Drain the OTC Swamp
The OTC market or more affectionately, Penny Stocks, has long been a place full of hype, speculation and fraud. It is also a space full of opportunity for massive gains as investors seek out the next greatest idea or technology. Most investors understand this is a place of extraordinary risk but in exchange have the opportunity for extraordinary reward. As you all know, sifting through the various filings, newsletters and chatrooms can be a rewarding and exhausting endeavor. The internet is full of bad information, hyperbole, bashers, pumpers and worst of all are the people that are part of the "system". These people can take all forms, email blasts, text alerts, newsletters, pay for play research reports, and chat room junkies. The existence of these people, tarnishes the OTC market. Most investors play the OTC to realize their dream of hitting it big, but the "system" people play by their own rules and their mere existence undermines the entire system. I am embarking on a drain the OTC swamp campaign and I need everyone's help out there to do so. I am compiling information on many of these nefarious character for the purpose of filing formal SEC complaints. I have already compiled extensive files on several individuals and companies but as you can imagine, it is rather time consuming. So, I am reaching out to the general OTC investing public for help. I will be doing this by the occasional posting of a Seeking Alpha article and I would appreciate responses by commenting on the article or sending me an email. My initial plan is to do one individual/entity at a time. I would imagine it would take 1-2 months to compile all the information to be ready to file the complaint. All your help is appreciated.
The first individual we are targeting is __________, for the purpose of this aricle we'll call him Joe. This individual is or has been active on yahoo, seeking alpha, The Lion, Investors Hub, twitter, periscope, paltalk and others I'm sure. I have been following him for years and for a time I was casual participant in a semi private chat room with him. I have been suspect of him for some time but his recent involvement with KSIX is what has really gotten my attention.
Joe is a very active, I would go so far as to say that "investing" is his only job. He has a very aggressive nature and his style tends to be one that is always in attack mode, you seldom see him engaged in a civil debate or exchange of ideas. He appears to do legit investing as well as being a part of the "system". He often touts about his many direct calls with CEOs and often talks as though he has information that no one else has. He has been an active Seeking Alpha writer in the past, usually pre announcing the release of his articles. He claims to have above average returns every year and also claims to have had a nearly 3000% gain in 2009. He is also on many quarterly conference calls and typically introduces himself as a portfolio manager.
Joe has had several good picks and I would say a good portion of his stock picks may very well be legit but there are far too many instances that are not legit. I will point out a couple of instances of SEC violations. His own words and actions have lead me to my conclusions. I will point out a couple of instances, I have more but in the interest of compiling a stronger complaint, I am asking you, the readers to provide with me further suspicious circumstances. My conclusion are that he has:
Received compensation to promote public companies and has never disclosed that information, he has traded stock while knowingly possessing inside information and disseminates this information to others. Manages other people's money without being licensed to do so.
My compensation allegations are largely due to the fact that he often talks about Nuwa Group. For those that are familiar with Nuwa, they are in investor relations firm. They appear to be legitimate and have had a few nice companies the last few years. Why I have suspicion is the fact that over the last few years, it was common to see Joe writing articles for companies that Nuwa represents. Sure, it is possible he was doing it out of the goodness of his heart but not likely. It is safe to assume, he either received stock, cash or information to produce these articles. Which in and of itself is not necessarily a bad thing but I have never seen a disclosure from Joe that has ever referenced compensation. It won't take much digging to prove this one.
My insider information thoughts began when this article was published about NVIV, http://microcapresearch.com/invivo-therapeutics-jordan-lee-fallis/ I will give him this, it was a great piece of due diligence but I would imagine that a peek into his trading account and you will find some stock buying after his interview with the patient was complete. He also touted that he was about to publish the article several days prior to the actual publish date, point being, he had the information for quite some time prior to publishing the article and I'm sure shared the information with many people. Further, I would also guess that he was compensated by microcapresearch.com to write the piece. He has a tendency to pre announce the publishing of articles, I think it would be quite telling to see his trading activity before and after his publish dates.
One of his big homeruns has been NBEV (ABRW) This one he touted from when it was sub .30. This one, you can be certain he had inside information on, if he is as great of an investor as he claims, he never would have held onto this stock prior to exit from beer. The company was garbage prior to acquistions. He is very vocal bashing companies with far more going on than ABRW, so why did he continue to promote it? He was either being paid to or he had information that the general public did not have. In regards to NBEV, I am long the stock and want nothing but the best for it, their current CEO has done an amazing job and Joe's due diligence has been exceptional, but this doesn't change the fact of why he stayed in early on and accumulated more.
As I said earlier what really got my attention was his involvement with KSIX, this was a stock he was heavily promoting and touting it as the next NBEV. Then a couple months ago he posted an SEC complaint letter he filed against the company. So what could've have changed in such a short period of time? The company decided not to pay him? They shut him off from information? He had a falling out with Nuwa? Who knows but I'm sure it wasn't that his fundamental view of the company had changed that dramatically.
I've seen this behavior from him before, aggressive tirades on chat rooms, far right wing posts on twitter and homophobic rants on paltalk, but for someone like Joe, publicly going after a company is hypocritical. This is coming from the same guy that has been a part of the "system" that has sucked from investors for years.
There is that 1% chance that I am wrong, there is that chance that 1+1 does not equal 2 but that will be for the SEC to sort out. It will be a simple exercise of reviewing his bank and trading accounts. He may not have engaged in everything I suspect, but I am 99% sure he has violated more than one SEC rule and FINRA for that matter is he really is managing other people's money as he claims . My motive is not to do personal harm to Joe, rather get him and all the guys like him out of the market. This is not a commentary on the companies he's involved in either, I wish them the best. If Joe has never been compensated, acted on inside info or managed other people's money then he has nothing to worry about, but what I've uncovered thus far says otherwise. Let's drain the swamp, 1 bad guy at a time.
Micro-cap stocks Joe has been active in the last few years, to name a few, biad, nviv, wyy, abrw, itkg, nbev, adtm, admp. If you have others, please send them to me.
Disclosure: I am/we are long NBEV.