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PDFEcosphere: A Clean Energy Company with a Dirty CEO?
by Melissa Davis - 7/12/2010 10:24:49 AM
Either Ecosphere Technology (OTC: ESPH.OB) CEO 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.
Those drug busts involved far more than a little weed. The first stemmed from cocaine distribution, and the second ranked as a high-profile case – involving drug smuggling, money laundering and racketeering – that generated widespread newspaper coverage and even spawned a “Frontline” documentary.
The latter case also featured a business that, like Ecosphere, recruited former professional football players in an effort to fuel its success. That business – a once-popular restaurant known as Crackers – became a favorite hangout for Miami Dolphins fans, past news reports show, before running into tax problems and later filing for Chapter 7 bankruptcy following its leader’s second drug arrest.
With McGuire at the helm, Ecosphere is now relying on its own football stars – Drew Bledsoe and Troy Aikman – to generate publicity and drum up business for the company. Just as Crackers scored valuable media coverage because of support from celebrity athletes more than 20 years ago, Ecosphere is now basking in the spotlight with the help of big-name athletes who’ve been promoting the company’s water-treatment technology as a solution to BP’s (NYSE: BP) massive oil spill in the Gulf Coast.
Investors wholeheartedly embraced ESPH at first, sending the stock to a near-record high of $1.75 a share two weeks ago, due in part to the company’s high-profile backers and the media attention they generated. The stock took a big hit a few days later, however, after TheStreetSweeper raised questions about ESPH’s track record and the company’s ties to a stock-promotion firm.
Since then, TheStreetSweeper has uncovered even more reason for alarm. It has spent the past week gathering and cross-referencing documents packed with overwhelming evidence that ESPH relies on a repeat criminal offender – aided primarily by members of his own family – to run its operations.
If true, experts say, ESPH should have at least disclosed these issues to investors who could not be expected to nail down such elusive information on their own. (ESPH failed to answer questions for this story.)
“Disclosure is not a matter of hide-and-seek,” emphasized Peter J. Henning, a Wayne State University law professor who previously worked as both a regulator and a prosecutor focused on white-collar crime. “Would a reasonable investor consider this important?
“Tell people,” he stated simply, “and let them decide.”
Drugs and Bribes
Assuming that ESPH’s leader and the convicted felon are one and the same – a theory that’s easier to prove than disprove based on available evidence – that disclosure might read something like this: The CEO of Ecosphere was convicted of felonies in two drug-related cases, one of which later resulted in clemency, more than 20 years ago. The company does not consider this matter to be material to its current operations.
That disclosure might be enough to deter investors who would normally refrain from sinking their hard-earned money into companies led by criminals. However, it would still lack the telling details – and the powerful impact – of the entire story.
TheStreetSweeper has therefore decided to provide a much fuller account of those convictions, fleshed out by past news stories and other supporting documents, for investors to read.
The story officially begins in mid-1978, court documents show, when officers nailed McGuire for distributing cocaine during an undercover sting. He was convicted of three felonies and, according to The Miami News (a publication connected to The Palm Beach Post), served 19 months in prison for those crimes.
McGuire was apparently free by early 1982, because he filed incorporation papers for a company known as Adobe Construction in February of that year. Roughly 10 months later, The Miami Herald revealed, McGuire saw a friend – Patrick Bilton – busted for allegedly trying to smuggle 400 pounds of marijuana into the country and agreed to help him arrange for a light sentence. Together, the Herald noted, the pair then turned to a powerful Florida politician for aid.
McGuire allegedly delivered bribe money from Bilton to Elton Gissendanner, the Herald reported, a well-connected Florida official who was serving as director of the state’s Department of Natural Resources at the time. With Gissendanner’s assistance, the Herald said, Bilton arranged to become a Marine Patrol informant and received probation – rather than an actual prison sentence – for his crimes.
However, the Herald said, Bilton wound up tricking Marine Patrol officers instead of helping them by leading them to a cocaine shipment that he had personally arranged. Officers found a wrecked Hatteras boat with about two kilograms of cocaine sprinkled on the deck, the Herald said, and assumed that the remaining drugs had simply sunk.
“They wrecked the Hatteras on the reef and had a second boat following it,” a federal prosecutor stated in the article. Officers “thought the rest of the cocaine was at the bottom of the water. They were taken in.”
Shortly after Bilton staged that wreck and secured probation as his reward, news reports show, McGuire won some valuable help from Gissendanner as well. Acting upon a recommendation from Gissendanner, those reports state, outgoing Florida Gov. Bob Graham approved a clemency request from McGuire that restored certain rights that he would have otherwise lost as a result of his first drug conviction.
Like Bilton, the Miami New Times would later report, McGuire won that favor based upon fabricated claims that he helped the police by serving as a government informant.
On its official website, the Florida Parole Commission lists Dennis Edward McGuire – with a birth date of Sept. 12, 1950 – as the recipient of that clemency award. Based upon documents reviewed by TheStreetSweeper, the chief of ESPH has that name and birth date as well.
For example, government records show, 21 people who obtained driver’s licenses in the state of Florida registered under the name of Dennis McGuire. Of those, 17 have conflicting middle names or middle initials that would rule them out as the head of ESPH. Of the remaining four, three are too young to be the CEO.
That leaves one: Dennis Edward McGuire, born on Sept. 12, 1950, and listing a P.O. Box in Stuart, Fla. – home to ESPH -- as his address. Jacqueline K. McGuire, identified in ESPH filings as the CEO’s wife and the company’s senior vice president of administration, lists that P.O. Box as her address in that same database as well.
Crackers and Convictions
That long-ago clemency award promised to open an important door for McGuire.
Without it, various newspapers observed, McGuire could not serve as an officer for any business holding a liquor license. Since Crackers restaurant – owned by McGuire’s Adobe Construction – would later become a popular “watering hole” that generated almost half of its sales from alcoholic beverages, news reports show, that license proved quite valuable.
Initially, past news stories indicate, McGuire encountered resistance despite his clemency award. At first, The Miami News reported, the state’s Alcoholic Beverages and Tobacco (ABT) division urged rejection of McGuire’s application with the following note: “Impairment of qualifications, convicted felon.” By installing McGuire’s father (Thomas) as its sole officer, the newspaper noted, Crackers managed to overcome that obstacle.
Crackers officially opened in February of 1984, Restaurant Business magazine reported, and quickly became a hit. The restaurant scored some big-time publicity when it hosted the official “Super Bowl Countdown” special ahead of Miami’s big matchup with San Francisco in 1985, the magazine stated, and soon inked a deal to expand its concept into a national restaurant chain. By early 1986, news reports indicate, two former Miami Dolphins – Larry Csonka and Jim Kiick – had already signed up to open Crackers restaurants of their own.
The Crackers success story proved to be short-lived, however. The Internal Revenue Service seized control of the restaurant for unpaid taxes by the end of 1986, past news reports show, with its leader nailed in a second – much larger – drug bust the following year.
This time, media reports reveal, McGuire and Bilton went down together as key players in a major drug-smuggling and money-laundering operation that stretched from the U.S. to Europe and beyond. McGuire pleaded guilty to racketeering and tax fraud in 1987, the Sun Sentinel reported, and received an eight-year prison sentence for his crimes. Bilton pleaded guilty to racketeering and marijuana importation, the newspaper noted, and wound up with an even longer jail term.
The case later caught the attention of PBS, which aired a “Frontline” documentary featuring former Bilton attorney Michael Levine in a starring role. Levine helped launder drug money for Bilton and fellow client Scott Errico, “Frontline” reported, the second of whom wound up charged with violent drug-related crimes.
“I was about to make a trip to London,” Levine told “Frontline” from his prison cell in 1989. “And all of a sudden, in the paper, The Miami Herald had a picture of Scott Errico and said he had murdered somebody – which I didn’t know that, you know, until that time.
“All of a sudden, it wasn’t a game any more,” he added. “All of a sudden, the person that was in the paper was my client I was assisting prior to that time … These are real people and real lives.”
Errico was convicted in 1991 of murdering two fellow drug smugglers, the Sun Sentinel later reported, and receivedconsecutive life sentences for those crimes.
Favors and Rewards
According to records compiled by the Federal Bureau of Prisons, McGuire apparently completed his own jail term in January of that same year.
McGuire’s original ESPH bio, totally blank from 1974 until the early 1990s, finally begins detailing his work experience – when he was already 40 – around that same time. He invented a new technique for removing paint from ships in the early 1990s, the bio states, and launched a company called Amclean to market that service in 1992.
McGuire then spent the next eight years securing patents and adding relatives – including wife Jacqueline and brother-in-law Michael Donn – to the company’s tiny executive team. Those three relatives now hold every executive post, save one, at ESPH itself. (According to corporate filings, three other relatives work at ESPH as well.) CFO Adrian Goldfarb, the former partner of a stock promoter with a checkered regulatory past, fills the other.
At one point, ESPH did recruit an accomplished outsider – investment banker Patrick Haskell – when pursuing crucial funding for the company. Haskell assumed the post of co-CEO in mid-2008, shortly after Bledsoe’s investment firm announced plans to sink $50 million into the company, and took over as sole CEO later that same year. But Haskell suddenly resigned as CEO last August, about a week after Bledsoe came through with a scaled-back commitment of $10 million (most of it dependant upon future accomplishments), and left McGuire once again in charge of the company.
ESPH rewarded Haskell well for his temporary service. Since Haskell helped ESPH raise $3.42 million in capital (an amount roughly equal to the cash Bledsoe invested), regulatory filings show, the company granted him 450,000 shares of stock as a “finder’s fee.” ESPH also granted Haskell 1.5 million stock options, priced at 49 cents a share, when he resigned as CEO of the company. Clearly grateful, ESPH gave Haskell another 50,000 stock options -- with an even lower strike price -- five months after he gave up his executive post.
ESPH has aggressively capitalized on Bledsoe’s connection to the company since that time. Together with Aikman, another retired football player and ESPH investor, Bledsoe has scored widespread media exposure for the company as it seeks a lucrative contract with BP in the wake of the Gulf oil spill.
Meanwhile, as the CEO of ESPH, McGuire himself has remained largely invisible throughout that big publicity campaign. He appeared in a local TV newscast (wearing ESPH’s stock symbol on his sleeve) more than a month ago, but has otherwise seemed curiously absent from the scene.
Of course, if he’s a convicted felon as the evidence suggests, then McGuire could have good reason to hide.
“It is a strange feeling, all of a sudden, to be thrust into the limelight for something illegal and finding yourself recognized by this illegal act,” Levine stated in that “Frontline” documentary so many years ago. “Forget about what you have done prior to that date.
“It doesn’t matter at that point. It is just that illegal act, from then on, that will be with you the rest of your life – no matter what.”
To contact Melissa Davis, the author of this story, please send an email to editor@thestreetsweeper.org.
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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.
more...
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.”
more...LEXG: The Biggest Snow Job of the Year?
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.
more...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
more...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.”
more...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.
more...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.”
more...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.
more...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.”
more...Alternate Energy: Power Stock or Toxic Waste?
Four years ago, Alternate Energy (OTC: AEHI.PK) CEO 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 pennies, currently 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.
more...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.
more...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.
more...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.
more...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.
more...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.
more...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
more...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.”
more...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.”
more...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.
more...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.
more...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.
more...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.
more...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...
