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Microcap & Penny Stocks : NVID International -- Ignore unavailable to you. Want to Upgrade?

To: Cindy Powell who wrote (3230)	10/20/2000 9:12:10 AM
From: John Sladek	Read Replies (1) \| Respond to of 3244

Cindy, As a general rule I avoid a long-term hold on any stocks that I feel are being driven by hype. Investor sentiment can swing, and suddenly the stock is down 20 or 30 or 40%. This applies to listed stocks as well. I have always wondered if there is some collaboration between market makers and penny stock gurus when a stock mysteriously rises just before a reverse split announcement or some major insider selling. In general, I do not think that the market makers are involved in rigging stocks - they make money on the spread, so the direction the stock moves doesn't make a big difference. More than likely, the management of the company, or the controlling shareholder is involved in manipulating the stock - the NVID scam was a typical example. Check out the following poost: Message 14613444 Ex-Broker Tosto, Convicted in 1994, Admits Guilt in Second Scam New York, Oct. 18 (Bloomberg) -- Former broker Peter Tosto, who cooperated with the government in 1998 by testifying against two accomplices in a $1.6 million securities fraud, pleaded guilty today to his role in a second scam -- defrauding investors in three penny stocks. Tosto, who is also known as Peter Lybrand, admitted today that he gained control of three publicly traded shell companies - - Polus Inc., Citron Inc. and Electronic Transfer Associates Inc. -- then used offshore companies he controlled to secretly buy and sell stock in them. Tosto also said he committed perjury when he testified against Thomas Browne and Gerald McNeil in the 1998 fraud case. The two men were convicted of helping Tosto bribe brokers to sell shares in San Diego Bancorp Inc., a penny stock. Lawyers for the two have asked that their convictions be reversed. ``I lied under oath,'' Tosto told U.S. District Judge Denny Chin. Prosecutors said Tosto pocketed approximately $6.4 million in his latest scheme. Under federal sentencing guidelines, he faces up to 87 months in prison when he is sentenced in January. Tosto ... admitted that he and his colleagues secretly bought blocks of stock, then transferred the shares to offshore companies he controlled so that it appeared as if investors were bullish on the stocks. At the same time, he arranged for friends, brokers, and even his hairdresser to buy shares in the companies, as he issued bogus press releases hyping them, prosecutors said. Tosto sold his holdings as the share prices climbed. The conspiracy lasted for two years, including the period when Tosto took the stand in federal court against Browne and McNeil. Oct/18/2000 18:22 ET For more stories from Bloomberg News, click here. (C) Copyright 2000 Bloomberg L.P. Regards, John Sladek