CSC names Poonian, others in manipulation case

2012-08-03 11:52 ET - Street Wire

Also Street Wire (C-GPI) Great Pacific International Inc
Also Street Wire (C-LC) Logan Copper Inc (2)
Also Street Wire (C-OSE) OSE Corp

by Mike Caswell

The B.C. Securities Commission has launched an administrative action against Vancouver promoter Thal Poonian and four others, claiming they were behind a market manipulation scheme that netted them $7.1-million. The BCSC says they boosted TSX Venture Exchange listing OSE Corp. to around $2 and maintained it at that price for much of 2008 by dominating the buying and selling of the company. During the manipulation they sold 4.6 million shares, according to the regulator.

The allegations against Mr. Poonian and the others are contained in a notice of hearing that the BCSC released on Thursday, Aug. 2. In addition to Mr. Poonian, the respondents include his wife Sharon Poonian, his cousin Perminder Sihota and her husband Manjit Sihota. Also named is former OSE director Robert Leyk.

The scheme, as described by the BCSC, began in late 2007 when Mr. Poonian and the others acquired millions of OSE shares in private placements, at prices of 10 and 11 cents. The placements gave them control over 88 per cent of the company. The shares had four-month hold periods (which expired in January, 2008, and April, 2008).

OSE chart for 2008
OSE chart for 2008

After the placements closed, they began manipulating OSE, buying it on the market at steadily rising prices and pushing it to $1 from 29 cents in just five trading days, the notice of hearing states. (The company issued a news release on Jan. 8, 2008, as the stock hit $1.50, in which it said it had no material changes. Mr. Leyk's name appeared at the bottom of the release.)

According to the BCSC, Mr. Poonian and the others continued to dominate the market through 2008, keeping the stock around $2. In that period they traded 10.4 million shares in transactions in which they were the buyer and the seller, the BCSC says. During the same period they unloaded 4.6 million shares.

The buyers of those shares, according to the notice of hearing, were clients of an Ontario debt management company called Phoenix Credit Risk Management Consulting Inc. The BCSC says Mr. Poonian had made an arrangement to pay the commissions for the referral of Phoenix clients to buy OSE shares. During the scheme, 216 Phoenix clients bought 4.6 million OSE shares at an average price of $1.80. The stock closed at eight cents on March 31, 2009, and Phoenix clients suffered a $7.1-million loss, according to the BCSC.

(In a related case launched by the Ontario Securities Commission, Phoenix and three of its employees agreed to pay $3.3-million to settle unregistered trading allegations. The OSC claimed that they recommended OSE and another TSX-V listing, Great Pacific International Inc., and told clients the stocks would rise. In addition to the financial penalties, Phoenix and the employees agreed to 15-year trading bans.)

Citing the length of time it will take to hold a hearing in the case, the BCSC has entered a temporary order that restricts Mr. Poonian and the others from trading at more than one brokerage and requiring that they resign as a director or officer of any public company. Mr. Poonian is the president of TSX-V listings Logan Copper Inc. and Great Pacific International.

The BCSC will hold a preliminary hearing on Aug. 14 at which it will seek an extension to the temporary ban on Mr. Poonian and the others. A date for a full hearing has not yet been set.

Mr. Poonian and the others have not yet responded to the case.




PS.  So who is behind the buying and dumping of many many many microcaps....and who is behind all the ids on the internet stock chat forums??????


xoxoxoxoxoxoxooxoxo as always.