Twernt Renne Hamouth involved in CDDD?
BCSC targets Pierce, Cicci file Raging Bull libel suit
B.C. Securities Commission *BCSC
Thu 29 Nov 2001 Street Wire
Also Vega-Atlantic Corp (U:VATL)
by Brent Mudry
After enduring the slings and arrows of all sorts of nasty name-calling and
serious allegations for more than a year on Raging Bull, controversial
Vancouver penny stock promoter Brent Pierce, former securities violator
Gino Cicci and their close associate Gary Powers have launched an Internet
libel suit in a bid to muzzle Harold Gooding, a now-disgruntled associate
in their Vega-Atlantic Corp., Goldstate Corp. and Intergold Corp. OTC
Bulletin Board promotions.
In an endorsed writ of summons filed Wednesday in the Supreme Court of
British Columbia, Mr. Pierce, Mr. Powers and Mr. Cicci claim they were
defamed in no less than two dozen chat-site postings dating back to Oct.
28, 2000. A full statement of claim has not yet been filed by rookie lawyer
Scarlett McGladery of Boughton Peterson Yang Anderson, who was called to
the bar in February, 1998. Although Mr. Gooding lives on the Atlantic coast
in Nahant, a tiny town near Boston, the transcontinental suit was filed in
Vancouver, on the basis the tort was committed in B.C., which has Internet
access.
Mr. Pierce, Mr. Cicci and Mr. Powers seek as-yet unspecified damages for
the damage caused to their fine reputations in the penny stock world, on
the Internet and elsewhere. The allegations in the suit have not yet been
proven in court and no statement of defence has yet been filed. Although
Raging Bull has kept up Mr. Gooding's unflattering posts for all to see,
unlike much-smaller Canadian rival Stockhouse, which generally yanks
anything anybody squawks about, the popular American chat site has not been
targeted in the B.C. suit.
While neither Mr. Pierce nor Mr. Cicci are strangers to Canadian
authorities, Mr. Powers, Vega-Atlantic's investor relations front man, has
kept a lower profile.
Although Vancouver regulators have had a high tolerance for penny stock
shenanigans in the past, Mr. Cicci had the misfortune in 1995 of a
three-year ban on serving as an officer or director, imposed by the British
Columbia Securities Commission. The regulator also banned naughty Mr. Cicci
from trading for six months.
The speedy penalty came a mere four years after the BCSC launched its
prosecution and just eight years after Mr. Cicci helped fuel the rise of
DNI Holdings Inc. on the former Vancouver Stock Exchange with bogus and
inflated promotional materials prepared by Strategic Marketing, a hired
Florida-based penny stock touting service. Shares of DNI rose from $1.09 in
late 1997 to a peak of $2.05 in mid-1998, before the regulators finally
figured out its flagship Buffalo mine was more bull than buffalo. The stock
last traded at eight cents in mid-1991, before being delisted from the VSE
the next year.
It is unclear just when the sleuths at the VSE and the BCSC twigged in that
something was amiss at DNI. In May, 1998, just before Mr. Cicci unleashed
his helpful Florida tout, DNI president David Edgell announced the tiny
company had managed to buy a 100-per-cent interest in the Buffalo mine,
near Baker, Ore. DNI even attracted a blue-chip backer, the secretive
Kadova Finanz, based in the respected international finance capital of
Vaduz, Liechtenstein.
DNI impressed Kadova Finanz so much that it decided to lend the junior
$3-million shares, interest-free, repayable in four years. The deal called
for DNI to issue up to five million shares to the secretive offshore
company. A few months later, in August, 1998, Swiss money man Max Engler,
described as a Zurich-based financial consultant, presumably related to
Kadova, was appointed to DNI's board.
Mr. Engler was subsequently named president of another of Mr. Edgell's
excellent VSE-listed companies, HPY Industries, in October, 1988, replacing
Wolfgang Rauball. Although HPY featured such notables as Jerome Rak, penny
stock promoter Rene Hamouth and the backing of another Liechtenstein
company, the stock promotion later collapsed amid allegations of dubious
dealings by Mr. Rauball.
In any event, DNI looked good, especially in the glowing profiles prepared
by World Prospective Communications, a subsidiary of Strategic
Communications, the Florida tout. More than three years later, in December,
1991, seven months after the VSE halted DNI trading, the BCSC issued a
notice of hearing alleging Mr. Edgell and Mr. Cicci conspired to
disseminate tout materials inflating the value of the Buffalo mine.
After a further four-year delay, the BCSC banned Mr. Cicci in November,
1995, finding he had played a "significant" role in co-ordinating the
promotional materials with Strategic.
On the basis of evidence at the hearing, the commission concluded that Mr.
Cicci played a significant role in coordinating communication between
Strategic and DNI regarding the promotional material. "Persons who are
involved in a significant way in the affairs of a reporting issuer, as
Cicci was, will be subjected to regulatory sanction if their involvement
contributes to conduct that is prejudicial to the public interest," stated
the commission.
While Mr. Cicci has served his penance with the BCSC, being an odd judge of
character, he recently set up shop with the notable Mr. Pierce, a seriously
misunderstood penny stock promoter nudged off the former VSE a decade ago.
Mr. Pierce's notable achievements include being named president of Exeter
Mining Inc. in mid-1991, a mere seven months before the VSE suspended
trading, citing a number of irregularities, including share issuances to
the penny stock promoter.
Exeter, however, paled by comparison with colleague Frank Balfour's Bu-Max
Gold Corp. scandal.
In mid-1989, Bu-Max declared it had suddenly discovered much of its money
was missing, and Mr.Pierce soon emerged as a key target in investigations
by the VSE and the BCSC. In a negotiated settlement in June, 1993, the BCSC
banned Mr. Pierce for 15 years. The sweeping ban prohibited the promoter
from becoming or acting as a director or officer of any company that
provides management, administrative, promotional or consulting services to
a reporting issuer. Besides diverting funds from Bu-Max, Mr. Pierce
admitted he tendered false documents to BCSC investigators during their
probe.
The BCSC's 15-year ban came two months after the VSE abruptly halted
trading in yet another dubious Pierce promotion, Cost Miser Coupons
(International) Inc., when Vancouver Sun reporter David Baines revealed the
promoter was an officer of Cost Miser's main subsidiary, in violation of a
temporary ban imposed by the regulator. Cost Miser's main products,
purportedly developed by Mr. Pierce, were cash register tapes with coupons
printed on the back, interspersed with pictures of missing children.
All of this might keep a lesser man down, but not Mr. Pierce. In early
1993, with his Cost Miser promotion about to blow up, the controversial
promoter was hard at work setting up Ultra Pure Water Systems (Canada)
Inc., which subsequently listed on the former Alberta Stock Exchange in
March, 1994.
Ultra Pure soon proved to be an ultra-dirty offshore rig job. The promotion
blew up in April, 1995, when the ASE halted trading, leaving $2.36-million
in unpaid debits at seven brokerages in accounts linked to Mr. Pierce and
his associates. Merit Investments of Toronto was hit hardest, with a
$1-million debit. Rampart Mercantile bought the weakened 35-year-old
brokerage in 1997, later changing its name to Rampart Securities, which
itself was shut down by regulators this August.
When Merit filed its million-dollar debit suit in April, 1995, Stockwatch
revealed the defendants were close associates, and presumably fronts, of
Mr. Pierce, the first suggestion that Mr. Pierce might be involved behind
the scenes. A subsequent 13-month criminal investigation by the Commercial
Crime Section of the RCMP featured searches of 13 brokerage firm offices in
Vancouver and Toronto, with Mr. Pierce and his associates as the key
subjects.
After spending years and extensive taxpayer resources preparing a solid
case, the RCMP handed over the file to a senior Crown prosecutor a few
years ago. In a controversial move that remains an open wound between the
RCMP and the Crown, the prosecutor "no-charged" the case, basically
torpedoeing the investigation, on the grounds there was insufficient
evidence for a conviction. The prosecutor has since been demoted to
handling welfare fraud cases.
With the Canadian Venture Exchange, the successor to the former Vancouver
and Alberta exchanges, less than enthusiastic about welcoming Mr. Pierce
back aboard, the controversial penny stock promoter, like so many others of
his ilk in Vancouver, has migrated to the greener pastures of the OTC
Bulletin Board, with such promotions as Vega-Atlantic, Goldstate and
Intergold.
Vega-Atlantic, Mr. Pierce's flagship, is not for the faint of heart. The
stock, which traded at 62 cents last December, bottomed out at about three
cents in September, rebounded to 28 cents 11 days later, and fell back to
15 cents two weeks ago. (All OTC-BB figures are in U.S. dollars.)
Vega-Atlantic shares rose eight cents to 60 cents on heavy volume of
264,000 shares on Thursday.
Vega-Atlantic's main asset is its Shangzai gold mine in China, which it
claims should produce 2,500 ounces this year. While China is not exactly a
mecca for gold juniors, company president Grant Atkins, a close associate
of Mr. Pierce dating back to the Ultra-Pure days, waxes eloquent.
"Mining investors weary of China cannot ignore that Vega-Atlantic has
proven that invested capital is being returned to the foreign investor
through one of the most cost-effective of mining operations anywhere,"
stated Mr. Atkins in a recent release. "Yunnan Province is to be commended
for their diligence and priority to foreign investment laws." (It is not
clear whether the due diligence by the folks in Yunnan included any review
of the past promotions of Mr. Atkins, Mr. Pierce and their associates.)
Mr. Pierce has similar high hopes for his two other related promotions,
Intergold and Goldstate, which have focused on the Blackhawk mineral claims
in Nevada.
With their reputations on the line, Mr. Pierce and Mr. Cicci, along with
Vega Atlantic front Mr. Powers, have turned their legal guns on
party-pooper Mr. Gooding, who has served directorship stints with all three
companies: Intergold, Goldstate and Vega-Atlantic, which he served as
president. The B.C. libel action claims Mr. Pierce and his associates were
defamed in two dozen Raging Bull postings over the past 13 months.
Mr. Gooding may know a thing or two about Mr. Pierce, well beyond the
current bulletin board promotions. The Boston man's diverse business career
includes working in sales in the water treatment industry with Osmonics
between April, 1993, and August, 1994. According to regulatory filings,
from April, 1994, to August, 1995, Mr. Gooding served as sales manager for
Ultra Pure Water Systems (U.S.A.) Inc., which was based in his home state
of Massachusetts.
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