First off, I have absolutely NO position in IMOT. I had purchased a few shares back in early March but cashed in Monday, 8 March 99. This is merely a free public service announcement, food for thought. Having said that, consider the following:
DUE DILIGENCE
The process of investigation, performed by investors, into the details of a potential investment, such as an examination of operations and management and the verification of material facts.
sec.gov
Navigating the Frontier: Where the Frauds Are
The Internet allows individuals or companies to communicate with a large audience without spending a lot of time, effort, or money. Anyone can reach tens of thousands of people by building an Internet web site, posting a message on an online bulletin board, entering a discussion in a live "chat" room, or sending mass e-mails. It's easy for fraudsters to make their messages look real and credible. But it's nearly impossible for investors to tell the difference between fact and fiction.
Online Investment Newsletters
Hundreds of online investment newsletters have appeared on the Internet in recent years. Many offer investors seemingly unbiased information free of charge about featured companies or recommending "stock picks of the month." While legitimate online newsletters can help investors gather valuable information, some online newsletters are tools for fraud.
Some companies pay the people who write online newsletters cash or securities to "tout" or recommend their stocks. While this isn't illegal, the federal securities laws require the newsletters to disclose who paid them, the amount, and the type of payment. But many fraudsters fail to do so. Instead, they'll lie about the payments they received, their independence, their so-called research, and their track records. Their newsletters masquerade as sources of unbiased information, when in fact they stand to profit handsomely if they convince investors to buy or sell particular stocks.
Some online newsletters falsely claim to independently research the stocks they profile. Others spread false information or promote worthless stocks. The most notorious sometimes "scalp" the stocks they hype, driving up the price of the stock with their baseless recommendations and then selling their own holdings at high prices and high profits. To learn how to separate the good from the bad, read our tips for checking out newsletters.
Bulletin Boards
Online bulletin boards – whether newsgroups, usenet, or web-based bulletin boards – have become an increasingly popular forum for investors to share information. Bulletin boards typically feature "threads" made up of numerous messages on various investment opportunities.
While some messages may be true, many turn out to be bogus – or even scams. Fraudsters often pump up a company or pretend to reveal "inside" information about upcoming announcements, new products, or lucrative contracts.
Also, you never know for certain who you're dealing with – or whether they're credible – because many bulletin boards allow users to hide their identity behind multiple aliases. People claiming to be unbiased observers who've carefully researched the company may actually be company insiders, large shareholders, or paid promoters. A single person can easily create the illusion of widespread interest in a small, thinly-traded stock by posting a series of messages under various aliases.
Online Investment Fraud:
New Medium, Same Old Scam
The types of investment fraud seen online mirror the frauds perpetrated over the phone or through the mail. Remember that fraudsters can use a variety of Internet tools to spread false information, including bulletin boards, online newsletters, spam, or chat (including Internet Relay Chat or Web Page Chat). They can also build a glitzy, sophisticated web page. All of these tools cost very little money and can be found at the fingertips of fraudsters.
Consider all offers with skepticism. Investment frauds usually fit one of the following categories:
The "Pump And Dump" Scam
It's common to see messages posted online that urge readers to buy a stock quickly or tell you to sell before the price goes down. Often the writers will claim to have "inside" information about an impending development or to use an "infallible" combination of economic and stock market data to pick stocks. In reality, they may be insiders or paid promoters who stand to gain by selling their shares after the stock price is pumped up by gullible investors. Once these fraudsters sell their shares and stop hyping the stock, the price typically falls and investors lose their money. Fraudsters frequently use this ploy with small, thinly-traded companies because it's easier to manipulate a stock when there's little or no information available about the company.
Now, dial your yellow page browsers to Buchanan Consulting in Longwood, FL. Find the business? An address?
Now, dial your yellow page browsers to Tedrow Communications, Corp. in Orlando, FL. Find anything?
Now, conduct a search at the Wall Street Journal archives on-line (http://www.wsj.com). Find any mention of IMOT; Intermost Corp. or ChinaEcom in the WSJ or Barron's archives? I didn't.
The old IMOT web page listed Computer Associates as a partner. Consider this:
Subj: ChinaEcom/Intermost
Date: 3/19/99 8:39:59 AM Central Standard Time
From: Yvette.Gutierrez@CAI.COM (Gutierrez, Yvette)
I have received your inquiry as to our partnership with Chinaecom and/or Intermost. From the investigating that I have been able to do thus far, I have not be able to establish that we have any relationship with either of these two companies. (Egan being the other) We are continuing to look into this and I will let you
know if that changes.
Yvette Gutierrez
Investor Relations
One Computer Associates Plaza
Islandia, NY 11788
Phone: (516) 342-4078 Fax: (516) 342-6864
email: yvette.gutierrez@cai.com
Sorry folks, but until this company files financial data with the SEC and quits announcing PR News releases through telephone booths in Florida and IBC, I'm on the sidelines! Can you spell SCAMOLA? |
