ANTISOCIALMEDIA ALERT!! "It seems Schneider has been sued multiple times for making defamatory statements about companies in anonymous message board settings, such as Yahoo and Silicon Investor, "
Ziasun and Bryant Cragun are two of the law suits. Patrick Byrne and Judd Bagley supports Utah Boiler Room crooks.
also visit: Head of Fraud Network : wwauctions.biz
What a CRIMM!!
Here is the proof:
High flyers' divorce proceedings expose world of `boiler room' investing
David Baines
CanWest News Service; Vancouver Sun
Saturday, May 13, 2006
VANCOUVER - For more than a decade, Vancouver businessman Mark Harris made a fortune running boiler rooms high-pressure telephone stock sales operations in Europe and Asia. Unfortunately for his net worth, his wife Lori made a career out of spending it.
From 1986 to 1997, Harris worked in phone rooms that used high-pressure methods to sell stocks, mostly of dubious value, to people all over the world. Initially, he manned the phones himself, but eventually he became involved in setting up and overseeing the sales operations.
For various reasons, some of them regulatory, he moved often: from Spain, to Hong Kong, to Macau, back to Hong Kong, then to the Philippines, California and finally Vancouver. Throughout most of this period, he worked closely with Bryant Cragun, owner of a boiler room operation that was called Oxford International Management.
Wherever he went, Lori followed.
It was a nomadic existence, but it had its rewards. In his peak earning years, he made more than $500,000 US per year.
Neither of them were shy about spending it.
They employed a maid, a gardener, a chauffeur, even a dog-walker. Every year, for Lori's birthday, they went to Italy. During the beach season, they spent weekends on Boracay Island, about 90 minutes from Manila.
Aside from the occasional modelling job, Lori Harris did not work. She took Spanish lessons, she played tennis, she flew to Hong Kong to have her hair done. But mostly she shopped.
When her credit card at Saks Fifth Avenue exceeded her limit, she simply opened another account and purchased an $8,000 full-length mink coat.
She shopped so much that she hired a personal shopper to help her.
In 1995, the couple began construction of a mansion on an acre of land in Osoyoos, B.C., almost 400 kilometres east of Vancouver. The project, originally budgeted at $500,000, ballooned to $3 million.
In 1997, Harris returned to Vancouver to provide investor relations services for many of the same companies he had been selling by phone. Business was initially good, but by 2000 the market had collapsed. His income was decimated and his marriage in shambles.
In 2002 they separated.
Unable to agree on a division of assets, the couple went to court. In a 10-day trial earlier this year, and in a 14-page decision released just days ago, their private lives were laid bare, providing unique insight into the controversial and lucrative business of boiler room operators.
Not mentioned in the decision are the people who bought stock from Harris's telemarketers. According to newspaper accounts, court records and securities filings, many of them lost substantial amounts of money.
One was Guy Fletchere-Davies, a 62-year-old carpet manufacturer in Melbourne, Australia. He told the Wall Street Journal in August 2000 that he bought shares of ZIASUN Technologies Inc., which traded on the dreadful OTC Bulletin Board in the U.S., and several other junior stocks, from the Manila office of Oxford International Management, where Harris ran the telemarketing operation.
Fletchere-Davies said his brokerage account was passed around among several Oxford salespeople, then to a successor firm. In late 1999, ``the phone calls stopped and the paperwork dried up.'' ZIASUN collapsed and he lost $150,000.
By this time, Harris had left Oxford and at Cragun's behest he had set up an investor relations business, Veritas Marketing & Communications Group Ltd., with offices in Vancouver and Solana Beach, Calif., to help promote ZIASUN and other stocks Oxford was selling.
Oxford and Veritas have since shut down and Cragun has reportedly retired, but Harris continues to provide investor relations services through a private firm, Skylla Capital Corp., which operates out of a corner office in downtown Vancouver.
Harris denies any of his business activities have been predatory:
``Every company I have been associated with was fully registered, and all the companies we recommended were legitimate,'' he said in an interview this week.
-
According to the divorce action, Harris, 49, was born and raised in Calgary.
He dropped out of school in Grade 11 and worked at a steel mill, as a truck driver, at McDonald's and as a car salesman.
In 1986, he met and married Lori, seven years his junior. He began training as a stock broker, then a friend offered him a job with a firm called Indigo Investments in Torremolinos, Spain.
``He immediately began work as a telemarketer persuading prospective clients to purchase stock in companies,'' Judge Linda Loo noted in her judgment.
It was clear he had an aptitude for the job, and he worked in several operations.
In 1990, Harris arrived in Hong Kong and teamed with Cragun, a former senior vice-president with Goldman Sachs, in another telemarketing operation.
Within months, however, Hong Kong regulators stepped in and the phone room was shut down.
No reason was given.
-
The following year, in April 1991, Cragun established another telemarketing business in the Philippines, Oxford International Management, which styled itself as a ``U.S. equity fund manager.''
He hired Harris to manage the phone room, with huge success.
Within four months, Harris was making $10,000 US per month, plus a percentage of sales. By 1993, the firm had grown to 50 employees and he was making more than $250,000 US per year. By 1995, the firm had offices in Spain, Brussels, Taipei, Indonesia and Bangkok, and he was making $500,000 US annually.
Life was good. He and Lori travelled extensively.
-
Oxford had a stable of junior companies that it organized, financed and promoted to retail investors. Among them were ZIASUN Technologies Inc. and Chequemate International Inc.
Both were listed on the OTC Bulletin Board, a trading forum that is virtually unregulated. In fact, prior to 1999, bulletin board companies didn't even have to issue financial statements.
ZIASUN and Chequemate financed their businesses by selling large blocks of stocks to foreign purchasers under a U.S. securities rule known as Regulation S.
Under this rule, issuers can avoid going through the onerous process of a registered stock offering by placing the shares with ``accredited investors'' outside the country. The condition is that these shares cannot be sold back to U.S. investors for at least a year.
Harris rejects the characterization of Oxford as a ``boiler room.''
He said the companies that Oxford recommended were all legitimate companies and a lot of Oxford clients made money. ``I bought IBM and lost a lot of money on it. It's all based on timing,'' he said.
He also said neither he nor Cragun have ever been accused of wrongdoing.
-
But the gravy train was coming to a halt.
By 1996, Oxford had more than 10,000 clients, but according to Loo, the stock market had turned and Harris ``was forced to deal with unhappy investors.''
Cragun opened an investment banking business in San Diego and invited Harris to join him. In October 1997, Mark and Lori moved to Del Mar, just outside San Diego, and rented a 3,200-square-foot ocean-view home for $4,750 a month.
Within a few months, Cragun decided he wanted Harris to help him support the public companies that he was promoting. So Harris incorporated Veritas Marketing & Communications with offices in Vancouver and Solana Beach. He commuted back and forth, spending Tuesdays to Friday in Vancouver, and Saturday to Monday in Del Mar.
Veritas provided investor relations services for several companies, including ZIASUN. At its peak, it had 20 employees, but it was not a lucrative enterprise. Harris was paid in shares, which initially soared in value, but by the time they became free-trading, the share price had collapsed. ZIASUN, for example, rose to $30, but plunged to 30 cents by the time they werecleared for trading.
In 2001, Harris's total income slumped to $10,000, but Lori could not adjust to this new financial reality. As Loo remarked: ``Her passion for high-end designer fashions continued undeterred.'' Among the items she bought, over her husband's objections, was the $8,000 coat.
The following month, in September 2002, they separated.
-
Since their separation, Lori has been living in the Osoyoos mansion, but Loo has ordered it be sold and net proceeds divided between them.
She also ordered Mark to pay $150,000 spousal support in two equal instalments in January 2007 and January 2008.
It is not clear what Lori will do
``Mr. Harris has suggested avenues Ms. Harris might explore, such as being a veterinary assistant, because she loves animals, or being a personal shopper, because she has exquisite taste and enjoys interacting with people,'' Loo noted.
However, she added, Lori ``has taken no real steps towards finding work or training because she claims she is too emotionally distraught....''
In 2003, Mark returned to Marbella, Spain, to set up offices for another telemarketing firm called Global Capital Asset Advisors. At about the same time, he began a common-law relationship with Jonni-Colleen Sissons, then a broker with IPO Capital Corp.
In January 2004, Sissons gave birth to their son in Malaga, Spain, and they have since returned to Vancouver. Sissons is now registered with Northern Securities and Mark is pursing his investors relations business through Skylla Capital.
He refuses to say who his clients are: ``I have been advised by my lawyer not to say anything further to you.''
dbaines@png.canwest.com
Vancouver Sun
© CanWest News Service 2006
Beyond the SEC's Reach, Firms Sell Obscure Issues to Foreign Investors
By JOHN R. EMSHWILLER and CHRISTOPHER COOPER
Staff Reporters of THE WALL STREET JOURNAL
please visit wsj.com
The call couldn't have been timed better. Adrian Lawlor, a Dublin computer-systems salesman, and his wife had just received a $17,000 settlement from a car accident his wife had been in when a broker from International Asset Management in Brussels rang him up. Speaking with an American accent, the broker told Mr. Lawlor he had just the ticket for entering the red-hot U.S. stock MARKet.
"They said they had a wonderful investment opportunity for me," Mr. Lawlor says.
Although "absolutely green" when it came to stocks, Mr. Lawlor decided to sink most of the settlement into the broker's recommendations. That was in 1996, and he was happy for a time and unruffled when his broker moved from Brussels to Barcelona, Spain. But then he tried to sell some shares of a small-cap issue that had begun to stumble. The broker said he would make the sale only if Mr. Lawlor agreed to plow the proceeds -- and $10,000 more -- into shares of a tiny California company called ZIASUN Technologies Inc.
A Matter for the Police
Mr. Lawlor refused and then complained to Spanish regulators. Though the brokerage was based in Barcelona, Spanish regulators said they had no jurisdiction because IAM apparently didn't sell to Spaniards. "If you consider this situation a matter of fraud," Spanish regulators wrote, "the normal procedure is to get in touch with the police."
Instead of calling the police, Mr. Lawlor managed to sell some shares "by complaining bitterly to my broker." But still, he hasn't been able to unload his biggest holding, a stake in a troubled start-up that he bought for $6,000 and that is now worth about $90. He has lost contact with his IAM broker, who went by the name Steve Young.
"An Irish citizen buying U.S. stocks through a dealer based in Spain," Mr. Lawlor says. "The whole experience made me realize how alone I was."
Alone in a growing crowd, that is. Nurtured by economic liberalization and the steady rise in U.S. MARKets over the past decade, legions of Europeans and Asians have developed a STRONG appetite for stock investments. Much of the focus is on the U.S.; in just the 12 months ended March 31, foreigners bought $2.8 trillion worth of U.S. shares, up 65% from the previous 12 months, the U.S. Treasury says. After accounting for stock sales, net foreign purchases totaled $159.6 billion during the period. About 85% of that was from Europe.
Many Affiliates, Many Names
But as the global investor base broadens, a big problem has arisen: Investors are often venturing into a gray area that national regulators are either unable or unwilling to police. And that makes them particularly vulnerable to the likes of International Asset Management. This outfit and its many affiliates operating under many names throughout Europe and East Asia buy shares in small, obscure U.S. companies, some linked to IAM through equity or other ties, and then sell the stock to foreigners who often are ill-informed about the companies they are investing in, the difficulty of trading the stock and their own lack of regulatory protection.
IAM officials turned down repeated requests for interviews and have refused to identify the precise location of their Barcelona offices.
In recent years, investors from Athens to Australia have purchased millions of dollars of stock in U.S. companies from IAM and its affiliates. Many, like Mr. Lawlor, have found themselves unable to sell their shares or even get stock certificates, and nearly all are unable to get help from regulators.
Sudden Disappearance
Guy Fletchere-Davies, a 62-year-old carpet manufacturer in Melbourne, Australia, bought ZIASUN and other small U.S. stocks over several years from the Manila office of Oxford International Management, a brokerage firm with ties to IAM. Mr. Fletchere-Davies says his account was passed around among several Oxford salespeople and then to a successor firm. Late last year, "suddenly, the phone calls stopped and paperwork dried up," he says.
The Australian has since embarked on a frantic telephone journey from Manila to Jakarta to Manhattan to the British Virgin Islands in hopes of learning the fate of the nearly $150,000 that was to be his retirement nest egg. "We don't know who to talk to,'' he says. "We don't know where to go."
Nikolas Morokutti, a 26-year-old owner of a computer business in Innsbruck, Austria, thought he knew where to go when he had trouble getting his ZIASUN share certificates from IAM. He called the U.S. Securities and Exchange Commission. The agency, he says, told him that it couldn't help because the shares were issued under Regulation S.
These Regulation S stock sales are allowed under a 10-year-old provision of U.S. securities law that is intended to allow American public companies to raise capital from experienced foreign investors without the onerous registration process required to sell stock in the U.S. Once sold abroad, Regulation S shares cannot legally be resold to U.S. investors for at least a year; they can, however, be sold to other foreigners during that period.
While hundreds of perfectly legal and legitimate S-share transactions occur each year, unscrupulous operators have found a way to exploit Regulation S to their advantage. The way it often works, a promoter that is at least nominally based outside the U.S. buys large blocks of S shares from American issuers at deep discounts and then sells them at huge MARKups to neophyte investors abroad.
The SEC doesn't comment on specific cases and won't comment on the current state of Regulation S. Non-U.S. regulators aren't much help either, though they periodically warn citizens to avoid boiler-room brokers operating outside of their home country. British stock regulators recently noted a sharp rise in the number of boiler rooms in continental Europe that target English residents. "The firms are not registered here, so it's up to our counterparts in other nations to regulate them, which is very frustrating," says Sarah Modlock of Britain's Financial Services Authority.
A Lot in Common
Over the past few years, IAM and related brokerage firms have MARKeted shares in about a dozen small U.S. companies. Overseas customers of IAM's offices in Barcelona often receive a monthly publication called "The Capital Growth Report," which mixes glowing reviews of the small companies in IAM's stable with commentary about well-known companies such as Compaq Corp. Several of the small companies have held stock in each other, used the same investor-relations firm or employed Jones, Jensen & Co., a Salt Lake City accounting firm, which is auditor of ZIASUN, a company that looms large in IAM's pitches.
In May, the SEC filed administrative charges against the accounting firm's two named partners, R. Gordon Jones and MARK F. Jensen, for "recklessly violating professional accounting and auditing standards" in an audit of a company unrelated to ZIASUN. Mr. Jensen denies wrongdoing. Mr. Jones didn't return phone calls.
The tale of IAM and its affiliates is deeply entwined with that of ZIASUN, based in Solana Beach, Calif., just north of San Diego, in a modest ground-floor office suite nestled between a freeway and the sea. An IAM affiliate has an address on the same floor of a Hong Kong office building as ZIASUN's office in that city, and ZIASUN maintains the Web sites of IAM and of some of its affiliates.
ZIASUN has operated under various names since it was founded and went public in 1996, and it has engaged in businesses ranging from motorcycles to soda dispensers. In news releases, it now bills itself as "a leading Internet technology holding company focused on international investor education and e-commerce." About 85% of ZIASUN's 1999 revenue came from a business that operates traveling seminars on Internet stock trading for $2,995 a pop. "You Can Become a Millionaire on Regular Pay," says one seminar flier.
In an April 1999 news release, ZIASUN said its 1998 audited earnings totaled $1.15 million, on $3.5 million in revenue. When the company filed financial results with the SEC last September, the audited 1998 sales had dropped to $2.3 million. In a later SEC filing, ZIASUN again revised downward its 1998 sales, to $760,529, and cut net income to $769,320. ZIASUN earnings included profits from securities transactions involving other public companies. Some of ZIASUN's securities holdings include companies that also issue large amounts of Regulation S stock and whose shares have been sold by IAM and affiliates.
ZIASUN officials decline to be interviewed, citing a pending lawsuit filed by ZIASUN in federal court in San Francisco against a group of Internet critics of the company for allegedly mounting a "cybersmear campaign" against ZIASUN. In a written statement in response to written questions, ZIASUN officials say they are "fully committed to preserving and developing the shareholders' equity."
More than half of ZIASUN's own 27 million shares outstanding have been sold to foreigners under Regulation S, according to the company's SEC filings. In two transactions in 1997, ZIASUN sold 15 million shares at 10 cents a share under Regulation S to foreign investors, whose identities didn't have to be disclosed in public records. At about the same time, investors in Europe and Asia say they received calls from salesmen from IAM and related brokerages offering ZIASUN stock at $4.50 or more a share. In the U.S. during the same period, ZIASUN, under previous corporate names, was trading on the Nasdaq Bulletin Board at between $1.25 and $5.50 a share on average daily volume of several thousand shares.
Vladimir Kaplan, a Zurich doctor, bought some of those ZIASUN S shares. His Barcelona-based IAM broker, Lynn Briggs, offered ZIASUN at $4.50 a share on Oct. 7, 1998 -- when the stock was trading in the U.S. for between $2.50 and $4 a share. Unable at the time to independently determine ZIASUN's stock price, Dr. Kaplan bought nearly 8,000 shares to start, and more over the ensuing weeks. Dr. Kaplan knew his broker as a senior portfolio manager at IAM and trusted his judgment, especially after Mr. Briggs flew to Zurich to make a personal sales call. What he says he didn't know: According to SEC filings, Mr. Briggs also was one of ZIASUN's founders. Mr. Briggs couldn't be located for comment.
Tapping Overseas Buyers
Titan Motorcycle Co., a Phoenix, Ariz., motorcycle manufacturer, is another favorite of IAM brokers. Between 1996 and 1998, Titan issued about 5.3 million shares of Regulations S securities in chunks to unidentified overseas buyers for an average price of $1.32 a share, even as clients such as Dr. Kaplan were purchasing stock in the company for far more. According to SEC filings, about a third of the company's total shares outstanding have been sold to foreigners.
Titan officials didn't return calls. In a brief written statement, Titan Chief Executive Frank Keery said that all company Regulation S sales "were conducted precisely as required by law." Titan's "knowledge of subsequent resale activities is essentially nil as these resales take place exclusively outside the U.S.A.," he added.
ZIASUN and Titan have something in common besides IAM. Bryant CRAGUN, a former president and chief executive of ZIASUN and now a consultant to the company, describes himself in court documents as "investment adviser and fund-raiser" for ZIASUN, Titan and other small companies whose shares are sold by IAM and related brokerages. He co-owns four Titan motorcycle dealerships.
Several investors say their brokers referred to Mr. CRAGUN as a senior official of IAM. Stefan Van Rooyen, a Swiss investor, says he was told by his Barcelona-based broker in June that Mr. CRAGUN was IAM's president. A recent SEC filing shows IAM has the same U.S. address as Mr. CRAGUN, at a gated condominium project in Solana Beach, not far from ZIASUN's headquarters.
In a letter, Mr. CRAGUN says he was never an IAM officer. He says he leases the condominium in Solana Beach. He acknowledges that between 1991 and 1997, he was chairman of Oxford International, a Philippine brokerage firm that MARKets many of the stocks IAM touts and that, according to SEC filings, has bought Regulation S shares in two such companies.
Mr. CRAGUN says the SEC spent five years investigating his role in selling Regulation S shares overseas and "never filed anything against me." An SEC spokesman declines to comment. An offering statement for an overseas investment fund founded by Mr. CRAGUN says he has a U.S. securities broker's license. The National Association of Securities Dealers says its records show that Mr. CRAGUN hasn't held a license since 1988. Mr. CRAGUN, in a written response, says that putting his license status in the present tense was a "typographical error."
Mr. CRAGUN says he sold his interest in Oxford in 1997 to a company headed by William STRONG, who shows up as an account representative on monthly statements received by several IAM customers. Mr. STRONG, who says he was merely an IAM consultant, confirms that he bought Oxford. He says IAM and Oxford are "essentially the same company. They are two different entities in the same arena with the same people."
In an April filing, Titan said it issued 724,638 shares of Regulation S stock early this year to Oxford International in connection with a 1996 loan. As Oxford's owner, Mr. STRONG says he never received any of the stock (doing so could violate Regulation S, since he's an American). Titan officials didn't respond to questions on this matter.
No Outward Signs
In Barcelona, IAM has in the past shared offices, telephones and personnel with at least three other brokerage firms -- including one owned for at least a time by Mr. STRONG. But the exact location of IAM's current office is a mystery. A phone receptionist provides only a mailing address. That address leads to a small office building that has no identifying signs and that on three visits during business hours was locked and dark. Another location, often cited on IAM's correspondence, is an unMARKed and rundown suite of offices in an unfashionable part of town staffed by a woman who appears to run a phone service for dozens of companies. A woman who answered the phone at the firm's Manila office said all sales operations had ceased.
Several investors say their brokers, though hard to locate, have recently been pushing them to exchange stock in ZIASUN and other companies for shares in a British Virgin Islands-registered mutual fund called the Morgan Fund. Mr. Fletchere-Davies says he agreed to move his money into the Morgan Fund as an alternative to losing a large chunk of his investment in individual stocks, though he says he has been told he might not be able to cash out of the fund for at least several months.
A Morgan Fund brochure shows that Mr. CRAGUN, the former ZIASUN executive and former Oxford owner, is one of the fund's two directors. Mr. CRAGUN says he set up the fund because buying companies' shares directly "is way too much risk to individual investors."
Write to JOHN R. EMSHWILLER at JOHN.emschwiller@wsj.com and Christopher Cooper at christopher.cooper@wsj.com
Muckraker digs up dirt on companies, posts it on Net
By CHRISTOPHER CAREY
OF THE POST-DISPATCH
Sunday, Jun. 13 2004
FREDON TOWNSHIP, N.J. - Floyd Schneider, a mortgage broker with a booming voice
and boundless energy, has given three sermonettes at the small church he
attends.
Two were about stock fraud. The third might have been, were it not for the
pleadings of his wife, who urged him to focus on something more biblical.
Schneider, 47, leads a second life in cyberspace as the Truthseeker, nemesis of
wayward capitalists.
It is both an avocation and an obsession. Since 1998, he has posted more than
30,000 messages on Internet stock boards, raising questions about companies and
digging into the backgrounds of their officers, directors and consultants.
He has been sued by three of his targets and racked up nearly $60,000 in legal
bills.
Still he persists, driven by the belief that government regulators are
overmatched in their battle against white-collar criminals.
"It comes down to a moral obligation to society," Schneider said.
The information that he uncovered or pieced together has helped the Securities
and Exchange Commission and National Association of Securities Dealers bring
cases against rogue companies, financiers and promoters.
Schneider is thinking about cutting back on his sleuthing, to spend more time
with his three children, who range in age from 4 to 6 . But he remains
captivated by a case that the SEC has declined to pursue.
"The biggest thing that's kept me going is ZiaSun," Schneider said. "It's
something I've never been able to put to rest."
ZiaSun Technologies Inc., a little-known Internet holding company in
California, sued Schneider and seven other Internet posters in federal court in
1999, saying they made false allegations as part of a conspiracy to drive down
its stock price.
Bryant D. Cragun, who had been ZiaSun's chief executive, filed his own suit
against the Internet posters in California state court.
"They wanted more than $1 million," Schneider said. "What did I do? Just posted
my opinion on the Internet."
The defendants became known in Internet circles as the ZiaSun 8.
In its suit, ZiaSun claimed that the posters wrongly accused the company and
its executives of trying to mislead and defraud investors.
Cragun alleged that the posters falsely linked him to overseas brokerages -
regulators have since labeled them "boiler rooms" - that sold stock in ZiaSun,
Chequemate International Inc. and other small U.S. companies to foreign
investors.
ZiaSun and Cragun won court orders in early 2000 that barred Schneider from
making further "false or defamatory" statements and required him to retract
some information he had put on the message boards and a personal Internet site.
The plaintiffs and the members of the ZiaSun 8 agreed later that year to settle
the broader case, with no finding of fault against any of the parties.
On the day the parties settled, Cragun said in a press release that he knew
little about PT Dolok Permai, one of the overseas companies that had peddled
ZiaSun's stock.
However, ZiaSun's own SEC filings listed Cragun's address as an $844,000
oceanfront condominium in Solana Beach, Calif., that real estate records show
belonged to PT Dolok.
And documents filed in support of the injunction against Schneider show that
Cragun was in close contact with the Indonesian firm. For instance, copies of
letters that investors sent to their PT Dolok brokers after Schneider issued a
negative report on ZiaSun bear markings that indicate that they quickly were
forwarded by fax to Cragun.
What's more, court documents show that when Cragun and his wife divorced in
2001, he received their ownership interest in PT Dolok and Oxford International
Management, a similar firm incorporated in the Philippines.
In other words, Cragun was part-owner of a firm that he claimed to know little
about - and that had sold shares of his company to offshore customers.
Schneider has been perfecting his research methods since 1998, when he first
accessed the Internet through an America Online dial-up account at his office.
He eventually found his way to the stock message boards and discovered a thread
where people discussed how to use search engines to research stocks. He later
taught himself how to sift through SEC filings online.
He also pulled together information on suspect companies and forwarded the
dossiers to reporters.
Schneider's research has led to stories by the Wall Street Journal, Dow Jones
News Service and other news organizations.
John Emshwiller, a national correspondent at the Wall Street Journal, included
Schneider in his 2000 book about the online stock world, "Scam Dogs and Mo-Mo
Mamas." He also did a story on Cragun and the boiler rooms in August that year.
Business Week featured Schneider in a December 2002 story on amateur
investigators.
For a time, Schneider had his own Web site, where followers could pay $39.95 a
year to read his reports. He even put out "sell" recommendations, in the same
style as the "buy" reports issued by the promoters. His logo was a flying pig.
But when Schneider learned that charging for information could require him to
register with the SEC as an investment adviser, he refunded the subscription
money.
"I didn't need it," he said. "I do well enough in my mortgage business."
Indeed, he generated $31.8 million in home loans last year, making him one of
the top producers in his company.
The only way individual investors can overcome the limitations of the SEC and
counter stock fraud is by taking charge of their own destinies and doing their
own digging, he said.
"There's so much money involved, and (stock fraud is) so easy to do, and no
one's preventing it," he said. "It's legalized thievery." |
