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Regulators Probing 'Dramatic' Price Jump in Shares of Brentwood Marketing Firm

The SEC halts trading of Cameron International stock after it soars to $87 from $3.50 in four days.

November 08, 2005|Josh Friedman | Times Staff Writer

Federal regulators halted trading of an obscure Brentwood marketing firm Monday after its shares rocketed to $87 from $3.50 in just four days.

The Securities and Exchange Commission said it was examining the bizarre price jump and an apparent takeover attempt or ownership change at Cameron International Inc., which has an office on Montana Avenue and a Santa Monica mailing address.

"There is insufficient information in the marketplace concerning the tender offer, control of the company and the reasons for the movement in the stock price," said John Reed Stark of the SEC's Internet enforcement division.

"This is certainly one of the most dramatic price movements we've seen," said Stark, a 15-year veteran of the agency.

Calls to the company seeking comment were not returned. Its shares are sparsely traded on the OTC Bulletin Board, an electronic exchange that is home to many small companies.

Cameron has described itself as a "development stage" company that plans to offer marketing services to companies, as well as online public relations and trade show staffing.

The company has not publicly announced a tender offer or takeover attempt. In ordering the trading halt, the SEC cited "a lack of current and accurate information concerning a recent tender offer or other possible change in ownership."

Stark declined to elaborate. The agency said the halt would be in effect through Nov. 21.

Stark also declined to comment on a blog report that a lawyer representing the company offered shareholders 6 cents a share in an Aug. 1 letter on behalf of a "prospective purchaser," giving them four days to respond. The stock had traded at 5 cents a share on July 11, but no shares changed hands in the interim.

After resuming trading and leaping to $1 a share on Aug. 29, Cameron International's stock climbed to $3.50 by Oct. 25. On Oct. 28, the company notified the SEC of a management change and a planned 30-to-1 stock split -- sending its shares up to $55, from the previous day's close of $4.65.

In the Oct. 28 shake-up, Andy Quinn was named president, secretary and treasurer, replacing Stephen Samuels.

Quinn, a former chief operating officer at Internet education company Quick Compliance Inc., could not be reached for comment Monday.

On Oct. 31, Cameron issued a news release announcing the changes it had disclosed to the SEC three days earlier.

"I am excited to be working with Cameron International to expand on its Web-based programs," Quinn was quoted as saying. "There are some exciting new applications developing in the financial sector and I will be working towards bringing that to the company."

Samuels, who owned 68% of the company's shares at midyear, also could not be reached. He remained on Cameron International's board and was joined by Quinn as it expanded from one person to two.

Stark said he was unsure whether the split, slated to take effect Wednesday for shareholders of record as of today, still would occur. Such a split would make the stock easier to trade by increasing the number of shares outstanding 30-fold, while lowering their value correspondingly.

Stark noted that even if the split took effect, the stock could not be bought or sold for two weeks. "Hopefully we've acted before investors can be harmed," he said.

Cameron International's shares reached a record closing high of $87 on Oct. 31, the day the news release was issued. It closed at $75 on Friday.

Cameron International, with assets of $6,663 as of its last quarterly filing Aug. 11, has seen its stock market value soar as high as $133.2 million. The company reported profit of $2,872 on sales of $14,250 for the six months ended June 30, saying it obtained its first customer this year.

The company said in the filing that it hoped to raise $192,500 in capital by Oct. 31 to ramp up its minimal operations.

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