chicagotribune.com
Penny stock puts investor on costly path
Published March 4, 2002
Gary Dobry believes his Web postings could cost him his life.
At the very least, they're virtual reminders of the real risks, financial and personal, in "penny stock" investments and the Web hype that surrounds them.
According to court records, Dobry, 44, of Hoffman Estates, was a novice investor when he bought over-the-counter stock in Amazon Natural Treasures, a Las Vegas company selling a variety of holistic health products. Dobry visited investor message boards RagingBull.com and SiliconInvestor.com to discuss the stock with other investors. As the positive chatter about Amazon Natural Treasures swelled, so did Dobry's investment.
Then along came Janice Shell.
Known online as "Janice456," Shell's postings are hard to miss on message boards devoted to the small, volatile stocks favored by scammers. The self-described art historian is credited with debunking stocks that sound too good to be true. She studies the hype online and combs government records, news stories and press releases to track executives' past business failures, criminal records and other data that sheds light on their latest corporate endeavors. She reports what she finds on the message boards: RagingBull.com attributes more than 36,000 posts to Shell since September. That's 200 a day, every day.
"C'mon, what kind of art historian living in Milan, as she claims she does, would work the boards like this day and night without stop?" said WLS radio talk show host Jay Marvin, who said he has spent $10,500 of his own money to help his close friend Dobry investigate Shell's background.
Dobry's troubles started when Shell publicized her findings about Amazon Natural, and the firm's stock was delisted from the OTC bulletin board.
According to court records, Dobry, who lost about $20,000, believes Shell has a great nose for a scam because she's a part of it. "Pump-and-dump" is the name of the game: Crooked investors hype a stock and then sell while its price inflates. Dobry alleges that Shell plays a similar game, intentionally trying to drive down prices so she can buy stocks on the cheap or receive kickbacks from those who do.
Dobry wasn't the only Amazon Natural investor eager to learn why he lost money. Michael Kuhns, owner of a Los Angeles gutter installation firm, said he watched $100,000 of his own and another $100,000 invested by his family and friends go down the tubes. Dobry and Kuhns chatted online and scoured the boards for clues. A posting from Shell that included a mention of Richard Marchese caught their attention.
Marchese, former president of the now-defunct Power Securities Corp. in Colorado, is a notorious figure in penny-stock trading. To settle federal mail fraud charges, Marchese in 1999 agreed to leave the brokerage industry and never again participate in any offering of penny stock.
On the message boards, Dobry and Kuhns pummeled Shell with questions about her identity and her connections to Marchese. Dobry posted his research on the Web--a jumbled collection of documents that he says links Marchese to organized crime and shows Shell to be a fictitious character.
Marchese, seeking to protect his reputation already crippled by the federal charges, filed a defamation suit against Dobry in federal court.
"The stuff on that Web site is Oliver Stone-worthy," said Marchese's Chicago attorney, David Argentar. "And still there it is for all to see anytime. It's absolutely false, and we want it taken down."
To help build his case, Argentar said, Marchese paid Shell $5,000 to compile every message Dobry posted on the investor message boards. He also said neither he nor his client has met Shell in person or talked with her on the phone.
A woman who called the Tribune identifying herself as Shell said she happily did the work because she believes Dobry has defamed Marchese and invaded her privacy.
"Gary Dobry has very maliciously attacked anyone who disagrees with him about stocks," she said. "I think there's something seriously the matter with him."
Dobry declined to comment, but his Web site suggests that he feels the same about Shell.
The site includes claims of death threats against Dobry and his family and a string of hacking attempts made on his computer. His personal e-mail has been posted on the Web, bricks have been thrown through his Palatine gym and fitness center's windows and a package containing swords arrived at his parents' home.
Kuhns reports similar taunts. After one especially nasty bout with Shell on a message board, he said the electricity in his home was shut off and that the power company told him his bill had been directed to Amazon Natural's offices.
"All of these things started happening not after I invested in [Amazon Natural], but after I crossed Janice Shell," Kuhns said. "Where it stops, nobody knows."
Shell said she has nothing to do with the shenanigans, but that she's having fun watching from the shadows. "These people believe what they want to believe," she said. "What more can I say?"
More online: Personal-finance writer Kathy Kristof outlines the options in making sound investment decisions at chicagotribune.com/investing101.
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