To: Roy F who wrote (5653 ) 7/9/2003 9:15:59 PM From: StockDung Respond to of 6847 YET ANOTHER FRAUDULENT PROMOTER TIED TO XYBERNAUTmacreport.net ============================================== A little more about the Macreport --------------------------------------- February 25 , 2003 Stocklemon Reports on Macreport.net Say Goodbye to the Mac….Hello to the SEC. We at Stocklemon have been following the Macreport.net for some time now and this report could have gone many ways. We could have discussed how the CEO is a former stockbroker with customer complaints, or we could have discussed how the company has a $60 million market cap with a little more than $24,000 in the bank. We could discussed the payments to the CEO's consulting company. But those are just bad business. This report would rather focus on the illegal. Illegal Stock Promotion Macreport receives compensation from its clients to put out company profiles. Yet, in their disclosure they fail to mention how much cash or stock they receive and from who they receive it from. This is a major violation, and one that the SEC has been enforcing with a mighty arm. The Statute is listed in the Securities Act of 1933. Section 17b, Securities Act of 1933 "It shall be unlawful for any person, by the use of any means or instruments of transportation or communication in interstate commerce or by the use of the mails, to publish, give publicity to, or circulate any notice, circular, advertisement, newspaper, article, letter, investment service, or communication which, though not purporting to offer a security for sale, describes such security for a consideration received or to be received, directly or indirectly, from an issuer, underwriter, or dealer, without fully disclosing the receipt, whether past or prospective, of such consideration and the amount thereof." (15 U.S.C. § 77q(b).) In 1998, the SEC’s Internet Enforcement Unit wielded a heavy hand in doing a broad sweep containing 23 actions against 44 companies and individuals committing fraud over the internet. It was then that former head Director Of Enforcement Richard Walker said clearly that it is illegal to publicize a security if you are being paid unless you disclose three things. “The first thing that is required to be disclosed is nature of the compensation you are receiving, whether it is cash, or whether it is stock. The second is the amount of compensation you are receiving. And the third is the source of the compensation.” techlawjournal.com This is the Macreport’s blanket discussion of compensation in an inadequate blanket disclosure for the site. “ These companies (or some of these companies) have retained us to perform investor relation services including promotional services that consist of the placement of the profiled companies on our website. Such compensation has been or will be made in cash and or issuance of securities of the profiled company. We may liquidate any securities that we receive as compensation when deemed appropriate to do so, however, we generally liquidate such securities upon receipt thereof prior to performing any services for such company. Such liquidation may have a negative impact on the securities being liquidated.” Compare this with proper disclosure. Here is the OTC Journal’s disclosure on this month’s profile stock. “Click Here to view our compensation on every company we have ever covered, or visit the following web address: otcjournal.com for our full profiles and otcjournal.com for Trading Alerts. MarketByte LLC has been paid of fee of $75,000 directly by Shep Technologies, Inc. for coverage for a period of six months. An additional fee of 100,000 free trading shares has been paid by a third party.otcjournal.com Catch 22 The Macreport faces an interesting dilemma. If they put out how much they really receive from each client, they would lose their ability to generate higher fees from prospective customers and they would have to show the world how little their true revenues are before the mandatory filings. But if they do not put out the compensation than they can still dream of the high paying client. Conclusion Stocklemon believes that Macreport will get halted by the SEC and investigated for their practices. A stock promotion site should never be a public company and we scold the management of this company for the lack of imagination and intellectual prowess that they would actually bring this website public. PS. The Macreport.net did not pay Stocklemon any cash or stock for the dissemination of this report. Disclaimer: Stocklemon.com does not guarantee in any way that it is providing all of the information that may be available. We recommend that you do your own due diligence before buying or selling any security. At any times the principals of Stocklemon.com might hold a position in any of the securities profiled on the site. Stocklemon.com will not report when a position is initiated or covered. Each investor must make that decision based on his/her judgment of the market.