AREN Shares Held By Chinese Nationals
Liquidated During Pump & Dump Campaign
Hidden pockets are lined as the public is Shanghaied into buying shares of another worthless company
August 5, 2015: Acting on the tip of an unnamed source, theOTC.today has been able to determine that the current Pump & Dump email campaign being conducted on the intrinsically valueless shares of American Resources Exploration, Inc. (AREN) is designed to enable the liquidation of stock held in the name of Chinese nationals.
Confidential sources at Electronic Transaction Clearing, Inc. and Alpine Securities have confirmed that stock certificates representing millions of shares of Alazzio Entertainment Corp., AREN's predecessor entity, were deposited several months ago into accounts purportedly held by Chinese nationals at various brokerage firms that use the two clearing houses' services. ETC and Alpine are two of the few clearing houses that will accept the certificates of questionable companies such as AREN, charging clients significant fees to process the certificates and then full retail brokerage commissions to then dispose of the stock.
According to the sources at ETC and Alpine, the shares represented by these certificates are being liquidated under the current promotion. Both houses also confirm that FINRA has contacted them about trading in AREN and is requesting voluntary restrictions in the trading of these shares.
Eric Van Nyugen
The promotional emails have been distributed by a group of newsletters led by ElitePennyStock.com and FinestPennyStocks.com. The outrageous claims and timbre of the emails' rhetoric and the wash trades executed to create the facade of interest in the ticker are reminiscent of the old Awesome Penny Stock's promotions. This extensive report
by Promotion Stock Secrets looks into the history of APS's Eric Van Nguyen and speculates as to Van Nguyen's involvement with this group of newsletters.
The use of Chinese nationals as nominee shareholders is not a new tactic. Recently, recidivist penny stock scam artist Phillip Kueber was sued by the SEC for his involvement in the Cynk Technology Corp (CYNK) Pump & Dump scheme. In the complaint, the SEC accuses Kueber of using Chinese nationals as nominee shareholders to mask the fact that it was Kueber himself who would benefit from the sale of the shares.
In June 2013, Kueber sent a broker-dealer firm, directly or indirectly, two beneficial ownership declarations representing that two different IBCs, Digital Systems and Icefox, owned the Cynk shares; that the Chinese national signing on behalf of each IBC exclusively owned the Cynk shares beneficially; and that neither of these purported beneficial owners of Cynk shares was a control person, officer, director, or founder of Cynk or promoted the purchases or sales of Cynk’s shares on Cynk’s behalf.
Kueber signed each declaration as "the investment adviser" for the account and "represent[ed] and warrant[ed]" that he was "not aware of any material facts, which are inconsistent with, or which have been omitted from, the facts recited in the declaration."
In fact, as Kueber knew, Kueber himself beneficially owned these Cynk shares. Kueber, not the two Chinese nationals, beneficially owned and controlled the two IBCs.
Kueber has connections to several Pump & Dump schemes promoted by Awesome Penny Stocks among them Writers' Group Film Corp., now known as WRIT Media Group (WRIT) and Amwest Imaging (AWMI), now Intertech Solutions (ITEC). Another Kueber scheme, Pepper Rock Resources (PEPR) listed W. Scott Lawler as its General Counsel, a popular attorney among the penny stock fraud crowd. Lawler also has had associations with previous APS pumps Portage Resources (POTG) and Regency Resources (RSRS).
Now Lawler is listed as General Counsel of AREN. It's starting to sound like more than a coincidence, isn't it?
W. Scott Lawler
If Kueber is involved with the AREN Pump & Dump, it would certainly strengthen speculation that at least some of the old Awesome Penny Stocks gang is back at it again. In the meantime, it is unknown what effect FINRA's inquiries into the trading of AREN will have on the clearing houses or the brokerage firms that use them. Perhaps they will share FINRA's concerns and voluntarily restrict sales from these Chinese held certificates.
It is also possible that FINRA could impose a U3 halt: trading is halted because FINRA has determined that an extraordinary event has occurred or is ongoing that has had a material effect on the market for the OTC Equity Security or has caused or has the potential to cause major disruption to the marketplace and/or significant uncertainty in the settlement and clearance process. Or perhaps the SEC will decide to do its job before significant losses are incurred by the general public.