Suspicions of Insurance Fraud and Pump & Dump
Returning to the United States, Pearlman formed Airship Enterprises Ltd, which leased a blimp to Jordache before actually owning one. He used the funds from Jordache to construct a blimp, which promptly crashed. The two parties sued each other, and seven years later Pearlman was awarded $2.5 million in damages. On the advice of a friend, Pearlman started a new company, Airship International, taking it public to raise the $3 million he needed to purchase a blimp, claiming (falsely) that he had a partnership with Wüllenkemper. He leased the blimp to McDonald's, for advertising.
He then relocated Airship International to Orlando in July 1991, where he signed MetLife and Sea World as clients for his blimps. Airship International suffered when one of its clients left, and three of the aircraft crashed. The company's stock, which had once been pumped up to $6 a share, dropped to a price of 3 cents a share and the company was shut down:
After he took his air charter company, Airship International, public in 1985, Pearlman became personally and professionally close to Jerome Rosen, a partner at small-cap trading outfit Norbay Securities. Based in Bayside, Queens, and frequently in trouble with regulators, Norbay actively traded Airship stock. This sent Airship's stock price consistently higher, enabling Pearlman to sell hundreds of thousands of shares and warrants at ever-higher prices. However, Airship was reporting little revenue, cash flow or net income. In return for keeping his penny stock liquid, Pearlman allegedly paid Rosen handsome commissions, according to a mutual friend, that reached into 'the tens of thousands of dollars' per trade. —Roddy Boyd, New York PostRead more about this topic: Lou Pearlman
Famous quotes containing the words suspicions, insurance, fraud, pump and/or dump:
“When we cannot stand certain people, we try to have suspicions about them.”
—Friedrich Nietzsche (1844–1900)
“... business training in early life should not be regarded solely as insurance against destitution in the case of an emergency. For from business experience women can gain, too, knowledge of the world and of human beings, which should be of immeasurable value to their marriage careers. Self-discipline, co-operation, adaptability, efficiency, economic management,—if she learns these in her business life she is liable for many less heartbreaks and disappointments in her married life.”
—Hortense Odlum (1892–?)
“He saw, he wish’d, and to the prize aspir’d.
Resolv’d to win, he meditates the way,
By force to ravish, or by fraud betray;
For when success a lover’s toil attends,
Few ask, if fraud or force attain’d his ends.”
—Alexander Pope (1688–1744)
“My nurses, those starchy ghosts,
hover over me for my lame hours
and my lame days. The mechanics
of the body pump for their tricks.”
—Anne Sexton (1928–1974)
“Mrs. Van Daan’s grizzling is absolutely unbearable; now she can’t any longer drive us crazy over the invasion, she nags us the whole day long about the bad weather. It really would be nice to dump her in a bucket of cold water and put her up in the loft.”
—Anne Frank (1929–1945)