FOR IMMEDIATE RELEASE
Sep 23 2002
Contact: Spence Jackson, (573) 751-4951
Blunt Halts Activity of Unregistered Broker-Dealer from Pennsylvania
In January of this year, a Missouri citizen reported to the Securities Division of Blunt's office that these companies and persons offered and sold unregistered stock in Missouri. The Missouri resident reported that he had participated in a conference call in which information was offered to potential investors regarding stocks in two companies, CENNOID and Tutornet. Mr. Pavidis claimed to personally know people with these companies. John Pavidis represented that CENNOID stock was supposed to open at $21.00 per share, and that Tutornet, which was already publicly traded, was supposed to merge with another company and then be reissued under another name. The opening stock price for Tutornet would be $9.00 per share.
In reliance on John Pavidis's claims, the Missouri resident wrote checks to Lynnewood Leasing, and sent them to John Pavidis's residence for the purchase of 800 shares of CENNOID stock, at a price of $10,000, and 1,000 shares of Tutornet stock, at a price of $3,000, in March 2000. Following these transactions, the Missouri resident received two stock certificates from John W. Pavidis II, one for 1,000 shares of Lost Lake Enterprises, LTD., and one for 800 shares of Lynnewood Leasing Services, LTD, leaving the Missouri resident with shares of stock in two companies that do not have a market. The stock certificates were signed by John W. Pavidis as Director and Linda A. Pavidis as Secretary.
A check of Securities Division records revealed no registration or granted exemption for any of the securities offered or issued, and no registration for the persons or the companies to act as a broker-dealer or agents in the State of Missouri.
Blunt's order prohibits the companies from acting as a unregistered broker-dealer, from making false or fraudulent statements and from making any offer or sale of investments in CENNOID, Tutornet, Lynnewood Leasing and Lost Lake Enterprises.
"Missouri residents need to check investment opportunities before committing resources to them," said Blunt. "Investors can check the status of an investment and its representative by calling our Investor Hotline at 800-721-7996."
Blunt urged Missouri investors to follow these Investor Tips and ask questions and get answers before you invest.
1. Is the company registered to sell securities?
Be extremely cautious, if not. Companies that register file prospectuses and annual reports with securities regulators. Despite current problems with registered investments such as WorldCom, registration makes the "paper trail" of fraud very clear. Over the history of governmental review, securities regulation contributes to a fair investment market and a good climate for making informed investment decisions. With an unregistered investment -- the promoters can just disappear.
2. Does the investment have a track record?
Claiming that their "opportunity" is similar to those of "hot" entrepreneurs, scam artists often use news stories about the success of legitimate companies as bait. Success stories of other companies in the field are irrelevant for your purposes. Get the track record of the company you are considering investing in and the background of the people promoting it.
3. Where is my money going?
Legitimate companies account for investors' money at all times. Ask for written proof of how much of your money is going to the actual purchase or development of the opportunity and how much is going to commissions, promoter's profits and marketing costs.
4. Can I be certain a promoter is not lying to me?
Scam artists lie. Their success depends on having an airtight answer for everything. They inflate the costs and value of worthless investments. They promise you profits years down the road and then disappear with your money.
5. Do I know when something is too good to be true?
Investing is a risky business. Anyone who tells you an investment is likely to turn a profit quickly should have a basis for the claim. Demand written proof of profit projections from independent sources. Be especially wary when someone tells you profits will be big enough to offset the risk of investing. Every potentially high profit investment is high risk.