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The law finally caught up to Jon Carnes (aka Alfred Little). See the link to the article below.

Securities regulator alleges fraud against Silvercorp short-seller

We will be updating this blog shortly that will provide proof that Geoinvesting and Jon Carnes are closer aligned than anyone knows.

We will also be showing the connection to Jon Carnes along with every other hit piece author that has or has attempted to short and distort stocks at the expense of the general public.

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Just to be clear I am not defending any U.S. companies or Chinese companies that are committing fraud.  The purpose of our site is to state clearly "committing fraud just because someone else commits fraud is not a valid excuse to break the law".

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Updates coming soon as we have finally received in more files.  Furthermore, we have had conversations with the individual operating under the name "Alfred Little" via email and have forwarded those emails to the SEC as well. 

We have had over 7,836 hits from all over the world as of today (U.S., Mexico, Canada, South America, Germany, Netherlands, Eastern Europe, Asian Pacific region, Australia, etc.).  We believe informational awareness is important and we hope to further build upon this to help better society. 

Don't forget to check out our news links including the "Legal Review" section.  This is not to be taken as legal or investing advice.

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Short Sellers Profiting From Privileged Inside Information in the U.S. Listed Chinese Market Place

The actions of "hit piece research" providers is astonishing.  They are no worse than the actual companies that are committing fraud, if their claims are correct in the first place.  Regardless, they do not care if they are correct as they have found a niche environment that has yet to be monitored by the SEC.  They know they are breaking the law, but direct quotes from two such sources is that "we are finally providing the information to the retail investor that the large investor has had for years" and "I believe the authorities will look the other way on what I do as I am a cop of the wild wild west". 

One would believe that such manipulation and use of non-public information would cause fear in the eyes of these hit piece authors, yet jail time does not appear to be a deterrent that is strong enough to keep them away from the hopes of riches.  We hear about firms utilizing their �expert witnesses� (e.g. IFRA, etc) to basically stalk, steal and acquire any piece of information they can get their hands on with the sole intention of creating the next major short position for their portfolio.  Without a doubt, it appears to be working very well for these short sellers in a few cases, but we would have to assume (at least hopefully) the integrity of such traders and �hit piece� authors will eventually be questioned within the investment community.

Let me be very clear, we are not defending these fraudulent companies or believe that they shouldn�t be exposed, as it appears some at least are not honoring the requirements and regulations of the U.S. public markets, similar to that of Enron and many other U.S. companies in the past.  However, the major question we are asking is this: Is it not illegal to trade on information that is privileged (or �inside�) prior to divulging such information to the authorities (irrespective of whether or not the information is positive or negative)?  The simple definition of insider trading is below:

�the illegal buying and selling of securities by persons acting on privileged information.�

It would appear that at least some of the pejorative information regarding a few of these companies seems to have been privileged and clearly not �publicly available� prior to some of these short sellers executing their trades.  Also if the information is not privileged then wouldn�t that mean it is not factual and it has been conjured purely to drive market movements ---- Let�s not delve into the 10b-5 issues as that is yet to be seen in many cases, but let�s briefly evaluate a few particular cases:

  • RINO International Corporation (RINO.PK):  In this particular case, it has been brought to light that the company claimed to have contracts with two customers that it did not have.  I do indeed believe this company did abuse the trust of its investors, but wouldn�t trading on such information prior to being released to the public be illegal as well?  Were there not clear winners in the company who either sold early, or shorted the stock (or both) based on the use of such inside information and at the expense of the investors who had to rely only on publicly available information that happened to disguise the truth?  I leave it up to the Securities and Exchange Commission to sort through that issue

  • Puda Coal, Inc. (AMEX:PUDA):  This is one of the recent cases that I consider unique as it does not appear to be fraudulent from the business performance as the fraud it is accused of is a misrepresentation of company ownership.   The CEO has been accused of effectively stealing the company for his own benefit and using it to raise a substantial amount of capital to participate alongside the company in its acquisition of other mines.  We find it interesting that the firm that supposedly had this �concrete evidence� of such allegations and uncovered this information proceeded to trade the security prior to disclosing this information to the authorities, thereby profiting immensely at the expense of the general public. Once again you have to question the legality of such actions, which we are sure will be reviewed by our regulatory system. In essence, we agree that there are some bad apples listed in the U.S. markets acting in ways that ultimately are detrimental to shareholder value, which is something that has existed since the establishment of the public market place itself.  That being said, there are also many �hit piece research providers� that are also profiting heavily by using such privileged information, which information may be reality or fabricated, to trade in these stocks for profit prior to disclosing such information to the authorities or general public, leaving shareholders of all ilk left as bag holders of such actions.

we are willing to admit that there is indeed a thin line in these environments.  However, rather than flirt with the line of illegality, our research and experience tells me to stick to our current processes as jail time is still a legitimate fear and probably will eventually ensnare both sides of this shady arena.

When drafting this article the following files were provided to a colleague of mine which appear to be excerpts in a message board format (we have included a number of others and a summary at end as well).  You will be astonished to read the deliberate planning as to the best timing of when to put out such hit pieces to ensure that it has the MAXIMUM negative effect on the stock price (and its current shareholders), while delaying as long as possible a response from the company, as it is apparent the author of the report did not discuss their findings with management prior. We believe the publisher of these hit pieces (as phrased by these message board posters themselves), operates under the title whitetiger. Below are a few of the excerpts regarding a new highly publicized hit piece on Sino Clean Energy Inc (SCEI) that were provided by various posters.  Also we have been told that there are many other references to other non-public information on these message boards such Chinese SAT files, etc. (which are generally known as being information that is not available to the general public). 

 

 

 

 

 

 

 

 

 

It appears that the individuals on this message board have taken privileged inside information and are using manipulative tactics with such information.  We believe this is only one example of these activities, and that there are numerous hit piece providers planning their releases very strategically so as to manipulate and maximize the negative effect on the stock price, obviously only after trading on such privileged information themselves.  We are amazed that they can claim fraud, true or not, and attempt to supposedly combat it (i.e. profit from privileged information) with a fraud themselves � ultimately the question we must ask.  Who are the ones being hurt by the activities of such companies and their �hit piece� �research� providers?  Answer: The American investing public.  The individuals putting their IRA money at work are being hurt by the manipulative actions of such non-regulated �research� providers as well as the companies that are being cleaned out themselves.  We have always been told two wrongs don�t make a right, and it appears this situation is no exception.     

If these �research� providers wanted to do the right thing by the investing public they would:

1)    Speak to company first to get clarification as it appears many of these issues could be easily explained - if the company does not provide such clarification or a reasonable explanation then go ahead and release the information to the public and properly disclose the inconstancies.  Then we believe trading on such information would no longer be privileged. 

2)     Report the company to the authorities immediately.

Ultimately we believe these �hit piece� providers have no desire to do either of the above prior to trading on the information as they wouldn�t profit as handsomely from such actions.  In the end, we ask ourselves how is what is happening in this situation any different from the Galleon case which is highly publicized in our media today? 

See the following Exhibit A for additional excerpts and a summarized conversation�.

 

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 Exhibit A: Misc Excerpts and Summary: