The Deal: Microcap Stocks Get Undeserved Promotions
Direct mail and e-mail campaigns have long been the staple of paid promotions of microcap stocks, but in recent months stock promoters appear to have had increasing success using a potentially more powerful outlet.
"Forbes does not allow contributors to accept payment in exchange for coverage on Forbes.com," she said. DeSue did not respond to requests for comment for this story. It should be noted that DeSue has written for other publications, including TheStreet.com. TheStreet and The Daily Deal are both published by TheStreet Inc. ( TST). William Inman, editor-in-chief at TheStreet, said his editors were not aware of the controversy over DeSue's Forbes story. He said that TheStreet has a very strict policy forbidding acceptance of payments or gifts from sources and doesn't even allow its reporters or contributors to trade stocks. DeSue wrote 14 articles for TheStreet.com in April, but no longer writes for the website. All of her articles were on topics that editors assigned to her, Inman said. TheStreet stopped using DeSue as a contributor after she stopped responding to her editors' e-mails, he said. The decision to no longer use DeSue as a contributor was not related to the Forbes situation. Swingplane's promoter Awesome Penny Stocks was the subject of an SEC investigation in 2012, according to people who were interviewed by investigators. Neither Awesome Penny Stocks nor the SEC responded to a request for comment regarding the probe. Awesome Penny was involved in the 2012 promotion of vitamin producer Sunpeaks Ventures Inc., which has since changed its name to Pharmagen Inc. ( PHRX). Jacob Wolinsky, who runs investment information website ValueWalk, said he was offered $1,000 to write an article praising Sunpeaks. Wolinsky said he was offered an additional $500 if he agreed not to disclose the payment, but refused the bonus. The article was published on Seeking Alpha in April 2012. "I thought the guy who I talked to was just a shareholder who wanted some positive P.R.," Wolinsky said in an interview. "I had no idea that there was a promotion going on. It was the first and the last time I did a sponsored story." Michael Goode, who has published almost 50 articles on Seeking Alpha, called Wolinsky's article "yet another paid stock promotion on Seeking Alpha," in a comment on the site. "SA has gone completely to the dogs over the last few years. It is a shame."