"The civil complaint focuses on his touting of seven companies: American Copper, Computerized Thermal Imaging, Empire Capital, Delsoft Consulting, California Pro Sports and Power
Technology."
National Bank of Canada (The) - Street Wire
BCSC target Pacific International served Liberty tout
National Bank of Canada (The) NA
Shares issued 190,311,000 Jan 23 close $29.50
Wed 23 Jan 2002 Street Wire
See B.C. Securities Commission (*BCSC) Street Wire
by Brent Mudry
The list of dubious clients serviced by Pacific International Securities, a
scandal-plagued Vancouver brokerage controlled and patrolled by National
Bank of Canada, is much longer than earlier thought. While the British
Columbia Securities Commission identified 15 criminals or securities
violators who owned, operated or were associated with accounts at Pacific
International, at least eight more bad boys were serviced by the brokerage,
according to disclosure records.
Racketeer and money-launderer Shalom Weiss, fined $100-million and
sentenced to 845 years in jail, topped the initial BCSC list of 15 rotters
and rogues serviced by Pacific International, but the Howe Street brokerage
also catered to penny stock violators much further down the food chain.
(All figures are in U.S. dollars.) One of these is Jason A. Greig of
Bellingham, Wash., a rule-breaking Internet tout.
As Pacific International lawyer Bryan Baynham anxiously asserts that Mr.
Weiss was never a client of his brokerage-client, despite evidence linking
the money launderer to two offshore P.I.-hosted accounts in Geneva,
Switzerland, and Israel, it should be noted that Mr. Greig, like many of
the other rogues serviced by P.I., also used a corporate account. To
pre-empt any similar lawyerly confusion about who's who in the zoo, it is
worth noting that P.I. attracted, opened and serviced an account in the
name of Liberty Capital Group, account No. 020-7653-7. Mr. Greig is the
sole officer, director and shareholder of Liberty Capital, at least if the
United States Securities and Exchange Commission is to be believed.
Mr. Greig had the great misfortune of being targeted by the SEC, along with
43 other dubious penny stock promoters, in a massive crackdown on Internet
stock promotions in October, 1998. The regulator, which filed 23
enforcement actions for "committing fraud over the Internet and deceiving
investors around the world," called the overall case an "unprecedented
nationwide sweep." SEC enforcement director Richard Walker told reporters
at a press conference in the nation's capital that the case, the first
orchestrated coast-to-coast operation by the SEC to combat Internet fraud,
included actions filed by SEC offices in "Atlanta, Boston, Chicago, Denver,
Fort Worth, Los Angeles, Miami, New York, Philadelphia, Salt Lake City and
Washington, D.C."
Mr. Greig, the Bellingham-based tout and Pacific International client,
received nearly $1.2-million in cash and stock to promote seven penny stock
companies. It is not known if Pacific International was the main or only
brokerage used by Mr. Greig, or whether his broker or anyone else at the
brokerage had any clue the paid tout was doing anything wrong.
Mr. Greig and his Liberty Capital settled with the SEC on April 28, 2000,
agreeing to pay a $35,000 fine and refrain from future securities
violations. The order was issued by Chief Judge John Coughenour of the
United States District Court for the Western District of Washington.
Although filed in a Washington court, the Greig prosecution was handled by
the SEC's Denver office, which is quite familiar with Howe Street
brokerages being used as stock and money laundering conduits for dubious
U.S. and offshore penny stock promotions.
In a civil complaint filed Oct. 28, 1998, SEC attorney Thomas Carter noted
that Mr. Greig touted 20 penny stocks from April, 1996, to April, 1998,
through Jay Greig's Liberty Letter. The civil complaint focuses on his
touting of seven companies: American Copper, Computerized Thermal Imaging,
Empire Capital, Delsoft Consulting, California Pro Sports and Power
Technology.
Mr. Greig had not been in the lucrative business long, at least not under
the Liberty banner. Liberty was incorporated in December, 1995 and began
operating in early 1996, with Mr. Greig as its sole officer, director and
shareholder. In 1997, Mr. Greig developed his Liberty Web site and promoted
seven companies as "Hot Stocks," a name similar to that of the Web site
once operated by libeller George Chelekis, "www.hot-stocks.com." Mr
Chelekis was a colleague in spirit and business with one of lawyer
Baynham's highest profile clients, a case he lost badly, that of libeller
Robert Shore. Although the busy Mr. Greig, with the coincidentally named
Web site, forgot to disclose details of his secret payments from issuers or
associates of issuers, as required by securities regulations, he began
making general disclosure of compensation in July, 1998.
Mr. Greig, like Mr. Baynham's courtroom problem, Mr. Chelekis, was
certainly well paid for his efforts, judging by at least three such
tout-for-pay deals. CTI agreed to pay Liberty $150,000 and options for
300,000 shares, Empire agreed to pay $103,000 and 250,000 options, and
Global agreed to pay $250,000 and 225,000 shares.
According to the SEC's court filing, Liberty also agreed in July, 1998, to
promote American Copper, listed on the former Vancouver Stock Exchange, and
Power Technology, and touted the stocks as "Hot Stocks" through that
September without disclosing the specific agreements and the amounts of
compensation received. The complaint does not note how much money or shares
these two companies agreed to pay Mr. Greig and Liberty.
The SEC notes generally that Liberty and Mr. Greig's touting package
included Web site promotions, bulletin board postings and E-mails for
client companies. The commission notes that Mr. Greig and Liberty violated
Section 17 (b) of the Securities Act, which makes it unlawful to tout
stocks "without fully disclosing the receipt, whether past or prospective,
of such consideration and the amount therof."
(In another comical coincidence, Stockwatch was among the publications --
excellent publications of course -- Mr. Greig used to advertise his
Internet hosting services to potential corporate clients.)
While some Howe Street penny stock veterans may think Mr. Greig was fairly
harmless in the big picture, Pacific International also serviced a number
of members or associates of New York's Italian Mafia and Russian mob, who
of course did not use their real names either on the account front papers.
(c) Copyright 2002 Canjex Publishing Ltd. stockwatch.com
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