Bob chapman done for "manipulation" in penny stocks by #SEC

[Ognir]

Screw the SEC
http://www.stockwatch.com/newsit/newsit ... s_region=C

by Mike Caswell

The U.S. Securities and Exchange Commission has won an order permanently banning newsletter writer Bob Chapman from penny stocks for his role in the manipulation of Vancouver-based Sedona Software Solutions Inc. The order is a default decision, Mr. Chapman having failed to respond to the case.

The SEC claimed that Mr. Chapman, 72, touted Sedona in his International Forecaster newsletter in January, 2003. He predicted that the stock would reach $62, but did not disclose that he had bought 370,000 shares between 25 cents and $1. (All figures are in U.S. dollars.) His price prediction came just before other defendants sold $1.5-million worth of stock, the SEC said.

The SEC served Mr. Chapman with the suit on Aug. 13, 2009, delivering it by courier and certified mail to an address in Mexico and to a post office box in Florida. It also sent a copy via e-mail to the address for his newsletter, mailto:international_forecaster@yahoo.com">international_forecaster@yahoo.com. He had 20 days to respond, but he did not file an answer and no lawyer appeared on his behalf. On May 5, 2010, the judge ordered him to show why she should not find him in default. He did not respond.

The default judgment, entered on June 18, 2010, bars Mr. Chapman from buying or selling penny stocks, or most companies trading under $5. Mr. Chapman may also face fines, as the judge has also allowed the SEC to file an application for appropriate civil penalties and disgorgement of profits.

The case against the other defendants, including West Vancouver resident Anthony Wile and his uncle Wayne Wew, still has not gone to trial. The SEC is seeking a summary judgement against the men, arguing that there are undisputed facts in the case showing that they knowingly misled investors. The men deny any wrongdoing, and the judge has not ruled on the motion.

SEC's complaint

The SEC launched the case on Dec. 19, 2007, when it filed a complaint in the Southern District of New York. The complaint described how the men manipulated Sedona and another stock, SHEP Technologies Inc., and grossed $5.8-million selling shares of both companies. The defendants included Bermuda brokerage LOM (Holdings) Ltd. and its principals, Scott and Brian Lines. Also named were Vancouver residents Scott Peever and William Curtis.

Mr. Chapman's role was limited to the Sedona manipulation, according to the complaint. In late 2002, Mr. Wile and the Lines brothers were promoting Sedona as a gold producer in Latin America. They said the company was about to merge with a privately held entity called Renaissance Mining Corp., which held the rights to three gold mines in South America. According to the SEC, the information was misleading, as nobody had actually verified the potential of the mines, and Renaissance still required millions of dollars to acquire them.

Around the same time, the Lines brothers secretly bought 99 per cent of Sedona through nominees. The SEC claimed that they enlisted friends to act as signature directors for offshore companies that bought Sedona shares, which allowed the brothers to keep their ownership hidden.

The Lines brothers then had four newsletter writers create "independent" research reports on Sedona. The only newsletter writer that the SEC named was Mr. Chapman, who wrote that the company was "an incredible opportunity that could be the largest public offering in the United States for a mining company this year." Even though the stock had last traded for three cents, he predicted that it would hit $62.

Two days after Mr. Chapman made the prediction, the Lines brothers and Mr. Wew started manipulating the stock, the SEC said. According to the complaint, the men carried out a prearranged trade on Jan. 21, 2003, in which Mr. Wew bought 5,000 shares at $8.25 from accounts the Lines brothers controlled. Over the next week, the Lines brothers sold 159,300 shares at prices between $9 and $10 into the ensuing market demand, the complaint stated.

The promotion ended prematurely on Jan. 29, 2003, when the SEC halted the stock, citing questions about the accuracy of the information on Sedona's deal to acquire Renaissance. When the company resumed trading two weeks later, it fell to under $1.

The SHEP manipulation, as described by the SEC, followed a similar script. In that scheme, Mr. Peever and Mr. Curtis secretly acquired control of a public company that would become SHEP, and hid their control through the same six nominees that the Lines brothers used to acquire Sedona. They then paid tout sheet authors to issue recommendations to buy the stock, the complaint stated. One claimed that the company's product, a new form of car brakes, was the "Greatest Automobile Discovery Since Antilock Brakes." The stock went to $2.98 and Mr. Peever and Mr. Curtis sold $4.3-million worth of its shares, the SEC claimed.

The SEC sought orders permanently banning all of the defendants from participating in penny stock offerings, as well as appropriate civil penalties and disgorgement of profits.

Mr. Peever and Mr. Curtis settled early in the case. On Aug. 29, 2008, they agreed to permanent penny stock bans and to pay disgorgement in amounts to be determined by the judge. They did not admit to any wrongdoing.

The Lines brothers deny any wrongdoing and have filed motions to have the charges dismissed. They argue that Sedona's rise in price from three cents to $10 was because of the strength of the deal for the mining properties. The deal fell through when the SEC suspended the stock, they claim.

Mr. Wew and Mr. Wile also deny any wrongdoing, and have asked the judge to dismiss the charges.

[Timothy_Fitzpatrick]

Is this the same Bob Chapman that is Alex Jones' go-to guy?

[scorpio]

'The illuminists' are after Bob becuase he knows too much.  :think:  :crazy:  :lol: