Whenever a new Pump & Dump comes to town, we like to take a quick peek at the filings just to see what it is all about, in case something really obnoxious sticks out.
Whenever, attorney-to-the-penny-fraudsters, Diane Dalmy's name is involved, we know it merits a closer look. Ms. Dalmy's name can be linked to many a penny scam and she has been involved in dealings with Vancouver attorney, John Briner who has since been forbidden by the SEC to have any further dealings with the market. Ms. Dalmy is/was an attorney for Greenwood Gold Resources ( GGRI ) now ( BLUF ) one of the major penny scams of 2011, one we've written extensively about.
This time though, we've hit the jackpot.
We're talking about a brand new scam (at least to our knowledge) , Citadel EFT ( CDFT ), a scheme that is hanging its P&D hat on a deal to place advertising on eBay. That deal calls for 2.5 million impressions on eBay pages, which with eBay's extensive traffic, should take less than a day to fulfill. Big whoop!
But that ain't the big deal.
We know that Thursday's big new pump is CFDT because Primary Investments, whose newsletters include Penny Stock For Dummies and Moving Pennies, has been sending out teasers Wednesday night with the clue,
" Our alert tomorrow provides credit card merchant account services to retailers, mail order companies and online service providers and VERY recently struck a deal with Ebay to market their business with banner ads on their site " .
That clue coincides with CFDT's Wednesday monring press release, found here . We also know that CFDT is being shoved at suckers tomorrow because Wall Street Surfers has said so: " Thursdays New High Surf Advisory is $CDFT ".
But that ain't the big deal either.
What is the big deal, is that this new pyramid scheme coincides with Wednesday's SEC filing by the company , giving notice of a 1,000,000 share S-8 stock issuance on September 17, 2012 to one Nancy Figueiredo, under a consultancy contract. A copy of the contract, dated September 11, 2012 is attached as an exhibit to the SEC filing.
S-8 stock is immediately free-trading, so the sudden desire to conduct a promotion is no great shock. What Ms. Dalmy's, Ms. Figueiredo's and CFDT President Gary DeRoos collective problem is that, while S-8 stock can be issued in lieu of payment for services rendered, it cannot be issued in lieu of payment for an awareness program. Per the SEC's directive, as found on their website ;
(iii) the services are not in connection with the offeror sale of securities in a capital-raising transaction, and do not directly or indirectly promote or maintain a market for the registrant’s securities.
Here is what we found out about Ms. Figueiredo from her Linked In page. We have confirmed with 100% certainity that this is the same Nancy Figueiredo, as the one who received 1,000,000 shares of CDFT S-8 stock.
Ms. Figueiredo's Linked In page identifies her as being Creative Director at buzzbahn, llc. Here is the image of buzzbahn's website :
buzzbahn, llc clearly identifies itself as being in the business of investor relations.
We spoke to Ms. Dalmy about our revelation and she expressed what we can only assume to be crocodile tears of dismay. She insisted that she warned her client that S-8 stock could not be used to pay for awareness programs. So much for attorney-client privilege. Here's Ms. Dalmy's problem. Attached to the SEC filing is her opinion letter which states, among other damning things that,
" I have examined all instruments, documents and records which I deemed relevant and necessary for the basis of my opinion hereinafter expressed. In such examination, I have assumed the genuineness of all signatures and the authenticity of all documents submitted to me as originals and the conformity to the originals of all documents submitted to me as copies. I express no opinion concerning any law other than the corporation laws of the State of Nevada and the federal law of the United States. As to matters of Nevada corporation law, I have based our opinion solely upon my examination of such laws and the rules and regulations of the authorities administering such laws, all as reported in standard, unofficial compilations.
Based on such examination, I am of the opinion that the Shares issued pursuant to the Agreements are duly authorized and, when issued against receipt of the consideration therefor in accordance with the provisions of the Agreements, will be validly issued, fully paid and nonassessable. I am further of the opinion that the issuance of the Shares will not be a violation of any prohibitions of the rules and regulations pertaining to S-8 ."
Oops!
We also spoke to Gary DeRoos, President of CDFT , after he admittedly had already spoken to Ms. Dalmy and offered us the cockamamy story that the filing was an error and that the stock had never been issued. Really? Is that why the filing included Ms. Dalmy's opinion letter, the contract with Ms. Figueiredo and DeRoos' signature? It was all one big error?
Of course an examination of the Transfer Agent's records will clearly show what stock was issued. As we've been in contact with the SEC Enforcement Office about this issue, we're pretty sure that they will look into it.
We think that, at minimum, a 10 day suspension on CDFT is imminent and would advise anybody looking to make a quick buck to consider that possibility.
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