Gold analyst 'disappears' following WorldNetDaily report
Touter of Silverado stock rumored to have fled country after story ran
Originally Posted: February 19, 2003, 1:00 am Eastern
By Sherrie Gossett
WorldNetDaily.com
http://www.worldnetdaily.com/news/article.asp?ARTICLE_ID=31106A controversial gold "analyst" who had touted the stock of a company that was the subject of a WorldNetDaily investigative report has subsequently disappeared, according to industry insiders.
Bob Chapman was last seen at the 2003 Vancouver Investment Conference, held Jan. 26 and 27, where he was a featured speaker.
Sources report that Chapman had a lawyer by his side throughout the event.
Since then, several analysts report that Chapman's phone has been disconnected, that he has not replied to e-mail and that he is weeks behind in filing promised financial reports to editors.
Bob Chapman
In the special investigative report on Vancouver's Silverado Gold Mines, WND reported that Chapman, who was an avid promoter of Silverado stock, had previously been paid 1.8 million shares of Silverado stock as part of a "consultant" agreement. Silverado Gold stock plummeted 56 percent immediately following the WND report, as trading swelled to a record 27 million shares.
MineWeb, a mining/engineering industry journal, reported that Silverado stock was "crushed" by the WND report, which "was well through the market and investors were clearly voting on it."
Gold in Guadalajara?
"Three weeks ago [Chapman] disappeared," said Bill Murphy, chairman of the Gold Anti-Trust Action Committee."We can't find him. Word is he's gone to Mexico."
Continued Murphy: "I'm not happy with this situation. I have few facts to deal with. He's written for my site for four years. He's missed three Saturdays now. I don't know what's happened. It's not showing courtesy for him to not tell others what he's doing.
"He's usually very punctual and lets everyone know what's going on. And now there's nothing. But I want to be careful about what I say.
"All my people say his phone's been disconnected, and he doesn't respond to e-mail," Murphy added. "He won't contact me. I heard he's in Mexico. That's just a rumor. It's the craziest thing.
"He's gone AWOL. Maybe he's lost at sea – who knows? It's disturbing because of the negative publicity. A standup person would at least answer, not disappear. I liked Bob very much, but I'm very disappointed. I've got to tell my own people something. I haven't written anything yet, because I can't find the friggin' words."
Murphy emphasized that he did not publish Chapman's recommendations of particular stocks, but rather his analyses of the U.S. market, which Murphy characterized as "excellent," adding, "[Chapman's] reports dwarfed those of Wall Street."
Murphy runs Le Metropole website as well as the Gold Anti-Trust Action Committee website.
WorldNetDaily confirmed that Chapman's home telephone number in Punta Gorda, Fla., has been disconnected. That number is publicly listed under Robert J. Chapman and Judith Chapman. The latter signed the Silverado consultant agreement as a "witness." In addition, WND attempted to contact Chapman through his personal e-mail, but the message was returned as "undeliverable." WND also received no response after attempting to contact Chapman via his International Investor newsletter e-mail address.
WND contacted the Punta Gorda Police Department to find out if a missing-person report had been filed on Chapman. Dispatcher Fernandez told WND, "If a family member doesn't contact us, I don't see a report being filed." He added, "The only thing we have are a bunch of citations. No missing-person report has been filed for Robert J. Chapman."
Long history of disciplinary sanctions
The British Columbia Securities Commission, it turns out, previously sanctioned Chapman, in 1989 – the very same year that Chapman's profile says he "retired" from running his own brokerage house.
The Commission gave notice of a hearing to be held before the British Columbia Securities Commission on April 28, 1989, to give Chapman an opportunity to be heard. On Oct. 31, 1989, a hearing was held before the Commission at which Chapman did not appear and at which the superintendent presented oral and documentary evidence concerning Chapman's alleged violations of securities laws.
That evidence included the fact that Chapman resided in British Columbia between February and May 1989, during which time he was employed by Gulf Titanium Ltd. in the capacity of chief economist and director of national and international public relations. While employed by the company, Chapman wrote an article in the March 1989 edition of a publication called the Gary Allen Report, in which he recommended Gulf Titanium shares and offered to provide advice on securities portfolios. Chapman was not registered as an adviser.
Chapman actually owned and wrote the Gary Allen Report, which purportedly had 30,000 subscribers.
The Commission prohibited Chapman from becoming or acting as a director or officer of any reporting issuer for a period of 10 years and imposed a five-year trading ban on him.
The evidence presented by the Commission included details of certain orders issued against Chapman in the United States, including the following:
* Florida: On Feb. 4, 1986, the state comptroller issued a Cease and Desist Order against Chapman for selling unregistered securities when not a registered person;
* Connecticut: On Feb. 2, 1987, the banking commissioner issued an Order to Cease and Desist against Chapman for selling securities when not registered as a broker-dealer;
* Alabama: On March 17, 1987, the director of the state Securities Commission issued a temporary Cease and Desist Order against Chapman for selling securities when not registered as a securities salesman;
* Wisconsin: On June 15, 1987, the state commissioner of securities issued an Order of Prohibition and Revocation against Chapman for offering unregistered securities for sale;
* Michigan: On May 18, 1988, the director of the state Corporation and Securities Bureau issued a Final Order to Revoke and Deny Exemption and to Cease and Desist for transacting business as an agent without being registered and for omitting to state material facts in connection with the offer and sale of securities;
* South Dakota: On June 10, 1988, the state director of the Division of Securities issued an order denying agent registration against Chapman, stating that such an order was necessary for the public interest;
* Montana: On Sept. 22, 1988, the state auditor and commissioner of securities issued a Final Cease and Desist Order against Chapman for selling unregistered securities when not registered as a salesman;
* Georgia: On July 31, 1989, the state commissioner of securities issued an Order of Prohibition against Chapman for selling securities when not registered as a securities salesman;
* California: On Sept. 6, 1989, the commissioner of corporations for the state of California barred Chapman from employment with, or management or control of, any broker-dealer or investment adviser licensed by the state of California for selling unqualified securities.
Recommended Renaissance Mining
In Chapman's last report, he recommended Renaissance Mining as the "Dream Team" of mining, confidently asserting that it could easily become a 2-3 billion-dollar company. He was especially positive on the proposed merger between Renaissance Mining and Sedona Software Solutions.
The same Chapman commentary ran on Kitco.com on Jan 27. Two days later, the SEC halted trading of Sedona Software Solutions Inc. at noon Pacific Time. At one point, the stock had plunged 87 percent after a huge ramp up.
According to the SEC, trading was halted, due to "questions concerning the accuracy and completeness of information about Sedona on Internet websites, in press releases, and in other sources publicly available to investors concerning, among other things, Sedona's planned merger with Renaissance Mining Corp., a privately held company; the assets and business operations of Renaissance; and trading in Sedona common stock in connection with the announced merger."
Murky offshore deals
On Feb. 13, Sedona Software announced that the merger had been terminated. According to its last SEC filing, the software company started with $15 in cash at the beginning of the period and had none left. The company had no revenues.
Brent Mudry of Stockwatch.com noted the murky offshore machinations of the Renaissance Mining Corporation in one of two articles on the SEC investigation.
A respected gold analyst, who declined to be named for this report, told WND, "Many in the gold sector view Chapman in a friendly light, simply because he has been in their camp and, not incidentally, on the right side of the market for the past couple of years. With that said, Chapman has a long history of being a paid stock touter."
He added, "The recent disclosure of his role with Silverado and the less publicly acknowledged role he played with the Renaissance bag job should tell anyone all they need to know about the guy. If those episodes do not, his recent 'disappearance' says it all. Gold has enough of a kooky perception problem without this guy reinforcing every bad stereotype about those who populate the gold world."
Chapman currently is owner and editor of The International Forecaster, described as "a compendium of information on business, finance, economics and social and political issues worldwide, which reaches 10,000 investors and brokers monthly."
Gold-touting sites like kitco.com, goldseek.com and 321gold.com of Miami have published Chapman's commentaries.
Sherrie Gossett is associate editor for Accuracy in Media and a contributing reporter for WorldNetDaily. Her original news stories have been widely cited by the press, including the Wall Street Journal, Washington Post, Boston Herald, Agence France-Presse, London Times, Fox News and Inside Edition. She is based in Washington, D.C.
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SEC Hits Brothers with Fraud Charges
Two brothers, along with seven others, face SEC charges for two separate scams that took in roughly $5 million.
Originally Posted: January 3, 2008
By Edward Hayes
CCH WallStreet – Spotlight News
http://www1.cchwallstreet.com/ws-portal/content/news/container.jsp?fn=01-03-08The SEC has charged two brothers and seven other co-conspirators with orchestrating two separate scams that netted the group more than $5 million.
The regulator filed fraud charges against Scott and Brian Lines in the United States District Court for the Southern District of New York. The Commission also named Lines Overseas Management (LOM), a Bermuda-based group of financial services companies that included several broker-dealers, in the charges as well.
The brothers, along with their partners, manipulated the stocks of Sedona Software Solutions and SHEP Technologies, two microcap outfits. In both instances, they secretly acquired a firm and, with help from their partners, used deceptive techniques to increase the value of the stock so they could make a profit.
The regulator charged seven others including Anthony Wile, Wayne Wile, Todd Peever, James Curtis, Robert Chapman, John Cooper, Ian Park and Lawrence Isen.
In the first scheme, the brothers used LOM-controlled nominees to secretly acquire almost 100% of Sedona’s stock from Cooper, the then-CEO of the firm. Meanwhile, Anthony Wile, a stock promoter, and Park, the former CEO of the Renaissance Mining Corporation, worked to increase the value of their firm by issuing false press releases that claimed Renaissance had just acquired several gold mines and was a leading gold producer.
The two groups then combined their efforts as they arranged to take Renaissance public by merging it with Sedona. The Lines and LOM agreed to raise $6 million for a related private placement and proceeded to solicit investors by making false claims. Chapman helped out by issuing a report touting the merger. He claimed to be an independent newsletter writer, but he secretly owned shares in Renaissance. In the report, he said that shares of Sedona, which had last traded at three cents per share, would open at around $10 per share.
After the announcement in mid-January of 2003, the brothers sold 159,000 shares of Sedona for between $8.95 and $9.40 per share, reaping illegal proceeds of approximately $1.5 million. They made the trades through LOM while Leeds, a rep for the firm, assisted.
The SEC got suspicious and suspended trading of the stock on Jan. 29, 2003 and the brothers attempted to cover their tracks.
“After the Commission’s trading suspension, defendants Brian and Scott Lines ordered LOM staff to backdate and falsify internal records to create the false impression that the Sedona stock was owned by the nominees,” the SEC stated in its complaint.
In the second scam, the brothers, with help from Peever, Curtis, and certain LOM entities, engaged in a similar scheme to secretly obtain control of a publicly traded shell company, Inside Holdings (IH). That scheme involved merging IH into SHEP Technologies, paying touters to promote the stock, and later selling the stock at falsely inflated prices.
The men sold more than three million SHEP shares, generating about $4.3 million in illegal proceeds. Isen, one of the paid SHEP touters, published bullish reports on SHEP in his OTC Journal newsletter without disclosing that he was selling almost all of the 100,000 SHEP shares he received as compensation for his work.
No one informed regulators that they had beneficial ownership of IH and SHEP stock, while some of them even filed false reports to the SEC. Leeds also sold SHEP stock for defendants Brian and Scott Lines in violation of the securities registration provisions.
For the first scheme, the SEC is seeking permanent injunctions against future violations of the federal securities laws, as well as disgorgement and civil penalties. The Complaint also seeks permanent penny-stock bars against the Lines brothers, the LOM entities, Anthony Wile, Wayne Wile, Chapman, Peever, and Curtis, and a permanent officer-and-director bar against Anthony Wile.
Cooper has agreed to pay a $30,000 civil penalty, and Parker has also paid a $30,000 civil penalty and the Commission barred him for five years from serving as an officer or director of a public company. The regulator also ordered Isen to pay $133,595 in disgorgement and a $40,000 civil penalty.
