ASTV-Asian Star Development, BUYER BEWARE!!
Patagonia Capital Corp. Initiates Coverage of 10% of stock holders equity. Flaunters of the SEC and the World's Worst Stockpickers
Released
Patagonia Capital Corp. Initiates Coverage of 10% of stock holders equity. Flaunters of the SEC and the World's Worst Stockpickers.
Our Truth Police have taken out their night stick and have a few questions to ask CERRO DORADO INC, MEDINAH MINING INC, ASIAN STAR DEVELOPMENT INC and their promoter Patagonia Capital Corp.
"Can someone explain why, with only 700,000 total shares outstanding, the company would dilute the company by nearly 10% just for a paid buy recommendation? " Maybe the Securities and Exchange Commision can give us the answer.
The Crimcrusher Collective
"Proud Deputies of the Truth Police"
Patagonia Capital ;
Flaunters of the SEC and the World's Worst Stockpickers.
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On Sept. 7th 1999, CDCH ran from just over $1 to $1.60. Before open on Sept. 8th, a ?Stong Buy? recommendation was released by ?Patagonia Capital Corp.? on behalf of CDCH via a serice popular with pump & dumpers in Canada which will email anything, unverified, a company wants to spam to about 50000 subscribers, for a cash fee.
What caused the giant drop of almost 40% on the 8th?
This :
"Patagonia Capital Corp. Initiates Investment Coverage With
Strong Buy Recommendation For: Cerro Dorado, Inc. ("CDCH" on OTC - BB)"
Omitted is a long and extremely hyping bunch of fluff that curiously was not put out as an official news release like real companies do when they receive a "strong buy" recommendation. Why?
Here's a clue.
"Patagonia Capital advises the readers of this document that it has received 67,500 common shares of Cerro Dorado under the terms of an eight-month consulting / marketing services contract, pursuant to which Patagonia Capital will be periodically writing and disseminating research reports on CDCH, in addition to providing the Company with public relations, investor relations, broker relations and other equity market / Internet consulting services. Patagonia Capital, its officers, directors, partners and employees / consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after Patagonia Capital, its officers, directors, partners and employees / consultants have made positive comments regarding the Company."
"Patagonia Capital Corp. ("Patagonia Capital") is not a Registered Investment Advisor or a Broker / Dealer"
It is against SEC regulations to pay for promotions in shares to prevent pumping & dumping, as shown in the SEC article at bottom.
An SI poster had a good question that remains unanswered:
"Can someone explain why, with only 700,000 total shares outstanding, the company would dilute the company by nearly 10% just for a paid buy recommendation? "
If someone could explain that, then maybe they could explain why the price ran-up BEFORE and then plummeted AFTER such a glowing "report", and why these stocks continue to sink amidst the current gold appreciation?
CDCH is -57% since the Patagonia ?STRONG BUY? and sinking fast.
On the 17th Sept. 1999, Patagonia released this on behalf of MDHM, a company very connected to CDCH, again via the same email service mentioned above :
"Patagonia Capital Corp. Initiates Investment Coverage With
Strong Buy Recommendation For: Medinah Mining, Inc. ("MDHM" on OTC - BB)"
Again we've omitted a long and extremely bullish "report" on MDHM. What could inspire this enthusiasm?
"Patagonia Capital advises the readers of this document that it has received 250,000 common shares of Medinah Mining under the terms of an eight-month consulting / marketing services contract, pursuant to which Patagonia Capital will be periodically writing and disseminating research reports on MDHM, in addition to providing the Company with public relations, investor relations, broker relations and other equity market / Internet consulting services. Patagonia Capital, its officers, directors, partners and employees / consultants may profit in the event the shares of the Company increase in value. These positions may be liquidated from time to time even after Patagonia Capital, its officers, directors and employees / consultants have made positive comments regarding the Company."
MDHM was $0.30 and is now $0.20. That's ?33% and sinking daily, amidst the tout's insistence of existing proof of 30000000 shares short (1/3 of the massive float) still uncovered, and that MDHM is sitting on a massive gold deposit in which at least dozen ?majors? are ?very interested? in.
July 28th Patagonia "initiates coverage with a STRONG BUY" of ASTV. ASTV becomes ASTVE a few days later for failure to meet NASD reporting requirements, dropping straight down from $2 to $1.50, over the next month when it is de-listed. Patagonia is paid 1000 shares from "an unrelated third party" for their genius call. That's ?25% and de-listing within a month!
The same day Patagonia "initiates coverage with a STRONG BUY" on EYPI. They do it for 1000 shares. The price then was $1.25. In mid September it was $0.31, and is presently bid at $0.28. ?78%. EYPI is now EYPIE until de-listing next month for failure to comply with reporting regulations.
June 25th they "initiate coverage with a STRONG BUY" of SRU : ASE. They're busy huh!? They claim to have received no fees for that one, and despite not being registered investment advisors or brokers, they manage a target of $17 per share. Good thing they weren't paid, as that stock has gone from $1.38 to $0.60 since they hyped it, with an interesting looking big jump just BEFORE their "report" and a day or two's spike right after, then a drop ever since and about to go a lot lower. That's ?57% and sinking. Just a little bit short of their $17 per share target.
CDCH went from $1.60 to $0.75 (so far in about a month) and dropping fast. Cost 62000 shares for the "report" and 8 months promo work, which is against SEC regulations.
MDHM went from $0.30 to as low as $0.20, dropping. Cost 250000 shares for the "report" and 8 months promo work, which is against SEC regulations.
On July 23rd it was KAZ : ASE, then at $2.16, to a recent low of $.80 (-63% in 3 months!). 2000 shares for that report. Guess what?! There was a massive run-up BEFORE the Patagonia report. On October 20th, KAZ began a 100% appreciation run seemingly on news that they've purchased a minority interest in a private Arizona company that plans to market set-top internet boxes to the 2nd and 3rd world. But this was supposed to be a snowboard manufacturer with great revenues!
?My daughter's boyfriend in on the National Snowboard team, is sponsered by "Burton" and he still hasn't heard anything about their "new" board.?
techstocks.com
Sounds fishy to you? It does to this SI poster as well.
?Doesn't anybody find it to be a danger signal when 80% of the trading in the stock is being done by CC . . . both buys and sells??
techstocks.com
It will be back under $1 within days, having dropped over 10% the day of this report on its way back to obscurity. Even so, at its current price of $1.45 it is still down 33% from the historic high when Patagonia recommended it.
Their only "winner" we can find is OGPS called on July 14th at $1.12 for 1500 shares. It went to $3.40 on the benefit of much online touting and has since dropped like a stone back to $1.12 and sinking. Anyone who didn't sell is about to lose. Again.
In January, Patagonia produced a hyping report for SUNR.
It's gone from 75c straight down to 5c since then. ?93%.
Curiously, again there is a huge run-up BEFORE the Patagonia report, and dumping ever since then.
bigcharts.com
Now here's the CDCH chart. Notice the Patagonia "STRONG BUY", which cost 62000 shares (for the "report" and 8 months promotions services, which is against SEC regulations) coming right at the TOP of that spike to $1.60 in early September. You think CDCH is heading to under 10c too?
bigcharts.com
They'll have plenty of company at the bottom.
bigcharts.com
bigcharts.com
Now, how do these run-ups happen BEFORE the report comes out? You'd almost think people were being fed advance info. by someone so that there's buying into the big dump?
This was posted by a tout on Raging Bull the day BEFORE the Patagonia ?STRONG BUY? and subsequent dumping. It calls the EXACT release of the hyping Patagonia reports for both MDHM and CDCH. This poster posts ONLY on the CDCH & MDHM threads, seemingly having access to insiders and defending the company and its insiders vehemently against any scrutiny.
?Look for the buy rating on Thursday. Cerro Dorado's should be out tomorrow.?
ragingbull.com
ragingbull.com
Here's what the SEC says about this kind of activity.
May 26 On April 7, a long-standing and largely ignored Securities and Exchange Commission rule was underscored by the Commission in tough new interpretive language designed to protect investors from fraud and abuse in the penny stock market. Unfortunately, the very companies that the rule targets most directly seem to be ignoring it most flagrantly ? making a mockery of the SEC's continuing efforts to crack down on securities fraud involving microcap stocks.
THE RULE IN question bans companies from using their own stock to pay stock promoters and investor relations companies for promotional services rendered on behalf of the companies themselves. The new interpretive language for the rule, issued in late February in connection with several amendments to Rule 701 of the Securities and Exchange Act of 1933, was designed to prevent companies that have little or no value as investments from conjuring that value out of thin air.
The gimmick: hiring stock promoters to hype their companies to the public, while paying them with shares of the very companies being hyped. Such Ouiji board-type promotions are a common practice among companies on NASDAQ's so-called Over The Counter bulletin board market, where companies are either so small or worthless that they are exempted from having to file audited financial statements with their stockholders and the SEC.
The exemption from SEC filing requirements invites a type of abusive practice in the penny stock market that has become commonplace in recent years. The non-filing penny stock companies simply hire stock promoters to make outlandish claims for the companies, knowing that because the companies are non-filers, there is no way for investors to check out the claims before handing over their money.
In such situations, the SEC normally acts only after-the-fact, when an abusive or misleading stock promotion has already driven up a stock's price and investors have been victimized. Now, the SEC's decision to issue tough new interpretive language for Rule 701 of the 1933 Act has put companies on clear notice that they cannot use their stock as payment for the services of stock promoters and investors relations operators.
According to an SEC spokesman, companies found in violation of the rule will be required to buy back the stock in question for cash, and must carry the obligation as a balance sheet ?contingent liability? until it is
discharged. The official said offending firms also are subject to civil enforcement actions by the Commission.
What's more, said the official, there are no ?grandfather provisions? in the rule, meaning that any promoter who received stock for his services before April 7 cannot continue engaging in the services afterward.
These type of activities have not only now been specifically barred by the SEC since April 7 but are also banned by the Standards of Practice of the National Investor Relations Institute, the main trade organization for the financial P.R. field.
Taking note of the SEC action as early as March 5, the Institute issued an ?Executive Alert? to its members, calling attention to the restated SEC rule and stressing that ?consultants who provide investor relations or shareholder communications services? may not be compensated in stock or options in lieu of cash for their services.
Says the Institute's president and CEO, Louis Thompson, ?the companiesthat engage in this sort of thing aren't investor relations firms at all. They're stock hypers and promoters trying to hide behind a veil of respectability. It's disgusting.?
Cleaning up this abusive practice is what the SEC's action regarding Rule 701 was all about. But no cases have been brought since its issuance, and an SEC official says the Commission's staff has not yet even issued any individual opinion letters on the matter.
Bottom line? For now at least, it's business as usual on the Internet, where behind every press release about some fast rising penny stock company may very well lurk the impossibly conflicted self-interest of a stock promoter who agreed to hype the stock only if given shares in the company beforehand. That is how things have been done until now, and nothing seems to have changed since April 7 in any way.
The Truthseeker
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