Bucket Shops

Quick Take – More bad news for Westpark Capital and the WrASPs – (CIL, CDM, etc.)

The SEC announced today, in a press release, that it has instituted Stop Order Proceedings against two of Richard Rappaport‘s Westpark Capital WrASP deals. To catch up on Buyersstrike! coverage of Westpark and it’s special brand of reverse mergers, dubbed WrASPs, see here, here, and here.

According to the SEC release:

Washington, D.C., June 13, 2011 – The Securities and Exchange Commission today announced that it has instituted proceedings to determine whether stop orders should be issued suspending the effectiveness of registration statements filed by two companies – China Intelligent Lighting and Electronics Inc. (CIL) and China Century Dragon Media Inc. (CDM).

The purpose of a stop order is to prevent a company or its selling shareholders from selling their privately-held shares to the public under a registration statement that is materially misleading or deficient. If a stop order is issued, no new shares can enter the market pursuant to that registration statement until the company has corrected the deficiencies or misleading information in the prospectus.

Both companies mentioned in the SEC release remain halted since March. Two other Westpark deals, ZST Networks (ZSTN) and Highpower (HPJ) miraculously still trade.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Origin Agritech’s Irving Kau, caught in a lie? (SEED)

[UPDATE – Here’s a pic of Irving. – Editor]

If a Bloomberg report is accurate, Origin Agritech (SEED)’s Interim CFO Irving Kau just issued a whopping lie in a pathetic and transparent attempt to divert attention away from the warning issued yesterday by the SEC concerning reverse mergers, see here, of which Origin is one of many. According to Bloomberg:

12:54    *ORIGIN WASN’T FORMED BY REVERSE TAKEOVER, CFO SAYS     :SEED US
12:54    *ORIGIN FORMED BY SPECIAL PURPOSE ACQUISITION COMPANY, NOT RTO
12:54    *ORIGIN SAYS SHARES ARE A GOOD VALUE AFTER DROP         :SEED US
12:54    *ORIGIN AGRITECH CFO KAU SPEAKS IN PHONE INTERVIEW FROM BEIJING
12:53    *ORIGIN AGRITECH CONSIDERING SHARE BUYBACKS, CFO SAYS   :SEED US

If Irving Kau thinks that Origin Agritech (SEED) was not once a little shell called Chardan China Acquisition Corp (CAQC) he is delusional. All it takes is a simple search to find a press release from from November 2005 which states:

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Congratulations Echo He! (HRBN)

In a surprise victory, beating out both Carol Wang and Henry Ai, with almost 50% of the vote, the winner of the most recent Weekend Poll, “Who is the next Ping Luo?” is Maxim Group’s Echo He.

Echo released a report on Harbin Electric (HRBN), a prototypical Chinese reverse-merger company, entitled “It’s not about trust, but common sense; Reiterate Buy.” News flash for Echo, it is only about trust. And simply put, there is not a single sell-side analyst that should be trusted blindly, not ones who work at Morgan Stanley or Goldman Sachs and certainly not ones that work at third-tier SPAC shops like Maxim.

Harbin is not Echo‘s only bizarre call.

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Weekend Poll. The next Ping Luo is?

[Update – Poll is now closed – Editor]

 

Every scandal plagued company has a supporting cast. Sometimes, like at Subaye (SBAY), it is the denizens of the Yahoo message boards, like this gentleman. Other times, at firms like China Agritech (CAGC), it is naive buy-side investors like young environmentalist Jesse Glickenhaus. At some, such as China Media Express (CCME) it is a chorus of sycophantic sell-side analysts best exemplified by Global Hunter‘s former star Ping Luo.

And so, the question asked in this weekend’s poll is who is the next Ping Luo? Who has blindly defended a company in the face of all evidence, potentially destroying their careers in the process.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

Bad directing Chinese-Style? “Christopher” Wang Wenbing (FSIN, CBEH, ONP, ENHD, etc)

In early May, we took a look (catch up here) at now halted China Integrated Energy (CBEH), and one of its directors. CBEH, the subject of several scathing reports here and here, was once called China Bio Energy Holdings and before that it was a lowly shell called Intl Imaging Systems (IISY).

While looking through the CBEH filings, one of the members of the Board of Directors stands apart from the rest. “Christopher” Wang Wenbing. C-Wang could be our first Chinese contender for a “Bad Directors” award, joining Americans G. Michael Bennett and Lawrence Schafran. Not only was Christopher a Board Member of CBEH, since September 2009, but he has also been on the board of Muddy Waters exposed scam Orient Paper (ONP) since October, 2009. ONP started out life as a Carson City, NV shell called Carlateral (CARZ). Read more about Orient Paper here.

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Weekend Short Take – Insider Selling at AgFeed (FEED)

One of the first in a long line of “bankers” responsible for creating the toxic waste known as Chinese Reverse Mergers, was a gentleman named Benjamin Wei (aka Wey). Read all about Wei in this article by Chris Byron from the New York Post and in this piece by Herb Greenberg.

Wei, and his silly sounding “New York Global Group“, based at 40 Wall St., brought one of the earliest of the China frauds to market when, in 2004, they created Bodisen Biotech (BBCZ) out of the Stratabid.com (SBID) shell and a thoroughly uninteresting Chinese fertilizer producer (and, cue poo jokes). Byron writes:

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Shane Whittle’s 87% discounted share placement (JAMN)

On Friday, the 6th of April, Shane Whittle‘s latest promotion, Jammin Java (JAMN), previously discussed here, issued an 8K filing describing the sale of 6,250,000 shares of stock at $0.40 per share. This represents a massive 87% discount from the previous closing price of $3.11.

The shares were sold under Regulation S. For readers unfamiliar with the world of off-shore boiler rooms, “Reg S”, as it is known, is an exemption from the registration requirements which are designed to protect investors. As one might imagine, Reg S is prone to awful abuses. Here is what the SEC itself says about it:

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Update – The new, expanded, IB Death Watch List

UPDATE:

Interactive Brokers has just issued a second list of garbage stocks on which it is radically raising its margin requirements. The first list was discussed here. The names on this new expanded list are:

ALN AOB AXN CADC CBP CBPO CFSG CJJD CNAM CNGL CNIT COGO CPHI CPSL CREG CSR CTFO CWS CXDC HGSH HQS KEYP KGJI LLEN LPH NFEC SBAY SCOK SHZ SPU SUTR TBV THTI TPI WUHN WWIN

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WrASP Update – John Baldissera’s Bad Week (ZSTN, CELM, NIV, CDM)

Buyersstrike! HQ’s crack research team missed another common thread among many of the Westpark Capital WrASPs (discussed last week here, here, and previously here).

ZST Digital Networks (ZSTN), China Electrics Motor (CELM – Halted), NIVS Intellimedia (NIV – Halted), and China Dragon Media (CDM – Halted) all share the very same IR firm, John Baldissera‘s BPC Financial Marketing (which also represented fellow Chinese reverse-merger nightmare, and G. Michael Bennett stock, L&L Energy, Inc. LLEN). In the last ten days or so three of the joint Westpark/BPC Financial clients have been halted. Of the joint Westpark/BPC deals, only ZSTN remains.

The content contained in this blog represents only the opinions of the author. The author may hold either long or short positions in securities of various companies discussed in the blog. This commentary in no way constitutes investment advice, and should never be relied on in making an investment decision, ever. This blog is not a solicitation of business: all inquiries will be ignored. The content herein is intended solely for the entertainment of the reader, and the author.

WrASP Update – China Electric Motors just got stung (CELM)

Some breaking news this morning on another one of Richard Rappaport‘s WrASP Chinese reverse-merger deals (for more background on Rappaport‘s LA based bucket shop Westpark Capital, and the WrASPS read here and here). Today the bad news concerns China Electric Motor Inc. (CELM) formerly a shell created by Rappaport known as SRKP 21, Inc. Like the other SRKP entities, this one also features large founding shareholder Debbie Schwartzberg. The Schwartzbergs, besides being prolific shell investors with Rappaport, are also the family that created the Sketchers and LA Gear shoe empires.

Today’s news is typical for the WrASPS of late. Trading in shares of CELM has been halted by the NASDAQ pending additional information. The 10K will be late. Says the company:

The delay in filing relates to possible discrepancies concerning the Company’s banking statements that were very recently identified by the Company’s auditors in the course of their audit of the consolidated financial statements for the fiscal year ended December 31, 2010.

And, naturally, yet another Very Special Committee of very special directors has been set up to investigate:

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