Now that all defendants have settled with the SEC for the Pump & Dump campaign of 5 years ago, China Auto Logistics continues with the share dump
September 21, 2015: Just three weeks removed from fines and bans being levied by the SEC against one of the perpetrators of the 2008- 2010 Pump & Dump of China Auto Logistics (CALI), schemers have once again brought the company to the forefront of penny stock scams.
On August 31, 2015, the SEC obtained a consent judgment entailing a seven-year penny stock ban and $1.3-million in penalties against Canadian George Tazbaz. According to the SEC, Tazbaz headed a $10.6-million scheme to manipulate two Chinese OTC Bulletin Board companies through wash trades and during which he sold hundreds of thousands of overvalued shares. One of those companies was CALI.
On May 4, 2014, the SEC charged Tazbaz and fellow Canadian S. Paul Kelley as well as other associates for carrying out the Pump & Dump scheme on CALI and Guanwei Recycling Corp (GRPC). Kelley previously agreed to a $6 million penalty and a penny stock ban.
According to the SEC, Tazbaz paid $590,000 out of his own pocket to acquire the shell that became CALI. He then hid his majority ownership of shares through foreign entities.
» Related: SEC Investor Alert: Investment Newsletters Used As Tools For Fraud
With CALI having been firmly established as a scam and the with the last of the perpetrators off the hook, at least from having to serve any time, the company is back at it again, having commenced a massive Pump & Dump campaign today. Somebody(s) is still looking for relief from their holdings. Very possibly those somebodies are other nominee(s) of Tazbaz, Kelley or their associates. Over 20 newsletters appeared in email Inboxes pumping these shares. That the SEC refers to them as "overvalued" is curious considering the company reports well over $300 million in tangible assets and based on their filings, we calculate the share book value at $6.62. Of course there is nothing that offers credibility to the company's filings, especially when one considers the notorious reputation of Chinese based OTC companies.
It very well could be that the SEC will react to this blatant spitting-in-their-face pump so soon after the case's last defendant was settled out and say "enough is enough".