In the interests of maintaining balance about my bullish views on Chinese small and mid cap stocks, the Securities and Exchange Commission filed suit against Jason Genet in a New York federal court alleging that he “pumped and dumped” the stock of China Energy Savings Technology for a profit of $1.7 million. China Energy completed a reverse merger in 2004.

Moral of the story. I love China and you can love China too – but make sure to do your due diligence each and every time you look at a new possible investment.

Regards,
Jonathan

Tags: ChinaSecurities.com, china, chinese, small cap stocks, online investor relations

InvestorsHub.com operater Matthew Brown and 7 other participants were charged by the SEC for their involvement in manipulative trading schemes often timed the  to coincide with false or misleading press releases issued by companies to hype their stock. The four companies were GH3 International, Inc., Asia Global Holdings, Inc., Playstar Corp., and Xtreme Motorsports of California, Inc.

In addition, the U.S. Attorney’s Office for the District of Delaware also announced felony criminal chargesagainst 6 members of the group, including Matthew Brown.

WERE INVESTORSHUB.COM MEMBERS VICTIMS OF THESE SCHEMES?

Further details about participants and charges are outlined below – but the big question for AGORACOM is whether members of InvestorsHub.com were taken advantage of in these schemes?  We know from the SEC’s press release that:

“In the scheme involving Asia Global stock, the SEC alleges that Dynkowski
personally saw to it that the manipulative trading was coordinated with misleading
press releases from the company, and in some instances he wrote the press releases
for Asia Global himself. According to the SEC’s complaint, Dynkowski instructed
Brown on Aug. 24, 2006, to have Asia Global issue a press release hyping the
company’s second quarter 2006 financial results and to “make it sound ENORMOUS.”

Given the fact Brown operates a very popular penny stock site that provides “free” stock alerts and also features sponsored penny stock press releases on its front page, it isn’t a stretch to assume that his very own members may have been victims of these manipulative trading and press release schemes. We’ll look deeper into the SEC complaint for any details.

PARTICIPANTS CHARGED BY THE SEC

The SEC’s complaint, filed in federal district court in Delaware, charges seven others in addition to Brown:

* Pawel Dynkowski of Newark, Del.

* Jacob Canceli of Mission Viejo, Calif., who is a stock promoter.

* Gerard J. D’Amaro of Pompano Beach, Fla., who is a stock promoter.

* Joseph Mangiapane Jr. of Laguna Niguel, Calif, who was a registered representative at AIS Financial, Inc and is currently CEO of Rubicon Financial, Inc., which owned AIS Financial, Inc. during the relevant time period.

* Nathan M. Michaud of Boston, Mass., who is a web site designer.

* Marc J. Riviello of Redwood City, Calif., who was a registered representative at AIS Financial, Inc.

* Adam S. Rosengard of Voorhees, N.J., who was a student at the University of Delaware during the relevant time period.

PARTICIPANTS CHARGED BY THE U.S. Attorney’s Office for the District of Delaware

The U.S. Attorney’s Office for the District of Delaware also today announced felony criminal charges against Dynkowski, Brown, Canceli, D’Amaro, Mangiapane, and Riviello.  Michaud the web designer and Rosengard the student were not charged.

CONCLUSION

Once again, we thank the SEC for aggressively going after penny stock fraudsters.  They are a scourge on an industry that is full of hard working and real small-cap companies that are trying to become tomorrow’s leaders.

Unfortunately, the pump and dump schemes often overshadow the efforts of real small-cap companies and often serve to set the identity of the space amongst investors.  The faster we get rid of them, the faster we can allow real small-cap companies to win or lose on their own merits, free of the baggage piled on by penny stock fraudsters.

Regards,
George