January 9, 2014

Fake SEC Filings: A Form S-1 Selling “The New Internet”

Some of my most popular blogs have been about fake registration statements or prospectuses – whether they are signed by Presidents or selling stock in the Vietnam War (as noted in this blog). Meaghan Nelson of Gunderson Dettmer brought this Form S-1 filed by Xgains4keeps to my attention.

It seems likely that the filing was made on a dare – or is a ponzi scheme as its business model consists of “continuous function of cycling the extended equity known as ‘gains’ or its proceeds to the users and advertisers on its website.” Some of the Form S-1 is technically correct – but when it comes time to describe what the company does, etc., it falls into the Nigerian hoax-like camp. Here is an excerpt:

This company was founded by Ugochukwu Unamka and the objective was to add an incremental value to the utility derived by the internet user something slightly different from what other companies are doing. Here at Xgains4keeps we aim to deliver no matter how small some economic benefit from the use of the internet as it is now and as it will be in the near and distance future.

The company has not really started making money but advertising is expected be our principal source of revenue as well as equity and other investment transactions. We are confident that we will deliver real and tangible value to the users and profit for the investors going by the model we have adopted.

In the “Risk Factors,” the primary competitors appear to be Microsoft, Yahoo, Google and Facebook. Oddly, the company has a “company overview” page on Nasdaq’s site – as well as one on Bloomberg’s site. There is even a Facebook page and YouTube videos about the company…

The Fake Filing Cabinet: The Guy Holds 999 Billion Shares?

Here’s an excerpt from Michelle Leder’s blog on

Footnoted regulars know that we don’t usually pay much attention to insider-related filings – those Form 3s,4s and 5s – which make up roughly 1/3 of all filings made to the SEC. Instead, we prefer to focus our attention on the roughly 400,000 other filings for a number of reasons, but mostly because we think that human intelligence still has the edge when it comes to massive amounts of unstructured data, which is essentially what these filings are.

Still, we’re fascinated when we spot unusual filings and there’s really no other way to describe the 61 filings made by Johnny Earl Satterwhite since June 2 other than downright bizarre. Among the claims are that Satterwhite, who lives in Killeen, Tx, owns 999 billion shares of Microsoft (MSFT) and Exxon Mobil (XOM). We’re attaching a screenshot of a Microsoft filing made on June 14 since the filings have since been removed from the SEC’s site.

Here’s a fake Form 3 filed by Johnny Earl Satterwhite claiming that he holds 1 trillion shares of ExxonMobil. And this Dow Jones article is entitled “Recent Trillion-Dollar Filings Suggest Weakness In SEC System.”

Fake Filings: How Do They Sneak a Form ID Past the SEC?

In light of the wild fake filings noted above, a member posted this question in our Q&A Forum (#6601): As reported by, someone filed fake Form 3s claiming fake ownership of major companies. If someone files a Form ID to get Edgar filing codes, etc, is that ever reviewed by a human at the SEC or is it all automated pretty much?

Here’s an answer posted by Ruth Kaufman of RR Donnelley:

When filing a Form ID to apply for Edgar codes, one must fax notarized authenticating documentation. The SEC’s Filer Support staff checks that all the required paperwork has been received before creating a CIK but does not research to confirm the person is who they claim to be. I believe that is the job of the notary.

Note that the Form ID doesn’t ask for a reporting owner’s affiliation or the number of shares one owns. The Section 16 filings are where one discloses a number of shares. One can be affiliated with one company when the initial application is made but to others (instead of “or” in addition to) later.

– Broc Romanek