No, these aren't Wall Street 2 spoilers
June 7, 2010 5:21 AM Subscribe
I have some information about a company and I believe that it indicates that it is involved (or is going to be involved) in stock market manipulation and/or fraud. How do I deal with this?
Here are some of the details about the company:
- It purports to be a green technology firm, but it is actually a shell company - probably consisting of only one employee - that fronts a research unit at a university.
- The company recently listed itself on the Frankfurt Stock Exchange, a known haunt for firms that want to avoid the regulations imposed by other major exchanges.
- The company has no clients, and its technology is, as far as I know, unproven. In fact I don't believe that even small-scale testing of the technology has been attempted. That is, it is an add-on technology for hydrocarbon power plants, but I don't think even a test model has been built.
- The company claims that it is actively bidding on contracts. As I said, I cannot find any evidence that the technology is even customer-ready.
- The company's share price has been rising ever-so-slightly despite little to no publicity about its existence, and little incentive to invest.
- The company has taken to spamming message boards completely unrelated to its technology to advertise itself.
I found out all of this quite by accident, but now I feel an obligation to let someone know what's going on who can look into this with a bit more expertise.
I've tried emailing elected officials and the media, by the way.
I thought I should post this anonymously, but, well, I've used this username to post this information online already, so I guess it won't matter. Plus I'll be able to better answer questions this way.
Here are some of the details about the company:
- It purports to be a green technology firm, but it is actually a shell company - probably consisting of only one employee - that fronts a research unit at a university.
- The company recently listed itself on the Frankfurt Stock Exchange, a known haunt for firms that want to avoid the regulations imposed by other major exchanges.
- The company has no clients, and its technology is, as far as I know, unproven. In fact I don't believe that even small-scale testing of the technology has been attempted. That is, it is an add-on technology for hydrocarbon power plants, but I don't think even a test model has been built.
- The company claims that it is actively bidding on contracts. As I said, I cannot find any evidence that the technology is even customer-ready.
- The company's share price has been rising ever-so-slightly despite little to no publicity about its existence, and little incentive to invest.
- The company has taken to spamming message boards completely unrelated to its technology to advertise itself.
I found out all of this quite by accident, but now I feel an obligation to let someone know what's going on who can look into this with a bit more expertise.
I've tried emailing elected officials and the media, by the way.
I thought I should post this anonymously, but, well, I've used this username to post this information online already, so I guess it won't matter. Plus I'll be able to better answer questions this way.
What you're describing seems highly subjective, but if you feel strongly about this I'd suggest contacting someone in compliance at the Frankfurt Stock Exchange, rather than elected officials and the media. The former couldn't give a toss and the latter will only care if there is a story to be hand. Which, before the fact, there isn't.
Curious - but I'm assuming you're speaking of a listing on the Geregelter Markt, correct? The company listing must still file an audited report and have share capital of (IIRC) 500K Euro. Have you grabbed a copy of the annual report and checked its veracity against what information you've acquired? Questioning that would be a good way to attract further scrutiny on the entity in question (and yourself as well, just that I'd point that out).
Finally the share capital requirement - does the Geregelter Markt constrain that to be fully paid in, or can the entity list if partially paid in? I only raise this as it seems to be if someone has ponied up half a million Euros or so to list (even what appears to you to be a shell company), then they're operating on a different scale then the US listed pink sheet companies, where an entity can be purchased for as low as $10K or so.
Once upon a time the US Pink Sheets were the place you'd see most of the pump and dump type of activity you seem to believe is happening here. What type of share price increase are you seeing in response to the message board activity? Also what do you know about share ownership, specifically large blocks?
posted by Mutant at 5:49 AM on June 7, 2010
Curious - but I'm assuming you're speaking of a listing on the Geregelter Markt, correct? The company listing must still file an audited report and have share capital of (IIRC) 500K Euro. Have you grabbed a copy of the annual report and checked its veracity against what information you've acquired? Questioning that would be a good way to attract further scrutiny on the entity in question (and yourself as well, just that I'd point that out).
Finally the share capital requirement - does the Geregelter Markt constrain that to be fully paid in, or can the entity list if partially paid in? I only raise this as it seems to be if someone has ponied up half a million Euros or so to list (even what appears to you to be a shell company), then they're operating on a different scale then the US listed pink sheet companies, where an entity can be purchased for as low as $10K or so.
Once upon a time the US Pink Sheets were the place you'd see most of the pump and dump type of activity you seem to believe is happening here. What type of share price increase are you seeing in response to the message board activity? Also what do you know about share ownership, specifically large blocks?
posted by Mutant at 5:49 AM on June 7, 2010
This thread is closed to new comments.
posted by HuronBob at 5:41 AM on June 7, 2010