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  • fourtwoonw99 fourtwoonw99 Nov 13, 2010 12:08 PM Flag

    Toronto investor relations firm hammered for phoney Web postings

    Toronto investor relations firm hammered for phoney Web postings


    In April, the Ontario Securities Commission levelled allegations of serious misconduct against Toronto based Agoracom Investor Relations Corp. and its two founders, George Tsiolis and Apostolis Kondakos.

    The commission accused the pair of directing their employees to pose as investors and anonymously post thousands of messages on Agoracom's website about corporate clients. The alleged purpose was to create the impression of active public interest in the shares of these client companies, many of which are based in Vancouver.

    On Friday, the OSC released a settlement agreement in which Tsiolis and Kondakos admitted the allegations and agreed to heavy sanctions.

    In particular, they admitted Agoracom reps had up to 200 aliases and "were required to make up to two posts per hub per day or risk having their pay docked. On occasion, Agoracom staff conversed with themselves on the forums using different aliases."

    It added up to a lot of posts. From September 2006 to July 2009, they made more than 24,000 such posts using more than 670 alias names, some of which promoted the purchase of client stocks.

    The settlement states that neither the public nor most of Agoracom's clients were aware of the phoney postings, and in one instance the pair took steps to actively conceal their clandestine activity.

    That was in March 2009 when an Agoracom employee revealed he was an Agoracom rep posting under an alias. Tsiolis and Kondakos posted an "official statement" stating that these actions were carried out by a single individual and that Agoracom would be taking steps within next 60 days to ensure that this would never happen again.

    In fact, they knew it was a routine practice.

    Kondakos also admitted he "intercepted private messages sent between public users for the purpose of gathering information about reporting issuers and issuers, in which he was personally invested."

    As a result of these admissions, the OSC terminated Agoracom's registration as a limited market dealer, and suspended the registrations of Tsiolis and Kondakos for 10 years.

    The pair was also permanently prohibited from acting as directors or officers of any reporting issuer, dealer or investment fund manager for five years.

    They were also barred from trading or investing in any client companies, other than any options or private placement placements that are part of contractual compensation arrangements, and ordered to pay a $125,000 penalty and $25,000 in costs.

    I must say, I am no fan of Agoracom's site or, for that matter, any of the large stock market chat sites. They contain too much misinformation and just plain dumb commentary. Sifting through them for worthwhile information is usually a waste of time.

    David Baines-

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