Markets
Penny Stock Printing Machine

TJ Management in Bogus Placements, SEC Says

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Yossef Kahlon and TJ Management Group secretly bought billions of deeply discounted shares from Pink Sheets companies and illegally sold them to a poorly informed public from 2008 to 2010, according to a Securities and Exchange Commission suit. Some of the issuers involved also sought equity or equity line financing in the PIPE market at one time or another. The suit was filed in the U.S. District Court in Texas’ Sherman Division. New York-based TJ Management allegedly reaped some $7 million in gains from fraudulent transactions involving large positions in companies such as Atlantis Internet Group Corp., RMD Entertainment Group, My Vintage Baby, Lecere Corp., Landstar Inc.(LSTR), Hard to Treat Diseases Inc., Good Life China Corp., VIPR Industries Inc., ChromoCure Inc., Biocentric Energy Holdings and Skybridge Technology Group. “TJM’s business model was predicated on acquiring large blocks of stock from small companies in multiple successive transactions at a price of at least 40% less than the prevailing market price and quickly reselling the stock into the public market without registration,” according to the SEC’s complaint.

Legal

SEC Sues Mining Shell Sweatshop

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The Securities and Exchange Commission is suing a husband and wife shell making team for fraudulently selling mining company entities that were never intended to have actual mining operations. Several of the 15 shells have changed hands and taken on new lives in reverse mergers, while others are defunct. The suit was filed on Aug. 13 in the U.S.District Court, Eastern District of Texas in Sherman, Tex.  The defendants have not yet responded to the SEC's allegations. The pair allegedly engaged in fraudulent shell formation from 2006 to 2011, according to commission allegations that Mr. Coldicutt previously had his license suspended by the Vancouver Stock Exchange in 1985.

Legal

SEC Sanctions, Sues China Yingxia Players

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Two years after the CEO of China Yingxia International Inc. (CYXI) was sentenced to death in China, company affiliates and promoters are being sanctioned by the Securities and Exchange Commission for wrongdoing including illegal issuances of stock. Nutraceutical maker China Yingxia went public in the U.S. via a 2006 reverse merger. The company raised $10.73 million in a 2007 common stock PIPE placed with investors including Endurance Partners, Guerilla Capital, JMG Capital, and Heller Capital. China Yingxia was a Florida corporation headquartered in Harbin, China with what the SEC calls "purported” operations in China. The SEC has announced separate settlements with consultant James Fuld, Jr., consultant and communications representative Peter Dong Zhou, unregistered broker Steve Mazur, and Peter Siris and his Guerrilla Capital and Hua Mei 21st Century entities.

Legal

Criminal Charges Loom over BayStar’s Goldfarb

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Lawrence Goldfarb and BayStar Capital face a renewed criminal investigation after Goldfarb allegedly violated a $14 million settlement with the Securities and Exchange Commission. The March 2011 civil settlement entailed a deferred prosecution agreement (DPA) for a criminal charge of wire fraud. After Goldfarb failed to make over $10 million of the scheduled payments, prosecutors took the view that the missing payments are a violation of the DPA. Goldfarb, who maintains he has done everything possible to come up with the cash, filed a motion to stave off criminal prosecution on July 17, weeks after the SEC had a receiver appointed in the civil matter. The civil and criminal cases were both filed in the U.S. District Court in San Francisco.