Way To Go Charlie!!!!
Fox News Reporter Charlie Gasparino Is Scooping The Greenwich Time, While A Clueless Hearst Newspaper Editor David McCumber Sits In His Stamford Office
SEC Press Release
FOR IMMEDIATE RELEASE
2010-70
Washington, D.C., May 5, 2010 — The Securities and Exchange Commission today charged New York City-based Spongetech Delivery Systems Inc., an affiliate, and five people involved in a massive pump-and-dump scheme that deceived investors into believing they were buying stock in a highly successful company.
The SEC alleges that Spongetech CEO Michael Metter and another senior executive, Steven Moskowitz, hyped fictional customers and grossly exaggerated sales figures through dozens of bogus press releases and fraudulent SEC filings to pump up demand for stock in Spongetech, a company that sells soap-filled sponges. After flooding the market with the false information to fraudulently inflate the stock price, Metter, Moskowitz, and Spongetech dumped approximately 2.5 billion shares by illegally selling them to the public through affiliated entities in unregistered transactions. They spent portions of their illicit profits in highly visible sponsorship deals with professional sports teams to further create the aura that Spongetech was a well-known and prosperous business.
The SEC suspended trading in Spongetech stock on Oct. 5, 2009, due to questions about the accuracy of the company's press releases and SEC filings. In today's enforcement action, Spongetech is accused of obstructing the SEC's investigation by producing phony sales documents in an attempt to legitimize the make-believe customers it hyped to the public. The U.S. Attorney's Office for the Eastern District of New York today announced a parallel criminal action in the matter.
"Spongetech used a menu of manipulative strategies to perpetuate this scheme, including fake sales orders and public statements as well as obstruction of the SEC's investigation," said Robert Khuzami, Director of the SEC's Division of Enforcement. "We will utilize all available means, including referral to criminal authorities, to prosecute those who attempt to thwart our investigations."
Christopher Conte, Associate Director of the SEC's Division of Enforcement, added, "Investors were deceived into believing that Spongetech was a successful business, while Spongetech and its senior executives were illegally dumping shares into the market."
Two of Spongetech's former attorneys — Jack Halperin and Joel Pensley — and stock promoter George Speranza are also charged in the SEC's complaint, which was filed in U.S. District Court for the Eastern District of New York. RM Enterprises International Inc., an affiliate through which Spongetech dumped shares, is also charged.
According to the SEC's complaint, after several years of relatively little business with a single customer comprising the bulk of Spongetech's limited sales, Metter and Moskowitz began to paint a more promising and misleading picture of Spongetech's business. Beginning in approximately April 2007, Spongetech issued dozens of phony press releases touting increasingly larger, yet fictitious, sales orders and revenue. The press releases fraudulently exaggerated the demand for pre-soaped sponges by referencing millions of dollars in sales orders, business, and revenue from five primary customers that purportedly accounted for 99 percent of Spongetech's business, yet none of those customers actually existed.
The SEC's complaint alleges that Metter, Moskowitz, Spongetech, and RM Enterprises used false and baseless attorney opinion letters by Pensley and Halperin to distribute shares of Spongetech to the public. Metter, Moskowitz, and Spongetech also used false and misleading attorney opinion letters — forged in Pensley's name and in the name of a fictitious lawyer, David Bomart — which were transmitted to Spongetech's transfer agents. The SEC further alleges that Speranza created websites and rented unoccupied office space for the fictional customers in an attempt to legitimize them.
The SEC's complaint alleges that Spongetech violated Sections 5(a), 5(c) and 17(a) of the Securities Act of 1933 and Sections 10(b), 13(a), 13(b)(2)(A), 13(b)(2)(B), and 15(d) of the Securities Exchange Act of 1934 and Exchange Act Rules 10b-5, 12b-20, 13a-13, 15d-1, 15d-11, and 15d-13. The complaint alleges that RM Enterprises violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5. The SEC alleges Metter and Moskowitz violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 10(b) and 13(b)(5) of the Exchange Act, Exchange Act Rules 10b-5, 13b2-1, 13b2-2 (Moskowitz only), and 15d-14, and Section 304 of the Sarbanes-Oxley Act of 2002, and aided and abetted Spongetech's violations of Sections 13(a), 13(b)(2)(A), 13(b)(2)(B), and 15(d) of the Exchange Act and Exchange Act Rules 12b-20, 13a-13, 15d-1, 15d-11, and 15d-13. The SEC further alleges Speranza violated Section 10(b) of the Exchange Act and Exchange Act Rule 10b-5, and aided and abetted violations of Sections 10(b) of the Exchange Act and Exchange Act Rule 10b-5. The Commission also alleges Pensley and Halperin violated Sections 5(a), 5(c), and 17(a) of the Securities Act, Section 10(b) of the Exchange Act, and Exchange Act Rule 10b-5.
The SEC thanks the U.S. Attorney's Office for the Eastern District of New York, the Federal Bureau of Investigation, the Internal Revenue Service, and the Financial Industry Regulatory Authority for their assistance in this matter. The SEC's investigation is continuing.
# # #
For more information about this enforcement action, contact:
Christopher Conte
Associate Director, SEC Division of Enforcement
(202) 551-4834
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Thaindian.com -
When Greenwich resident Michael Metter, owner of local radio station WGCH, is arrested at sunrise at his home on Tinker Lane and charged with securities fraud, obstruction of justice and tax evasion, you’d think that would be a story of interest to residents. That’s why I wrote about it at 10:48.
But not Greenwich Time. They did, however, manage to free up a reporter to cover a car fire in Old Greenwich. The fire happened at noon – Metter’s demise occurred hours before. Hmm.
So what else is in our local paper? Well, “Golfers wowed by new pro shop”
And, local chef on television. And a report that a 19-year-old punk has been arrested for the arson at Scusie’s place last winter. This last item would indeed be interesting, if only GT had thought to mention that the arsonist was surely a pawn of the Albanian Mafia that has plagued Valbella’s since it opened, torching it twice now, plus hanging the owner by his heels to extract protection money, but I suppose those indelicate details are too much for Greenwich residents to bear. Too bad – could have been a fun story.
UPDATE: Whoa! Alert Pulitzer! This just (6:21) in: Byram pool readied for summer!!!!
Greenwich Diva Has Also Been Covering The Story While Hearst Newspaper Editor David McCumber Has Remained Silent.
By Claudette Rothman
Greenwich, Connecticut resident and owner of WGCH radio station, Michael Metter and his business colleague were arrested on Wednesday and charged in an alleged scheme to defraud investors of millions of dollars by falsely overstating ...
Greenwich Diva - http://theoriginalgreenwichdiva.com/
| Spongetech: Michael Metter, Steven Moskowitz, Jack Halperin, Joel ... By Michael Fowke Michael Metter has been charged. He's the chief executive. Steven Moskowitz has been charged. He's a senior executive. Jack Halperin and Joel Pensley have been charged. They were attorneys to the firm. And George Speranza has been ... Money is the way - http://moneyistheway.blogspot.com/ |
| S.E.C. Charges SpongeTech With Fraud - DealBook Blog - NYTimes.com By By DEALBOOK On Wednesday, he and Michael Metter, the company's chief executive, were arrested by F.B.I. agents. They were charged with conspiracy to commit securities fraud and with obstruction of justice. The S.E.C. filed civil fraud charges ... DealBook - http://dealbook.blogs.nytimes.com/ |
| The Biggest Penny Stock Pump & Dump Ever? Possibly $250+ Million ... By Timothy Sykes The SEC alleges that Spongetech CEO Michael Metter and another senior executive, Steven Moskowitz, hyped fictional customers and grossly exaggerated sales figures through dozens of bogus press releases and fraudulent SEC filings to pump ... Timothy Sykes - http://www.timothysykes.com/ |
| New York - Executives Accused in Alleged Stock Fraud Scheme ... By admin According to a criminal complaint filed Wednesday, Michael Metter, Spongetech's chief executive and president, and Steven Moskowitz, the cleaning-products maker's chief operating officer and chief financial officer, were charged with ... Vos Iz Neias - (Yiddish:What's News?) - http://www.vosizneias.com/ |
| SpongeTech Execs Arrested for Fraud » Right Juris By Stacy The CFO Steven Moskowitz and CEO Michael Metter were baffled and say, quite convincingly, that the charges against them and their company are entirely unfounded. Check out the full story with video below! ... Right Juris - http://law.rightpundits.com/ |
| Spongetech and Thresher Shareholders Feel the Pain « Sumfolio.com ... By Simon Monger Spongetech Delivery Systems, Inc. (SPNG, Free Analysis), formerly a manufacturer of sponge-related products, saw its shares fall more than 80% to $0.0069 per share, after the SEC alleged that Spongetech CEO Michael Metter and six other ... Sumfolio.com :: Financial News... - http://sumfolio.com/ |
| Hot Stocks to Watch Today | BP | SPNG | ITMN | CITC | THRR | | Hot ... By Knowledge is Power According to a criminal complaint filed Wednesday, Michael Metter, Spongetech's chief executive and president, and Steven Moskowitz, the New York pre-soaped sponge maker's chief operating officer and chief financial officer, ... Hot stocks Everyday - http://www.hotstockseveryday.com/ |
| Hot Stock Alerts for May 5: $SYMC, $SPNG, $ITMN, $CBS, $CLMT, $FLS ... By BeaconEquity.com Spongetech's CEO Michael Metter and COO Steve Moskowitz were arrested and charged today in an alleged fraud scheme, reported Dow Jones. (OTC:SPNG), ($SPNG). InterMune Inc. (NASDAQ: ITMN) fell 74.96% to $11.38 after the FDA rejected the ... Beacon Equity Research - http://www.beaconequity.com/ |
| SpongeBob Bath Toymaker's Officers Accused of Fraud - NewsPlurk By Typed ROBIN Spongetech execs Steven Moskowitz, Michael Metter arrested for alleged fraud. The feds have arrested top executives of a company that makes a SpongeBob SquarePants bath product on fraud charges.... New York Daily News ( 5/5/2010 9:31:20 ... npusb - http://business.newsplurk.com/ |
| The Incredible Tale of Spongetech's Fraud | The Big Money By James Ledbetter In addition to the flurry of activity near New Haven and Bridgeport to catch the alleged Times Square bomber, this morning, Michael Metter, the CEO of Spongetech, was arrested at his home in Greenwich. It's quite a blow to a company ... The Big Money - http://www.thebigmoney.com/flags/external_content |
| BLOG.JMHAMILTONPUBLISHING.COM: "Mr. Metter vigorously denies the ... By JM Hamilton Blog Michael Metter, chief executive officer of New York-based SpongeTech Delivery Systems Inc., and Steven Moskowitz, its finance chief, were arrested today and charged by the U.S. Attorney's Office in Brooklyn, New York. ... BLOG.JMHAMILTONPUBLISHING.COM - http://blog.jmhamiltonpublishing.com/ |
| keeptradingblog | SpongeBob Bath Toymaker's Officers Accused of ... By AutoNews May 5 (Bloomberg) — Two top officers of the company that makes the SpongeBob SquarePants soap-filled bath sponges for children were arrested and charged with conspiracy to commit securities fraud.Michael Metter, chief executive … ... keeptradingblog - http://keeptradingblog.com/ UPDATE #8 More Than 24 Hours Later The Greenwich Time Finally Puts Something Up On Its Website Greenwich Time Indiders Say That The Greenwich Time And The Hearst Newspapers Are Ignoring The Arrest Of WGCH Owner Michael Metter, Because He Threatened To Go After The Secretive And Privetly Held Hearst Corporation With His Business Talk Radio Network.Here Is The Wire Bloomberg Wire Report From The Greenwich Time Greenwich Roundup Readers Read This Yesterday SpongeTech's Metter charged in pump-and-dump schemePublished: 12:42 p.m., Thursday, May 6, 2010Bloomberg News Two top officers of the company that makes the SpongeBob SquarePants soap-filled bath sponges for children were arrested and charged with conspiracy to commit securities fraud. Greenwich resident Michael Metter, chief executive officer of New York-based SpongeTech Delivery SystemsInc., and Steven Moskowitz, its finance chief, were arrested Wednesday and charged by the U.S. Attorney’s Office in Brooklyn, N.Y. “Between January 2007 and May 2010, the defendants Michael Metter and Steven Moskowitz, along with others, executed a scheme to defraud SpongeTech’s existing and potential investors by publicly reporting false and grossly overstated sales figures,” according to a criminal complaint unsealed Wednesday. The men also were charged with obstruction of justice and were sued separately by the Securities and Exchange Commission. The shares plunged in over-the-counter trading. Metter and Moskowitz, of Flushing, N.Y., were scheduled to appear Wednesday in federal court in Brooklyn. Metter, who also is president and part owner of WGCH radio, was arrested at his home in Greenwich. The company didn’t immediately respond to a voice-mail message seeking comment. SpongeTech fell as much as 98 percent to less than 1 cent on the news. The shares, which once traded as much as 35 cents, declined 18 percent this year before Wednesday. SpongeTech reported the fraudulent information in filings with the SEC and in statements, according to the criminal complaint. Metter and Moskowitz are accused of reporting that SpongeTech got purchase orders from or made sales to five customers that didn’t exist. For the nine months ended in February 2009, the five nonexistent customers constituted about 99 percent of SpongeTech’s revenue, according to the complaint. Metter and Moskowitz allegedly obstructed an SEC investigation into the company by seeking to fabricate websites and virtual offices for the customers and furnishing phony purchase orders, according to the complaint. The SEC sued SpongeTech, an affiliate, Metter, Moskowitz, two former SpongeTech lawyers and a stock promoter. SpongeTech, Metter and Moskowitz, after pumping up the stock by releasing false information, dumped about 2.5 billion shares in unregistered transactions, according to the SEC complaint. The profits were spent on “highly visible sponsorship deals with professional sports teams to further create the aura that SpongeTech was a well-known and prosperous business,” according to an SEC statement. SpongeTech, whose tagline is “the Smarter Sponge,” also makes products for marine, home, pet and car care, according to its website. The company markets cleaning and bathing supplies including soap-filled children’s bath sponges shaped like television cartoon characters SpongeBob SquarePants, Dora the Explorer and the Pink Panther. It also sells sponges pre-loaded with detergents for car, boat and home cleaning. “SpongeBob SquarePants,” the adventures of a good-natured sea creature who lives in a pineapple on the ocean floor, began airing in 1999 and still runs on Viacom Inc.’s Nickelodeoncable channel. “SpongeTech Delivery Systems Inc. can make no comment at this time during the SEC investigation,” according to an outgoing message at the company’s investor-relations line. The criminal conspiracy charge against Metter and Moskowitz brings a maximum prison term of five years. “The audacity of their scheme was matched only by their obstructive efforts during the course of the SEC’s investigation,” Loretta E. Lynch, who was sworn in as the U.S. attorney in Brooklyn on May 3, said in a statement. |
Update #10
Many Greenwich Residents have contacted Greenwich Roundup to say that its more than a bit curious. its a conspiracy and its outrageous.
Some Greenwich Time readers have noted that even though Ex-Hearst Investigative reporter Teri Bulh has said that her report about Greenwich Radio station owner Michael Metter had nothing to do with her dismissal.
However, many Greenwich residents cant help but think That it played a part.
It was just the beginning of the end.
You just don't come to Greenwich and start rocking the boat unless you are a citizen Journalist with a blog.
my gosh, what could the GT say in their defense? that they are waiting to finishing vetting the months of investigation work the DOJ and SEC put in the case?