Needless to say I'm very happy that the SEC moved so quickly in the end and protected new investors from falling for the lies and deceptions propagated by Gillispie and his associates. Many people complain about the SEC and its capability to move quickly against penny stock fraud. But this case proves that it is very possible for the public to submit enough evidence of a fraud to get the SEC's attention.
However it's also true that the SEC needs a bullet proof case before they can move forward. And that takes time. In retrospect I like the model I've pursued in this case: disclosing evidence to the SEC via the SEC tip form and to the public via a blog in parallel. This enables the SEC to gather enough evidence while warning investors early of potential scam.
I will later show how my disclosures on this blog and on Yahoo's AEHI message board warned investors exactly of the fraudulent acts described in the SEC complaint.
Meanwhile I'll answer a couple of questions people and press have asked me:
Q: Are you Joe Weatherby?
A: No, I'm not. I didn't even get to know Joe until late in the game and we worked largely independently from each other on this project.
Q: Do you use multiple Yahoo Ids to fake conversations?
A: No, I consider that unethical and would not engage in such tactics. I did have to change my id from firstname.lastname@example.org to email@example.com because someone with an interest to suppress my disclosures convinced Yahoo to terminate my previous Id.
Q: Tell us more about yourself? How can we trust your claims if we don't know who you are?
A: I try to present information with pointers to all sources so that anybody can follow my reasoning. I don't think more information about my identity would be helpful.
Q: Do you have a financial interest in the demise of AEHI?
A: I do have a short position and that initially kept my attention on this case. Over time though the fun of solving a puzzle became the dominant factor in my motivation. I do expect my position in AEHI to become profitable. However the cost of maintaining it has been really high, so it's not the home run you might expect. Overall my behavior of allocating so much time to AEHI was economically irrational.
Q: Isn't shorting a stock and publishing negative information about it illegal and unethical?
A: Not at all. It's not illegal unless you knowingly publish false or misleading information. Since the short side has the motivation to research the company deeply and to unveil its business practices it counteracts fraudulent and misleading promotions of the company. Therefore the short side actually works to protect investors interests in the long run.
Q: What's next for you?
A: This has been tremendously entertaining for me. One thing is certain: I'll continue to short and expose frauds. I've yet to figure out how to best take the experience from this case and apply it to future frauds. I know I want to get to a more scalable model. Stay tuned...