Here is my opinion on a recent development ... People seem to think it wont happen weill it already is. Here is an exerbt from a news article
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Friday, July 3, 1998
By JOHN P. McDERMOTT
Of The Post and Courier staff
Reece, a self-employed, part-time security consultant from Alexandria, Va., was introduced to Green Oasis by O'Brien. The SEC said Carraway and O'Brien encouraged him "to publish positive information about the company in numerous Internet news group messages he wrote and in an electronic newsletter he published about the company."
While passing himself off as an impartial investor and denying any payments from Green Oasis, Reece had in fact been reimbursed by the company for four trips he made to Charleston, the SEC said.
Also, the agency said Reece received $600 from the company to upgrade his computer and a $20,000 discount on a Green Oasis securities sale, "all of which he failed to disclose in his publications." Reece could not be reached for comment.
The SEC is seeking fines and other sanctions against Green Oasis, Carraway, O'Brien and Reece for numerous violations of securities laws.
Hmmm Looks to me the private investors are going to start getting drug into some lawsuits by the SEC. Mr. Reece believed in a stock and under encouragement put out a news letter with information he was given. Same as a lot of us have. The only problem is Reece was reimbursed travel expenses by the company which made him a consultant. However the article states he was a part-time security consultant This is called ignorance because he was in fact paid. Now the $600.00 for the computer upgrade does not look innocent though the amount was small however it is a compensation. Many a private investor has or rather is making trips to companies to verify they are not getting duped. Lets just hope that in accepting any gifts or anything they are not duping themselves. His discounted stock could or could not be a private placement and I do not know about what that will do for anyone who has ever bought a private offering. However because he accepted compensation the private placement could be linked as a consultant compensation.
Now I have searched the SEC files and found nothing on Mr. Reece at all. The first amendment allows the press to do anything and what you have to prove is malice when they do. The movie "Absence of Malice" is a good example of this. This is the second time I have seen where a private investor is being brought into an SEC case aside from the first one where Riley G. is involved in with OVIS/RMIL. Now have Riley or Reece done anything wrong I do not know till the final judgment is past down. Heck for all I know I am probably going to be the third for MIDL except I accepted no compensate from MIDL nor any other company I have invested in. ... I am happy C. Riley questioned my integrity prior to me excepting the flight expenses from MIDL. (who by the way was discovered to be a professional in the industry of the market slamming AWLT) I Thank God he warned me. Because of that I pay for all my expenses including phone calls.
Looks to me like anyone that is a private investor that buys a private placement, or talks positive about a stock they like or is convinced (encouraged) to post news about a stock or slams a stocks on line might as well expect to be named in a SEC law suit. Ever notice that law suits by the SEC are starting to say `others'. Now I wonder who others blankets.
I can tell you right now the top 20 on SI are under the microscope of the SEC and I am in the top ten I believe.
Why do you think I am so adamant that people state what are the facts as they know them. Why do you think I debate about facts? Verification is the key. Except when posting a negative it is not wise if you have not personally verified it. If you slam a stock on speculation, emotional frustration and false information under freedom of speech you might be liable for your motive and ignorance. You could be assisting a shorter and not even know it. If you tout one and have no facts then that is pump and might be helping a promoter and not even know it ... Again ignorance is no excuse.
As I get accused more and more because of the knowledge I am acquiring by studying the market, laws, and so forth I guess I will look like a paid shill. Catch22 if you are ignorant you loose and if you educate yourself the masses use it against you. However the bottomline is if I naysay a stock I do it with facts if I post what a company tells me then until verified it is not a fact. Ignorance as in Mr. Reece's part which is my interpretation from reading the article is no excuse for not knowing what you are doing. Any e-mail sent out or websites does not qualify you as a professional but basically Mr. Reece was compensated so he is considered what we call a "spin doctor". His ignorance since he was encouraged is his only fault I read into the article. However because he was paid/compensated he could be considered a consultant. Welcome to the law of the market.
Again the SEC has as I have advocated many times stated know the rules and the laws of the SEC and NASD. Ignorance is no excuse what so ever. You want to naysay do it with facts. If you want to pump then verify the information and find the facts. However the most important key here is compensation now that is where you mess up. Anybody wonder why I stopped on my internet site for posting my picks it is because I have not got a clear go ahead from my attorney that I would still be a private investor and not an adviser or consultant.
As the internet continues to grow and investor become more diligent they are opening themselves up to numerous scenarios by the SEC who does watch these threads. If it is a negative and you cannot verify it you best just shut up. Since everyone one of the stocks I know of has a short position in it you may find yourself being investigated and accidentally attached to a shorter in the stock the SEC is investigating.
If it is not a verified fact then it does not exist. Heck in stepping up as the IR I know I have put myself in harms way on MIDL. Stupid maybe so but it is what I had to do. I am at war with all this mess of shorters, misinformation, character assassinations, etc. etc. etc. I am tired of shareholders getting duped. I got involved in MIDL in such a way I was able to be the main part of catching those that were about to nail the shareholders. I have picked my war and I am not going to walk away from the shareholders nor co-operating with the proper authorities.
Heck it appears we all are going to have to start doing back ground checks on who we talk to or communicate with on line. I believe somewhere I read a thought of wisdom something to the affect that if an on-line name does not have a real world name attached to it, it is wise not to believe them. They are going to have to burn a few before people realize this is money and people are getting took. Just try to make sure you are not the one accidentally getting set-up like possibly Mr. Reece. It can happen to anyone.
JMHO
GB
PS I warned everyone this was going to start happening. Do your homework and deal with the facts as you know them to be facts. Don not allow someone else to encourage your decision when trading. |
