By Christopher Byron
The New York Post
August 16, 2004

IN Wall Street's house of ill repute, the cop on the beat might as well be the piano player. We're speaking of course of the gang in the front parlor at the Hotel Pink Sheets, which last week brought yet another X-rated example of how the Securities and Exchange Commission keeps missing obvious abuses of the market while claiming to keep the peace on America's street of dreams.

For those of you who may have missed the moment, it was an occasion to cherish, as a seemingly worthless penny stock called Concorde America, Inc., appeared out of nowhere in early July and streaked comet-like across the heavens, soaring nearly 800 percent in value in barely a month, before topping out last Wednesday at $8.90 a share and a market cap of close to $1.9 billion.

What treasure may have lurked in that market cap remains for the moment a mystery - and unless someone begins pouring black coffee down the throats of the SEC's dozing constabulary, it may stay that way forever - even though the contrails of the stock in question spell out "pump-and-dump" in mile-high letters in the sky.

The so-called pink sheets market, named for the pink colored paper on which the quoted daily prices of various stocks were distributed in the pre-computer era, is a gray market arena where the stocks of countless failed companies - many of which no longer bother to report their financial results to the SEC or even their own investors - are nonetheless permitted by the regulators to trade freely anyway.

Think of the Pink Sheets as the stock market's answer to the Hamburg Reeperbahn and you've got the basic idea, for it is here that the downtown hoi-polloi rub elbows with the uptown swells, as each eyes the merchandise for Wall Street's ultimate cheap date: a one-night stand with a non-reporting penny stock.

The hottest tart on the boulevard last week was of course Concorde America, which caught the eye of the johns thanks to a propitiously timed press release that had issued forth from the pen of a self-admiring fellow named Thomas Heysek late in July.

On various of his penny stock Web sites, Heysek is described as an "investment guru" and an "acclaimed" financial expert - such credentialing being presumably sufficient to vouchsafe the accuracy of the assertions in his press releases, the first of which regarding Concorde America appeared on July 28.

The release in question asserted that Concorde America Inc. was soon to emerge as a global player in the business of exporting labor from Latin America to Europe, and that it was destined to bring in revenues of $1.47 billion by the end of 2006 from a single contract with Spain alone.

Heysek's seemingly detailed knowledge of the exciting outlook for Concorde America is puzzling, to say the least, since the company itself turns out to be less than eight weeks old and as of last week appeared to consist of little but an "under construction" Web site and a telephone answering machine at an address in Boca Raton, Fla.

Upon what basis does such an operation warrant the fulsome praise Heysek heaped upon it? Anyone's answer is as good as anyone else's since this is a company that has not yet published any known financial statements, and so long as it remains "in the pinks" will never have to either.

Given the situation presented him, and with due regard for his own ethically challenged past in the stock market, one might easily imagine Heysek to have been tempted to spice up his investment outlook a bit for this mysterious entity.

According to his employment record on file with the National Association of Securities Dealers, Heysek has held five jobs on Wall Street over the past decade, and has been fired from three of them, for offenses ranging from "unsatisfactory sales practices" to "improper handling of customer funds."

And Heysek certainly stood to gain by jazz ing up his report since it turns out that one of his Web sites (www .winningstockpicks .net) had been paid 25,000 shares of stock in Concorde America to help the company wriggle into its fishnet nylons and slap on some Cover Girl war paint for a bit of the upstairs action.

It was a routine this pink sheets floosie knew well, having previously been shopped around under the name MBC Food, Inc., before which her ID read Fisher Television, Inc., and before that, Storage Systems Inc., in a series of penny stock mergers and stock splits stretching back a decade.

By the time she had morphed into Concorde America, our hustling honey had spread nearly 210 million shares of stock through the market, and by the time Heysek issued his report, those shares had already tripled in value to $3 per share. And further gains - on vastly greater volume - lay just ahead once his press release and its pheromone-like scent of easy money began to lure in the shills.

Who paid Heysek those 25,000 shares? One possible candidate might have been Concorde's skipper, one Hartley Lord, 75, whose residence turns out to located at the same Boca Raton address where the telephone answering machine that looks to be Concorde's principal (and maybe its only) business asset is itself located. In fact, Concorde's business phone number is also Lord's home phone.

But Lord issued a press release of his own last week, disavowing the report and asserting that he had no connection with it in any way - though he did not do so until after the close of business Wednesday, by which time Concorde America's stock price had climbed to $8.90 per share.

But if Lord didn't pay the 25,000 shares to Heysek, then who did? The question has more than merely academic value since scarcely had Concorde's stock price tumbled from $8.90 to $2.50 in the wake of Lord's press release than Heysek reiterated his "buy" recommendation with a year-ahead price target of $36, and the shares started to rise all over again, coming to rest at week's end at $5.

At that price, the collective wisdom of the market is proclaiming Concorde America to be a $1 billion company. In fact, of course, it has all the earmarks of a billion dollar pump-and-dump, and though the stock is able to trade only because it has a trading symbol, issued in this case by Nasdaq, only the SEC has the power to halt the trading.

And halting trading in Concorde America's shares is obviously something the SEC should do since this is a company with a $1 billion valuation that appears to be based on nothing but a stock tout's press release, which is being bad-mouthed and disparaged by the company's own top official.

Yet for the last two weeks the gendarmes of the SEC have done nothing but stand by silently and watch as the pumping and dumping has unfolded right under their noses. Why?

For public consumption the regulators will mutter some off-the-record inanity about "investigating" the situation. But in private, they'll tell you what they believe to be the truth - that anyone who visits a brothel checks his complaining rights at the door.

After all, in the Hotel Pink Sheets, isn't getting screwed the whole point of a visit?

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