Lenco Mobile links up with recidivist SEC offender

Using its stock as currency, Lenco Mobile Inc. (Pink Sheets: LNCM.PK) has spent the past few years snapping up cell phone and Internet marketing companies.

Lenco’s share price has risen with the acquisitions, hitting a new high of $6.05 on Friday. The company now has a market capitalization of $389 million, and is seeking a listing on the NASDAQ exchange.

But a Sharesleuth investigation has found that at least two of the businesses that Lenco acquired – for 8.5 million shares and other consideration – were connected to Michael Wayne Crow, the subject of two previous Securities and Exchange Commission cases.

In November 2008, a federal judge found that Crow secretly controlled a securities firm called Duncan Capital LLC, unlawfully collecting millions of dollars in commissions while violating broker-dealer registration and reporting provisions. Crow was ordered to disgorge those earnings, with interest, and pay a $250,000 fine.

He had previously settled another SEC case alleging that he engaged in insider trading as chief executive of a public company, and also filed false financial reports.

Although one of Lenco’s SEC filings mentions a “Michael Crow,” the company has not disclosed that he is the same Michael Crow who has been barred from serving as an officer or director of any public company, or from associating with any broker, dealer or investment advisor.

Crow filed for personal bankruptcy in California last month, listing $30,000 in assets and $11.5 million in debts, including $7.25 million owed to the SEC. In that filing, he said that one of the companies that Lenco purchased, for millions of dollars in stock, never had any business operations.

Sharesleuth found that a third business that Lenco acquired is connected to Thomas C. Ronk, a former stockbroker with a history of disciplinary actions by the National Association of Securities Dealers (now FINRA).

Ronk operates several investment web sites, including BuyIns.net, which purport to identify companies whose stocks have been targeted by illegal “naked shorting” and are poised for price jumps.

He also is partners with former SEC Chairman Harvey L. Pitt in RegSho.com, a site created to help short sellers locate shares to borrow so that they can remain in compliance with market rules.


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