RE: RE: RE: RE: RE: Opinions Colt I will never be accused of this...but I can think of a few on this board that just popped up over the last few months and exspecially when some of us have been on Cliff...
.S.C takes aim at firm's investor chat rooms
Grant Robertson
For the past several years Agora com Investor Relations Corp. has runa burgeoning Internet forum for attention-starved mining, energy andtech companies, where investors could gather to muse about the stockthey hold in those firms.
But what the companies were never told, the Ontario SecuritiesCommission alleges, is that much of the online chatter about thosestocks was instead the work of Agoracom's own employees.
Operating under dozens of online aliases, and sometimes holding fakeconversations with themselves, the staff actively tried to push upshare prices, the regulator alleges.
In documents filed Thursday, the O.S.C alleged representatives ofToronto-based Agora com made more than 24,000 online posts under morethan 670 fake names to promote stocks in firms it represented.
“The representatives created fictitious usernames and posed asinvestors blending in with other users, investors and interestedpersons,” the OSC alleged.
“On occasion, Agora com staff conversed with themselves on the forums using different aliases.”
None of the allegations have been proven.
George Tsiolis, the company's founder, said Agora com will defenditself against the allegations, which he called a misunderstanding. Thecompany was preparing a more detailed response Thursday night.
The OSC alleged that for a fee and some stock options in thecompanies it represented, Agora com oversaw Internet chats fromSeptember, 2006 to July, 2009, that involved fake postings.
Agora com promoted itself to companies as a place where investors could hold credible, moderated discussions on stocks.
But the regulator alleged that Agora com representatives “as part oftheir daily responsibilities,” were required to post anonymously to theInternet forums of the companies who signed up for the service.
Several of the company's staff had between 40 and 50 aliases, andsome had up to 200, the O.S.C alleged. Employees were required to make arequisite number of posts per hub per day or risk having their paydocked, the regulator said in its statement of allegations.
Some of the postings originated from Mr. Tsiolis's Toronto home, andmany on the site were used to promote stocks in the companies who paidfor the service, the O.S.C alleged.
In exchange for its services, Aqora com collected a monthly fee andstock options in each of the companies it represented, the O.S.C said,and the stock options were equal to 250,000 shares or 0.5 per cent ofthe firm's stock. The O.S.C alleged Aqora com stood to gain from theonline postings, since they could induce other clients to sign up, andto increase the value of its own options. “Neither the public users norAqora com's clients were aware that representatives of Aqora com wereposting on their hubs using aliases,” the O.S.C alleged in the documents.“In fact, [Agora com] knowingly deceived clients about the traffic andactivity generated on their hubs.”
The head of Vancouver-based mining company Bard Ventures Ltd. saidhe was shocked by the allegations. Eugene Beuuk man, president of thecompany that trades on the TSX Venture exchange, said he paid thecompany “a few thousand dollars” along with options to provide anonline forum for investors to discuss his mining projects. He said themoderated forum appeared more responsible than the unmoderated chatboards that can be populated by short-sellers and the like.
However, Mr. Beuuk man said he didn't see much impact from theservice, since his shares have been stuck at about 10 cents for thepast year.
“If the stock was trading at a few dollars, I'd be thinking ‘Ok,it's working guys,” Mr. Beukman joked of the allegations. “But whateverthey were doing wasn't working for me as of yet.
“I thought this was always decent, organized. I've never had anyreaction on my share price because of whatever was posted or not postedon this. My share price was normally regulated by news with explorationresults.”
The O.S.C alleged Aqoracom “took steps to actively conceal thefraudulent posting activity.” In March 2009, when an online posterrevealed he was an Aqoracom representative posting with an alias, thecompany posted a statement condemning that person's actions. Thestatement said the actions were carried out by a single representativeand that Aqoracom would be taking steps within 60 days to ensure itdidn't happen again.