SHOW ME THE STAMPS !!!
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Had Wall Street's case history been publicized in the US -- either when the promotion was being debunked in Canada in 1989 and 1990 or during a subsequent legal battle that pitted Church of Scientology members against Time magazine -- American journalists could have learned about the surreal world of stamp dealing once inhabited by John Reznikoff, the hair-collecting JFK/Marilyn Monroe papers player.
Wall Street Ventures Inc. was incorporated in British Columbia, Canada on February 28 1986 as 9006 Investments Ltd. The company changed its name to Wall Street Ventures before it began trading on the Vancouver Exchange on February 11 1988. Originally saying it was looking for gold, silver and other minerals in Nevada, by early 1989 Wall Street had announced it was going to acquire and market bulky collections of Middle Eastern postage stamps under the guidance of Reznikoff and a new board of directors.
In total, Wall Street claimed to have entered into transactions giving it access to at least 713 crates of stamps - issued by governments in Aden, the Trucial States and similar Arabian locales - weighing about 100 pounds each. These stamps had been authenticated by assorted N.Y. and Connecticut-based appraisers found by the company who valued them at upwards of US$386 million. Wall Street announced to investors: "These transactions are thought to be among the largest in the history of the philatelic world, according to available information, and are believed to make Wall Street the largest holder of South and Southeastern Arabian postal issue stamps in the world, as well as in all likelihood the world's largest stamp company."
Overseeing this philatelic treasure was a new management slate which included: a pair of Beverly Hills-based PR consultants and Scientologists, Michael Baybak and George Duggan (both of whom have been associated with other Vancouver penny stock promotions); a reputed "Sultan" Ghalib Bin'Awadh Al-Qu'aitl, said to be a "Self-employed consultant on Arabian history, Islamic art and business"; and Denis Potvin, the retired New York Islanders hockey star. Ex-NHLer Potvin was referred to in one promotional Wall Street article as a "retired professional hockey player and collector of Middle East stamps." And, it was claimed that, Wall Street officer Steven C. Rockefeller of Norwalk, Connecticut held "an informed appreciation of the unique and growing appeal of the South and Southeastern Arabian stamps represented in the company's inventory." John Reznikoff, who was Wall Street's Chief Operating Officer and Executive Vice-President, was the only board member to have a professional background as a dealer in collectible stamps.
Reznikoff also served as COO and Executive VP of Congor Minerals Inc., a privately incorporated BC company through which Wall Street was to get into the stamp business via a stock market manoeuvre known as a "reverse take-over" or RTO. (Corporate regulatory filings accepted by Vancouver stock exchange officials identify stamp dealer Reznikoff's address, fittingly, as a post office box in Stamford, Connecticut.)
Once the Wall Street/Congor RTO had been effected, the company's shares returned to trade on the VSE and immediately jumped from the $0.52 level to $5.125. On March 16 1989, only two weeks after trading had resumed, Wall Street stock hit an all-time high mark of $6.625. But, almost as quickly and dramatically as "the world's largest stamp company" had appeared on the VSE, the company's published claims were criticized and rejected by stamp collectors and philatelic authorities.
Wall Street's description of its COO as "President, University Stamp Company Inc., which is one of the largest suppllers (sic) of stamps to auction houses, retail dealers and investment and serious collectors in the United States, 1980 to present" was soon disputed. "We wouldn't agree with that", Dick Sine, editorial director of Scott Publishing, publisher of the reputable Scott's stamp catalogue, told a reporter with The Globe and Mail newspaper. As for the company's tons of stamps, Sine explained, "We don't list any of them. We question their legitimacy." While they may look, smell and taste like stamps, "they just don't quack".
David Allen, an executive member of the BC philatelic society, told Vancouver journalists as well as stock market regulators that "None of the reputable stamp catalogues around the world will touch these Aden Provisionals". (The Aden stamps were the first collection to be touted by Wall Street.) The stock promotion was a matter to be raised at the June 1989 meeting of the Royal Canadian Philatelic Society. Allen noted: "The International Federation of Philately is actively campaigning against stamps such as these which it says are harmful." Another local stamp dealer put it bluntly: "These stamps are nothing but junk."
Wall Street's stamps, from various "sand dune" countries, had never enjoyed acceptance as collectible stamps of value. They served as filler in packets of starter stamp collecting kits for children and, on occasion, they had been given away as free prizes in specially marked boxes of breakfast cereal.
The marketing goal of the Wall Street group to suddenly make tons of previously undesirable or worthless stamps tremendously valuable was incredible even by VSE standards. Public ridicule of the company and its claims resulted in BC stock market regulators asking for verifications that further stalled the penny share promotion.
Support for the company's stratospheric valuations came from a small circle of parties primarily located in New York and Connecticut. Those in Connecticut relied upon by Wall Street in making its public representations included Walter Ponichtera and Bruce Corson of Stamford, Kenneth Potok of Huntington and Armand-Marc Rousso of Greenwich.
While there was little that could reduce the company's already negligible level of credibility among independent philatelists, it did not help matters that Marc Rousso was known by authorities to employ deceptive marketing strategies such as using fronts to attempt buying stamps at higher than their market value in order to create new and artificial price levels. In connection with the Wall Street stamps case, a private company related to Rousso, Coach Investments (which listed Steven C. Rockefeller as a director and was one of the proposed vendors of stamps to Wall Street), placed a full-page advertisement in "The Stamp Wholesaler" (a philatelic trade paper) offering to buy certain Aden-Quaiti stamps at 10 times their already dubiously quoted price. (Earlier stamp deals involving Rousso, who called himself "The Croc" in homage to the thick-skinned reptile, had been exposed in a series of articles published by the Los Angeles Times in 1988.) Wall Street Venture's other experts included Edward Corbat of Throg's Neck, New York and Lee Rosenbloom of Regal Stamp and Coin Company, Fifth Avenue, N.Y. City (Rosenbloom was also a director of Coach).
But the company's share price was grounded by public exposure of the stamp's actual status as unmarketable pieces of sticky paper and by the end of July 1989 the stock had dropped from over $6 to the $1 mark. Shares then drifted to a year low of $0.35.
Following concerns raised about the legitimacy of the stamps valuations, the company's acquisition of the Aden Provisionals and certain other Middle Eastern stamp collections failed to be approved by VSE regulators. In January 1990, Wall Street proposed exchanging 50% - 60% of its Trucial States collection (stamps that it had been allowed to acquire before the public controversy arose) for 30,000 acres of property in Oregon and Nevada. This trade never materialized but in December 1990 the company did swap 30% of its stamp holdings for an interest in a Nevada gold prospect.
By this time, new players were getting involved with Wall Street and the stamp promotion had little life left. During 1990 the company's shares ranged from a high of $0.90 to a low of $0.09. By an agreement dated November 11 1991, Wall Street officially ended its career as the self-proclaimed ("in all likelihood") world's largest stamp company by disposing of its remaining stamp inventory for payment of US$45,000 and the return of some Wall Street shares by Martin Sellinger, a White Plains, New York stamp dealer.
Sellinger had begun the cycle as the vendor of the Trucial States stamps to Omar Mukharesh, identified in VSE filings as a Saudi Arabian bank manager who joined John Reznikoff and others on the board of Congor Minerals. Congor, on paper at least, acquired the Trucial States stamps from Mukharesh before vending them to the publicly traded Wall Street Ventures. In August 1992 the VSE accepted the Wall Street-Sellinger arrangement and thus, not only had the stock promotion cycle ended (collapsing from a market capitalization of over $22 million to under $400,000) but the underlying "asset" itself, the stamps, had, in their comic way, come full circle.
On March 18 1993, Wall Street's shares were consolidated on a 1:4 (one-new for four-old) basis and the company renamed Bionic Enterprises Inc. The Middle Eastern stamp promotion was now history. |
