SEC target Amyot a no-show for Boston trial

Wednesday, November 19, 2014

SEC target Jean-François Amyot failed to appear for the first day of his jury trial in Boston Monday morning.The SEC claims that he was behind the manipulation of pink sheets listing Spencer Pharmaceuticals Inc.

by Mike Caswell

QUEBEC'S JEAN-FRANCOIS Amyot was a no show at his pump and dump trial in Boston on Monday. The hearing,which includes a jury, was to begin Monday and continue for several days until the jury decided allegations that Mr. Amyot had run a $5.8-million market manipu lation. (All figures are in U.S. dollars.). Mr. Amyot was not present at the start of the day, and after waiting just 15 min utes the judge decided that he was not going to arrive. The judge then declared him to be in default, a finding that will likely result in him losing the case.

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Source: Stockwatch, 19 Nov 2014, page 41


Quote:
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Pharma Exec Can't Duck SEC's Pump-And-Dump Suit
By Stewart Bishop
Law360, New York (November 14, 2014, 6:38 PM ET) -- The Canadian man behind Spencer Pharmaceutical Inc. must face charges from the U.S. Securities and Exchange Commission of spreading fictitious reports of a $245 million buyout to inflate stock prices, a Massachusetts federal judge said Friday, rejecting the man's bid to evade U.S. jurisdiction.
After revisiting the issue of jurisdiction ahead of a trial scheduled to begin Monday, U.S. District Judge Indira Talwani said given the SEC’s allegations that Spencer director Jean-Francois Amyot deceived investors into believing that Spencer was a U.S.-based company and considering he set up a “virtual office” in Boston, there is enough proof that Massachusetts is the proper venue to adjudicate charges that Amyot violated the Exchange Act of 1934.

Since the SEC satisfied jurisdiction under the Exchange Act, that is sufficient to establish a proper venue for other securities violations as well, Judge Talwani said in a written order.

“Accordingly, plaintiff SEC’s satisfaction of the venue provision of the Exchange Act is sufficient to establish that Massachusetts is an appropriate venue for the claims brought in this suit,” the judge said.

The agency claims the scheme was orchestrated by Amyot and Spencer directors Maximilien Arella and Ian Morrice, who allegedly began disseminating false press releases in November 2010 claiming a Mideast company had made an unsolicited bid to buy Spencer.

The trio collaborated with IAB Media Inc. and Hilbroy Advisory Inc., two public relations companies controlled by Amyot, to distribute the press releases and create a promotional campaign to drum up publicity for the alleged buyout offer, the complaint says. Spencer billed itself as a cutting-edge biotech firm but in reality had no business operations other than a research contract with a university in Montreal to develop technology related to a failed U.S. patent covering drug absorption.

As a result of the pump-and-dump campaign, the SEC says, Spencer’s stock more than doubled in the span of two days while its trading volume reached 6 million shares on Nov. 11, 2010 — a different stratosphere than the 50,000 shares Spencer was averaging in the three months prior to the buyout rumors.

The SEC says Amyot collected over $5.8 million from selling 36 million Spencer shares.

Amyot, who had been represented by counsel but is now appearing pro se, argued that jurisdiction in this case was precluded by the U.S. Supreme Court’s decision in Morrison v. National Australia Bank, which barred federal securities fraud actions for securities traded on foreign exchanges. He claimed Spencer’s stock was traded on OTC-Links, which is not an exchange as defined in Morrison.

However, Judge Talwani said Amyot was misapplying Morrison because the court in that case ruled that extraterritorial application of law was related to whether the allegations the plaintiff makes entitles it to relief, not whether the court had the power to hear the case.

Amyot and the SEC could not be reached for comment Friday.

Arella and Morrice settled with the SEC in September, agreeing to pay $50,000 each in penalties, and to five-year bans from serving as officers and directors of public companies.

Amyot, Morrice and several other associates are also facing charges from Quebec financial regulator Autorite des marches financier over alleged market manipulation involving Spencer and multiple other companies.

The SEC is represented in-house by Rua M. Kelly and James R. Drabick.

Amyot is appearing pro se.

The case is U.S. Securities and Exchange Commission v. Spencer Pharmaceutical Inc. et al., case number 1:12-cv-12334, in the U.S. District Court for the District of Massachusetts.

--Editing by Edrienne Su.
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http://www.law360.com/lifesciences/articles/596291/pharma-exec-can-t-duck-sec-s-pump-and-dump-suit

With grateful thanks to scion, some updates on the SEC case against Amyot et al in relation to Spencer Pharma (SPPH)/Hail First Pharma:

It's easy to see why there has been a concerted effort to suppress the evidence from the AMF that has been gathered in the WDRP investigation. Amyot has some friends in very high places:

"10. All of the press-releases and public information disseminated by the company were based on documents and facts (written messages, letters an faxes) and confirmed by a certain number of credible people (for instance the Middle-East connection was brought by a member of the Canadian Senate and Mr Amyot was always mentioning his tight links with the Canadian government (Ministers and Senators). I verified personally this link since I actually met in person in the office of Mr Amyot with one of the top political organizers (Mr Pierre Coulombe) of the Prime Minister of Canada and two prominent senators (Senator Larry Smith and Senator Leo Housakos) that spoke highly of Mr Amyot during a private political fund-raising dinner in March 2011."

and


"20.37 I ignored the previous business practices of Mr Amyot. If the SEC knew about his business practices as of 2009, I am surprised that they agreed to allow the new administration of Spencer Pharmaceutical to enter into an agreement with Mr Amyot. People surrounding Mr Amyot from the beginning and according to his own words and all of the members of his office were high level political figures very close to the Canadian prime Ministers and some of cabinets ministers and senators. This was one of the reasons that I accepted to license part of the science signed in my private Canadian company (4413261 Canada Inc) into the public vehicle that was offered to me and the scientists."



OCR extract
Doc 7 PDF file
http://www.scribd.com/doc/136035469/SEC-v-Spencer-Pharmaceutical-Inc-Et-Al-Doc-7-19-Mar-13

See here:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86853686

Here:

http://investorshub.advfn.com/boards/read_msg.aspx?message_id=86853755

and the following posts on that MB.

Hail First Pharma was, as claimed by me and others, a pure fiction:

"SPPH SEC Litigation:

www.sec.gov/litigation/litreleases/2012/lr22574.htm

U.S. SECURITIES AND EXCHANGE COMMISSION

Litigation Release No. 22574 / December 17, 2012

Securities and Exchange Commission v. Spencer Pharmaceutical Inc., Jean-François Amyot, Maximilien Arella, Ian Morrice, IAB Media Inc., and Hilbroy Advisory Inc., Civil Action No. 1:12-cv-12334 (D. Mass.)

The Securities and Exchange Commission filed an enforcement action on December 17, 2012, in federal court in Boston charging Spencer Pharmaceutical Inc., its officers, and several other parties for their roles in a “pump-and-dump” scheme involving Spencer’s stock. The Commission’s complaint alleges that Jean-François Amyot, a Canadian resident who controlled Spencer, orchestrated the scheme and worked with Maximilien Arella and Ian Morrice, Spencer’s officers and directors, as well as IAB Media Inc. and Hilbroy Advisory Inc., two other companies controlled by Amyot, to create and disseminate false press releases, including press releases about a fictitious buyout offer for Spencer, and to otherwise promote Spencer’s stock. The Commission alleges that the promotional campaign pumped up the price of Spencer’s stock, and Amyot benefited by dumping his own Spencer stock at artificially inflated prices.

The Commission’s complaint, filed in the U.S. District Court for the District of Massachusetts, alleges that beginning in November 2010, Spencer, a purported pharmaceutical company with addresses in Boston, Massachusetts, and Canada, disseminated false and misleading press releases claiming that it had received an unsolicited buyout offer from a Mideast company for $245 million when, in fact, the purported buyout offer was not real. The complaint further alleges that Arella and Morrice worked with Amyot to create and disseminate the fraudulent press releases. According to the complaint, while Spencer was issuing the press releases, the defendants were conducting a promotional campaign using Internet websites and newsletters to tout Spencer’s stock and the bogus buyout offer, and the false press releases and promotional campaign were successful in pumping up the price of Spencer’s stock. For example, after Spencer publically announced that the Mideast company proposed to pay $245 million for Spencer, the price of Spencer stock more than doubled in two days – opening at $0.25 per share on November 10, 2010 and closing at $0.60 per share on November 12 – and the daily trading volume for Spencer’s stock reached almost six million shares on November 11, compared to a daily average trading volume of less than 50,000 shares during the previous three months. During the time the buyout offer was being promoted, Amyot sold approximately 36 million Spencer shares for gross proceeds of approximately $5.8 million. Each of the defendants are charged by the Commission with violating various antifraud provisions of the federal securities laws. The complaint further charges Spencer, Amyot, and Arella with violating securities registration provisions of the securities laws. According to the complaint, Amyot and Arella were involved in a series of transfers involving 12 million Spencer shares that were done to evade the securities registration requirements and move the shares into an account controlled by Amyot.

The Commission also suspended trading in Spencer securities on December 17, 2012, 34-68447. Securities of Spencer were quoted on OTC Link operated by OTC Markets Group Inc.

The Commission alleges that Spencer, Amyot, Arella, and Morrice violated Section 17(a) of the Securities Act of 1933 (Securities Act) and Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder; that IAB Media and Hilbroy violated Sections 17(a)(1) and (3) of the Securities Act and Section 10(b) of the Exchange Act and Rules 10b-5(a) and (c); and that Arella, Morrice, IAB Media, and Hilbroy aided and abetted the violations by Spencer of Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and Rule 10b-5. The Commission also alleges that Amyot is liable for Spencer’s violations of Section 10(b) and Rule 10b-5 as the company’s control person and that Spencer, Amyot, and Arella violated Sections 5(a) and 5(c) of the Securities Act. The Commission is seeking permanent injunctions, disgorgement plus prejudgment interest, and civil penalties against Spencer, Amyot, Arella, Morrice, IAB Media, and Hilbroy. It also seeks an order prohibiting Amyot, Arella, and Morrice from serving as an officer or director of a public company and from participating in the offering of a penny stock.

The Commission acknowledges the assistance of the Quebec Autorité des Marchés Financiers in this matter."

The complaint contains specific information about Hail First Pharma and Al-Durra/A-Dorra/Al-Dora etc. etc.:

"On November 16, 20 I 0 at 9:05 a.m., Market Wire carried a press release from Spencer that identified the purported buyer as Al-Dora Holdings, a Kuwaiti company: Spencer Pharmaceutical Inc. disclosed today that the Al-Dora Holdings is the buyout offering entity.1 According to information provided to the company, the Al-Dora Holdings is a Kuwaiti private investment company owned and
managed by some of the Gulfs richest families. The Al-Dora
Holdings is represented by its chairman, His Excellency Dr. Bandar
AI-Dhafiri and its CEO His Excellency Hussein Al-Awaid.
"We are happy to now be advanced enough to disclose the name of
the acquiring party," said Dr. Max Arella, President of Spencer
Pharmaceutical Inc. "Even though we are advancing with our
research and licensing we are putting forth all necessary efforts to see this transaction to a successful conclusion," further added Dr. Arella.
During the day, Amyot's Small-Cap Fund sold 172,120 shares of Spencer stock (18% of the day's trading volume) for gross proceeds of$83,048.......

On January 20, 2011, a public news outlet called RediNews carried a press release purportedly from Al-Dorra announcing that it was going to spin off a subsidiary called Hail First Pharma Inc. ("Hail First Pharma"): According to the company, Hail First Phanna Inc. is the result of several acquisitions and or joint-ventures with international pharmaceutical companies
including but not limited to Spencer Phannaceutical Inc., a public traded company listed on the US OTC Markets (PINK:SPPH).
Those statements were false and misleading because Hail First Pharma had not acquired or entered into a joint venture with Spencer. The price of Spencer stock closed that day at $0.21 per
share- up 62% from its closing price on the prior trading day........................

Amyot, Arella, and Morrice -and, by extension, the companies they controlled collectively (Spencer) or individually (lAB Media and Hilbroy controlled by Amyot)- knew or were reckless in not knowing that the purported buyout offer was not real.

79. According to several of its press releases, Spencer conducted due diligence about Al-Dora. However, Arella and Morrice never confirmed that Al-Dora was a legitimate company.
They never spoke with anyone at the Russian firm that first approached them about the buyout.
They supposedly sent someone to visit Al-Dora's offices in Kuwait, but the individual did not meet with any representatives of Al-Dora, and the office building he identified does not actually contain a business by that name.
80. Strategema Capital, the Swiss finn hired by Spencer to evaluate the buyout offer, did not speak with anyone at Al-Dora and found nothing in the public domain to confirm the existence of Al-Dora.
81. Spencer's November 16, 2010 press release identified Al-Dora Holdings as "a Kuwaiti private investment company owned and managed by some of the Gulfs richest families" and identified "His Excellency Dr. Bandar Al-Dhafiri" as its Chairman. Arella and Morrice never met or spoke with Al-Dhafiri, and they obtained no evidence that the name refers to a real person.
82. Spencer's November 16,2010 press release also identified "His Excellency Hussein Al-Awaid" as the CEO of Al-Dora Holdings. Al-Awaid is a real person, but he is simply a Kuwaiti-born Canadian citizen who is vice president of a Canadian immigration company. Al-Awaid has had other business dealings with Amyot, who has described him at times as being affiliated with Hilbroy.
83. The letter dated November 22,2010 in which Al-Dora supposedly offered to provide the $500,000 non-refundable deposit contains no return address, no letterhead, and no other contact information, and the signature at the bottom of the letter is illegible and does not contain any typed name.
84. The letter dated December 8, 201 0 and entitled "Conditions to Offer to Purchase Agreement" did not originate with Al-Dora. Rather, an outside attorney hired by Spencer provided Morrice with a blank template that Arella and/or Morrice filled in. The brief document does not contain the level of detail and evidence of due diligence to be expected in a multimillion dollar transaction, and there are multiple spelling and grammatical errors. The document provides only a post office box address for Al-Dora. The document was purportedly signed by Bandar Al-Dhafiri for Al-Dora, but as noted above, Arella and Morrice never met Al-Dhafiri, and they obtained no evidence that the name refers to a real person.
85. The $500,000 non-refundable deposit that Spencer received on December 21, 2010 did not come from Al-Dora. Rather, Amyot caused Hilbroy to advance the $500,000 to Spencer in exchange for 500,000 shares of Spencer stock.
86. Spencer received two letters from Sterling purporting to guarantee that Al-Dora had access to $500 million. However, Amyot drafted the letter for his contact Schlosser to sign, and the Sterling finn at the address shown on the letterhead is not an investment firm but rather a chartered accountant business that has no knowledge of the people or information mentioned in the letters.
87. When Al-Dora's supposed subsidiary, Hail First Pharma, issued press releases,the press releases were sometimes drafted by Amyot, and the company's contact information was
sometimes listed as Hilbroy.
88. Besides the circumstantial evidence set forth above, the purported acquisition of Spencer makes absolutely no business sense. On November 12, 2010, Spencer announced that the buyer was prepared to pay $245 million for the company. Yet just a week earlier, the company's interim financial statement indicated that it had assets of$111,532, liabilities of $303,855, and a shareholders' deficit of more than $17 million. The interim statement also indicated that Spencer had no revenue and a net loss of$188,660 in the third quarter of2010.
Further, an inquiry at the PTO would have revealed that the company's only supposed asset- the U.S. patent- had been denied by the PTO. It is inconceivable that a "Kuwaiti private investment company owned and managed by some of the Gulfs richest families" would have offered to pay $245 million for a fledgling company with no legitimate assets and no revenue. Also, the acquisition was styled as a "tender offer", but none of the necessary paperwork for a real tender offer was ever filed with the Commission, and public investors were never given instructions about how to tender their shares

"

http://www.sec.gov/litigation/complaints/2012/comp22574.pdf

Hail First Pharma has removed its listing on the Frankfurt Stock Exchange.

And finally the Yahoo! page for Amyot-owned and controlled Canadian shell Hail First Pharma:


http://finance.yahoo.com/q?s=499A.F&ql=0

"This Account Has Been Suspended.

Please contact the billing/support department as soon as possible."

http://www.hailfirstpharma.com/suspended.page/

"This Account Has Been Moved to a New Server.

Please reopen your browser, or clear your dns cache and try again."

http://www.hailfirstpharma.com/moving.page/

Hail First Pharma has now been delisted from XETRA:

http://deutsche-boerse.com/dbag/dispatch/en/xetraNewsboard/gdb_navigation/home?news=40451&venue=2

It was never even traded on the exchange, but did have the dubious distinction of being suspended not once, but twice.

Jean François Amyot (the sole owner and Director of Hail First Pharma) and the boys must have something else on their minds at the moment.

Hail First Pharma is still halted with no news. I think we all know that it will not be a spencer deal since both companies terminated talks. So lets see where it goes from here. Perhaps a total delisting is in the works.

The fact that Jean-Francois Amyot is on the registry does not surprise me since that what he does is supply shells, so in many instances he would be an officer and or director or in this case sole officer and director.

If there was a deal, and only obviously if the company was trading, would an operating company take over. Perhaps the people from the middle east that were announced will take over.

Sometimes, no news is good news, but then again, sometimes its not! LOL

Hail First Pharma:

Another Jean François Amyot shell, set up for the express purpose of furthering his Spencer Pharma (SPPH) scam.

Here are the two Canadian listings for HFP, showing Amyot as the sole Director of both of these shells:

https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpDtls.html?corpId=4413296&V_TOKEN=1320225825326&crpNm=Hail%20First%20Pharma&crpNmbr=&bsNmbr=

https://www.ic.gc.ca/app/scr/cc/CorporationsCanada/fdrlCrpDtls.html?corpId=7757557&V_TOKEN=1320225889637&crpNm=Hail%20First%20Pharma&crpNmbr=&bsNmbr=

Here's the link to the XETRA quote for HFP, where it has receieved the relatively rare distinction of being suspended not once, but twice during its brief existence:

http://www.boerse-frankfurt.de/EN/index.aspx?pageID=35&ISIN=CA40522C1086

It remains suspended, and neither of the German companies, Schnigge and Wertpapierhandelsbank, associated with gaining this listing will comment on the current status of the company.

The XETRA exchange is, of course, the German equivalent of the US Pink Sheets, but is often used by scamsters like Amyot to introduce a vaguely plausible "third party" into bogus acquisition stories like the one he constructed around Spencer Pharma:

"Notice
The following information is intended for investors who are able to thoroughly evaluate and accept the high risks related to an investment in shares issued by this company. This information neither presents an offer to sell nor an invitation to buy or subscribe for shares of this company.

The shares of this company are neither admitted to trading on the Regulated Market nor included in trading on the Regulated Market. At the time of their inclusion, they were not traded at any other domestic or foreign stock exchange, but were tradable at a stock exchange for the first time upon inclusion in the Open Market (Regulated Unofficial Market) at FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange).

Investment decisions based on shares of this company thus bear high risks. Investors must be aware of the high risk connected to the fact that available information on the company may be inexistent or insufficient. Consequently, there is a high risk that the situation and development of the company and subsequently its substance and value cannot be correctly assessed. In addition, Investors must be aware of the fact that the Open Market (Regulated Unofficial Market) at Frankfurt Stock Exchange is not subject to the high Europe-wide transparency standards on EU-regulated markets."

http://www.boerse-frankfurt.de/EN/index.aspx?pageID=34&ISIN=CA40522C1086


It's quite possible HFP will get deployed to promulgate the SPPH scam - or some other Hilbroy/IAB/Jean François Amyot penny stock fraud scheme - in the future, so I applaud the Moderator in setting up this new MB where we can carefully monitor such an event.