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An investigative consultant / journalist with extensive experience in forensic investigation focusing on financial fraud. Has uncovered high profile fraud cases against companies and individuals throughout Europe, Canada and Asian Pacific Region. For dislcosure, I am using the alias Arthur Big... More
  • "Bash and Cover" The New "Pump and Dump" 16 comments
    May 1, 2011 4:30 PM | about stocks: , PUDA, GURE

    We are seeing a new kind of "pump and dump" its called "bash and cover".  We have outlined this procedure extensively on our site http://hitpieceresearch.com/How%20It%20Works.htm

    This is a new era for investors and auhorities and I am sure they are monitoring and tracking such information.  We really see no difference in these styles of investing or market manipulation.

    In one case the investors are the bag holders as they own stock that was pumped up.

    In the other "hit piece research" scammers put out manipulative and market moving pieces of information to smash a stock hurting all shareholders. 

    Other times in the "Bash and Cover" the manipulators are actually using inside information such as SAT filings, and information that is materially different than SEC filings to trade in the security prior disclosing and also often putting price targets of zero on the securities to move the stock price in their direction.

    Rejoice as another great day has begun.

    Stocks: , PUDA, GURE
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Comments (16)
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  • peopless
    , contributor
    Comments (3) | Send Message
     
    vimeo.com/channels/scei
    2 May 2011, 05:32 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » Well I have not specialized on that area to date. I have focused my efforts more on the financial services sector side of fraud. Have brought light to and reported ponzi schemes in U.S. and Canada. The latest in the U.S. was an oil and gas fraud in Oklahoma. In Asia the last case we handled was a gold trading platform that was fraudulently reporting its activity.

     

    Once again, I believe you are not listening. I am not arguing hat there is fraud in the China. I do not know the extent nor am I going to try to find out as that is not where my efforts are best spent.

     

    Why I jumped on this case? It was blatant and prevalent in the public domain what these "hit piece" authors were doing. The shocking aspect about this fraud is they were openly admitting (in public forums) to having inside information and trading on such information for profit or selling it to others. That was pretty shocking, but makes it easy to analyze and report. I believe if these research providers acted as "regulated research analysts" and compiled their information and reported it to the public and authorities for disclosure than there would be little wrong with what they are doing - which would involve not selling it prior, validating the information prior to dissemination and not trading on such information prior. The problem with these authors is that they care little about fact and little about disclosure and more about "maximizing stock price movement in the direction of their benefit", front running reports, trading on materially non public information that is different information than in the SEC filings, etc.

     

    Also the Section 9 and 10b-5 violations were very prevalent . That is why I took the case on and begun my work. The activities are just way to obvious and by the way they are putting it in public forums it is rubbing it in the face of our legal system.

     

    From my conversations this weekend, despite being outside working most of it, I believe the case is moving properly ahead and will not need my efforts much longer.

     

    I am open to hearing about other areas to focus my time, but corporate fraud is not to interesting to me at the moment.
    2 May 2011, 07:26 AM Reply Like
  • nostores
    , contributor
    Comments (94) | Send Message
     
    You mention inside information. The only thing i've seen you mention is SAT stuff. SAIC files are hardly inside information neither are videos showing that these companies aren't producing a fraction of what they claim. Could you extrapolate on your claims of trading on inside information? I find it odd that you have Global Hunters claiming to have access to all of CCME's bank records, client contact information.. etc. even they they state they may have positions in CCME yet you take no issue with that. Likewise with clowns like Jason Nevadar claiming to have access to CHBT addresses prior to release. Of course both turned out to not only supposedly have access to inside information but to also have been shown to have had access to fraudulent inside information.

     

    fyi - the short reports have tended to be extremely clear that they had negative bets via puts/shorts against the target companies. Also in several cases the authors haven't covered imediatly after release as you suggest. Al claims to still be short CBEH and I believe SCEI. He covered DEER because the puts turned into shorts without locates and locates are extremely expensive. I believe GEO still has puts in PUDA and believe they maintained shorts well after the SBAY and NEWN news hit. Many of these are covered due to difficulty of getting locates, negatives with maintaining shorts and fear of halts.

     

    You're one sided view of a subject dealing with massive financial fraud is rather telling.
    2 May 2011, 07:39 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » So by the fact they only have a little inside information that makes it ok? i don't agree, but we can see what the authorities say as they may feel otherwise, but i doubt it.

     

    Global Hunter is an investment bank. They are regulated by FINRA and the SEC and have to report their position and trading patterns in audits.

     

    Are you and the rest willing to open your records up to that degree? If so that could clear your name during the investigation if you are as honest as you are claiming. But your defensive nature here would lead me to believe you are nervous and I should more deeply into your actions directly.

     

    The fact that Geo sells inside information (through subscriptions) and their investors short then cover immediately prior and after that would make them an accomplice and libel i believe. But I am not the judge, we will let him determine what happens.

     

    I will check the boards and see if my sources have info on claims on NEWN and SBAY as i don't have any infomation on them yet, but i am assuming it will be easy to get.

     

    Thank you greatly for the referral!
    2 May 2011, 08:35 AM Reply Like
  • sikako?
    , contributor
    Comments (13) | Send Message
     
    You clearly don't understand what insider information is. Most people don't, including myself, and there's a lot of legal clarity on what is insider information.

     

    It's not the case that trading on any material non-public information is insider trading. I think, and this is just my layman opinion about the law, that in most countries the insider information has to be obtained during the performance of an insider's duties at the traded company. There's the broader definition of insider trading that is based on trading using "misappropriated information," that is, stolen information. I think the US law is probably now consistent with this misappropriation theory.

     

    My personal opinion is that not only are the short sellers providing a valuable service to society by exposing these Chinese RTO frauds, they haven't misappropriated any information. Just my view.
    4 May 2011, 12:24 PM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » My lawyer sure does.

     

    Your view is very flawed unfortunately. I am sure you have a lawyer - you should call them and ask them their opinion. If you don't have one, please hire one immediately! Inside information has nothing to do with where the information is obtained, especially has nothing to do with what country its obtained.

     

    If you would like to challenge the law based on your opinion feel free. But pleading ignorance is not a defense. If you break a law, even one you do not know about or misinterpret, you are still guilty.

     

    I would be very entertained to watch you on stand telling the judge you believed the law was different and you should not be held guilty because "your" interpretation was different.

     

    Enjoy your day.
    4 May 2011, 01:07 PM Reply Like
  • sikako?
    , contributor
    Comments (13) | Send Message
     
    I think we have to agree to disagree here. Luckily, this is only theoretical for me! ;-)

     

    I think, again based on just a smart layman's interpretation, that the illegal use of insider information by people who don't work for the company in question is defined in the US based on the "misappropriations theory."

     

    Quoting your own web page (hitpieceresearch.com/L...):

     

    "Rule 10b5-2 clarifies how the misappropriation theory applies to certain non-business relationships. This rule provides that a person receiving confidential information under circumstances specified in the rule would owe a duty of trust or confidence and thus could be liable under the misappropriation theory."

     

    Also check out United States v. O'Hagan from I think 1997.

     

    Specifically in the case of short sellers and analysts finding fraudulent companies to short, please read: (www.sec.gov/news/speec..., this link is also on your web site):

     

    "Three years later in Dirks v. SEC,30 the Supreme Court reversed the SEC's censure of a securities analyst who told his clients about the alleged fraud of an issuer he had learned from the inside before he made the facts public. Dirks was significant because it addressed the issue of trading liability of "tippees": those who receive information from the insider tipper. Dirks held that tippees are liable if they knew or had reason to believe that the tipper had breached a fiduciary duty in disclosing the confidential information and the tipper received a direct or indirect personal benefit from the disclosure. Because the original tipper in Dirks disclosed the information for the purpose of exposing a fraud and not for personal gain, his tippee escaped liability."

     

    To me this makes it seem that if confidential information is revealed to expose fraud, it's not misappropriated.
    4 May 2011, 02:47 PM Reply Like
  • nostores
    , contributor
    Comments (94) | Send Message
     
    My records? LOL Go for it. I've posted some on GEO. I'm not worried in the least (I started buying puts on SINO shortly after GEO said things weren't right at that place, but even prior to GEO saying jack I had short position in SCEI that had been called and then moved into short CALLS, so i was already short.

     

    I'm not nervous, but rather just annoyed by your rather one sided view on this subject. It's amusing that you won't criticize Global Hunters blatent pumping of frauds like CCME or their access to fraudulent inside information, nor will you comment on a single fraudulent RTO. You seem a chump.. probably one who either lost a lot of money going long some of these POS's or more likely one who is getting paid to harass short sellers.

     

    Also, I'm not saying the SAT numbers inside information but agree that it seems pretty gray. The SAIC's are much more common tools and readily available though.
    2 May 2011, 09:16 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » You seem a chump.. please elaborate as to what you mean please? Why are you so defensive? Nerves can do that to a person. Don't worry though if you are doing things legally you will be fine.

     

    You are mad at me because I am not everything? If "I seem a chump" then why would you care that I also investigate Global Hunter? I believe FINRA and SEC are very capable of monitoring their actions.

     

    Appears I hit a nerve with you and I can understand why as the law is a serious matter.

     

    Thank you for providing me your trading information. If you are violating the law I am assuming the authorities will be more concerned with your brokerage statements versus your word of mouth. I seldom rely on word of mouth unless its from the horses mouth who is saying they are breaking the law - rare, but appeared to have occurred here.

     

    Rejoice as another great day has begun.

     

    Oh, can you send me your seeking alpha statements as my source hasn't been responding last two days.
    2 May 2011, 09:34 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » seen what news specially? Yes. I believe Finra and SEC and monitor the investment banks and do a pretty good job. I hear their audits are pretty aggresive - but have never been through one myself as I was never an investment bank.

     

    Just to be clear again. I am not the authorities. I am just helping communicate with the authorities. Whistleblowers are prevalent in all light.

     

    If you have proof of someone such as global hunter doing anything is wrong you should email:

     

    - khuzamir@sec.gov
    - kotzd@sec.gov
    - Criminal.Division@usdo...

     

    They listen if your information is credible. Trust me.

     

    Click on your bio on seeking alpha? I was actually asking for your geo comments? Are they the same?
    2 May 2011, 10:06 AM Reply Like
  • nostores
    , contributor
    Comments (94) | Send Message
     
    "Oh, can you send me your seeking alpha statements as my source hasn't been responding last two days. "

     

    "Click on your bio on seeking alpha? I was actually asking for your geo comments? Are they the same? "

     

    How about a little consistency. :) I'm not going to waste time copying GEO posts for you.. if you want to, then have at it. They are out there and probably google cached by now.
    2 May 2011, 11:15 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » ok. I apologize. I meant your geoinvesting posts. I obviously have access to seeking alpha. I do not have access to geo atleast havent received any info. Would you be willing to provide?

     

    Would you be happy if i agreed that Geo did have material non public information on PUDA, jury is still out on others I believe?

     

    The issue I have is that they took such information and traded on it instead of disclosing to authorities and public to help the average shareholder - not just their "ring of cronies".
    2 May 2011, 12:09 PM Reply Like
  • nostores
    , contributor
    Comments (94) | Send Message
     
    I'll admit that I have no idea what is public or not in china. I assume in PUDA's case you are referring to the transfer of ownership document? I had thought that it was public record to be honest.

     

    The SAT issues I've heard mixed things about. I thought you couldn't get them without the company agreeing or something like that and never understood how the short side got access to them.

     

    With SCEI I can't recall any of those issues. I'm not sure what other stuff you might be referring to as inside information.

     

    fyi - I'm not going to copy GEO stuff for you.
    2 May 2011, 12:37 PM Reply Like
  • jonsjon1223
    , contributor
    Comments (224) | Send Message
     
    SAT is not insider information. SAT is the equivalent of SEC, and SEC is public information, which means SAT is also public information. It doesn't matter that the Chinese government thinks otherwise, it only matters what the SEC thinks. And the SEC clearly thinks SEC-type information is public information.
    6 May 2011, 08:09 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » Jons - you are flat wrong. SAT is not equivalent at all to SEC filings.

     

    SEC filings are reports filed in compliance with a public listing that are required for investors.

     

    SAT are tax filings with the government. Similar to IRS filings. These are not public. IRS filings are not public.

     

    Question - can i access your IRS filings? No they are not public information.
    6 May 2011, 08:17 AM Reply Like
  • Arthur_Big
    , contributor
    Comments (174) | Send Message
     
    Author’s reply » Do you work for a long short fund in HK? You must be tired when you get to work if you stay up writing novels to me all night.

     

    Don't worry it will all catch up to you.

     

    You talked to your counsel and SEC staff attorneys? Which one?
    21 Jun 2011, 06:23 PM Reply Like
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