I know you guys all love Boiler Room. Anyone fuck around with penny stocks? Were you invested in SpongeTech? I flipped it a couple of times, so I came out ahead, but before it all blew up, I had about $12,000 in house money still riding on it.
Market Place - S.E.C. Charges SpongeTech With Fraud - NYTimes.com
This is some Bernie Madoff type shit. He frauded people out of a lot of money, but most of it was tied up in his own scam. He only had about $700 mil in worth that wasn't stuck in the scam. These guys at SpongeTech are fucking morons for the most part and even paid a kid to register domains and create a presence for fake companies they claimed they had sales from 2 years earlier. Everyone thought the sites were put out by bashers because they all had the same registation date (6 days after the SEC investigation began, but 2 years after the claimed sales). The funny thing is that these guys were actually the ones behind the sites and provided the URL's to the SEC to try to establish existence of the companies.
What makes the whole thing interesting is that they dumped about 2.5 billion shares onto the market between about 5 and 30 cents. They easily netted $200+ million in just 2 years. That's pretty good money for guys who aren't even smart enough to realize that anyone can do a whois and see the creation dates of domains.
It's possible they wanted to get caught though. To prove that money came in from the ficticious sales, they provided some wire transfer documentation with money coming in from banks in Hungary, Switzerland, and Panama. So you know the money they made is well hidden. Also, they're facing 5 years each, max. In a nice Federal prison. They will most likely plea out and serve a year or less. They'll be out enjoying all the money they made in no time! There are a ton of law suits pending and more coming, but they'll never show a dime in their own names again, so nothing will ever come of them.
Criminal Complaint (very detailed about their operation):
http://investigatethesec.com/drupal-5.5/files/2010-05-03 COMPLAINT.pdf
Market Place - S.E.C. Charges SpongeTech With Fraud - NYTimes.com
This is some Bernie Madoff type shit. He frauded people out of a lot of money, but most of it was tied up in his own scam. He only had about $700 mil in worth that wasn't stuck in the scam. These guys at SpongeTech are fucking morons for the most part and even paid a kid to register domains and create a presence for fake companies they claimed they had sales from 2 years earlier. Everyone thought the sites were put out by bashers because they all had the same registation date (6 days after the SEC investigation began, but 2 years after the claimed sales). The funny thing is that these guys were actually the ones behind the sites and provided the URL's to the SEC to try to establish existence of the companies.
What makes the whole thing interesting is that they dumped about 2.5 billion shares onto the market between about 5 and 30 cents. They easily netted $200+ million in just 2 years. That's pretty good money for guys who aren't even smart enough to realize that anyone can do a whois and see the creation dates of domains.
It's possible they wanted to get caught though. To prove that money came in from the ficticious sales, they provided some wire transfer documentation with money coming in from banks in Hungary, Switzerland, and Panama. So you know the money they made is well hidden. Also, they're facing 5 years each, max. In a nice Federal prison. They will most likely plea out and serve a year or less. They'll be out enjoying all the money they made in no time! There are a ton of law suits pending and more coming, but they'll never show a dime in their own names again, so nothing will ever come of them.
Criminal Complaint (very detailed about their operation):
http://investigatethesec.com/drupal-5.5/files/2010-05-03 COMPLAINT.pdf
