How the Hot Copper stock forum exploits ASX investors
Everyone has heard of 'pump and dump' companies. Many of you signed this petition because you have invested in one or more of them and lost all your investment. Maybe many of lost your money in an ASX company and don't even know it was a pump and dump. Pump and dumps are all over the ASX. One might even wonder if there are more fraudulent ASX companies than genuine ones!
To me, the real meaning behind a pump and dump is a company that really has no value and the directors and promotors know it has no value but continue to promote it just to sell their own shares. The only people that think the company has value are us, the investors who get sucked in to buying shares in it. I have fallen for many of them. Many people I know have fallen for many of them. For many of us, it was too difficult to believe that a company could report publicly such big claims if they weren't true. Surely there would be consequences of they weren't. Now many of us know there aren't consequences. Directors, brokers, sophisticated investors and Hot Copper management are all networking together to strip wealth from us on the ASX in a rinse and repeat process which is well known to practically everyone in the stockmarket industry. ASIC know what is going on. The ASX sanctions it because although they have a regulatory function, they are a profit making company and they profit enormously from allowing Hot Copper to promote these pump and dumps. One Fund Manager told me that every fund manager knows that the same networks of people are using Hot Copper to pump and dump their stocks.
These are some of the reasons why pump and dumps are so successful on Hot Copper.
1) Hot Copper moderators will suspend people who expose any of the pump and dumps.
2) Those involved in the pump and dumps are in collusion with Hot Copper Management. HC management allow these pumpers to have many different aliases from which they pump and dump their own stocks.
3) There are people who are paid 'pumpers and dumpers' who sit all day at a computer using Hot Copper saying only positive things about a company which they know is worthless and criticize very strongly anyone who questions the companies value. It is believed that some of these people have up to 200 active accounts from which they log in from one to the next commenting positively on each stock that is a pump and dump. That is why if you do any investigation into what other posts they are making, you will find they only post on one stock. It is because they have a different name for each stock so they wont give themselves away.
4) These pump and dumpers have a gang mentality. For example if you say something that questions the dubious nature of the announcements of the company Environmental Clean Technologies (ECT) (to use a known example), you will be immediately told by a dozen people how dumb you are.
This is how they come up with a new pump and dump company or reinvigorate an old one.
A few of these criminals will get together, come up with a new idea for a company. It might be based on the current fad (say cannabis or an eco tech stock), or it might be based on some mineral like nickel or cobalt which has surged in price. They will then try and list as an IPO (initial public offering). To list as an IPO they need a minimum number of shareholders. Mostly they can't get this so they create a large number of pretend companies all at the same address and they put 1 or 2 shares only in each company. The ASX knows this happens. Then there are other listing rules that the ASX blatantly ignores. Several ex ASX compliance officers are now working for these pump and dump companies (I'm just saying the facts here). The ASX makes squillions from IPO's and even after the company lists, I cannot confirm this but have been told that the ASX makes money every time a company puts out an announcement. So it is in the ASX's interest to have as many IPO's as possible and as many companies trading on the ASX.
Those making the IPO then contact brokers. The Brokers raise the money through their clients. They care nothing about the company prospects because they will not hold the shares for too long. After the company has launched, the work on Hot Copper starts. I have a computer full of screenshots of how they pump. These guys have financial backgrounds. They can sound like they know what they are talking about. They take photos of the equipment. They say they just had a phone call to the CEO who said things are great. They will lure you in like anybody's business. They are professionals because they have had a lifetime of doing it.
While they are pumping up the stock on Hot Copper, they are ofcourse selling all their shares. Once all sold they leave that discussion. Then there is the inevitable announcement of poor results, a change of direction for the company, a name change and a capital raising (or whats called a share placement to outsiders). These are given to sophisticated investors ie mates of the brokers, directors and Hot Copper management. It is a raising of finance where shares are offered to the mates at a big discount to the share price. When they get their shares, the pumpers come back to pump so the share price goes up. Those outsiders sell their shares back to the market. In some companies this will happen 5 times with five different name changes, stripping millions of dollars from us mums and dads and it goes all in the pockets of these mastermind criminals.
It is difficult for any inexperienced investor (or experienced one) to research the credentials of a company when there has been several name changes. You would have to spend days pouring over old announcements. Nobody can warn future victims on Hot Copper. For example if I were to try and warn people about the pump and dump Elmore (EME) which was previously Indiore, and before that NSL Consolidated and before that NSL Health, I would immediately be moderated.
The most famous journalist in Australia Adele Ferguson confirmed last week she knows one of these has transferred all his wealth to Swiss Accounts offshore.
Then there are the Director bonuses. Despite making up a company's credentials, aiding in the pumping and dumping and then never turning a profit, directors are giving themselves free options, bonuses and incentive shares. They get the votes passed at a crucial time - just after the shares have been given to the outsiders so that those outsiders will vote in favour of the bonuses.
Remember Lance Armstrong. He was a cyclist who continuously lied and cheated to evade authorities. He was a pathological liar. He showed no remorse afterwards only a disappointment that he got caught. Pathological liars are behind the pumps and dumps on the ASX. And it is all known and tolerated by the ASX and ASIC.
@Stockswami on Twitter is a good source of information if you want to know whether your company has been pumped and dumped. All his exposures are there in full view with ASIC and the Managing Director of Hot Copper Jag Sanger copied in to his exposures.
You are most welcome to post this update on Hot Copper or any other social media if you feel it would inform other shareholders of the dangers of investing on the ASX.
Ben.pauley@gmail.com