A Rare Inside Look At How Stock Promoters Work, Very Worthwhile Reading

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Today, we’re fortunate enough to have a stock promoter come forward and detail their shady dealings for the very first time. Reposted with permission from “The Dean” over at CollegeStock.com, brace yourselves:

(Disclaimer: I have no idea if the following is true or who wrote this, just been emailing back and forth, as I do with too many people in this gutter trash niche…shady stuff, be warned this is how bad stock promotion really is, Boiler Room just touched the surface)

Standing in the Shadows of Wall Street
Sep 16, 2008
Posted in: Washington, The Classroom, Stock Scams, Stock Promotions

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.

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