RE:Look at thissuspends Centor Energy
2014-02-11 18:48 ET - Street Wire
See Street Wire (C-*SEC) U.S. Securities and Exchange Commission
by Mike Caswell
The U.S. Securities and Exchange Commission has halted Centor Energy Inc., a company that purportedly has $45.3-billion worth of oil in Saskatchewan. (All figures are in U.S. dollars.) The regulator cites concerns about the accuracy of promotional material. The stock, which traded under 20 cents in October, 2013, has a recent high of $2.95.
https://centorenergyinc.com/
The SEC has not specifically stated its concerns, but it has likely viewed a recent paid tout sheet that predicted Centor could hit $60. The sheet, called the Myers' Letter, contains hype typical of that found in such publications. It claims that the company has a 21,685-acre property in Saskatchewan that is "soaked in oil." Supposedly the stock will "surge from $2 to double digits" before it "goes global." Even better, "Wall Street doesn't even realize what is happening."
Investors who read the full 11-page report also learn that the company's assets may be worth $138.8-billion, with a more conservative valuation being $45.3-billion. At the very bottom is a lengthy paragraph with fine print, which discloses that the publisher received a substantial fee. An entity called Code Inc. paid $2,145,000 for the report.
In addition to the promotional materials, the SEC says it is concerned about recent statements by the company in its news releases. The SEC has not provided any specifics, but in a Dec. 18, 2013, release the company said that it had an agreement to acquire 55 per cent of an oil shale resource in the Pasquia Hills area of Saskatchewan with over 1.1 billion barrels of recoverable oil. Centor further claimed to have a National Instrument 51-101 report on the property, but so far the report has not appeared in the company's SEC filings. In a more recent news release, dated Feb. 4, 2014, the company said that it had arranged a $1.25-million loan to pay for a feasibility study on the project.
Also likely drawing the SEC's attention are recent gains by Centor in the market. In October, 2013, the stock was barely trading and was mostly under 20 cents. On Dec. 30, 2013, the company started to rise on substantial volumes, with over one million shares trading on many subsequent days. It reached a high of $2.95 on Jan. 23. Its most recent close, prior to the halt, was $2.08, giving Centor a $143.4-million market cap.
Despite the market's apparent enthusiasm, there is nothing in the company's most recent financials to justify the valuation. Centor's Sept. 30, 2013, balance sheet shows $127,053 in total assets and $439,124 in liabilities. The company reported a $166,019 loss in the same period.
Centor, which has an address in Florida, did not return a phone call seeking comment on the halt and the promotional campaign. Companies that are mentioned in paid tout sheets usually deny any involvement. The company lists its president as James Sullivan, a former project manager for TransCanada Pipelines and the founder of a Calgary entity called Affluence Capital Corp.
The SEC's halt order will last for 10 business days, expiring on Feb. 25, 2014. After that, brokers in the U.S. wishing to trade the stock will face an onerous burden. They must keep up-to-date information on the company's financial status and on the company's insiders. They must also have copies of the company's prospectus, its most recent annual report and any subsequent quarterly reports. In addition, brokers must maintain current information on the company's name, address, state of incorporation, number of shares outstanding, the name of its transfer agent and the nature of its products. Brokers must also know if a price quotation is from another broker or from an insider. They must provide this information to anyone interested in trading the company.
In addition to the SEC halt, the company has received a cease trade order from the Alberta Securities Commission for failing to file financial results.