'Cirque du Anselmo'?
While Silverado rides high on its stock upswing and garners increasing attention from the use of such names as Bob Chapman and David Tice, some professional stock traders and businessmen are crying "foul" and accusing the company of being a "pump and dump" scheme. One referred to it as "Cirque du Anselmo."
"Pump and dump" is a practice by which a large group of people buy into a low-priced stock and start touting the equity. This is most frequently done on the Internet. Then when others buy in at an inflated price, the group sells and makes a profit while the investor is left holding a large loss.
WND has also obtained complaints filed with the SEC and addressed to Emily Breckinridge, Kara Axel and Jessica Ridgley of the Pacific Regional office of the SEC. The complaints allege fraudulent business practices on the part of Silverado, and complain of SEC laxity in failing to intervene.
Are the complaints legitimate concerns or just the disgruntled efforts of opportunistic short-sellers? WND attempted to contact Breckinridge, but was referred instead to the assistant regional director for the SEC's Pacific Regional Office, Kelly Bowers.
Bowers would not comment on the complaints, and was not able to answer the simplest questions without extensively leafing through an SEC manual in search of an answer. Bowers finally suggested WND look through the manual itself.
WorldNetDaily asked Miami attorney Gary Goodenow Sr. to comment on the issue. Without divulging the company name, or any persons or entities connected to Silverado, WND gave Goodenow public statements made by the company as well as pertinent SEC filing information. Goodenow is licensed to practice in the State of Florida and the District of Columbia, and has served in large law firms, his own firm and the Securities and Exchange Commission.
During his tenure at the SEC,. Goodenow served as staff attorney, branch chief, senior trial counsel and senior counsel. In the latter capacity, Goodenow made the final recommendations on which cases the office would investigate and prosecute and which it would decline. He has variously investigated and prosecuted cases for the SEC, supervised the work of five or six SEC staff attorneys, and was responsible for litigating about 30 enforcement cases at any one time in federal court.
Gary Goodenow Sr., former SEC prosecutor
Goodenow also participated as an author and panelist at the Fourteenth Annual Conference on Money Laundering, Cyber Crime and International Financial Crimes and writes extensively on systemic problems at the SEC. His most recent op-ed, "SEC Chairman Must Go," appeared in the Miami Herald.
Regarding the use of a famous person's name (David Tice), Goodenow said: "Regretfully, I report that the best thing a person or group behind a pump and dump could hope for is to have an important personality invest." He explained: "Sales of the stock of such a venture will be presented to the investing public as having the imprimatur of a person who it seems would have the resources to learn the legitimacy of the investment."
Goodenow compared the situation WND presented to him with the Premium Sales case he brought while at the SEC. "The fraud-doers took in about $425 million, and the investors, because of rollovers of their 'profits,' thought they were out around a billion dollars." He added: "What was critical to the fraud was that baseball great Joe DiMaggio had invested $100,000. If it was honest enough for the 'Yankee Clipper,' it was seemingly honest enough for other investors."
Goodenow's advice? "I caution my clients never to buy on hype of who is in a stock," he said, "unless – and this is a big 'unless' – the personality has gone on record endorsing the investment."
He further cautioned, "By 'on the record,' I do not mean salespersons' statements or PR copy that he or she has invested. I mean endorsements to third-party members of the investment community or to journalists who cover investments. Any investment conduct to the contrary is fraught with hazard. Anyone who tells you that it's not risky is either an idiot or a liar."
Regarding Silverado's meteoric rise, Goodenow said he would be "very, very, very leery of a stock that has risen 750 percent in a year. … My reaction is one of complete skepticism, and this view is exacerbated by your reporting if the hype that a significant investor has a position and that upon your inquiry, it appears that they company and the putative investor 'circled the wagons' to borrow a phrase from movie westerns." He added, "I think it is reasonable for me to say that any journalist on to a pump and dump, would likely be called a person performing a 'hatchet job.'"
In his last year at the SEC, Goodenow was in charge of the "New Matter Committee," responsible for the intake of all complaints, tips, news articles and the like. "Based on that," he said, "if I got a report of a OTC:BB stock, up 750 percent, with the matter unsettled factually as to how or if a major personality was involved, and I had a journalist stating that the reaction to his or her inquiries was for the company to consider the questions to be a 'hatchet job,' I would think. And again, I note that you've given me no proper nouns – I think in that circumstance I would have strongly recommended that the New Matter Committee order an investigation forthwith."
Goodenow told WND, "What can I say? It seems to me that you have found the contradictions that are all 'red flags.'"
Specifically, Goodenow emphasized:
"The claim of $7.5 million in projected gold sales this year 'raises my eyebrows.'"
"The 'partners' issue may stem from the situation where there may be no legal definition of 'partner' in the state law that governs any such partnership agreement – but we likely will not know 'choice of law provision' of such an agreement because you have learned there is no agreement – very strange."
"The ounces of gold involved would be questioned by the SEC to learn the factual basis of the claims. No basis, then the fraud provisions kick in."
"The SEC would not likely countenance an expert opinion, like that required to make an assay report, made by 'insiders' as such people seem to me to be from your description."
"The whole 'fuel technology' [LRCWF] that's 'decades old,' yet without a 'single drop,' for me just reeks of fraud."
One stock analyst, who declined to be named, told WND that in general the region of Vancouver was known to give rise to pump and dumps: "It's well-known among bulletin board traders that Vancouver is the mother-ship of all pump and dumps. "He theorizes, that historically, this was because "it's more difficult to prosecute someone in Vancouver, therefore they’re less inclined to do it."
For that reason, he advises investors therefore, to protect their investment by giving extra diligence to examining such companies prior to investment.
Goodenow also sought to shed light on the how the Vancouver area in general got such a history.
"The Vancouver Stock exchange has had a very, very bad reputation among the enforcement attorneys of the SEC. It got that reputation from investigations years prior to my service, which showed, or suggested, that the VSE was used to launder money organized crime skimmed off the Las Vegas casinos."
He added, "Whether that reputation is presently deserved or not, I do not know. But I do know that I do not presently own any stocks traded on the VSE."
(Note: This history of the VSE does not pertain to Silverado itself, which is an OTCBB stock,and which does not trade on what is now theTSX Venture Exchange, part of the TSX Group, which also includes the Toronto Stock Exchange, TSX Markets and TSX Datalinx.)
Adding further words of caution, Goodenow said: "Pump and dumps are often used for money laundering. And the people who need their money laundered do not accept failure very well. They express their disappointment at failure with guns. I keep thinking of that Goldcor case, also a pump and dump, also with gold … and a person was murdered."
Goodenow was referring to Richard D. Brown, 51, who was found shot dead at his home in Daytona Beach, Fla., on the morning of Saturday, Aug. 17, 1991. He had been shot once behind his left ear, execution-style. His murder is still unsolved.
Brown had been due to appear in court three days later, on Aug. 20, in connection with a 21-count criminal indictment against him for his involvement in Goldcor, a mysterious securities scam that netted up to $100 million.
In the Goldcor case, it's been estimated as many as 3,000 investors could have lost between $75 million and $100 million investing in the scam. Many of the investors were Christians who trusted Goldcor because of Brown's "religious" background. Brown was the founder of the International Christian Life Ministries, described as an evangelical outreach ministry based in Daytona Beach.
Goodenow warns that "there's very little the SEC can or will do to prevent the losses" incurred by duped investors.
Meanwhile, Silverado's CEO, Garry Anselmo, considers any suggestion that his company is a "pump and dump" to be "bulls--t." He added, "Sure we promote it, but there is no 'dump.'" Claiming support from U.S. senator and now Alaska's Republican governor, Frank Murkowski, as well as others, based on supportive letters written by the politicians about Silverado, Anselmo is confident that the momentum behind Silverado will continue and that the next three years will bring about a bonanza in gold sales.
In the meantime, investors might want to review those financial statements, even if the politicians don't have the time!
Sherrie Gossett is a Florida-based researcher and writer, formerly with the South Florida Sun-Sentinel, and a contributing reporter to WorldNetDaily. |
