I want to thank JenkinsLane for the heads up.
The Wallace Street Journal
The Anatomy Of A Smear
Depravity In The Chat Rooms
By David Bond, Editor
The Silver Valley Mining Journal
It ain’t hard to get along with somebody else’s troubles
They don’t make you lose any sleep at night.
Just as long as they been out there b*stin’ somebody else’s bubble
Everthing’s gonna be alright.
— Steve Goodman
Wallace,Idaho – One of life’s more painful lessons is that most of the timeit’s best to run from somebody else’s troubles. Step in and make themyour troubles, too, and you’re inviting indescribable (if sometimesquite imaginative) grief for yourself. But sometimes honor, or outrageat a particularly savage injustice, compels one to step into another’sfray.
This is one of those times. And a few caveats are inorder. Firstly, the target of this smear campaign, “Silver Guru” DavidMorgan of silver-investor.com, is a close personal friend and confidant.In the ch*rlatan-infested waters of investment opinion in which he haschosen to swim, Morgan has kept his nose clean. There certainly must beanother newsletter-writer besides Morgan out there who refuses to acceptsome form of bribe or another before pumping a mining stock, but we’veyet to meet him or her. There must be others, but that’s not how the“pump-and-dump” game is played. The game Morgan plays is different; heperforms an honest
evaluation of a property and its management and reports his conclusionsto his readers. Sometimes the promising management of a promisingproperty does something unimaginably idiotic or amateurish, in whichcase Morgan will eat his own recommendation publicly. Not many guys withballs that size in any walk of life, much less amongst the self-dealingshills who peddle their perfidious punditry but never disclose the realrules of their game.
(Having recently been the target of anethics-impaired website publisher’s attempted – thankfully failed –smear campaign ourselves, we confess a little sensitive on this subject.The website publisher also threatened to run a certain
silver company’s stock down to 35 cents from $3 if its managers didn’tdo exactly what he told them to do. Once again, thankfully, managementheld its mud and the threat fizzled. But what follows is even nastierthan what we were compelled to endure.)
The smear campaign beingwaged against Morgan, against Florida-based Free Market News Networkpublisher Tony Wile (another friend of ours, by the way) and a littlecompany called Sino-Silver with promising silver mining prospects inChina appears to this writer to be well orchestrated, but hides behindthe cloak of anonymity chat rooms afford to their posters. Emails sentto the individuals we are about to mention have gone unanswered, perhapsfor good reason: one reportedly lives with his mother in an undisclosedlocation as he is preparing to relocate to Canada; another is in exilein Mexico.
Let’s start with Robert (“Fly-Away Bob”) Chapman, astock promoter and publisher of the website International Forecaster.Writes like a libertarian, but he is not. Chapman was smack-dab in themiddle of the Silverado Silver fiasco exposed by WorldNetDaily back inearly 2003. In the special investigative report on Vancouver's Silverado Gold
Mines, WND reported that Chapman, who was an avid promoter of Silveradostock, had previously been paid 1.8 million shares of Silverado stockas part of a “consultant” agreement. The story on Silverado Gold bySherrie Gossett tubed Silverado’s stock by some 56 percent on recordheavy trading. It wasn’t Chapman’s first transgression. ReportedGossett: “Chapman resided in British Columbia between February and May1989, during which time he was employed by Gulf Titanium Ltd. in thecapacity of chief economist and director of national and internationalpublic relations. While employed by the company, Chapman wrote anarticle in the March 1989 edition of a publication called the Gary AllenReport, in which he recommended Gulf Titanium shares and offered toprovide advice on securities portfolios. Chapman was not registered asan adviser.”
While all this was going on, Chapman wasrecommending a public stock called Sedona Software Solutions and itsproposed acquisition of Renaissance Mining Corp., a private company thatwas intent on acquiring various gold mines in Central America – pickingup the pieces of the failed Greenstone Resources. Greenstone at onetime had a market cap of $1 billion, based on the value of the mines,but gold prices had turned nastily south and the company failed. TonyWile was putting the property deal together for Renaissance as itspresident. The Nova Scotia-born Wile, who now resides in Pompano Beach,is a graduate of Saint Mary’s University and worked for Scotia McLeod(Bank of Nova Scotia), and became a Fellow of the Canadian SecuritiesInstitute in 1994. Unlike Chapman, he had a license to do what he wasdoing.
Chapman wasn’t the only one hyping Renaissance’sprospects. Beside him were Laurence Roulston (Resource Opportunities);David Skarica (now-defunct Addicted to Profits); and David Morgan.Chapman, Roulston and Skarica got in on the initial 25-cent privateplacement but didn’t bother telling their readers. Morgan, who bought inat $1, did – as is his damnably honest nature. But a prematureannouncement by Sedona of the Renaissance acquisition brought thetransaction, and trading in the companies, to a halt. Investorseventually got most if not all of their money back, the deal wasunraveled, and the old Greenstone properties were vended into RNC Gold,which is now cranking out 100,000 ounces per year of gold from fourcountries in Central America and Mexico, thank-you very much, under thecapable stewardship of CEO Randy Martin.
But that wasn’t enoughto mollify Chapman, who made repeated threats to Wile and to othersinterviewed for this rant that he would bury Wile, even if it meantgoing (one assumes by e-mail) to the very regulatory authorities who arewaiting for him on the north bank of the Rio Grande. Wile attributesthis fury to his (Wile’s) reluctance to take Chapman’s advice to make aquick killing in Renaissance by illegally selling its shares offshoreand depositing the funds in a bank in the Caymans with which Chapman hadconnections. But Chapman needed a youthful and malleable shill. Hefound two: David Skarica. Skarica, a delightful presenter at investmentconferences who’d published a book on investing
in his teens, and “Trader Mike” Swanson, another young stock whiz-kid.The trio met up at a gold show in Boca Raton, Florida, where Chapman haddazzled a small crowd by brandishing a .45-calibre handgun andadvocated the commission of white-collar crime because sentences were soscare and light.
A third protégé would become a Southern “goodol’ boy,” Bill Rummell, another chat-room denizen and author of thecontroversial Charleston Voice. (Chapman, incidentally was one of thefinanciers of Ronald Wolfbauer's failed Minnesota based gold/silverbullion and commodities trading operation. Where is Wolfbauer now? Aftera failed attempted suicide following allegations of fraudulentactivity, a publicly disgraced Wolfbauer lost control of his businessand slipped into obscurity.)
After Skarica, Chapman and Swansonbadgered Morgan in to taking a flyer on Renaissance, Chapman made a bigdeal about Morgan’s participation in the offering. Morgan lost his a**in the end when the deal blew up but for Chapman it was probablydifferent, given his pipeline to the Caymans and his propensity foroffshore (and illegal) trades. We’ll never know so long as he remains inGuadalajara, where he is not answering e-mails from this writer, atleast.
Stung by the Renaissance fiasco, Morgan pulled hisrecommendation for another Chapman-backed stock, Clifton Mining. Thisdrew Chapman briefly from cover. He e-mailed Morgan from Mexico andhurled a steaming pile of invective and obscenity at him. Morgan wasn’tdancing to Chapman’s tune, and had to be silenced or at leastdiscredited. A plan apparently emerged in Chapman’s mind, the “headshot” he’d bragged to others he’d taken so many times as a hit manalternately for the mob or the U.S. government. If he could take outWile and Free Market News (of which Morgan is a director) he could takeout Morgan.
Enter again Dave Skarica, whose Canadian father,Toni, at one time headed up Free Market News Network at Wile’sinvitation, but later quit in a huff over, among other things moreidiotic, a salary dispute. So the younger Skarica already had an agendato settle his father’s score with Wile. Chapman sent young Skarica andMike Swanson out to do his dirty work, David and father in thebackground, Swanson out front. To kick things off, they did a mostun-libertarian thing. The elder Skarica, and probably several of theothers in this claque, went to Canadian regulators and the SEC with atale of woe, full of sound and fury, signifying nothing. The Canadiansturned up nothing; neither did their U.S. counterpart (you read it herefirst, folks.) But word of an SEC investigation, like word of an FBIinvestigation or allegations of infidelity – no matter how unfounded –can destroy the reputation of even the most innocent.
Thereputation-busting enterprise is still in operation, and went a stepfurther recently by seeming to build up public interest in Sino Silverwith boiler-room style e-mails and calls to newspaper business writers.If a reporter showed some interest, the pitch changed 180 degrees – theold bait-and-switch routine. As an example, the claque wrote back toJeannine Klein Menzies, a business reporter for Bermuda daily The RoyalGazette – who’d replied that she would like to write about Chineseinvesting – “(W)e’re sure you’ll readily agree there is a blockbusterstory breaking here, not only for Bermudians but for the U.S. investmentcommunity, and world focus on highly questionable business deals beingentertained by westerners and the elites of Mainland China.”Bait-and-switch with a particularly nasty twist.
Speaking ofnastiness, recent anonymous postings in StockHouse chat rooms aboutMorgan and, to a lesser extent Wile, have been downright vile. Theywon’t be repeated here, but obviously they come from a single source ortwo and are aimed directly at those very large kn**kers. How Morgan hasmanaged to maintain his sense of humor through all of this is quitebeyond me. I hope he can find out who they are and sues the c**p out ofthem.
Instructively, here is Stock House’s advice on how to spot a scammer in a chat room:
“Someone who hyper-posts on only one stock.
Someone who uses multiple identities.
Some who repeatedly attacks or belittles others on a stock's message boards.
Someone who emerges as the stock's moderator, or even the leader of the discussion group on that stock.
Someone,with a short history in their member profile, who suddenly shows upduring a stock run-up, and appears to know "all about" the company.
Someone who is nearly always the first to respond to company developments.
Someone who continuously hints at upcoming news and unannounced contracts.
Someonewho hypes the company during the run-up and then "changes" his/her mindand begins attacking the company, its insiders and the project.
Someone who goes out of their way to find bad news about the company and makes a ‘case’ out of it.”
Loginto the Sino chat room and see if you can spot who the scammers are.The obvious one is somebody calling himself “silverhero.” If you’re adecent student of writing styles and remember some of the articles inthe failed Addicted to Profits newsletter, a conclusion won’t bedifficult to draw.
Now remember, all this c**p is coming from agroup of guys who are touting Swanson’s and Skarica’s favorite Chineseventure, Wood Products Inc., whose Chinese connection (you’ll love this)is a convicted felon and penny-stock swindler extraordinaire, theaptly-named ex-pat Christian Lawless Harper. WPRO shares have sunk from$10 in April of 2004 to 11 cents Friday, dropping faster than that atombomb Slim Pickins rode in Dr. Strangelove. Gentleman that he is, andeven while the claque was intensifying its smear of him, Morgan urgedSwanson and Skarica to get out of WPRO after he’d made the Chris Harperconnection. Apparently they didn’t take his advice. If they’re notpitching it in Vancouver this weekend, the one-day run-up in volume(from zip to 6 million shares in one day) and price (from a dime to 40cents) back in mid-January will require no further explanation than thatthe big insiders got out. Why isn’t the SEC investigating this WPRO andits promoters’ business? The only explanation I can give is becauseMorgan ain’t a snitch.
When David Skarica folded Addicted toProfits, a paid-for subscription site, he came to Morgan and asked him(Morgan) to fill out his (Skarica’s) subscription obligations withsilver-investor.com subscriptions. Christian that he is, at no charge toSkarica, Morgan obliged. First inkling that something was amiss andamok was on the third month of silver-investor’s comp to Skarica’sdefault: former Addicted to Profits subscribers started calling Morgan,bitching that they weren’t getting their promised issues ofsilver-investor.com, which were to have been forwarded by Skarica.Morgan investigated, and found out that Skarica had let everyone know hewouldn’t forward silver-investor.com to his old list anymore becauseMorgan had taken an interest in Sino. In other words,Skarica/Chapman/Swanson et. al used Morgan to smear Sino to their ownperfidious ends.
So where is Morgan now? Doing what he doesbest. Making the calls as best he can, promptly admitting any bad callshe makes (c’mon, David, you’re batting about 700, so quit beatingyourself up), living in Washington State with a phone number and emailaddress accessible to his subscribers. Where is Skarica? Hiding inbig-daddy’s breast pocket. Where is Chapman? Hiding in Guadalajara.Where is Swanson? Touting WPRO until he’s rid of all of his WPRO stock?
They don’t answer e-mails, that’s for sure, unless they can do so anonymously.
DavidMorgan will weather all of this, because in the end the truth will out.This is too nasty a situation for a too-nice guy like Morgan to bethrust in to. For several months, since I first got a whiff of the foulodour of the Chapman claque, I urged him to strike back. His answer tome was, “Why throw mud? You just lose ground.”
And he isprobably right. But this writer has no misconceptions about the natureof evil, and in the end, as the philosopher said, all that is necessaryfor evil to prevail is for good men to do nothing. Scr*w it. It’s timefor a fight.