College Stock: Penny Stock News

Since 2004, mPhase Technologies (XDSL) has been retaining the services of notorious penny stock promoter Jonathan Lebed. Over the past 5 years Lebed has shamelessly promotedXDSL while the company continues to lose tens of millions of dollars.

When Jonathan Lebed had his first run in with the SEC back in 2001, he resided with his parents in Cedar Grove, NJ just a few blocks away from Ron Durando and XDSL’s corporate office in Little Falls, NJ.

Obviously Ron Durando had heard of Lebed at that time and the two started doing business together shortly thereafter. Before Lebed was even old enough to incorporate his own company (must be 18 years old) he was accepting large chunks of cash and stock to hypepump tout exaggerate discuss XDSL.

What’s ironic about their relationship is that Ron Durando himself has run afoul with the SEC.

On October 18, 2007 the SEC instituted a cease-and-desist proceeding against Durando and one of his companies at the time, PacketPort.com. Specifically, Ron Durando had…

-Violated Section 5 of the Securities Act by making unregistered offers or sales of PacketPort.com common stock.

-Violated Section 16(a) of the Exchange Act and Rule 16a-3 by failing to timely disclose his positions on Form 3.

-Violated Section 13(d) of the Exchange Act and Rule 13d-1 by failing to timely disclose his acquisition of +5% of PacketPort.com’s shares outstanding.

The SEC cease-and-desist order naming Ron Durando can be seen in its entirety HERE.

Since 2004 the two have been working together and in my opinion it’s been a mutually beneficial relationship (Lebed pumps, Durando’s team dumps & everyone gets paid minusXDSL shareholders). You can see from Lebed’s legal disclaimer below that it’s certainly been a very profitable endeavor for him:

My firm Lebed Biz LLC has been compensated by XDSL 1 million restricted shares and $50,000 cash for a one-year investor relations contract. We were previously compensated by XDSL 850,000 restricted shares, $55,000 cash and 175,000 warrants to purchase shares at $0.35 for past investor relations contracts which have since expired. We have sold our shares but still hold our warrants. Never invest into a stock we discuss unless you can afford to lose your entire investment. For our full disclaimer go to:www.lebed.biz/disclaimer.htm

So Lebed has received about $130,000 from XDSL over the years for “investor relations” services… good for him. But when he first started promoting XDSL the stock was trading as high as $0.60 and today it closed at $0.0123 for a loss of 98%.

A 98% loss in a stock (XDSL) that Lebed wrote:

12/27/05 “I believe XDSL should be worth a lot more than what it is currently trading at [$0.21].”

1/10/06 “My #1 pick for 2006 XDSL”

2/1/06 “I believe XDSL clearly is the most promising stock trading on the entire OTC BB”

10/24/06 “I believe XDSL is going to EXPLODE just like PLRS did for us!!!!!!!!!!!”

1/5/07 “I am willing to bet anything that we are about to see XDSL breakout above the 200-day moving average of $0.201 and start to explode.”

2/13/07 “I think the PERFECT Valentine’s Day Gift would be shares of XDSL stock [at $0.20]”

7/18/07 “XDSL is going to EXPLODE! I can’t believe the stock is only $0.125!”

5/5/08 “I can’t believe XDSL is trading right now for only $0.104! XDSL‘s chart looks amazing and I believe the stock could be ready to make it’s BIGGEST run ever!”

Yikes! Talk about one bad call. Since 5/5/08 Lebed hasn’t mentioned XDSL in a single email newsletter and I tend to doubt that he’ll ever mention the stock again unless XDSLforks over more cash.

Exaggerated claims are the bread-and-butter of Lebed’s business model because a small % of email subscribers buy into his lingo. But in the long-term ‘Accountability is King’ and in a perfect world every mention of  Jonathan Lebed would cite all his successes, failures, winners and BIGGEST FLOPS EVER!!!!!!!!!!! (yes, that’s 11 exclamation points).

Key Takeaways:

(1) Never invest in a penny stock for its “coming soon” products or anything whatsoever that’s 100% forward-looking without material substance.

(2) Tips are for waiters. Be skeptical of all “tips” regardless of the source and remember that some stock promoters fail to properly disclose their compensation received.

(3) There are a lot of dishonest penny stock executives out there.

(4) Birds of a Feather Flock Together

So Lebed.biz released their “HUGE NEW PICK” @ 9:39am and the symbol is CLXS. Within 60 seconds I had bought 20,000 shares at an average price of roughly $0.196 (fill’s at .19, .195 & .2).

It took CLXS just 5 minutes to reach its intra-day high of $0.22 per share from the time Lebed.biz released their first email alert. Lucky for me I spend about 10 hours/day in front of a keyboard because I literally had to be that quick to make money on this stock promotion.

Once CLXS dropped back to $0.20 I got into “asset protection” mode and immediately entered a sell order for $0.21. I  was able to liquidate all my shares at that price for a return of 7.6% and it took just 11 minutes from start to finish  so I’ll take the quick return and happily move on to the next paid pump.

Below is a zoomed in chart of the morning volume for CLXS. The upward price action was even faster than I anticipated… so it’s tough for me to recommend anyone doing this without super quick fingers.

Back on 3/20/08 the SEC halted the stocks of three companies for promotional videos on youtube.com: NTCX, YNGR and GPKE. These halts by the SEC were the first of their kind for promotional activities on social media websites… but The Dean thinks they certainly won’t be the last!

Social media stock promotions are catching fire— and the latest trend seems to be stock promotions on Twitter.com. Now while stock promotion is legal… if you don’t disclose payment then you’re violating SEC regulations.

While Twitter.com should be utilized by every company (both public and private) for marketing purposes… there’s a big difference between good tweeting & bad tweeting. I’ll use CVIC as an example of bad tweeting.

CVIC already has 1,816 followers but only 27 twitter updates. And most of those updates are promoting their own stock… ultra risky move for SEC halt IMO!

They also claim to be the “first public co in medical marijuana biz” but that’s completely false… there were plenty of otherscams stocks that tried the medical marijuana angle (google Amigula). There’s even another publicly-traded marijuana scam stock spamming on twitter! The symbol is GFON.

So any public company utilizing twitter.com… you’re walking a very fine line and should get in contact with the pro’s @ http://www.intelligendo.com. Their expertise is social media for public companies and they understand the in’s & out’s.

In my opinion, the year 2009 will see numerous counts of stock halts by the SEC for undisclosed stock promotions using Twitter. So before the SEC warns you on such illegal activity… take it from The Dean. You don’t want to be caught holding the stock of any company risking a halt from the SEC on the likes of twitter stock promotion.

It’s amazing how many different angles you can trade play these high-flying penny stocks with access to the right information. My latest example of this phenomenom is MTIZ- a paid-pump by hototc.com that I introduced to subscribers in the 4/9/09 issue of The Dean’s List.

I pegged MTIZ as a ‘Long’ and specifically said to watch out for the early A.M. gap up since hototc.com has a big following. Sure enough… MTIZ gapped up over 200% and I immediately saw the opportunity to short because its one of the many common trading patterns of paid-pumps. If you were able to borrow shares to short at $0.031 and covered at $0.025 you could have locked in a nice 51% return in under 4 hours. Pretty cool, huh?

Of course its likely a ‘hard-to-borrow’ stock but thats all the more reason to work countless hours to find the right broker/market-maker to trade with so you can take advantage of these opportunities.

SPNG finished up about 31% today and continues its huge run since I wrote about it on 3/18 as a possible bottom-feeder play. The stock now up as much as 215% since my 3/18 blog post on the heels of Tuesday’s announcement of record sales for the month of March 2009.

But for as much dirty water as that Spongetech sponge can absord… I’m more interested in sharing a Barack Obama quote from today’s G20 conference. If you can fully absorb the absurdity of this quote I think you’ll become a better trader.

During Obama’s speech he suggested that people act out of hope and confidence in their future and not out of fear.

“Despite the current hardships we are going to get through this [and] basing decisions around fear is not the right way to go.“

In my opinion taking this advice and trading based off of “hope” is like trading stocks when you’re drunk. I recommend doing the complete opposite and start becoming a more skeptical trader than ever before. And BTW I tagged this entry into the “Stock Promotion” category cause that’s basically what Obama has become.

Last night Boonmarket.com began a stock promotion for LLSR. ‘Bones’ @Boonmarket.com was compensated $15,000 cash (from an unknown 3rd party) to promote LLSR and what an incredible job they’re doing!

As I type this entry LLSR is @ $0.28 (+115%) so we’ve obviously missed the run. IMO the play is now to the short side but its gotta be impossible to find shares to short (unless you’re a shady market maker). The next time Boonmarket.com starts a promotion I’ll def. consider buying shares early A.M. but only if it doesn’t gap up.

TIP TO REMEMBER: please please please never buy a promoted stock on the first day of a campaign if it gaps up more than 15-20% cause you’re just asking for trouble.

Anyone else notice MNTX is mysteriously up by as much as 80% this morning on heavy volume??? Well its a pump being orchestrated by Beacon Equity Research headlined “MNTX Could Surge on New Infrastructure Stimulus Spending” (:cough:hyperbole :cough:). By studying the MNTX 30-day chart you may learn some good insight to how a Pumper works.

The odd part of this pump is that Beacon claims that they have not been compensated for this campaign. ULTRA FISHY! My speculation is that someone on the inside is unloading lots of shares today. 

Analyzing the chart above, the green spray paint indicates unusually high volume. This is pure speculation— but it wouldn’t surprise me if these buyers are unloading shares today… completely orchestrated with the Beacon pump. Fueling my speculation is the fact that MNTX is profitable (4 P/E) and that they’re trading at a 52-wk low (therefore giving the Pumper a supposed floor). Or maybe i’m wrong and Beacon was feeling generous and wanted to render their services for free… DOUBT IT!

I expect MNTX to give back a lot of today’s gain so I’m looking for shares to short.

Using my 5 years experience as a stock promoter… the chart below screams pump & dump. Now this is all pure speculation but I want to analyze the PGYC chart to show everyone how a real successful pump & dump works.

It’s sad to see promoters like StandOutStocks.com actually taking these crappy deals. According to their website they have received $50,000 USD to promote PGYC… and i’d bet my entire Sacagawea Dollar the party responsible for funding this promotion will make at least $1 million by purchasing millions of shares below $0.02 and selling them all above $0.06.

Other websites associated with the PGYC pump are HotShotStocks.com and PennyPerformers.com.

It’s sad to see how desperate people have become in the Great Recession and I wish for just once in their lives they could experience the feeling of helping real companies and helping people while making money at the same time!

Rarely a day goes by where I don’t read about naked shorting & counterfeit shares. Especially in the aftermath of the SEC’s July 15th decision to “ban” so-called naked short sales in financial stocks, investors everywhere ponder the extent to which criminal activity involving counterfeit shares happens.

To the naysayers out there, counterfeit shares do exist. In my early days as a stock promoter, I pocketed the quickest $50,000 of my life in what may go down as the most blatant case of counterfeit shares in the history of Wall Street. For the past three years I’ve kept my mouth shut for fear of prosecution. Only now, with a cloak of anonymity, am I willing to share my experiences in the shadows of Wall Street.

I pump penny stocks for a living. It’s a shitty existence, but the pay is unbeatable for those (like me) without a college degree. In January 2005, in the midst of my daily cold calling to microcap CEOs, I dialed the number to Citrus Research, a pink sheet listed “investment bank” located just 15 minutes away from my office. I got the CEO on the line with ease, and the following day we met at his downtown office.

He told me about Citrus Research and how he was taking 6 private companies onto the pink sheets in Q1. He could tell I was impressive on the phones and he asked if I’d like to join his team full-time (while still promoting my deals on the side). He convinced me with $20,000 up front to promote 3 of his deals, and the next morning I arrived at his office minutes before the opening bell to start my new job at Citrus Research.

His so-called “investment bank” turned out to be a complete scam. My job was to cold call pinksheet CEOs and tell them that Citrus wanted to finance their company. The terms were always to get $5 million in stock in exchange for $1 million cash. Citrus used Rule 504 of Regulation D for all their financing, which is basically a way to get cheap free-trading stock in pink sheet companies. Needless to say, I couldn’t dupe any pink sheet executives into the financing, and I quit working there after 2 weeks.

Then in late June 2005, a full 6 months after I quit working at Citrus Research, I got a call out of the blue from Citrus’ CEO. He wanted me to promote Unidex Bancorp International, a sub-penny deal he’d been working on. Unidex traded at $0.002 and just issued a new release hyping an “exclusive agreement” with the Venezuelan Government. I knew the deal was ultra-shady from day one, but its easy money in the promotion game. I told him I wanted 50 million shares ($100,000) and he willingly obliged and told me to stop by the office the following day to pick up a stock certificate.

The following morning, I showed up at his office really early in anticipation of a major payday. He handed over the 50 million share stock certificate for Unidex Bancorp Intl., but not before inconspicuously placing it in a manila folder. He told me “not to tell anyone about this” and I didn’t, until now.

I raced right to the nearest Scottrade branch to deposit my Unidex stock. I expected to liquidate my position the following day, and was surprised when I received a phone call from Scottrade that same afternoon.

Apparently, the Unidex stock certificate I’d been given wasn’t “DTC Certified”, and Scottrade wouldn’t deposit it. I picked up my certificate and called Citrus’ CEO to see what went wrong. He said the certificate was good, and he even put the “transfer agent” on the phone with me, who I recognized as my old co-worker.

She told me to call Brody at J.T. Derby, a small broker/dealer in NYC, who would take care of everything. Surely enough, J.T. Derby accepted my stock certificate and I began liquidating my position immediately. I hit every imaginable bid that day and caused the stock to drop over 50%. I couldn’t care less, because I was in the game for myself, and I just made $50,000 cash.

Citrus’ CEO called me for the next 2 weeks to see how my Unidex campaign was going, but I didn’t answer a single call. After a while he stopped calling me and on August 1, 2005, Unidex Bancorp International issued the most disturbing press release I’ve ever seen. They withdrew their previous statements about the “exclusive agreement” with the Venezuelan Government and informed the public that a 3rd party had hijacked the company by issuing over 40 counterfeit stock certificates. As you could imagine I didn’t sleep much that night, figuring I’d get a call the next day from the S.E.C. about the 50 million counterfeit shares I just sold.

To my relief the next day passed without any inquires. The next day… nothing. The next week… nothing. Before I knew it the leaves were changing colors and I was celebrating the greatest unintended financial heist on my life! I became obsessed with reading Unidex message board posts on iHub from disgruntled investors, and felt only the slightest guilt for taking their money. I mean come on, I’m a stock promoter.

Then On December 8, 2005, Unidex Bancorp announced a settlement agreement with 13 individuals and J.T. Derby, the shady stock broker, whereby everyone agreed to give up all ill gotten gains made from the sale of the counterfeit stock certificates.

I couldn’t be happier that day because in my mind, it meant that nobody would be looking for me. The case had settled, and somehow I was able to slip through the cracks and keep $50,000 cash from the sale of blatantly counterfeit stock certificates.

Here I am 3 years later, still holding onto the proceeds I made when I deposited a counterfeit stock certificate into a brokerage account and sold 50 million shares of Unidex Bancorp. As for the shady Citrus CEO and “transfer agent” aka old co-worker, they recently got charged by the S.E.C. and were barred from being officers of a public company ever again. As for me, I’m still a paid pumper and see crooked dealings like Unidex every single day.