I just received and filled out a customer satisfaction survey from the Securities Exchange Commission. Its prompted me to take some time off from the mega-Fannie-and-Freddie series. I wasn’t satisfied – and the questions did not allow me to spell out all the ways that I was dissatisfied – so I will do it here. Especially as the SEC is promising to be more responsive – and quicker.
The Bronte Experience
On the evidence presented I beg to differ about quicker.
Sometimes something so easy to prosecute and so charmingly banal comes across my desk that I wonder if there is any future in securities regulation in the US.
I point to a small but well promoted penny stock. The name is Cobra Oil and Gas.
This stock was pitched (by email) to Bronte Capital by a promoter who I had never heard of. [I have been around a while – and a broker/promoter that I have not heard of makes me pause for thought…]
Cobra – according to the pitch – has some very large shale-oil reserves in the lower 48.
That alone makes it worth 15 minutes of my time. And that is all it took…
Cobra Oil & Gas Company is pleased to announce that the company, along with its partner Enercor Inc., has secured the use of a proprietary oil extraction process for its Utah Oil Sands Prospect. The process, known as In-situ Combustion ('ISC'), will be overseen and carried out by Vernal, Utah-based Rocky Mountain Consulting, utilizing the expertise of renowned petroleum engineer Dr. Daulat Mamora, who is an expert in ISC methodology.
This was easy to check. I emailed Dr Mamora and received the following reply:
I have never heard of Cobra Oil & Gas Company, nor am I consulting for this company. I conduct insitu combustion research and publish in this area. I guess it is just too easy to "google" and obtain a persons' name whose expertise is in insitu combustion.
Thank you for pointing the article out to me. I am going to write to the company requesting them to remove my name from the article and from all future communications from the company.
I sent all this to the local head of enforcement at the SEC. Receipt was acknowledged.
Anyway claiming you have a consultant who is not your consultant is probably just a little trivial. But then I am not sure it is just the consultant who is falsified. The CEO of the company is Mr. Massimiliano (Max) Pozzoni. Now my Italian is not very strong – but even I can see that this name translates roughly as Mr Big Wells – a name that is entirely appropriate for the CEO of a suspect oil and gas company. Max Pozzoni has a rather thin CV – consisting of executive positions at other pump-and-dump oil and gas stocks. My guess is that he does not exist – but he appears (at least in voice) in this video…
We have a CEO whose existence is suspect (and who has a funny name) and a consultant who has never heard of the company he is consulting for.
I can think of only one reason not to close this scam – which is that somehow you can find Mr Big Wells (whoever he might be) – and you are preserving it all for criminal action. But the right action is not a suspension (though the SEC should do that too). The right action is to suspend the stock, chase the seller of the big parcels and invite the Justice Department to press criminal charges. If the CEO cannot be found the company should be wound up.
For now however it seems that the new faster SEC will be too slow and the baddies will get away with the moolah…
That however is not the reason I am writing. Mr Big Wells is probably better described as a small dip-stick.
By contrast, I have thrown the SEC a very solid argument that a billion dollar plus New York Stock Exchange listed oil and gas company is largely fraudulent in its statements to the market. I know the relevant regional head of enforcement (the same regional head) is informed as to the issues. Unlike Cobra however this is a complex case – and I think I should give the SEC time to do its job before I go public.
After all, its a quicker more responsive SEC and I shouldn’t have to wait too long…