shares, he says he never actually sold the stock but simply lifted the restrictions on it so he could use it as collateral for a home loan instead.

That stock looked a lot less valuable, with the shares stuck around 20 cents apiece, until a powerful promotion this May. After talking with an AEHI shareholder in a bar, Gillispie says, a newsletter writer “got excited” and penned a report that portrayed the company as “the greatest thing since sliced bread.” Fueled by that promotion, AEHI’s stock soaredfrom 21 cents to $1.45 a share in a single day. While AEHI failed to hold onto most of those gains, dropping back to 60 cents by the close, the stock has remained well above its pre-promotion price since that time.

Alternative Energy Speculator, which issued that tout, followed up with another ringing endorsement – forecasting 18,375% gains – a few weeks before Gillispie lifted the restriction on his shares. Two other outfits, the KonLin Investment Letter and, chimed in with bullish AEHI calls shortly afterwards.

While some investors have taken big profits at this point, however, Gillispie says that he sees no reason to do the same.

“I would be foolish to sell it at 80 cents,” Gillispie told TheStreetSweeper last week. “This stock is going to be worth a lot of money. It will probably be $2 by the first quarter – and $4 or $5 by the end of next year.”

For AEHI, Gillispie predicts, the third time will prove to be a charm. He expresses total confidence that Payette County will approve the company’s nuclear power plant by December and, once that happens, financing for the multibillion-dollar project will finally arrive.

AEHI continues to issue a steady stream of press releases, touting its nuclear power plant and other business ventures (which now include water purifiers for Pakistani flood victims), in the meantime. But at some point, critics say, the company will need to deliver some actual results in order to support its lofty market value.

“Gillispie keeps writing press releases every couple of days, trying to pump up the stock,” Weber says. “But you can’t keep a company alive with just press releases.

“Eventually,” he declares, “you have to do something.”

* Note: No member of TheStreetSweeper’s staff or advisory board has ever taken a financial position in AEHI or received any compensation from others who have positions in the stock. As editor of the site, Melissa Davis will never take a position in any of the stocks that she covers. To contact Ms. Davis, the author of this story, please send an email to


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.   


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.



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.”


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.


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


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.”


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.


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.” 


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,, 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.


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.”


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.


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.


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.


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.


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.


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.


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


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.” 


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.”


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.


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.


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.


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.


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...

Convicted Swindler Touts Risky Penny Stocks

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. more...