Tuesday, 25 November 2014

ZipTel Limited listed securities fraud

ZipTel Limited (ZIP.AX) is a revaluation fraud currently masquerading as a lossmaking telecom minnow. Backdoor listed on the ASX in July 2014. the entity previously operated as a lossmaking mineral exploration company, and before that as a lossmaking sportswear company. According to its annual report, ZipTel had $556K in turnover and a $3m loss in the 2014 financial year. Whatever. As a revaluation fraud, operational performance is utterly irrelevant to Ziptel. The primary purpose of ZipTel is to provide a manipulable "market" price, which can be ramped for the benefit of insiders. Since listing, manipulating ZIP has created unrealized profits of around $18m for the investment cartel setting its price.

In July 2014, ZipTel raised $5m at $0.20 per share from an investment cartel including K2 Asset Management. In October 2014, ZipTel was shilled on a notorious pump-and-dump website affiliated with the criminal organization of which Michael Featherstone is a part. The investment cartel then ramped ZIP to $0.45, deliberately manufacturing millions in unrealized paper profits. The criminal operators of K2 Asset Management charge real cash fees based on such fraudulently engineered unrealized "profit". This planned fraud was the purpose of listing ZipTel in the very first place.


According to ASIC, this is not a ramp but a magical market mystery, an amazing coincidence for which there just can be no explanation. Investors just happened to rush in at that moment, the investment cartel led by K2 just got amazingly lucky, and no market manipulation occurred. If you are stupid enough to believe such a preposterous stance, you should invest with the next Nigerian prince that contacts you with a great opportunity.

The ZipTel ramp was sufficiently obvious as to constitute prima facie evidence of market manipulation. In a functioning market, regulators would immediately start investigating this blatant fraud, analysts would publicly deride it, newspaper articles would express outrage over this flagrant scam attempt. In a functioning market, the ramp would never even have taken place. But Australia does not have a functioning market, because every component of a working market has been removed. The media and analysts that in a functioning market are tasked to expose such fraud are either owned or controlled by the criminals. The regulator is a sick treasonous joke, only concerned with covering the tracks of the criminal community of which it has become an integral part.
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11 comments:

  1. The Central Scrutinizer26 November 2014 at 10:33

    Not saying Ziptel is not a fraud, but I'm wondering whether it might not also be riding on the coattails of the latest 'tech bubble' in the USA. All sorts of bogus 'start ups' with nonsensical 'valuations' proliferating out of California... again.

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    1. Dr Benway26 November 2014 at 11:24

      Hi CS, thanks for reading and commenting. Certainly you are right in that manipulators are more likely to target companies in hot sectors. But ZIPs move from 15c to 45c over a few days had nothing to do with markets. Without a shadow of a doubt this is a ramp, deliberately done by major shareholders.

      But yes, the Oz riding of coattails (and other things) has become comical. ZIP will launch the Aussie Skype. MKB will launch the Aussie Facebook. DVI will launch the Aussie Expedia. Innovation and entrepreneurship in Australia lol.

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  2. TheForms26 November 2014 at 18:57

    I see in note 21 that an ‘independent party’ was gifted 3.5mill options just for giving some advice.

    I figure at the top they would have been up ~ 900k on those options.

    That must have been some pretty good advice.

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    1. Dr Benway27 November 2014 at 06:47

      Yeah in Australia directors are free to loot at will. Favorite methods include "consulting fees","secretarial fees", "rental fees", selling inflated assets to the business, hiring relatives, and so forth and so on. Since everybody does it and there are no repercussions, this theft will continue to fester.

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  3. The Central Scrutinizer12 December 2014 at 23:22

    You might already know this, but a quick internet search revealed Patersons is broker for ZipTel, amongst various run ins with ASIC.

    I see a pattern emerging.

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  4. Bender Rodriguez12 January 2015 at 13:56

    This comment has been removed by the author.

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  5. Bender Rodriguez12 January 2015 at 13:59

    Hi Dr Benway. I have long been a subscriber to many of the reports from http://www.portphillippublishing.com.au/ although I subscribe to only one of their reports now. I have found they often have stocks in which you comment on as recommendations. Once I pointed this out to them but received no reply. I thought this might be of interest to you. Could they been involved in the pump and dump scams?

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  6. TheForms12 January 2015 at 18:19

    @ Bender. If I remember correctly (fairly sure) PCL was touted by Port Phillip Publishing back in Sep 2014 at 3 cents. It promptly rose to near 6 cents now it is in decline sub 2 cents. Pump and dump?

    Not sure how much the fall in oil prices explains this because it is a small explorer with seemingly no economic finds (last I looked) much less producing fields.

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    1. Dr Benway12 January 2015 at 19:52

      Hi TheForms, I think the broader issue here is that virtually all providers of "independent research" in Australia actually provide paid marketing, and as such are of use to pump-and-dumpers. Rampers pay these "research" providers for positive coverage. Several "research" providers are owned outright by circular investment cartels, for example Intelligent Investor is owned by the AWI criminals, that participated in the van Eyk circular investment scam. What are then the odds Intelligent Investor shills would criticize such fraud?

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  7. TheForms12 January 2015 at 21:25

    I think ones performance in the stock market may improve markedly simply by avoiding any stock that is in recommendation by any of these mobs.

    ReplyDelete

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