In this world of penny stock scams, where nothing should come as a surprise to anyone anymore, we can still find ourselves amazed at some of the in-your-face, let's-just-see-how-stupid-people-are schemes that come out from time to time. Such is the case today with Global Security Agency Inc.'s ( GSAG ) 5th Pump & Dump campaign in the last 14 months.
We label GSAG officers Larry Lunger, Ronald Relf, John D. Kuykendall and Rock Rutherford fraudsters of the highest order.
Research Driven Investor, the owner of 8 penny pimping publications, including newsletters Penny Stock Scholar and Research Driven Alerts, began pushing GSAG late Thursday afternoon, after disastrous results with its pump on Ghana Gold Corp ( GGCO ). That GGCO did not perform well, should not have been a surprise to RDI, as it was already on the email circuit for nine days and closed in the red on each of those days. Things are so bad for the GGCO pump, that huge chunks of bag holders are already down better than 60%.
So to try and save face, RDI announces it is bailing on GGCO , and comes out on GSAG around 3:00pm. It is notable that that stock performed no better for RDI on Thursday than GGCO did, and in fact, the promotion was barely able to scratch up another trade.
But this really isn't about RDI's failings. It's about the criminal intent of GSAG .
That GSAG is a habitual P & D target should not come as a shock to anyone. After all the company has its printing presses on day and night diluting the crap out of its shareholders. The share count has increased 50% since May of 2012 and the recurring Pump & Dump campaigns have created losses of as much as 95%, entirely wiping out some investors in just 14 months.
No, the reason the street (and the regulators) should be indignant, is the laughter coming from the mouths of Lunger, Reif, Kuyendall and Rutherford, which is generated by the reliability of the gullibility of so many penny stock players.
On January 14, 2013, GSAG filed an 8-K with the SEC, containing the two sentence announcement that,
"On January 9, 2013, we issued 13,500,000 restricted shares of common stock of our company to an investor for an aggregate of $5,000. The sale of the shares was made pursuant to the exemption from the registration requirements of the United States Securities Act of 1933, as amended (the “Act”) provided by Regulation S under the Act."
Should we be concerned that GSAG is so broke, that it had to raise $5,000 by issuing stock at $.00037 per share, 95.5% below the closing price on January 9 and 74% below book value? Yep! But here comes the real slap in the face.
On January 23, 2013, just nine days later, GSAG filed its second 8-K of the month. This one is a killer.
"On January 23, 2013, the board of directors of Global Security Agency Inc. (the “Company”) authorized a stock repurchase program permitting the Company to repurchase up to $500,000 in shares of its outstanding common stock, par value $.00001 per share (the “Common Stock”), over the next 12 months. The shares of Common Stock may be repurchased from time to time in open market transactions or privately negotiated transactions or other means in the Company’s discretion."
Say what??!! That's right. Just nine days after GSAG was so desperate for a cool 5 grand, that it sold itself out at a 95.5% discount to the market price, it comes back and says it is going to buy back those shares and a whole lot more (up to 500 grand worth). With the stock closing on Thursday at .014, those that put up the 5 grand two weeks ago could see 39 times their money or more over the next 12 months. Looking at it another way, the $5,000 used to create 13,500,000 more shares could be used to buy back just 357,000 of those shares.
And just where is that $500,000 supposed to come from? Will GSAG be selling another 13.5 billion shares at a 95.5% discount to raise that money? $500K certainly isn't coming from revenues, as the company loses money hand over foot.
Of course the whole thing is BS. GSAG isn't about to buy back $500,000 worth of stock, $50,000 worth of stock or $1,000 worth of stock, any more than you are about to take over the company. This announcement is all about supporting a Pump & Dump scheme. What we don't like is that con artists like this can count on the stupidity of the public at large, to make their schemes work and the the regulators allow this crap to go on.
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