>"There are no short opportunities either for this kind of pump and dump." > >Read that sentence over to yourself a dozen times or so. Eventually you'll >realize you just logically said A & !A.
Jones analysis is essentially correct. It's very difficult to short Canadian pump and dump stocks. Most brokerages will not accept short orders for penny stocks. And in general, markets can stay irrational for longer than you can stay solvent. It doesn't matter if the stock crashes after you've already had to cover a margin call. On the larger topic, fraud in Canadian OTC/"wildcat" markets is rife, and the penalties are few. Canadian exchanges would be the ideal location for a fraudulent cold fusion enterprise, and the level of corporate disclosure and due diligence is not comparable to US exchanges. I doubt we will get to see many details of Defkalion's technology and customers, and I also highly doubt that their roadshow includes any actual technology demonstration beyond a Powerpoint deck. BRE-X is the most famous example of a Canadian stock fraud- a $6 billion mining company built entirely on elaborate faked test results. After the stock crashed, the RCMP eventually dropped all charges and other civil cases failed, so nobody went to jail over it. The founder was tracked down years later in the Bahamas by armed thugs and died shortly afterwards. It took well over a decade for the entire BRE-X story to play out. The recent sorry tale of Zenn Motors (and their claims for EESTOR) could be headed for a similar fate based on the postings at http://theeestory.com AF
