It might seem that there’s no way but up for a Company whose shares trade at two one hundredths of a cent. In the case of Pinnacle Business Management, Inc. (Pink Sheets: PCBM) “up” is so far away that investors might prefer to the odds of climbing Annapura, a mountain that reportedly has killed about half of those who reached its summit.
As we first reported in February 2002, the Company was promising profitable spin offs, promoting the prospects of its auto dealerships, and projecting that one newly spun-off entity would be listed on the American Stock Exchange. See 3 E International Corp., Part I - Lighter Than Air; Part II - Falling From the Pinnacle; and Part III - From All Pro to All That Dough. There was little sign, however, that Pinnacle was positioned to deliver on its promises.
The SEC agreed. On May 8, 2002, the SEC suspended trading of Pinnacle shares, citing concerns about
the accuracy of assertions made by PCBM, and by others, in Commission filings and in documents sent to and statements made to investors concerning among other things, a planned spin-off by PCBM of a subsidiary in May 2002, the initial price at which the subsidiary will trade after the spin-off has been completed, and the conditions bearing on the subsidiary's chances of achieving an American Stock Exchange listing.
That same day, the SEC filed a civil fraud complaint in federal court against Pinnacle, its Chief Executive Officer, Jeffrey Turino, and its Chief Operating Officer Vincent LoCastro. The complaint charged that that Pinnacle, Turino and LoCastro issued a false and misleading April 2, 2002 press release concerning plans to spin-off Pinnacle’s “All Pro Group” subsidiary, which operated a used car dealership, a Daewoo dealership, and a wireless telephone sales office, all located in Western Pennsylvania.
That April 2, 2002 press release expressed some optimism that the newly spun-off entity would gain listing on the AMEX at an opening price of $4 per share. As the SEC pointed out at the time, that valuation was vastly over inflated, and there was no legitimate basis for projecting imminent AMEX listing.
The SEC lawsuit has now been resolved. Pinnacle, Turino and LoCastro have been enjoined from future violations of the securities laws, Turino and LoCastro have been barred from serving as officers or directors of public companies. In addition, Turino and LoCastro were ordered to pay fines of $60,000 and $25,000, respectively, and Turino was barred from participating in any offering of a penny stock for five years.
As is generally the case, the defendants consented to the judgments without admitting or denying the allegations against them.
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