Friday, June 29, 2007

Another Naked Shorting Poster Child Bites the Dust


This one is CyberKey Solutions, and its CEO was indicted by a federal grand jury today on charges of lying to the SEC in its probe of a pump and dump scheme involving the company.

The SEC litigation release on the indictment can be found here.

As recently as last October, CyberKey was pointing to "fails to deliver" in its stock as an excuse for the company's lagging share price. You gotta love this little sermon in the press release from Buyins.net, a stock-touting firm that is trying to cash in on the naked shorting loons:

"Short selling, especially 'naked' short selling, is a drain on the investment community and robs millions of dollars from investors. It also significantly reduces the ability of small cap companies to raise capital for their operations. By identifying the fact that there is a short position, we hope to address the issue and see a more accurate share price," stated Jim Plant, CEO of CyberKey Solutions, Inc.
Now, here's another perspective on this righteous victim of "naked shorting," from the SEC announcement today:

The two-count indictment charges Plant with orchestrating a fraud scheme in which he personally made in excess of one million dollars selling Cyberkey shares at inflated prices while lying to the public about Cyberkey's business prospects and management.

According to the indictment, Plant was responsible for disseminating, in an effort artificially to inflate the price of Cyberkey's shares, numerous false and misleading press releases between December 8, 2005 and March 15, 2007. These press releases contained materially false and misleading statements concerning 1) a fictitious $24.5 million purchase order that CyberKey supposedly received from DHS, when as Plant knew, that DHS purchase order did not exist; 2) revenues and profits that CyberKey had supposedly realized from the fictitious DHS purchase order, when as Plant knew, CyberKey did not receive, and did not expect to receive. . .
Etc. etc. You get the idea. Perhaps, if bail is denied and he has to report to prison, Jim can buy some nice memory foam from another phony "naked shorting victim," Overstock.com, to keep him comfy?

© 2007 Gary Weiss. All rights reserved.

-----------

Wall Street Versus America was published by Penguin USA on April 6.
Click here for its Amazon.com listing and here for more information on the book, from my web site, gary-weiss.com.

Labels: , , , ,

Links to this post:

Create a Link

<< Home

Enter your email address:

Delivered by FeedBurner