Why rob banks when you can sell penny stocks?

Dead Fish on a Silver Platter

Being a public spirited citizen I am passing on a deep insight that should make the SEC's job of policing markets easier for them: go to InvestorsHub.com; read the "top ten" stocks being discussed; they are all odds-on scams.

Number one in the listing for several months has been Spongetech (OTCBB SPNG), a cash poor penny stock that claims to be selling tens of millions of dollars worth of soap impregnated sponges, and whose fanatical message board following believe will soon be a billion dollar company.

I will not belabor the company's dubious financial figures, its gagged transfer agent, or the fact that over 90% of its claimed sales are to companies of questionable existence.

Why go to all that hard work when there is clear and convincing evidence that the company has forged an attorney's signature on opinion letters opening new stock to free trading status, constructed a fictional New York City law firm for yet other opinion letters, and gotten dumped by their former transfer agent because of these actions.

The SEC would be on this one like a duck on a junebug if they only knew, right?

Wrong.

The SEC has had hard documentation of these facts in their possession since May 15, 2009, since which time clueless investors have lapped up BILLIONS of questionably registered shares at prices ranging from ten to twenty cents per share. Not Madoff level, but not chump change either.

Some stock fraud cases are tough to make. This is a slam dunk that a Summer intern could handle.

But from the Federales?

Crickets.

UPDATE-We now have hard confirmation that Spongtech, despite claims of a share buyback, has outstanding shares in excess of 2.2 billion, several hundred million of them newly minted in June and distributed to insiders and promoters.


cc: SECOIG

Throw Jasper Knabb's Ass in Jail

Where are the Customer's Yachts?

The SEC yesterday published a fraud complaint against Jasper (Jay) Knabb et.al. as regards to manipulation of the stock of the now bankrupt Pegasus Wireless.

Good on the SEC, except it was four years after the fact, and nine years after the fact of Knabb's never mentioned and never punished BIFS Technologies fraud in 2000-2001.

As detailed in the SEC complaint, Knabb, his criminal wifey Tammy, and his partner Stephen Durland stole untold millions of dollars from the public from the illegal sales of the hyped Pegasus, which at one point made it onto the Naz National Market listings. The complaint details the friends, relatives, and mistress Knabb et. al. used to hide the illegal sales of the shares of the company, which at one point had a market capitalization of $1.5 billion and change.

Never ones to hide their lights under a basket, Knabb, Tammy-poo, and Durland were living large.

Jay-boy was featured in a fawning article with his yacht. Durland bought exotic cars, and Tammy-poo picked up a $1.5 million cabin outside of Anchorage AK. (hat tip to Seth Jayson for the boat and cars links, and to the Anchorage Daily News for the property report).

I'll just make a SWAG here, and say that Jay et. al., his crooked attorneys, and his paid promoters stole north of $100 million, not the paltry $30 million cited in the SEC complaint. And they are facing fucking CIVIL charges likely to be settled without admitting or denying guilt and fines that will never be paid? Maybe that pesky class action suit will cause them some problems. The document is long, but well worth the read if you are interested in a decade long history of corporate crime and regulatory coma.

Then there is the back story; had the SEC gotten off of their lethargic ass in 2000 when Knabb made his first-known foray into fraud, Pegasus might never have happened.

That story involved BIFS Technologies, an OTC-BB company shell headed by Alpha Keyser, still comfortably dwelling in his Longboat Key, Sarasota condo. BIFS (Biofiltration Systems) was a dormant shell whose business aspirations were to make it big in detoxing de-icing fluid at airports. Or something.

Taking a page from the Vertical Computer Systems playbook, Keyser conducted a 100/1 forward split of the company shares to lower the quoted price to pennies, and hired Orville Baldridge, a convicted Florida sex offender to "get this thing moving".

Enter Jasper, stage left, selling BIFS Beach Access, a small Myrtle Beach ISP, and promising the rights to SWOMI (Seamless Wireles Omnidirectional Internet), a revolutionary new wireless Internet technology that he claimed to have developed.

Hyped by this improbable claim, BIFS stock soared from pennies to over $2.00 per share, with both Alpha and Knabb happily selling into the surge. Although their relationship soured when it turned out that Jay-boy didn't actually own Beach Access and he was fired from his "executive" position, he nevertheless retained the twenty million shares paid to him for the acquisition. The revolutionary wireless technology turned out to be 811.a Wi-Fi. The SEC took no action, nor did they bother to investigate Knabb in his subsequent pump and dump scams, all of which were eerie clones of BIFS, and all of which made the lame claim of "naked shorting" for the poor performance of the companyies.

Enough, already. This gonif is a career criminal who has left a wasteland of investor losses in his wake. Maybe, just maybe the DOJ could take some time away from chasing phony terrorist threats, prosecute Jasper et. ux., and send them on vacation to Club Fed.

If they can find them. They seem to have gone missing.

ADVFN Comes a Cropper

ADVFN Comes a Cropper

Well, we finally heard from Clem of the mighty ADVFN, and what we got was...crickets.

No prob, according to Clem. Matt Brown, head of IHub indicted on criminal charges? Hey:

Just as in TV and Film , the public face of our products, be they in the US, the UK, Brazil, Italy or otherwise, get a disproportionate amount of attention, in the same way as a news presenter or a talk show host does on a TV channel. These profiles are all part of the product offering but they are not a pivotal business continuity issue. iHub is a community of smart, seasoned stock speculators that we feel is big enough to sit back and await the outcome of this situation without pre-judgement.

No prob, clem. Just because the head of your property has been scamming for years, and conspiring with others to do so using your IHub property, and finally got indicted, it's not to worry.

Yeah. Crickets.