Naked Shorting Crybaby Skewered by SEC

Word emerged yesterday that the SEC is zeroing in on a notorious naked shorting crybaby, Pegasus Wireless.

The weak-kneed SEC is fast lapsing into irrelevancy, having admitted to doing a lousy job of supervising investment banks in the current financial calamity, so it's interesting to see this feeble agency do much of anything nowadays. In this case, it has taken action to enforce subpoenas ignored by some creep involved in this stock scam. Amazing! More can be found here.

Far from being the innocent victim of naked shorters, as portrayed in idiotic media reports a while back, Pegasus is a typical penny stock piece of rubbish. The SEC describes it thusly:

Pegasus Wireless Corporation is a once-high-flying now-bankrupt penny stock company that made extravagant claims about certain acquisitions and then mysteriously issued hundreds of millions of shares of stock to satisfy so-called debts that previously had never been publicly disclosed.

. . . in mid 2006, Pegasus began issuing large amounts of shares, claiming it was doing so to satisfy debts incurred by Blue Industries that had not been previously disclosed to investors. When the Commission staff requested documents relating to the so-called debts, Pegasus produced several promissory notes purportedly issued to Adams [the guy ducking the subpoenas]. Between mid 2006 and 2008, Pegasus issued nearly 500 million shares (more than 75% of the outstanding shares) based on promissory notes...

Etc. Etc. That's it. Just another crappy small company stock masquerading as a naked shorting "victim."

© 2008 Gary Weiss. All rights reserved.