Infinium Labs' Founder Charged With Pump And Dump Scam
from the no-product,-but-the-stock-trades-were-real dept
However, after lots of questions, the company suddenly brought in some serious credibility in early 2004 by hiring a well known CEO, a former executive at Microsoft who worked on the X-Box. With this sudden boost of credibility, many were shocked when the company's first big move after this new hire, was to sue HardOCP for libel over their months' old post questioning the company's founder. What was most suprising about this is that many people had put the questions about Infinium behind it, assuming the new CEO gave the company legitimacy. Suing HardOCP simply gave the original accusations a lot more attention -- which got even worse when HardOCP won the case. After that, things only got worse. There were plenty of additional announcements about launch dates and prices... and no product was ever released. Then, at one point late last year, the company suddenly said it wasn't going to sell that gaming console, but a gaming keyboard instead -- though that product is still vaporware as well. Of course, then there were lawsuits from a former investment banker who claimed the company stiffed them on their fee after helping it raise $30 million. Then there was the executive who claimed he was brought on to help them raise money, but he was fired right before the reverse merger (though, he later rescinded the charge). On top of that, there were the SEC filings that showed the company somehow squandered almost $67 million, but only $2.5 million of that went towards product development.
So if all of that isn't enough evidence to raise some questions about what was really going on at Infinium Labs, it appears the SEC has finally taken an interest in the company, as it turns out Infinium Labs' founder is now being charged with running a pump and dump stock scam. He apparently hired someone to send out a junk fax spam promoting the stock, quickly selling nearly half a million dollars worth of his own shares, without disclosing those sales to the SEC (a bit of a no-no for a public company). He also paid the stock promoter in stock, again without letting the SEC know. In the end, it certainly would appear that HardOCP had the right idea with their original assessment of Timothy Roberts and Infinium Labs, suggesting that it was a clear case of "buyer beware." Unfortunately, it looks like more than a few investors weren't so careful in their due diligence.