Beyond weird: a fake filing in penny stock land…
We don’t normally spend much time looking at filings for penny stocks. Indeed, we usually draw the line at around $200 million in market cap. But yesterday, a journalist in Texas sent us a link to this filing from Firstplus Financial Group (FPFX) that was so odd, we just couldn’t help ourselves. Here’s the filing in its entirety:
A Form 8-K purportedly filed on behalf of FirstPlus Financial Group, Inc. (the “Company”) on February 9, 2009 was filed without the Company’s knowledge and was not an authorized filing on behalf of the Company. The Company cautions that statements in the unauthorized Form 8-K filing should not be relied upon in any manner whatsoever.
That was filed on Feb. 13. The so-called fake — if that’s even the right word — 8K filed on Feb. 9 noted that four board members “no longer have the approval of the majority of the members of the Board of Directors to be appointed to fill the vacant positions on the Board of Directors.”
Now I have to say I don’t really know much about the actual mechanics of how companies get their filings into the SEC, other than it’s done electronically, usually by one of several firms that provide this service. But I would have to assume that even at penny stock companies, not anyone can just push the button and send an 8K off into the world.
A quick look at other 8Ks filed by this company clearly shows lots of other odd things going on. For example, this 8K which was also filed on Feb. 13, said that the CEO had been removed on Sept. 22, which seems like a clear violation of the four business day rule. And this 8K which was also filed on Feb. 13 notes that the financial results for 2007 and for one quarter in 2008 should no longer be relied on.
Just last week, the SEC warned about con-artists impersonating SEC employees. Hopefully this is an isolated incident as opposed to having to worry about fake 8Ks. Still, for those readers who are more familiar with the penny stock space: is this sort of thing par for the course because it seems awfully weird. Has anyone else ever come across a “fake” filing?
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Posted in Tags: 8Ks, SEC |
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March 12th, 2009 at 10:01 am
Every company that files with the SEC is assigned a CIK code, which is publicly available, and a CCC code, which is private and (one hopes) only known to people within the company responsible for SEC filings. You need both codes to make a filing. If the wrong person gets a hold of a company’s CCC code, it’s possible to hire a filing service to make a fake filing on the company’s behalf — most of those filing services do no due diligence to ensure they’re dealing with the right company.
Another possibility here, however, is that the company is saying that the filing was not “authorized” in the sense that a lower-level functionary at the company made the filing without clearing it through proper channels (e.g., getting it signed and approved by an authorized officer, clearing it with counsel). If true, it wouldn’t be totally accurate to also say that the filing was made without the “knowledge” of the company, however, as was done here.
March 12th, 2009 at 10:17 am
Sounds like either dissident board member(s) or disgruntled employee(s) might be filing these. Is the journalist going to follow up on this? It looks like a really great story.
March 12th, 2009 at 10:21 am
New one on me. Most bad Penny behavior is Pump & Dump
mailings or CEO floats massive fake shares.
FPFX just did 8:45 am ET BK.
Worth keeping eye on the names of owners as these guys so odten will soon resurface.
There are boards that try and hip people to scams & such
bad actions like serial reverse splits or things like BK. Course Donald Trump makes the list now. lol.
FIRSTPLUS Financial Group Inc (Pink Sheets: FPFX) will change to FIRSTPLUS Financial Group Inc (Pink Sheets: FPFXQ)
March 12th, 2009 at 3:11 pm
If it is the same FirstPlus(Symbol FP) as the one that went bankrupt years ago,NOTHING is hard to believe.
I lost a boatload of money in that company.Got a class-action settlement.The president or another higher up executive ended up being a woman dressed as a man.
An absolute freak show of a company!
NOTHING would surprise me!
If they are Texas based,it is the same.
Avoid at all costs.
I would invest in Crazy Eddie before I would even look at FirstPlus!
March 12th, 2009 at 4:11 pm
What a gem, I love all of the crazy things that you manage to dig up. Only time I’ve ever heard of anything like this was in 2000 when some kid shorted emulex and then issued a fake press release that shaved 2.5 billion off it’s market cap. He probably wouldn’t have had much luck if they were an East coast company, but because they worked left coast hours, their stock had an opportunity to tank before anyone had time to refute the hoax.
March 13th, 2009 at 9:26 am
@ Davis: Thanks for the credit, but I actually didn’t find this one on my own, so I can’t take the credit here. It’s impossible to get to every filing, which is why I depend on readers for their tips.
March 13th, 2009 at 10:56 am
It is the same First Plus, as far as I know. When I originally read the filing I interpreted as a dispute over control of the company.
Recall the fake tender offers by a fake company for a group of large public companies years ago? That one did not move the market.
March 13th, 2009 at 11:16 am
Still no SEC filing or PR on the bankruptcy, though there was notice of a ticker change. Hopefully not some more hijinx!
Here is a bizarre story about FirstPlus.
http://www.philly.com/inquirer/local/nj/20080917_Mob_associate_Daidone_ordered_back_to_prison.html
March 13th, 2009 at 1:12 pm
Each filing comes with an “Accession Number” (and it’s carried in the filing’s URL), the first ten digits of which represent the party making the filing. Somebody may have spoofed the filer of course, but anyone can perform that 10-digit lookup [for CIK 0001376474] at:
http://www.edgarcompany.sec.gov/servlet/CompanyDBSearch?page=main
March 13th, 2009 at 2:24 pm
This is truly a very weird occurrence. What would happen to the people who suffered a loss because of a fake 8k being released. This is scary if it can happen once or twice, but will be terrifying if the trend continues.
March 13th, 2009 at 6:12 pm
It is in fact the same FirstPlus and more proof that our regulatory agencies are a joke.
Worse than a joke!
The criminals with the help of Washington DC have been cleaning out our bank accounts forever but the big scandals seem to occur with more frequency and with ever increasing numbers,further proof that there is no limit to the amounts that they are willing to steal.
Investing in FirstPlus or going on a date with Charlie Manson. I would choose the later.
March 16th, 2009 at 10:25 am
As Andy says, the CCC (plus the publicly-available CIK) are needed to make an EDGAR filing. Companies are not always as careful as they should be with their CCC, and it looks like this one has lost control of its.
It is, of course, possible to change your CCC, and there is a separate code needed for that. You have to wonder who has control over this company’s codes now.