THE NEXT TIME SOMEONE REFERS TO STOCK DETECTIVE REFER HIM TO THIS!!
To: Jim Johnson (6019 )
From: witeout Saturday, Mar 13 1999 6:28AM ET
Reply # of 6030
New Hot News!! Stinky Stock Detective
Kevin Lichtman of Axxess Inc. failed to disclose on the web that he was paid pitchman for stock that dropped from $2.00 to .02 cents!
What is that saying about throwing stones when you live in a glass house? Well, Kevin Lichtman of Stock Detective may need to listen to the lesson therein. Why? Guess who may be breaking the law while pretending to be the defender of the people. That's right its Kevin Lichtman from the infamous Stock Detective web site. Stock Detective is a web site tries to dig up dirt on whoever they can. Especially people that dare to talk badly about the site.
One of SD's latest shenanigans has been over disclosure of payments to Licktman by public companies. The law is simple on this issue. Section 17b of the Securities Act, requires paid stock promoters to disclose the amounts and terms of payments received for their efforts.
We caught a whiff of Lichtman's outrageous hype of bulletin board stock on the Silicon Investor web site. Paid pitchman Lichtman, made post after post on the website about Spa Faucet, Inc (OTCBB:DRIP), without disclosing anywhere how much he was paid to hype the stock. While Kevin Lichtman was shamelessly pumping Spa Faucet, Inc, the stock plummeted from $2.00 a share to .02 cent a share. All the while Lichtman passing himself off as an independent and impartial stock picker when, in fact, he was nothing more than a paid pitch man for DRIP. On July 22nd 1996 or 10:59AM ET on Sillicon Investor, in Lichtman's post DRIP is called "Hot Stock of The Week". The same post states "..as word of Spa's earnings gains a wider audience, share prices are likely to trade at higher multiples". The only way this stock looked to be trading higher was if you stood on your head. In the post Lichtman never tells the unsuspecting read that he was paid to pump this stock.
It even seems to us that Lichtman might have been disclosing inside information over the web before it was announced. On Jul 29th 1996 10:06AM ET Lichtman wrote in his SI thread "I hope to see some news from Spa shortly on a big increase in product orders." Was Kevin spreading inside information that he received as the company's paid puff peddler?
Lichtman kept on posting. The following are some of his attempts to pump up the stock;
January 13 1997 Lichtman wrote; "To: Kevin Lichtman From: Kevin Lichtman. New web site for Spa and other items of interest. Spa Faucet has its own web site at spafaucet.com While still under construction it is an excellent place to learn more about the company. In fact, they are putting up an electronic catalog of all their products. Make sure you have your monitor set on "thousands" of colors for MAC or 64,000 for PC's. Also, Spa will make a presentation tomorrow at the monthly forum of the New York Society of Securities Analysts and 2nd quater results should be announced soon showing additional progress."
January 16 1997 he wrote; "To: Ernie Miller From: Kevin Lichtman. I did. In fact, I was there, at the presentation. Leonardo Sudman was soft-spoken but confident that sales of Spa Faucet products would continue to rise as the company keeps getting more and more orders for new products from its major customers, especially Home Depot and Lowes. Sudman brought several sample faucets in their packaging and I had a chance to examine them and was VERY impressed with the craftsmanship and styling. These were heavy, solid brass fixtures finished impeccably in brilliant polished brass, chrome, 24K gold plated and porcelin enamel. Very high quality stuff! On an interesting note, one of the analysts attending asked Sudman if the major players in his market were aware of Spa Faucet yet - to which he replied, absolutly!"
January 16th 1997 he wrote "To: Kevin Lichtman From: Kevin Lichtman. Press release today. Spa announces purchase of Eco2 owned shares...."
January 29 1997 he wrote, "Free Corporate Profile from Spa Faucet's web site....go to www.spafaucet.com/freereport.html and fill out the on-line request form."
January 30 1997 he wrote; "Spa is currently "dug-in" with accountants in order to prepare its form 10-sb which it plans to submit to the SEC in order to become a "fully reporting" company. This is also a requirement of listing on AMEX. Hopefully, the bean counters will emerge soon and we'll be able to access Spa's financials on EDGAR. Second quarter results should be included in the form 10. The move by the investor group led by Sudman should send confidence signals to the market. After all, they purchased a huge interest in their own company in rule 144 resticted shares. As the company's investor relations contact, I can tell you that I've already received a few inquiries from investors and market makers who've picked up on this info and are starting to look into the company. Recently, there has been a little short-selling activity and some profit taking from investors who got in last year at much lower prices, but it seems to be offset by about an equal amount of new buying at this time, resulting in a fairly stable price range. If the company lists on AMEX, short sellers may lose interest since the exchange's short selling rules are more restrictive than the OTCBB's. Since I can't always keep up with these message boards, I suggest that interested investors visit Spa's new web sit at spafaucet.com for news and updates."
March 7th 1997 we found a press release on DRIP with the following contact information; CONTACT: Kevin Lichtman, Investor Relations, 407-786-6539, or e-mail, kevin@magicnet.net
April 8th 1997, Lichtman wrote the following to himself and for the world to see; "To: Kevin Lichtman From: Kevin Lichtman, To all. The DRIP-HMAT deal is designed to bring long term value to DRIP and HMAT shareholders. How the new preferred shares or the HMAT common will trade as a result of the announcement is a matter of speculation and, of course, market perception."
April 8 1997 he writes "Spa believes that the deal brings significant long-term value to its shareholders through improved fundamentals and performance. The prospect of a markedly enhanced balance sheet and substantially improved earnings could potentially put the value of Harmat shares (which Spa shareholders are receiving, and will own a majority) at much higher levels. My guess is is had Harmat been say...$5....at the date of the announcement, investors would probably think they had a better deal. However, Harmat's shares, by nature of their very small float, are rather illiquid and the company has had virtually no punlic exposure since it's IPO, which makes for the argument that at today's prices HMAT shares are, indeed, undervalued. The expectation is that "two-heads are better than one" and the combined company will ultimately trade with greater liquidity and at higher multiples than either did seperately. Also, the path to an exchange listing should be more direct with the combined companies as HMAT, the acquirer is already a fully reporting company."
April 8 1997 he wrote; " Spa should report its 9 months ending 2/28/97 within a few weeks. however, Spa is not a "reporting" company yet and therefore not bound by the same criteria as "reporting" companies."
As the stock started to fall, Lichtman seemed to be nowhere to be found. He did'nt even let the people listening to his hype know he was leaving and would not return. The following are the desperate attempts from people on his thread looking for answers;
May 30 1997 To: Kevin Lichtman. SPA is getting a good ole ### whipping. Do you have any thoughts on this. No news and the stock drop. Also any report on earnings coming out anytime soon? Thanks in advance for your response.
June 17 1997 Kevin, what is going on with our investment I still own drip through eco2 for now. As an investor I am concerned with my investment in drip lately. Would you please comment. I would like to know when earnings are due.
August 22 1997 Kevin why aren't you pumping up the stock It needs some air. 60% growth and you have nothing to say.
No response from Lichtman, only the sound of air escaping from the stock that he pumped up with such fervor. We have looked through the whole thread of this site for Lichtman's disclosure, none could be found. We looked at his profile he filed on the site and no Disclosure. We did of course find that he was the investor relations guy for this brick. Just look at the March 7th release there it is big as day.
When we called Lichtman we asked him about DRIP. We asked him if he was paid to hype DRIP. Lichtman proudly said "Yes, I was paid only cash!". We then asked him why he didn't disclose that over the web. His tone changed. He told us, "What the hell are you trying to do?". We said we wanted to know why he didn't have to disclose but others do. His answer , "Go F&*% yourself".
This is not the first time Lichtman has been under fire and accused of forgetting to follow the law that he pretends to find so sacred. On 12/06/97 DON BAUDER of The San Diego Union-Tribune wrote a story called "Exposer of stock fraud is itself under scrutiny". The story starts out to say "A Florida publisher that specializes in exposing stock market fraud is tied up in a government investigation of -- you guessed it -- alleged manipulation of its shares." The story ran after a Dec. 15 1997 Business Week story quoted sources as saying the stock of Altamonte Springs-based Axxess Inc. may have been pushed by brokers who were paid off.
Axxess is a company with a past that is confusing at best. The company was seemingly created from a company shell called Peppermint Park Productions, (OTCBB PPPS). Peppermint Park Productions, Inc. had all but stopped making money and had limited capital with which to support continuing business operations. The Company changed its name to Axxess, Inc, and Lichtman was made a director. Then the Company's common stock was reverse split on a 1-for-25 basis. Next the Company issue one million eight hundred fifty thousand (1,850,000) shares in the aggregate, to Kevin A. Lichtman , the incoming Chairman of the Board and President of the Company. In May of 1998 Axxess was going to be bought by a bakery, but that fizzled when the bakery could raise the bread needed for the deal. The company that tried to buy Axxess was a Sacramento company that once tried unsuccessfully to cash in on the espresso cafe craze and then turned to the bakery business and next felt they should try publishing on the Internet. Espresso bar to Bakery to Internet publishing, What was Lichtman thinking about? In his words in the article he states, "Basically, they are getting out of the bakery business and getting into the electronic publishing business,". Thanks Kevin that makes sense.
At the time of this writing we have supplied the SEC with 132 pages from Kevin's DRIP thread. The SEC said they are currently reviewing Lichtman's activity.
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