Article – Media – Page 129 – Financial Treason & Crime

Nelson Smith, 25 August 2016

Tuesday was not a good day for Home Capital Group Inc. (TSX:HCG) shares. An anonymous author identifying as “The Friendly Bear” wrote a scathing piece about the company on the investing website “Seeking Alpha.” The article investigated the company’s relationship with a mortgage brokerage called Re-Charge Corp.

Essentially, the dirt goes something like this.

Home Capital sold mortgages to Re-Charge in the autumn of 2015 on at least 14 different occasions. Many of these mortgages were on real estate in Brampton, Ontario, which insiders view as a place where mortgage fraud is common. Thus, the author of the article hinted that the reason why many of these loans were sold is because borrowers were either behind or in default.

Additionally, one of the principals of Re-Charge Corp is William J. Walker, a lawyer who was named to Home Capital’s board of directors in November 2015. This relationship between Walker and Re-Charge was never disclosed to shareholders. In fact, the relationship with Re-Charge was never disclosed.
Continue reading “Article: Are Short Sellers Right About Home Capital Group Inc.?”

08/24/201603/01/2021

Article: Home Capital stock in turmoil after anonymous short seller’s post

Article - Media, Publications

Home Capital stock in turmoil after anonymous short seller’s post

TAMSIN MCMAHON, 24 August 2016

Shares of Home Capital Group Inc. were on a roller coaster this week after a popular investor website accused the company of hiding losses by selling bad mortgages to a firm run by one of its board members.

A report posted by someone identifying as a Home Capital short seller called “The Friendly Bear” on the website Seeking Alpha on Tuesday highlighted more than a dozen mortgages that Home Capital transferred last year to a mortgage brokerage called Re-Charge Corp, based in Ancaster, Ont. One of Re-Charge’s directors is William J. Walker, a partner in the Hamilton office of law firm Gowling WLG. Home Capital appointed Mr. Walker to its board as an independent director last November.
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08/23/201603/01/2021

Article: Home Capital Group: Time To ‘Re-Charge’ Your Loan Loss Provisions

Article - Media, Publications

Home Capital Group: Time To ‘Re-Charge’ Your Loan Loss Provisions

The Friendly Bear, 23 August 2016

In today’s report, The Friendly Bear goes “global”. We recently found out the hard way that making it through a TSA screen as a Bear is quite challenging, but particularly for a Bear that seeks to raise questions about a publicly traded Canadian company. Today’s report focuses on Home Capital Group (OTCPK:HMCBF)- a company that has been on the radar of numerous celebrity US short sellers (including Steve Eisman of “Big Short” fame). Some view the company as one of the best ways to play the Canadian ‘Housing Bubble’. More recently, we have watched from afar and admired the work and insight that has come out of firms such as PAA Research on the name. Given our experience in forensic due diligence into suspect US financial institutions, we thought we may be able to bring something to the table on the topic of Home Capital Group. The stock fits squarely inside the screens that we look for – commodity financial service products with too good to be true stories and alarmingly low reserves.

It also fits within our absolute favorite bucket of shorts – companies that publicly blame short sellers for their woes.

On a May 5, 2015 earnings call, Gerry Soloway, the Chairman and CEO of Home Capital Group, gave his final parting words to the investment community before riding off into retirement. After founding HCG over 30 years prior, he had grown the company into Canada’s largest “alternative lender”. He had a lot to be proud of as his accomplishments are undeniable as evidenced by the tremendous shareholder value created under his watch. We can imagine that in such circumstances, it would be hard to find just the right last words to say to stakeholders. One could reasonably expect a heartfelt speech thanking shareholders, colleagues, and family for their support over the years. Instead, Mr. Soloway provided the following quip:
Continue reading “Article: Home Capital Group: Time To ‘Re-Charge’ Your Loan Loss Provisions”

08/22/201605/13/2021

Article: Deutsche Bank’s $10-Billion Scandal

Article - Media, Publications

Deutsche Bank’s $10-Billion Scandal

Ed Caesar, 22 August 2016

Almost every weekday between the fall of 2011 and early 2015, a Russian broker named Igor Volkov called the equities desk of Deutsche Bank’s Moscow headquarters. Volkov would speak to a sales trader—often, a young woman named Dina Maksutova—and ask her to place two trades simultaneously. In one, he would use Russian rubles to buy a blue-chip Russian stock, such as Lukoil, for a Russian company that he represented. Usually, the order was for about ten million dollars’ worth of the stock. In the second trade, Volkov—acting on behalf of a different company, which typically was registered in an offshore territory, such as the British Virgin Islands—would sell the same Russian stock, in the same quantity, in London, in exchange for dollars, pounds, or euros. Both the Russian company and the offshore company had the same owner. Deutsche Bank was helping the client to buy and sell to himself. Continue reading “Article: Deutsche Bank’s $10-Billion Scandal”

08/16/201603/01/2021

Article: Hearing StreetSweeper Will Issue Negative Report on Northern Dynasty Minerals

Article - Media, Publications

Hearing StreetSweeper Will Issue Negative Report on Northern Dynasty Minerals

Paul Quintaro, 16 August 2016

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Continue reading “Article: Hearing StreetSweeper Will Issue Negative Report on Northern Dynasty Minerals”

08/16/201603/01/2021

Article: Northern Dynasty Minerals (NAK): Looming Dilution Potential, 6 More Downside Risks

Article - Media, Publications

Northern Dynasty Minerals (NAK): Looming Dilution Potential, 6 More Downside Risks

The Street Sweeper’s Blog, 16 August 2016

Northern Dynasty Minerals (NYSEMKT:NAK) proposes to build a massive copper and gold mine in Alaska’s Bristol Bay headwaters. But opposition has stretched over the past decade to block any advancement. Meanwhile the downside risks are piling up, including:
*Momentum trading influences the stock price in this company with “going concern” issues.
*A major investor has recently sold 4 million shares.
*The same investor recently promoted the stock on TV.
*Low cash, high burn are forcing NAK to issue stock. More dilutive shares will be ready for sale in October.
*Local opposition is stronger than ever, according to one observer.
*Copper prices are low amid oversupply concerns.

After a decade of controversy over its proposed Pebble mine, Northern Dynasty Minerals (NAK) is still absolutely nowhere. At first glimpse, unwary investors might expect significant news because the stock has practically doubled over a month to unsustainable levels.

The Pebble property covers 153 square miles of land in Alaska, taking in at least 15 square miles for the proposed mine operation and tailings ponds. The project would place one of the world’s largest copper and gold mine against the world’s largest salmon fishery and environmental concerns.The project has not yet entered the permitting phase.
Continue reading “Article: Northern Dynasty Minerals (NAK): Looming Dilution Potential, 6 More Downside Risks”

08/11/201602/24/2021

Article: Nymox Pharmaceutical Corporation Investigated For Securities Fraud By Block & Leviton After Report Reveals Pervasive Misconduct By The Company

Article - Media, Publications

Nymox Pharmaceutical Corporation Investigated For Securities Fraud By Block & Leviton After Report Reveals Pervasive Misconduct By The Company

PRNewswire, 11 August 2016

Block & Leviton LLP (www.blockesq.com), a securities litigation firm representing investors nationwide, is investigating whether Nymox Pharmaceutical Corporation (“Nymox” or the “Company”) (NASDAQ: NYMX) and certain of its officers and directors violated federal securities laws.

Nymox shares plummeted nearly 41% on August 10, 2016, after an article titled “Nymox: This Offshore ‘Biotech’ Promotion Will Go To Zero (Yes, Zero)” was published on the investment research site Seeking Alpha, reporting that Nymox has and continues to mislead shareholders about the Company’s prospects, while “dumping millions in stock without making timely SEC disclosures.” The revelation of Nymox’s fraudulent conduct has caused tens of millions in losses to Nymox investors.
Continue reading “Article: Nymox Pharmaceutical Corporation Investigated For Securities Fraud By Block & Leviton After Report Reveals Pervasive Misconduct By The Company”

08/08/201603/01/2021

Article: Raging Capital Reveals New Long Position (CAVM) and Discusses 3 Short Positions (VRX, LC, PMTS) in Q2 Letter to Investors

Article - Media, Publications

Raging Capital Reveals New Long Position (CAVM) and Discusses 3 Short Positions (VRX, LC, PMTS) in Q2 Letter to Investors

GENE GUZUN, 08 August 2016

Hedge funds’ quarterly 13F filings are quite useful for retail investors seeking to invest like wealthy and successful money managers, but their quarterly letters to investors are even more informative and useful. Raging Capital Management LLC, an investment firm launched by William C. Martin in April 2006 with capital from friends and family, recently sent a quarterly letter to investors discussing the firm’s performance and its biggest contributors to that performance.

New Jersey-based Raging Capital Management, mostly known for its activist investment strategy, invests in both emerging growth stocks and deep-value investments. The activist asset manager generated a net-of-fees return of 5.1% in the second quarter of 2016, bringing tits return for the first half of the year to an impressive 14.0%. Mr. Martin’s investment firm delivered a compound annual growth rate of 21.2% since inception through the end of the second quarter, approximately three-times the 7.1% return generated by the S&P 500 Index over the same time span.
Continue reading “Article: Raging Capital Reveals New Long Position (CAVM) and Discusses 3 Short Positions (VRX, LC, PMTS) in Q2 Letter to Investors”

08/04/201603/03/2021

Article: Robot Funds and Bank Regulation

Article - Media, Publications

Robot Funds and Bank Regulation

Matt Levine, 04 August 2016

What’s Steve Cohen up to? Stamford Harbor Capital, the new firm started by Steven Cohen and led by a longtime deputy, is working with a third-party marketing company that’s meeting with potential clients to gauge interest in investment vehicles that could be started as soon as 2018. Continue reading “Article: Robot Funds and Bank Regulation”

07/20/201603/20/2021

Article: FBI arrests senior HSBC banker accused of rigging multibillion-dollar deal

Article - Media, Publications

FBI arrests senior HSBC banker accused of rigging multibillion-dollar deal

Rupert Neate in New York and Jill Treanor in London, 20 July 2016

Mark Johnson and a colleague allegedly defrauded clients and ‘manipulated the foreign exchange market to benefit themselves and their bank’

A senior HSBC banker has been arrested by the FBI as he attempted to board a transatlantic flight and charged him with fraudulently rigging a multibillion-dollar currency exchange deal.

Mark Johnson, a British citizen and HSBC’s global head of foreign exchange trading, and a colleague are accused of “defrauding clients” and alleged to have “corruptly manipulated the foreign exchange market to benefit themselves and their bank”.

He was arrested on Tuesday night shortly before he was due to fly to London from New York’s JFK airport, and was due to be formally charged by a judge at Brooklyn federal court later on Wednesday. He was later released on bail.

A second Briton, Stuart Scott, who was HSBC’s European head of foreign exchange trading in London until December 2014, is accused of the same crimes. A warrant was issued for Scott’s arrest.

They are the first people to be charged in connection with the US government’s long-running investigation into bankers’ alleged rigging of the $5.3tn (£4tn) per day forex market.

“The defendants allegedly betrayed their client’s confidence, and corruptly manipulated the foreign exchange market to benefit themselves and their bank,” said the US assistant attorney general Leslie Caldwell. “This case demonstrates the [US Department of Justice’s] criminal division’s commitment to hold corporate executives, including at the world’s largest and most sophisticated institutions, responsible for their crimes.”

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07/20/201603/01/2021

Article: Asanko fires back after allegations from K2 Investment

Article - Media, Publications

Asanko fires back after allegations from K2 Investment

MATTHEW KEEVIL, 20 July 2016

Asanko Gold (TSX: AKG; NYSE-MKT: AKG) has reported its inaugural production quarter at its Asanko gold mine in Ghana, but it is also busy countering criticism about its technical reporting from Toronto-based hedge fund K2 & Associates Investment Management. Asanko hit commercial production at its namesake operation in early April after completing the US$295-million development ahead of schedule. Asanko’s first phase of mining will focus on the Obotan project, which includes the Nkran pit and four satellite deposits.

This first phase of production is expected to total 2.34 million oz. over a 12.4-year mine life based on reserves of 2.5 million oz. gold hosted within 36.7 million tonnes grading 2.15 grams gold per tonne. Asanko is scheduled to produce 190,000 oz. gold annually.
Continue reading “Article: Asanko fires back after allegations from K2 Investment”

07/19/201603/01/2021

Article: Asanko Gold’s (TSE:AKG) Q2 Results Will Be One to Watch

Article - Media, Publications

Asanko Gold’s (TSE:AKG) Q2 Results Will Be One to Watch

SmallCapPower, 19 July 2016

Asanko Gold Inc. (TSE:AKG) is a gold junior that seemed to have been doing everything right. Yet, a Toronto-based hedge fund recently questioned the calculation of the Ghana gold miner’s resource. Asanko has yet to issue any news in response to these claims, so the release of its second-quarter production and conference call on Wednesday, July 20, 2016, should be an event of great interest to its shareholders.

On June 29, 2016, the Financial Post reported that K2 & Associates Investment Management alleged that Asanko’s gold resources “don’t add up” and appear to be over-inflated by a factor of two. It must be noted that K2 has a short position in Asanko and, thus, has much to gain if the Company’s stock price were to fall.
Continue reading “Article: Asanko Gold’s (TSE:AKG) Q2 Results Will Be One to Watch”

07/05/201603/01/2021

Article: Short seller Cohodes targets yet another Canadian firm: Exchange Income

Article - Media, Publications

Short seller Cohodes targets yet another Canadian firm: Exchange Income

Jennifer Ablan, 05 July 2016

Short seller Marc Cohodes, who has famously bet against the shares of six Canadian-based companies including Valeant Pharmaceuticals International Inc and Home Capital Group Inc, said on Wednesday that he is targeting yet another Canadian firm – Exchange Income Corp.

Cohodes told Reuters that Exchange Income – a Winnipeg-based company focused on opportunities in aerospace and aviation services and equipment, and manufacturing – does not generate enough cash to pay the juicy dividend it provides investors. At about C$33 per share, Exchange Income commands a market capitalization of $1 billion.

Cohodes, who worked at a short-selling hedge fund but now raises chickens in California and invests his own money, has targeted Valeant, Intertain Group Ltd, Concordia International Corp, Home Capital, Equitable Group Inc and Badger Daylighting Ltd. Cohodes told Reuters last month that he is keeping his short position on the Canadian lender Home Capital despite a capital infusion from Warren Buffett’s Berkshire Hathaway Inc .

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07/04/201603/18/2021

Article: Israeli Businessman Nochi Dankner Found Guilty of Stock Manipulation

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Israeli Businessman Nochi Dankner Found Guilty of Stock Manipulation

Jasmin Gueta, 04 July 2016

Nochi Dankner, who was for a decade one of the most powerful business tycoons in Israel, was found guilty on Monday of stock manipulation and other securities-related offenses.

Broke tycoon ejected from Tel Aviv restaurant. In first testimony, Dankner denies role in alleged share manipulation. Nochi Dankner survives South America helicopter crash. The maximum punishment for the offenses is five years’ imprisonment.

In a 280-page decision, Judge Khaled Kabub of the Tel Aviv District Court found Dankner guilty of all the charges that had been brought against him, which centered on his manipulating the share price of his publicly traded IDB Holding Corporation ahead of a secondary offering of its shares in February 2012. Dankner consistently denied any wrongdoing. Continue reading “Article: Israeli Businessman Nochi Dankner Found Guilty of Stock Manipulation”

06/29/201603/01/2021

Article: Hedge fund claims 90% downside potential at Asanko Gold

Article - Media, Publications

Hedge fund claims 90% downside potential at Asanko Gold

Peter Koven, 29 June 2016

Gold miner Asanko Gold Inc. has come under attack from a Toronto-based hedge fund that claims its stock price could plunge 90 per cent. The main allegation from K2 & Associates Investment Management Inc. is that Asanko’s gold resources “don’t add up” and appear to be over-inflated by a factor of two. K2 has a short position in Asanko, and in the grand tradition of short sellers, the hedge fund published its report on the company on a public website, allowing anyone to download it.

The strategy is reminiscent of previous short-seller attacks on Chinese-Canadian firms Sino-Forest Corp. and Silvercorp Metals Inc., which were highly effective in driving down the stock prices of the targets. However, this short report only had a minor impact. Asanko shares dropped five per cent on Wednesday, closing at $5.17 on the Toronto Stock Exchange.

“We thought it was important for our work and opinions to be entered into the public conversation,” K2 founder Shawn Kimel said in an emailed response to questions. He noted at least nine other groups are publishing opinions on Asanko and that it is the largest short position in K2’s precious metals portfolio.
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