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TOPIC: Shell "hijackings"

Shell "hijackings" 9 years 11 months ago #1407

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[SEC files civil complaint against shell Hijacker]
U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 20681 / August 12, 2008
SEC v. David B. Stocker and Carrera Capital, Inc., Civil Action No. 2:08-CV-1475 (D. Arizona)
On August 11, 2008, the United States Securities and Exchange Commission filed a civil complaint against David B. Stocker, a Phoenix, Arizona attorney, and his wholly-owned corporation, Carrera Capital, Inc. The Commission's complaint alleges that Stocker perpetrated multiple instances of corporate identity theft. Beginning in early 2006, Stocker allegedly found several companies whose stock had once traded in the public markets, but that had become defunct corporations and were no longer operating. When he found such a company, he allegedly incorporated a new company under the same name in the same State and, using his authority to act for the new company, purported to act on behalf of the old company. Specifically, Stocker allegedly caused stock in the old companies to be exchanged for stock in the new companies under the false pretense that the old company was undergoing a reverse stock split. Stocker then allegedly caused the new companies to issue large blocks of stock to Carrera Capital, Inc., or to other persons, such that he or the other persons typically held 99% of the stock in the new companies. Through this scheme, Stocker was allegedly able to gain control of public shells without having to pay for them or otherwise deal with their former control persons. The Commission alleges that Stocker profited from the scheme by selling the shells for cash payments.

Because an exchange of stock under false pretenses took place, fraud occurred in the offer or sale and in connection with the purchase or sale of a security. The Commission thus alleges that Stocker violated Section 17(a) of the Securities Act of 1933 and Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder. The issuance of stock in the new companies to the shareholders of the old companies also allegedly constituted an unregistered distribution of stock in violation of Sections 5(a) and (c) of the Securities Act of 1933, and the Commission charges the defendants with violating these provisions.

The Commission's complaint seeks permanent injunctions, orders to provide an accounting, disgorgement plus prejudgment interest, third tier civil penalties, and penny stock bars against each defendant.

www.sec.gov/litigation/litreleases/2008/lr20681.htm
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Shell "hijackings" 10 years 4 months ago #1331

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[HSXI responds to suspension.]
HealthSonix Addresses Trading Suspension

IRVINE, Calif.--(BUSINESS WIRE)--March 13, 2008 HealthSonix, Inc. (OTC:HSXI)(FWB:H7S) today was made aware that trading on its securities has been suspended by the United States Securities and Exchange Commission (SEC): please refer to the release posted on the SEC website at www.sec.gov/.

"We weren't aware of any kind of a problem until this morning. It appears that there are questions surrounding the original publicly traded shell company prior to HealthSonix being vended into it - not, and I stress this, with the operations of HealthSonix itself," stated Dieter D. Doederlein, Vice President Corporate Development for HealthSonix. "We are in the process of obtaining clarification and more information from the authorities and will keep shareholders informed as we learn more," added Doederlein.

HealthSonix, Inc. (OTC: HSXI)(FWB: H7S) is a publicly traded research oriented medical technology company that develops and markets medical devices and healthcare products for institutional and consumer use. The company's patent pending medical devices deliver sound pressure waves to the human body for relief of pain and other musculoskeletal conditions. The focus is on arthritis, athletic injuries and conditions where acute or chronic pain is the cardinal symptom.

More information regarding HealthSonix, Inc. and its products and services can be found on the World Wide Web at: www.HealthSonix.com or by calling the company at 1-877-622-2121.

www.bloomberg.com/apps/news?pid=conewsst...:US&sid=agW3MoscMiIw
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Shell "hijackings" 10 years 4 months ago #1330

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[Shell "hijackings"]
Appears the SEC is going after shell "hijackings."

This has been a very big problem in the Shell Industry. Basically what happens: someone identifies an abandoned shell company, goes to the corresponding Secretary of State, re-activates the shell company, issues themselves controlling interest, and then sell it to an unsuspecting private company that wishes to become public.

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SEC Suspends Trading of 26 Companies to Combat Corporate Hijackings

Actions Are First From Enforcement Division's Recently-Formed Microcap Fraud Working Group

FOR IMMEDIATE RELEASE
2008-41

Washington, D.C., March 13, 2008 - The Securities and Exchange Commission today suspended trading in the securities of 26 companies that appear to have usurped the identity of defunct or inactive publicly-traded corporations using a tactic known as corporate hijacking. The Commission ordered the suspensions because of questions regarding the adequacy and accuracy of information pertaining to their status as publicly-traded companies.

The trading suspensions are part of the SEC's stepped-up effort to address fraud involving the securities of non-exchange traded, or microcap, securities. These are the first actions resulting from the recent formation of the Enforcement Division's microcap fraud working group. In March 2007, the Commission suspended trading in the securities of 35 companies as part of the SEC's Anti-Spam Initiative, which targets potentially fraudulent spam e-mail.

"Microcap investing involves thousands of companies and hundreds of thousands of investors. Keeping this tier of the market honest and free of fraud is every bit as important to investor confidence as our regulation of the world's largest companies and exchanges," said SEC Chairman Christopher Cox. "These trading suspensions demonstrate the SEC's intensified commitment to eradicating microcap fraud. The trading suspensions, and the actions that will follow, should leave no doubt that the Commission will use all of the weapons in its arsenal to combat those who threaten the integrity of our markets."

Linda Chatman Thomsen, Director of the SEC's Division of Enforcement, added, "Hijackings are a burgeoning problem, and a type which the Division's microcap fraud working group was created to address. Today's trading suspensions are squarely aimed at putting the market on notice about the risks associated with acquiring non-operational or 'shell' companies, and with investing in microcaps. This is a first step. We will continue to vigorously investigate those involved."

In conducting the corporate hijacking, certain persons appear to have incorporated each of the 26 companies using the same name as a then defunct or inactive publicly-traded corporation. For identification purposes, each class of an issuer's publicly-traded securities is assigned a ticker symbol by Nasdaq Reorganization and a CUSIP number by the Standard & Poor's CUSIP Bureau. These same persons appear to have usurped the CUSIP numbers and ticker symbols assigned to the defunct or inactive corporations' publicly-traded securities for use by the newly-incorporated entities. They then appear to have obtained new CUSIP numbers and ticker symbols in lieu of the old ones, also for use of the newly incorporated entities, by apparently representing falsely that they were duly authorized officers, directors, or agents of the original publicly-traded corporation.

The trading suspensions will last for 10 business days. The trading suspensions commenced today at 9:30 a.m. ET and terminate at 11:59 p.m. ET on March 27, 2008.

The 26 companies whose trading was suspended today are: Andros Isle Development Corp. (AVPJ); Asante Networks, Inc. (ASTN); Beluga Composites Corporation (BGCC); Cobra Energy Inc. (CBNG); Complete Care Medical, Inc. (CCMI); Disability Access Corporation (DBYC); El Alacran Gold Mine Corp. (EAGM); Extreme Fitness Inc. (EXTF); Gaming Transactions Inc. (GGTS); Global Equity Fund, Inc. (GEQF); HealthSonix Inc. (HSXI); IQ Webquest, Inc. (IQWB); JSX Energy Inc. (JSXG); Kensington Industries, Inc. (KSGT); Kingslake Energy Inc. (KGLJ); L International Computers Inc. (LITL); Let's Talk Recovery Inc. (LKRV); Mobilestream, Inc. (MSRM); Mvive, Inc. (MVIV); Native American Energy Group Inc. (NVMG); Paramount Gold and Silver Corp. (PZG); Regal Technologies Inc. (RGTN); Remington Ventures, Inc. (REMV); Straight Up Brands, Inc. (STRU); Transglobal Oil Corp. (TRGO); and Turquoise Development Company (TQDC).

The Commission cautions broker-dealers, shareholders and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by these companies. Further, broker-dealers should be alert to the fact that, pursuant to Rule 15c2-11 of the Securities Exchange Act of 1934, at the termination of the trading suspensions, no quotation may be entered unless and until the broker-dealer has strictly complied with all of the provisions of the rule. If any broker or dealer is uncertain as to what is required by the rule, it should refrain from entering quotations relating to the securities of this company that has been subject to a trading suspension until such time as it has familiarized itself with the rule and is certain that all of its provisions have been met. Any broker or dealer with questions regarding the rule should contact the staff of the Securities and Exchange Commission in Washington, D.C. at (202) 551-5720. If any broker or dealer enters any quotation that is in violation of the rule, the Commission will consider the need for prompt enforcement action.

The Commission acknowledges the assistance and cooperation of the Royal Canadian Mounted Police, the Ontario Securities Commission, the U.S. Attorney's Office for the District of New Jersey in Newark, the U.S. Attorney's Office for the Middle District of Florida in Tampa, the Newark and Tampa Field Offices of the U.S. Secret Service, and the Financial Industry Regulatory Authority (FINRA).

Any investor or other person with information relating to this matter is invited to contact the staff at (202) 551-4600 or by e-mail at This email address is being protected from spambots. You need JavaScript enabled to view it..


# # #

For more information, contact:

Scott W. Friestad
Associate Director, SEC's Division of Enforcement
(202) 551-4962

John S. Polise
Assistant Director, SEC's Division of Enforcement
(202) 551-4981

www.sec.gov/news/press/2008/2008-41.htm
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