Ike, what's going on in Canada these days? This reminds me of the old Vancouver stock exchange days, and the penny gold mining stock pump and dump.
Who is Mr. Singh?
>>SEC targets Toronto ring in OTC-BB pump-and-dump
2002-08-09 17:43 PT - Street Wireby Brent Mudry
In a fitting tribute to Canada's legacy as a breeding ground for boiler room players, including legendary operator Irving Kott, the United States Securities and Exchange Commission has named five Canadians, including two Ontario lawyers, in its kickoff prosecution of a major international boiler room network.
The sole American defendant is Mark Bergman, a close associate of disbarred Los Angeles lawyer Regis Possino, significant players in the recent General Commerce Bank affair, an Austrian scandal featuring fugitive Thai financier Rakesh Saxena, Saudi arms merchant Adnan Khashoggi and a star-studded cast of other colourful financiers.
In a civil complaint filed Thursday in the United States District Court for the District of Columbia, the SEC claims the ring perpetrated a "massive" stock fraud from 1998 to 2000 with Environmental Solutions Worldwide, an OTC Bulletin Board company now based in Telford, Penn., after moving from Markham, a suburb of Toronto.
The SEC claims the pump and dump, which featured dubious distributions of millions of shares through European and offshore accounts, ran the stock up from $2 to $7 per share. (All figures are in U.S. dollars.) Two Canadians, Teodisio V. (Ted) Pangia, of Kleinburg, Ont., and New York, and Satbal Singh, of Toronto, allegedly dumped $15-million of Environmental Solutions shares on unsuspecting victims.
While Mr. Possino is not named and it is not known if he had any involvement in the SEC case, he and Mr. Singh share at least one thing in common: blunders in drug trafficking. Mr. Singh was convicted in Canada of narcotics trafficking and sentenced to two years in jail. Mr. Possino was disbarred about 17 years ago by the State Bar of California, which took a dim view of his entrepreneurial moonlighting in the marijuana industry. In 1975, after just three years at bar, the budding young lawyer tried to sell 1,000 pounds, a mere half a ton, of weed to undercover Los Angeles police officers.
The named individual defendants in the current SEC case include Mr. Pangia, 42, Mr. Singh, also known as Spal Singh, 41, Ontario lawyers Michael W. Smith, age unknown, of London, and Adam Michael Oliver, 47, of Otterville, Toronto associate Eugene Foo, 35, Mr. Bergman, 50, of Jersey City, N.J., and Bengt Odner, 48, of the United Kingdom, who served as chief executive officer and chairman of Environmental Solutions.
The corporate defendants include Environmental Solutions, three offshore companies Mr. Pangia incorporated in Guernsey for sham distributions: Jalon Investments Ltd., Gata Investments Ltd. and Altea Investments Ltd., Mr. Singh's Zoya Financial Ltd. of Toronto, which the drug-turned-penny-stock-pusher used to disseminate numerous false press releases, and Access 1 Financial Ltd. of Nevada, Mr. Bergman's touting company until recently.
The SEC case was filed by attorney Steve Korotash of the SEC's Fort Worth District Office in Texas, with senior SEC attorney Spencer Barasch, of Washington, and Stephen Webster and John Fahy, both of the Fort Worth office.
The SEC claims that between October of 1998 and June of 2000, Mr. Pangia, Mr. Smith and Mr. Singh orchestrated a pump-and-dump scheme using fraudulent press releases, millions of spam E-mails, and a paid analyst report to prime the market for Environmental Solutions shares. "The promotional documents falsely claimed that that ESWW had developed a revolutionary catalytic converter that, unlike any other catalytic converter, dramatically reduced toxic emissions, including nitrous oxide, a greenhouse gas believed to be a cause of global warming. These claims were false and contrary to ESWW's own test results."
The regulator claims the promotional documents, including purportedly independent analyst reports, which Mr. Pangia paid Mr. Bergman to publish, also contained unrealistic and unsupported share price projections for Environmental Solutions ranging from $15 to $150 per share. The complaint also alleges that Mr. Oliver served as an officer and director in name only, while he was merely a nominee for Mr. Smith, and that Mr. Odner repeated the false information about Environmental Solutions' test results in statements to the investing public.
The complaint further alleges Messrs. Pangia, Smith, Singh and Foo orchestrated a sham private offering in which millions of unregistered Environmental Solutions shares were issued to themselves. These shares were dumped into the inflated market from the fraudulent promotional campaign. The group allegedly realized about $15-million from these stock sales.
In addition, the SEC claims Mr. Pangia also violated the beneficial ownership reporting provisions of the federal securities laws and Environmental Solutions violated the books and records and financial reporting provisions.
The SEC is believed to have received significant investigative support from the Ontario Securities Commission's investigations and enforcement divisions. Although not noted in court filings, the list of brokerages servicing Environmental Solutions insiders and associates is dominated by seven current or former Canadian houses: Scotia Capital, the major servicer, Canaccord Capital, Yorkton Securities, Nesbitt Burns, Wood Gundy, RBC Dominion Securities and Thomson Kernaghan, which recently collapsed under regulatory investigation.
The timing of the SEC case is especially unfortunate for Mr. Pangia, who is eager to clear his name with the OSC. In a prosecution launched last October, small potatoes compared with the new SEC action, the OSC claims Mr. Pangia and Ontario associate Agostino Capista broke securities violations relating to EPA Enterprises Inc., a company listed on the former Vancouver Stock Exchange, in 1995. The SEC claims the most egregious of the dubious distributions involved about 26,000 shares, for which the purchasers paid $84,500 (Canadian.) Over all, the OSC noted Mr. Pangia, Mr. Capista and Dallas North, a company they used, sold at least 452,000 EPA shares to the public in 113 transactions for a total of $1.39-million (Canadian.)
While neither Mr. Pangia, a Toronto broker in 1988 and 1989, nor Mr. Capista were registered with the OSC, the pair used three brokers at TD Evergreen to effect trades, including Simon Kin-Ho Tam, hired by TD as branch manager to set up a branch in the Toronto suburb of Scarborough in 1994 to target Chinese-Canadian clients. Between March, 1995, and February, 1996, Mr. Tam, assisted by brokers Woody Woo-Keung Woo and April Shuk-Fan Che, helped Mr. Pangia and Mr. Capista sell 452,000 EPA shares to the public in "off book" transactions which were not recorded in the books and records of TD Evergreen.
"The trading in EPA shares was primarily orchestrated and directed by Pangia," states the OSC in its allegations. The Canadian regulator claims Mr. Pangia instructed branch manager Mr. Tam on the number of EPA shares available for sale, the price they should be sold at, and the entity to which payment cheques should be payable, and provided Mr. Tam with share certificates that Mr. Pangia, Mr. Capista or Dallas North owned or controlled.
While above transactions constituted unregistered trading, at least 15 of the transactions were allegedly illegal distributions. In this portion, the TD Evergreen clients purchased EPA shares, with funds paid to a company called Envirovision, Mr. Pangia exercised EPA options and shares issued under these exercises were delivered by Mr. Pangia to Mr. Tam for deposit into the client accounts.<< |
