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To: Labrador who wrote (2960)	3/27/1999 5:38:00 PM
From: gao seng	Respond to of 4122

Taking the lead from Labrador: Heard on the Net column for Friday, July 17: Web Stock-Promoter Floods Message Boards With Hype By JASON ANDERS THE WALL STREET JOURNAL INTERACTIVE EDITION Daryn Fleming is a regular participant in Silicon Investor on-line message boards, often urging others to buy stocks and hinting about news to come. "Acquisition in the works," he wrote on one board. "Another big story due out Tuesday! I would buy more..." he wrote on another. But what isn't always clear from Mr. Fleming's posts is that his firm is paid to promote the companies. Mr. Fleming is president of Wall Street West, which describes itself as a "stock research firm and holding company." For a fee, Wall Street West promotes companies as its stock picks on its Web site, and in many cases writes research reports that include "buy" recommendations on the stocks. It also sends out mass mailings of electronic mail and press releases promoting the companies. Its Web site lists offices in Denver and Las Vegas. Mr. Fleming says 15,000 people have signed up to receive the site's "stock alerts" via e-mail. Mr. Fleming says when he talks up companies on the Silicon Investor Web site (www.techstocks.com) he is acting as an "individual investor," and not on behalf of Wall Street West. "I post because I have opinions on these companies, and sometimes I get pretty excited about them. Often I'll put my own money into these companies," he says. Mr. Fleming says that other Silicon Investor users know that he is president of Wall Street West and is paid to promote companies. "I say that in most of my postings because of the potential conflict of interest," he says. But in his last 75 messages posted on Silicon Investor, Mr. Fleming doesn't make any disclosures about receiving payments. He occasionally identifies himself or his affiliation with Wall Street West. In a sales pitch to prospective clients on Wall Street West's Web site (www.wallstreetwest.com), the firm says it can disseminate information on companies through a variety of outlets, including message boards. "There are more than 30,000 electronic bulletin boards on the Internet. We have the ability to post messages on these boards, targeting prospective investors," according to the site. Of the 15 companies listed as "selected stocks" on the Wall Street West site, 11 have message boards on Silicon Investor. Mr. Fleming has been an active participant in all of them. In an interview Thursday, Mr. Fleming said that he has slowed down in posting to Silicon Investor. "I think you're going to see a lot less posting from me, and it will probably stop entirely, because I think some people could see it as a conflict of interest and we don't want that," he said. Still, early Friday, Mr. Fleming created a new message board on Silicon Investor dedicated to MobileVest, a company in a Sebring, Fla., that manages manufactured housing communities. Wall Street West issued a research report and "buy" recommendation on MobileVest late last week. Wall Street West's first client, Mr. Fleming says, was U.S. Basketball League, a group that franchises minor league basketball teams. Mr. Fleming began posting on a message board devoted to the company shortly after being retained by the company. "Rumors abound about ... oh I won't say what. I will say BUY BUY BUY. GO USBL!" he wrote in one of the first messages on the forum. "Looks like this thing could explode!" he wrote in another. He repeatedly suggested that others buy the stock, and predicted the stock, which is quoted on the OTC Bulletin Board for around $2.20 a share, would reach $5 a share. Mr. Fleming never revealed on the U.S. Basketball message board that he was president of Wall Street West, or that his company had received compensation in exchange for promoting U.S. Basketball. A spokesman for U.S. Basketball, which is based in Milford, Conn., couldn't be reached for comment. Mr. Fleming declines to say how much U.S. Basketball paid Wall Street West in exchange for promotion. He says he believes a disclaimer at the bottom of the Web site's front page is enough. It alerts users that the company "has received or will receive compensation for the dissemination of this information." Mr. Fleming says U.S. Basketball supplied a research report that is posted on the Wall Street West site. He says Wall Street West is responsible for all of the other research reports on the Web site. "I don't think we have to say the amount [of compensation]," he says. "We've told the SEC what we're doing and they seem fine with it." John Stark, special counsel for Internet projects for the U.S. Securities and Exchange Commission, declines to comment specifically on Wall Street West. But he says the law is clear: Companies that promote stocks have to disclose whether or not they were compensated, and the specific amount. "It's not enough to give a vague blanket disclaimer. You have to say exactly what you received," he says. Mr. Fleming says Wall Street West has been compensated by all 15 companies featured on it's home page. Only two of the profiles disclose the terms of the compensation. Silver Star International gave Wall Street West $15,000 worth of stock in exchange for promoting the company, which sells a variety of products through stores on military bases. The company's stock price more than doubled to $3 on the OTC Bulletin Board Thursday after Wall Street West issued a press release announcing it had completed a research report on Silver Star. Wall Street West recommends Silver Star as an "aggressive buy" in the report. The press release doesn't disclose that the firm received compensation from Silver Star in exchange for producing the report. "The phone is ringing off the hook based on the report they issued," Michael Faessler, president of Silver Star, said. "I've got two bottles of champagne being iced down right now in the front office. This is an incredible day of history for this company. For trading volume that is 20 times a previous best day, that's incredible." More than 491,000 shares of Silver Star changed hands Thursday. Silver Star is based in Dunedin, Fla. Mr. Fleming also created a message board on Silicon Investor to discuss Silver Star. Roy Samuels of Hawke Group, which handles public relations for Silver Star, says it was understood that message board exposure would be part of Wall Street West's promotion of Silver Star. Mr. Faessler acknowledges there could be a conflict of interest in issuing a research report in exchange for compensation. "Obviously there is bias. >From what I have learned, bias is quite normal." Mr. Faessler says he believes brokers often hold positions in stocks they recommend. Mr. Fleming says Wall Street West is not "pumping and dumping" -- driving a stock price higher through hype and then selling off shares. He says his company is always compensated in stock, or in cash that is then used to buy stock in the featured company. "We like to be paid in stock, because we believe in what we do and we believe we can help these companies. Our success is tied to their success," he says. From time to time, he says, Wall Street West will take a "very small" profit on stock it holds. "We sell only for basic living expenses. We're well-financed," he says. He says all of Wall Street West's income comes from the compensation it receives for promoting companies. Mr. Fleming also identifies himself as the president of Diversified Marketing Concepts, the parent company of Wall Street West. He says Magna Advisors is a "strategic partner" of the Wall Street West site, but says it doesn't contribute to the site's content. He declines to name anyone who works for Magna, or to describe what the company does. The Wall Street West site says Magna is based in San Diego. Mr. Fleming says Wall Street West has three employees, including himself and that Magna has three or four employees. Mr. Fleming says Wall Street West is trying to move away from promoting OTC Bulletin Board stocks and toward "larger, more stable" companies. "We want to get a good reputation and have some solid companies. We'd like to have more like InternetJet, one that went from $3.50 to the $9 to $10 range." Jon Marple, president of InterjetNet, a Newport Beach, Calif., wireless telecommunications company first featured on Wall Street West in April, says Mr. Fleming approached him about promoting the stock. "They wanted to feature us in exchange for stock. We were looking for an introduction to the public, and it sounded like a good deal," says Mr. Marple. But he says he felt "uneasy" after seeing the research report Wall Street West issued on InterjetNet, where it gave the company a "buy" recommendation. "I felt uncomfortable about giving stock in exchange for the recommendation," he says. InterjetNet gave Wall Street West 2,400 shares of stock in exchange for the promotion. Mr. Marple says InterjetNet hasn't paid anyone to recommend its stock since, and never will again. "You've got a young guy out there, this Daryn Fleming, who is trying something a little unusual with a tricky name," says Mr. Marple, who believed the company was involved in financial research based on its name. "Just starting out, we were vulnerable to an appeal like that." Gary Schulteis, president of International Industries, says he hired Wall Street West to get some exposure for his company, particularly on-line. "[Mr. Fleming] said that he is very active in the Internet, and that he had lots of places to get us good corporate exposure," Mr. Schulteis says. He says he never specifically asked Mr. Fleming to post on message boards. Mr. Fleming created a Silicon Investor message board to discuss International Industries, a Boca Raton, Fla., company that manufactures cigars and cigar vending machines. Mr. Fleming has posted 11 of the board's 27 messages. When some participants complained that the stock's price appeared to be slipping, he responded, "We think mostly big time investors bought [International], which is why we want to do a Wall Street West style SQUEEZE. This is where none of us will sell. In light of increasing demand, the stock could soar!!!!" Mr. Fleming says Wall Street West handles investor relations for Leah Industries, a Canadian manufacturer of windows and doors that was profiled on the Web site and received a research recommendation. But Leah's president, Alex Nafanailov, says the company no longer has a business relationship with Wall Street West. "We're not happy with them and we want nothing to do with them," says Mr. Nafanailov. He says Leah gave Wall Street West 10,000 shares last month in exchange for promotion, but stopped working with the company a short time later.

To: Labrador who wrote (2960)	3/27/1999 5:39:00 PM
From: gao seng	Read Replies (1) \| Respond to of 4122

Further on the subject of OTC Stocks MR. SHORT Exclusive to Mr. Cyriuss July, 1998 MORE ABOUT STOCK OPERATORS After perusing numerous chat forum subjects, we concluded that the average investor is in the dark about how a small cap deal really works. While many blame the promoter(s), few are even aware a stock operator manipulated them into their misery. Examine any thread with several thousand postings and you will hear, after the stock's demise, the pathetic grumbling of the believer. The investor believed the story. The investor blamed the stock promoter or newsletter writer, often for his own failings. The regulatory campaign against newsletter writers exists only to beat the bushes and flush out the true crooks: the stock operators. This strategy is hardly working and stock operators continue fleecing the public. Early in our own education on Wall Street, we learned about newsletter writers. If they are so good, why are they writing about the stocks instead of trading those stocks themselves? Successful traders are often too busy to share their secrets with you. No professional trader, in his right mind, would tip you off to a hot stock until AFTER he accumulated all the stock he could, even if went into hock to do so. Successful stock operators operate along that same course. Professional currency operators, hedge fund operators, only begin their media campaigns to generate bids so they can cover their positions. Did you notice recently the media uproar, over the Japanese Yen, just before that currency reversed course? That is how they manipulate the media so they can close out their positions. A hedge fund operator, on the order of George Soros, lends money to help bail out governments, as he earlier did with Russia, with a $200 million bridge loan. The most successful stock operators were once stockbrokers or traders that turned to the promotion game because it paid better. Only when they mastered marketing did they become operators. In the penny stock world, stock operators turn to this vocation because they were banned from promotions or censured because of one or more failed promotions. Have no sympathy for such characters because their incompetence or criminality generally rings up more than $10 million in losses before the regulator stings them. In their shadow world, and often-extravagant lifestyle, the promoter sinks deeper into the bog and becomes an operator. When his name has been sullied, he becomes an operator. The stock operator is the truly dangerous force in the penny stock market. Because he is hidden and very effective, the operator has the capability of creating high drama in a stock. He is the one who feeds hyperbolic phrases to his stable of unwitting, but bought, stock promoters. He is the one who hires the slugs to riddle chat groups with flowery projections about the stock, the same slugs that howl about the shortsellers and ridicule detractors. It is the stock operator who trades the stock to higher price, forcing shorts to cover and enticing the average shareholder to buy more and more and more. The stock operator bribes brokers to recommend the stock to clients. He is the one who greases the wheels for funds to add positions. He weaves the story for the promoters and captures their souls with options, cheap or free stock. Others he locks into private placements, which means you'll keep hearing about that stock until the letter writer or promoter has cashed out. The best stock operators are more effective in a bear market. Speculators are more desperate for a good score to bail them out of their previous losses. Most of the tricks used by today's stock operators were perfected before and during the US Great Depression. Indeed, the greater part of US securities law was born after the bottom of that economic collapse because of the scams that conned investors during the long drought of that period. If you recently lost in the western Canadian or OTC markets, you are among the best candidates for the next big scam. You will be eager to recoup your losses. Your name is on an email or fax list. Someone has your phone number or your address. You attended an investment conference, subscribed to a newsletter or joined a chat forum, right? They will find their way to you. But, in actuality, it is you who will reach for their next story. There is no shortage of lemmings itching for the quick buck. Penny stocks offer a leverage unavailable in the senior markets. Where else can you potentially gain by 1000% or more? That, at least, is the hope. More lose 70, 80 or 90 percent of their investment than those lucky few that score a double or better. Just as there are great numbers of future losers lining up to spin the penny stock roulette wheel, there are dozens of new promoters champing at the bit to launch a new career. Hundreds of new speculators, who think they can beat the odds. This game won't stop because of the regulators. The veteran stock operator is far too clever to be caught. His attorneys skillfully devise a strategy to detect and eliminate regulatory reprimand. Poor suckers, those newsletter writers - they are bribed by the operator and would also harm themselves by blowing the whistle. The same goes for others trapped in his web. Regulators can do little in stopping even the most treacherous operator. A handful every few years are nailed, but rarely are those the best operators. Many stock operators are merely auditioning for the job. One finds those half-baked stock promotions that helplessly sputter, leaving investors bid-less, after a few short weeks. Amateur promoters, with not much of a position, bluster and fumble while their following sinks down the drain. IR staff that cash out their options during the first rocket ride. Traders and shortselling syndicates obliterate their promotions. Indeed, these traders and groups accelerate the upswing so they can obtain a large enough short position to make it worth their while. Financiers who initially fund these mock operators blow them away during the roller-coaster ride. The better the stock operator, the more glorified the presentation. The price target will represent a stratospheric valuation. The story will include the overcoming of known obstacles, which are always to the company's benefit. The opposition will be painted as incompetent or desperate for what this company has. In the final, sometimes in the earlier, stages there will be takeover talk. After all, if the property or product is so good, a brand-name company will want what your tiny company has in their stable of acquisitions. Because there are the occasional, if infrequent, successes, the possibility alone sounds worth the minor speculation. If you've been had before, you may even take the quick profit, kick yourself for missing the "big run" and then find yourself back in the stock at a higher price. That, again, is one of the stock operator's tricks. Blaming the promoters for your losses is as senseless as blaming a gun or bullet for someone's murder. Who pulled the trigger? The stock operator. He designed the battle and already knows who's going to win or die. Once you are hooked into a story, the exit doors seal shut and you can not escape. At the exact moment that you begin to care about the small-cap company, you are hooked. There is little to separate yourself from the fantasy that is being created, for you, too, have become imbedded in this dream. How pathetic are the defenders of those manipulated stocks when you read their comments on the Internet chat forums. The operators are howling in laughter. So are the professionals. Without the little suckers, there is no one to fleece. An entire industry has grown around the penny stock marketplace: newsletters, specialized quote services, news release services, stockbrokers, stock promoters, traders, shortsellers, whistleblowers, chat forums, financiers and others. Regulators are too busy and under-funded to eliminate the gross fraud perpetuated in this industry. The infrequent indicted or penalized promoters are but grains of sand across an entire beach. The powerful broker-dealers, especially in Vancouver, Calgary, Montreal and Toronto live too well to resign from this industry. The US penny stockbrokers love the fast and easy money of the small cap business. They get cheap paper, dump during the promotional runup and then shortsell for the ride down the tubes. Where does this leave you? If you are fortunate, you will suffer minor losses and walk away from the game. That is unlikely. What drove you to the penny stock markets will keep you there. Speculating in penny stocks will never restructure the missing discipline in your life, which led you to the hot tip in the first place. Your options are slim: walk away disappointed, continue losing until you are broke, evolve into a cynic using stock certificates for wallpaper, or learn the discipline professional traders use to play these markets. At some future point, a new promotion will strike your fancy and you may again be suckered into the irresistibility of it all. A new mining discovery might bring you back into the exploration market. And so it goes. The hallmark of successful trades, that which separates the professional winner from the novice loser, is technical analysis. There is no substitute. Some use it but not enough and even fewer analyze consistently well. With the breadth of available technical indicators, most shun this subject or barely grasp more than a few basics. In this business, knowing a little makes you dangerous. Technical analysis is not a toy, but a powerful weapon. Judging from our cursory review of numerous Internet chat groups, technical analysis is only occasionally mentioned proportionate to the great number of postings discussing daydreams and fantasies, rumors and wishful thinking, defenses, complaints over shortsellers and promoters, soaring hopes and crushed expectations, and general drivel. It is our hope to radically alter the course of penny stock swindles and Internet discussion groups. The next issue you will receive from the Cyriuss group of publications: The Technical Register. This Internet service will evaluate the most active venture issues traded on the speculative stock exchanges, solely on the basis of technical indicators.