Pumping Stock, Spam and the Criminal Underworld
If you ever feel the urge to trade on a spam stock tip, I offer this unsolved whodunnit as a cautionary tale.
If you’ve been getting an extra dumpster of spam in your inbox lately, it’s probably because of a little known company called Cana Petroleum. If you open the email in question (and I’ve counted nearly 300 in my spam dumps in the past three days alone) you’ll find it’s a pretty straightforward pump and dump scam, where the sender tries to raise buying interest in the stock (the pumping bit) to push up the price so he can make a killing selling his stock (the dumping bit.)
It worked: according to Don Mecoy of The Daily Oklahoman:
Cana Petroleum shares, which trade on the unregulated Pink Sheets via the over-the-counter market, lost 32 percent on Friday to close at $4. On Thursday, the stock traded as high as $10 a share. Seven months ago, it traded for about a dime.
But is this just a case of some day trader making a quick killing? Or is there something more sinister afoot? The company involved has been in trouble before for promoting its stock. Don says that “Information regarding the company is difficult to find. Internet searches reveal no Web site, and telephone listings for Cana Petroleum led to disconnected or wrong numbers:
The company changed its name, ticker symbol and business model in August. Previously called Global DataTel, the company sold personal computers, mainly in Latin America.
Securities regulators filed a complaint against Global DataTel in 2001, and obtained a judgment against a stock promoter hired by the company. He was accused of spreading groundless price projections and strong “buy” recommendations even as he sold his own shares of the company’s stock. The promoter and two Global DataTel executives were fined.
Global DataTel shut down operations in the spring of 2001, “due to the big financials problems,” according to a regulatory filing.
That’s pretty much where the trail ends. As Don points out, a lot of companies don’t like their stock being manipulated for obvious reasons. The promoter involved in the 2001 case, Stuart Bockler, seems to have kept a low profile since. The SEC complaint describes him as a “corporate public relations consultant who controlled and operated, as the sole employee, three public relations-related companies — International Market Advisors Inc., International Market Call Inc., and Imcadvisors, Inc. — and a related Internet website www.imcadvisors.com.” The website itself is under construction although it does offer an address in Columbus, Indiana and an email address under the name Don Michael. The WHOIS information is the same.
Archived copies of the site indicate it’s been pretty dormant since 2001, when its homepage touted a mailing list of “hot news” for $100 a year. (You can see the buy recommendations IMC put out on Global Data Tel at this archived page: In less than five months it put out six ‘breakout buy’ reports on the company, out of a total of nine. A copy of one of the reports is here.) According to the SEC complaint, Bockler sent out 30,000 emails drawing attention to the reports. The stock rose, according to the SEC, from $7.19 a share on Jan 12 1999 to reach a high of $18.84 in April. Within a month of Bockler’s last report the price had fallen to $2.875.
From there the trail goes cold. Or does it? In 2004 a Beverly Hills lawyer called Allen Barry Witz pleaded guilty in a Newark District Court to manipulating the same stock with the help of four other men. (Bockler was also indicted, but I can find no record of the case having gone to trial.) But more intriguing is the link to a murder case that has not been solved: One of Witz’s unindicted co-conspirators, Joe. T. Logan Jnr, was, according to the Asbury Park Press, closely connected to two pump and dump stock dealers, Albert Alain Chalem and Maier Lehmann, who were murdered execution-style in October 1999, the same time the Global Datatel pump fraud ended. The two men’s stock website, StockInvestor.com, was heavily promoting the stock in the last recorded snapshot of the site before their deaths, about two weeks before they were killed. The most recent news article on the unsolved killings, by AP’s David Porter on October 30, quotes one of the dead man’s attorneys as saying:
“It sounded like an extremely professional hit,” he said. “It sounded like the perpetrators were on a plane back to Eastern Europe before they even found the bodies.”
It all may be a coincidence, of course. But the killings, the indictments and the fraud in the Global Datatel case might help to remind us that the links between stock scams, spam and criminal organisations with access to ruthless killers are not the stuff of fiction.