have you met Robert Millstone of Tradeway Consulting? according to PLNI SEC filings he owned 20,000,000 shares lol.
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SEC sues Valley PR firm for touting clients' stocks
J. Craig Anderson
The Business Journal
From the August 6, 1999 print edition
As part of a nationwide crackdown on microcap stock fraud, the U.S. Securities and Exchange Commission is suing a Valley investor-relations firm for allegedly touting its clients' stocks illegally.
But the firm's owners -- who admit they failed to disclose their relationship with the companies they promoted -- claim they are being railroaded despite immediate efforts to correct the violation.
The SEC filed a civil lawsuit on Aug. 3 in U.S. District Court in San Diego alleging that North American Corporate Consultants and its principals, Robert L. Millstone and Jay F. Johnson, hyped seven clients' stocks via newsletters and the Internet "without disclosing that the issuers of the stocks paid for those promotional efforts."
Lisa Gok, assistant Pacific regional director for the SEC's office of enforcement, said the lawsuit stems from a nationwide sweep that netted 82 people in 26 cases of alleged securities fraud.
Gok could not comment on the specifics of North American's case, but she said it is unlikely the SEC -- which is seeking a permanent injunction and civil penalties -- would take such action unless the violations were severe and widespread.
The official SEC complaint contends that for three years North American published and distributed thousands of newsletters to investors promoting its clients' stocks.
Neither the pamphlets nor an Internet site containing the same information ever mentioned that the firm was paid for its efforts.
In addition, North American failed to tell investors that it owned thousands of shares of the stocks it hyped, the complaint states.
But Millstone, whose office is in Peoria, said he and Johnson had been violating the securities laws unknowingly.
"The whole thing was resolved in 15 minutes about a year ago," Millstone said. "When they (the SEC) said we had made a mistake, we fixed it immediately. When they asked us for information, we sent it right away."
But remnants of North American's promotional efforts still can be found in various locations on the Internet. Silicon Investor, a microcap investor site (http://www.techstocks.com) includes a page touting one of North American's former clients, Caye Chapel Inc., chartered in Nevada. At the bottom of the release, Johnson's name and phone number are listed as the corporate contact.
But Johnson claims the information was put there by a third party without his consent.
Millstone said federal regulators treated his firm too harshly because they were caught up in the momentum of a nationwide fraud sweep.
"They put us through hell," he said. "They subpoenaed every client we ever had -- they nearly put us out of business."
Johnson, whose office is in Ramona, Calif., said the SEC is doing a service by trying to stop abuse on the Internet.
"I don't question their motives -- there is some cleanup needed," he said. "Unfortunately, we got caught up in that."
Johnson reiterated that North American simply didn't know the rules.
Still, Gok said ignorance is no excuse for entrepreneurs who promote stocks for a living. |
