HUSA recent run-up is a “Snow Job”

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Citron alerts readers about the identity of the pseudo-analyst responsible for the puff  piece responsible for jacking HUSA, a mere shell of an oil company, from 8 to 20 a share over the last month or so.

He is none other than David G Snow, a name you might not know if you’re a newbie to the stock fraud beat.  But for you old-timers, grab your Fedoras.

David G. Snow is none other than the notorious analyst who pegged the $1000 price target on Solv-Ex, one of the most notorious stock frauds of the 90’s … and probably the largest energy stock fraud ever … until Enron came along.

Houston American Energy Corp., (NASDAQ:HUSA) took a stumble yesterday in response to skeptical pieces published in Seeking Alpha this week.  ( Citron notes the credible work of blog authors http://seekingalpha.com/article/197437-houston-american-energy-corp-set-up-for-collapse  and http://seekingalpha.com/article/197094-houston-american-energy-priced-for-perfection discussing the business merits; we won’t restate their facts, opinions and conclusions here.  )

The stock had enjoyed a remarkable 9-fold run-up in the last nine months –on the shaky premise that purchasing a minority “farm-in” of another company’s drilling prospect in Colombia for $15 million justifies an energy powerhouse worth more than $500 million overnight.

The company’s CEO was quick to complain in an after-hours PR yesterday about the “internet postings” causing his stock to fall from 20 to 15…..we note no similar complaints from him as wildly optimistic postings in February pushed the stock from 8 to 20 in a few weeks.  Life is strange. 

So we presume he has no problem with David G. Snow’s work on behalf of his company’s stock. 

Introducing… “That young sea-faring, bold and daring, big bewhiskered, overbearing. Darling Mister Snow” – Carousel

Here is Snow’s piece:  http://aaronandmoses.blogspot.com/2010/02/bull-case-for-husa.html

He calls it “Another Triton Energy”.  Citron suggests Snow knows a lot more about Solv-Ex than Triton. 

He then goes on to discuss in minute detail all the ins and outs of oil drilling prospects in Columbia as though he just walked the oil-patch this morning.  Seems impressive, leading the casual reader to assume this guy must really know his resource stocks.  Either he is a world-class expert on drilling in Colombia, or he’s just cut and pasted the CEO’s stream-of-hype into a story.  Seems like a guy we should get to know!

So what do we actually know about “our darling Mr. Snow”?

Oh no, not the SEC!!!

http://www.sec.gov/litigation/admin/ia-1811.htm

And it’s not just any stocks Mr. Snow was recommending; he was the infamous shill whose $1000 target shilled the notorious Solv-Ex, one of the most notorious stock frauds of the 90’s … a spectacular bust that cost investors $825 million.   Nice call Mr. Snow.  We’d rate that one “another Enron” …

As part of the above consent decree, his company surrendered his company’s registration for unlawfully recommending securities without disclosing positions in the securities he was recommending.  (In the case another worthless penny-stock company, he had received shares for free as a “finders’ fee”. )

Other Recommendations of “our Darling Mister Snow”

http://www.ariansilver.com/i/pdf/energyequities-dec1107.pdf  
From Dec 11, 2007, ASLRF –we guess this isn’t another Hecla … It was 43c at the time… and now its 9c.  Down 80%, during a time silver has risen 45%  (Was $12 / oz, now $17.50 per ounce)

http://energy-equities.com/gold.htm
From July 28, 2008  SRCH  — we guess this isn’t another Newmont…It was 2.80 after his recommendation, now $1.16.  That’s a loss of about 60% … during an interval in which gold has gained about 25%.

Conclusion

Here we have a company whose principal asset was bought for just $15 million; with just 3 employees, and somehow that justifies a market cap of $450 million….( with the CEO complaining that its down from $600 million )  on the strength of a recommendation coming from an advisor who lost his license because he illegally recommended Solv-Ex. 

 Cautious investing to all.