I strongly advise my public company clients to seek ways to encourage their existing shareholders to become long-term investors in company. If your existing shareholders don't sell their stock, it costs your company far less to spread word about your "forward looking" statements with expectation that investor relation's effort will result in a sustainable strong share price. The primary group who should be long-term investors are your company's insiders, officers and directors. Your employees shouldn't have shares they can quickly sell into Market.

Whatever "forward looking" statements you use to seek buying for your company's stock keep message simple and credible. Try to focus upon statements that should result in greater demand for your shares within next few months.

There is an infrastructure of firms that can help you spread word about your "forward looking" statements. Be certain that you are dealing with reputable professionals and not with stock swindlers that are always aggressively courting you to use them to hype your shares. Be aware that investor relations' cost are never ending and a serious drain on your company's profits. If your public company hasn't a sound reason to pay to create a strong and sustainable share price, your company shouldn't be public.

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There is no possibility that Private PRC Company will pay dividends to Private BVI tax haven Corporation as long as American Public Company appears to own BVI Corporation. So, there is no possibility that American public company will ever see a dime.

Follow Money

The swindle targets investment funds and angel investors willing to buy Public Company's shares. The Private Placement investors receive shares in worthless public company. Their money goes to BVI tax haven Corporation. The private BVI Corporation invests American Private Placement funds into private PRC Company. The Private Investments continue as long as there are foolish American investors willing to convert their dollars into worthless stock.

Usually ineptly, worthless public company's shares are promoted to American investors. The insiders, as with almost all stocks, dump into public buying. After paying public company filing costs and costs for stock promotions, insiders take their profit.

The End Game

Once it's clear that more American Private Placement financings are unlikely, private PRC Company cuts link to American Public Company. In a recent NYSE example, private PRC Company refused to be audited. The game was over.

The BVI link is key that gives swindlers ownership of American public company assets. From PRC's viewpoint, foreign investor is BVI Company and not American Public Company. Tax havens are tax havens because it's nearly impossible to get any information about a company incorporated in that jurisdiction. So, swindlers can easily transfer public company's assets in BVI without anyone being wiser.

Avoiding This Sting

I call this Shell Game a Roach Motel because your money goes in, but it never comes out. It's easy to spot Roach Motels in annual filings of any public company. Find item that discusses company's corporate history. If that history is a corporate structure with public company owning a tax haven corporation that in turn owns a private operating company, it's a Roach Motel. There are scores, if not hundreds of these Roach Motels trading today. If you can't find an example, email me at Beowulfinvestments@Earthlink.net and I'll send you a few examples to use at SEC's EDGAR website.

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