SEC probing three LV firms

An accountant linked to three Las Vegas shell corporations declined comment Thursday on why their stock prices soared and why the government ordered trading in the securities suspended.

The Securities & Exchange Commission halted trading in the three companies Wednesday, citing questions about reports the firms had released to the public.

The trio -- Shebolt International Inc., Redwing Inc. and CPR Corp. -- all have the same address at 6767 West Tropicana Ave., Suite 207.

That's also the address of Savoy Financial Services, which Paul Andre said is his Las Vegas accounting firm.

Andre is listed as an officer and director of two of the suspended companies, while his wife Sandra is an officer and director of all three, according to an SEC spokesman.

"I don't recall what companies I was an officer or director of," Andre said Thursday during a brief phone interview with the Sun. "I resigned."

Asked when the resignations occurred, Andre said, "Various dates -- back toward the first part of the year." He refused to say what prompted his resignations or answer any questions about the companies, referring the Sun to a Salt Lake City lawyer listed as attorney for the three corporations.

The attorney, Leonard Nielson, couldn't be reached for comment.

Andre earlier told Bloomberg news the three companies had no assets or revenue. He also told Bloomberg he and 34 other individuals sold the companies to Neilson for less than $1 million.

Andre's resignations came in the midst of unusual activities involving the three companies that prompted the SEC to suspend trading in their shares.

The activities began last New Year's Eve, when the trio's stocks posted some surprisingly large gains in over-the-counter bulletin board trades during an abbreviated pre-holiday session.

During the first few weeks of December, according to Nasdaq records, the stocks were all quoted at $5 a share.

On Dec. 29, though, 2,000 shares of Shebolt stock traded at $8 a share. Two days later, the stock jumped 125 percent, to $18, on trading of just 27,000 shares. It has since traded as high as $22, which was the price quoted when trading was suspended.

At that price, Shebolt had a market capitalization of $44 million.

Redwing stock notched a similar performance. On Dec. 28, the stock traded 5,500 shares at $5.50. The next day, 30,000 shares traded at $10.50. No trades occurred on Dec. 30, but on Dec. 31, the stock had soared to $20 -- a 264 percent increase on trading of just over 50,000 shares in three days.

When trading was suspended, Redwing's stock was quoted at $21 a share, giving it a market cap of $39.1 million.

Amazingly, CPR stock also soared on New Year's Eve. A big block of 123,500 shares had traded at $10.375 on Christmas Eve, followed by a 100-share block at $10.50 on Dec. 28. On the 31st, CPR zoomed to $15. By the trading halt on Tuesday, the stock had jumped to $33, giving it a market cap of $59.4 million.

Combined, the companies' stock valuation had jumped to $142.5 million from $28.3 million in early December -- a better than 400 percent appreciation in just two months. And it had done so without any news from the companies.

Surprisingly, when the companies did report "news," their stock prices hardly reacted at all.

On Jan. 15, Shebolt released an announcement to Bloomberg saying "today it has completed the first stage of its global acquisition program, having successfully acquired six companies in the hi-tech electronics and software sector."

Shebolt didn't identify the purported acquisitions or say how they were accomplished, but said the acquired companies had "collective assets of over $60 million."

The same day, Redwing issued a one-paragraph announcement saying it "has successfully completed the first phase of its multiple acquisition program today by acquiring three companies in the Far East with a combined net worth in excess of $20 million, primarily comprised of publicly traded banking stocks."

Also the same day, CPR said it had "today completed the first stage of its global acquisition program with the acquisition of five companies in the hi-tech engineering and automotive sectors."

The acquisitions "bring a net worth with them of over $250 million," said CPR, which didn't divulge how it paid for them.

The press releases were all issued within eight minutes and carried a London dateline.

The commission's notice of suspension of trading cited the SEC's concerns over "the adequacy and accuracy" of the companies' announcements and the identities of the people who control them.

Unless extended, the trading suspensions are due to expire on March 2.

The SEC indicated it's waiting for information from the three companies and said anyone with information about the matter can call the SEC's Pacific Regional Office.

The SEC appears to be investigating the possibility the stock prices of the three companies have been manipulated.

In numerous past penny stock "pump-and-dump" schemes, market makers have run up the price of the stock with artificial trades, shorted it, and then pocketed the money when the price declined to zero.

The SEC spokesman said he didn't have any information on the identity of the market makers for the three stocks. He also said that, while domiciled in Nevada, the three companies "have no operations or business or customers" in the state.

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