If you are looking for a textbook example of illegal trading and the systematic destruction of a company's stock price, look no further than Royale Energy (ROYL).
Royale Energy's management successfully navigated this company through difficult times. In the first quarter of 2008, they increased cash flow more than 50%. They then promised and delivered profit in Q2. In fact they exceeded expectations. The company was then listed on the Russell 2000 and received favorable articles from a variety of sources (i.e. Fortune and Motley Fool).
Since then, market movers have systematically engaged in automated, electronic, illegal trading and did something I didn't think they would be able to pull off. They recently drove the price down on 7 consecutive days, which culminated in yesterday's closing price of $3.89 (down 16% for the day), when UNG (natural gas index fund) was down less than .5 % on absolutely no notable news.
This goes well beyond drops in the energy sector, and this company has repeatedly been listed on the naked short list. I strongly recommend investors stay away from any small cap stocks. ROYL is a solid company and will eventually rebound. Two weeks ago, this stock traded at $7.17. From there, it plunged to $3.89 on a series of naked short sales. If this isn't illegal trading, what is?
Disclosure: Long
