Market Abuse - Ramping and De-ramping

[This post has been edited and a new link demonstrating Market Abuse from the Wall Street Journal added to it Thursday 12th July 2007]

Have you been on a shareholders bulletin board (BB) or forum recently where something looks fishy?

Well over on the iii BB for Stanelco, a shareholder has taken things into his own hands and reported the company to the LSE for what he/she perceives to have been the company's deliberate attempts to ramp their position in the market by sending out overly positive statements whilst in reality everything wasn't as rosy in their garden after all as was evidenced by the failure of their Greenseal Trials with Asda.

Prior to their admission of the trial failure, all company statements had said the trials were going well. So what might the company have been guilty of (allegedly)? Well maybe they were guilty of suppressing the negative price sensitive news that should maybe have been issued at a much earlier stage.

A company has an obligation to their shareholders to issue ALL price sensitive news within a timely manner, whether that be in the Positive or the Negative as this is what shareholders use to make financial decisions on their stakes within the company ie their shareholding levels.

It is understandable to a degree that no company wants to have to issue bad news as they want the shareprice to go up not down obviously. Keeping the price heading up makes it easier for them to get institutions on board and to secure funding when required. Negative news hinders this.

So what is Ramping?

Well ramping can take many forms, from a company not issuing the negative news, a shareholder who has lost a lot of money in the past and has maybe bought in at a new low and now wants to make back his losses, a company owner overstating the future potential of the company, to even someone circulating rumours of a take over bid on it's way.

A ramper might use a BB to constantly espouse the future potential revenue of the company even if unfounded, put ridiculous valuations on a company for possible take over bids and post so often as to drown out other peoples opinions. They might also pick on other posters and mis-represent what they are saying if they take a even a slightly different view to them or an obvious opposing position. This can even go so far as to go offline and become a personal attack if they have access to your email address.

What is De-ramping - and who does it benefit?

This, also, can take different forms. Perhaps a shareholder has gone short on a share, they obviously then need a decline in the shareprice to make a profit, so they will go onto BB's and say anything they can to persuade others that the company is going to fail or a particular product is going to fail. Directors who want to perform a management buyout, might similarly suppress the positives about how the company or products are progressing to a degree where they are not fully informing the market of 'positive' price sensitive news, for their own ends.

A de-ramper can and will also use all of the same tactics as the ramper when it comes to BB's and making sure their message is the only one heard.


So what is the difference between the ordinary shareholder and the ramper or de-ramper?

Well the ordinary shareholder, while they probably enthuse about any company they have bought shares in, they will also take on board the possible negatives and be happy to have both sides of any argument openly aired so that they can make an informed decision. They might not like to hear the negatives or have their excitement quelled a bit, however, they will listen and accept that no company or product market is buoyant ALL the time and they will want to hear clear arguments from both sides of the fence and from that, they will then decide to continue to hold a share or sell up and move on. At least they will have had all the information available to them to do this.

Now lets face it, we all get a bit excited when we hear a rumour and the old adage goes, Buy on Rumour Sell on Fact, the market operates a lot on rumours, but I suppose the important thing to think about when you hear a rumour is. Where did the rumour start, has the person posting the rumour backed it up with any research and/or links to that research. If it has just appeared completely out of the blue and has absolutely no basis in fact, then bide your time and wait for confirmation or you could just be supporting a shorters dream situation, or helping someone who's lost a lot of money to sell into a rise created by the rumour. They will then be off, while you are left sitting with the shares and the price drifting down again.


Related Articles
thisismoney.co.uk published an article entitled Avoid the Pump And Dump last year, warning people about email and BB campaigns to ramp or de-ramp shares.

And what happens if someone is found out.......
'City Slicker' Hipwell Jailed
Livedoor founder arrested
'Lie for me' asked Morgan
High-risk journey to the unknown
Wall street Journal

Enjoy BB's they can be a lot of fun and you can meet a lot of very nice, knowledgeable, witty, trustworthy people on there. But be wary, you can also become a gullible victim of someone elses game very easily, but be careful of getting dragged into something that could see you entrapped in an illegal situation.

If it looks fishy and smells fishy, then take care, we all know what bad fish does to us. :o)

Oh and by the way, I hold Stanelco shares at a loss, but I'm not afraid to hide the negatives because of that loss....LOL....the truth is the truth.

Croma Group

This was one of the first shares I blogged about and said it should be put on a watch list as it had won some government contracts. It's only been a couple of months since I started this, but there has been nothing coming through on google alerts for this one since.

Today for some reason it has drifted back by 0.38p as I type. Probably for no other reason than the lack on anything tangible to keep it up. For those who didn't buy at the time and were watching, it might be time to start looking for the buy in price in the next couple of months. the chart isn't really giving an indication either.

If I get any news on it, I'll update you, but for now it's all quiet.

Croma Defence Systems Ltd

http://www.armedforces-int.com/categories/tactical-equipment/zeus-tactical-light.asp

The Zeus Tactical Light
By John Hall, Managing Director Croma Defence Systems Limited , Croma Group plc

The Zeus Tactical Light has been developed by Croma Defence Systems Limited (part of Croma Group plc) in close collaboration with the specialist surveillance unit of the UK MoD, primarily for use in OBUA (Operations in built up areas) roles.

Recent developments in the Middle East have confirmed the importance of such operations, and highlighted the stresses that such roles impose upon the soldier.

The primary application of Zeus is in building and room clearance, where traditionally, this function was carried out by the use of HE grenades and torches strapped to the stock of a soldier’s personal weapon.

Because of the restrictions imposed by darkness, the deployment of HE devices such as grenades can be extremely dangerous. They are very much “double- edged” weapons, and can lead to shrapnel injuries being self inflicted due to thin walls failing to offer the protection initially perceived by the clearance team. Supporting structures can also become damaged, particularly in basement areas, leading to the possibility of building collapse with potentially dire results.

As HE grenades can of course be used only once, the problem of re-supply can be a serious handicap to forces engaged in OBUA. In the case of torches attached to the fore stock of weapons, the major disadvantage is that the beam can be easily traced back to its source thereby compromising the operator’s safety, again with potentially dire results. Together, these two factors can result in a serious reduction in a soldier’s survivability.

A requirement therefore exists for a device which can provide sufficient illumination to detect persons and booby traps etc. in an urban environment, but is remote from the user whilst remaining under their control. Furthermore, on deployment of such a light, the enemies natural instinct would be to take cover, thus it is advantageous for the light to resemble an HE grenade as far as possible to reinforce this aspect.

The Zeus tactical light permits the soldier to control the illumination by means of an RF link. He carries a small hand held key fob sized device with both on and off controls. The device can therefore be illuminated whenever it is advantageous to the user. The link permits ranges up to 40 m. to be achieved within buildings, 100 m. line of sight.

The greatest asset of the Zeus tactical light is its ability to illuminate areas of concern whilst allowing the user to remain in the darkness, resulting in a very effective and user friendly illumination device.

The Zeus power is supplied from an internal and commercially available PP3 cell. Where time permits, Zeus can be recovered and reused thereby overcoming another of disadvantage of HE grenades. Zeus not only offers operational advantages but economy as well.

The OBUA environment can be very demanding; the Zeus has therefore been designed to offer the very highest levels of mechanical and electrical reliability even when, for example, it is thrown against concrete walls, down stairs and against cave walls etc.

Although the light has been primarily designed with the urban warfare environment in mind, it offers several additional features which render it invaluable in other scenarios such as;

Perimeter and local area protection
Emergency landing lights
Route markers
Ambush lights
River crossings, ( the Zeus devices can be immersed with total confidence)

In these roles, the Zeus can be mounted remotely on a ground spike at ranges up to 100 m. from the controller. An external trigger facility permits trip wires etc. to be connected to the device resulting in automatic illumination upon activation. The Zeus lights can also be activated in this mode by Remote Ground Sensors such as seismic, infra-red and magnetic transducers.

The Zeus light is also available with IR emitters, the advantage of this variant when users are wearing NVG’s are obvious, particularly in its external activation mode.

The Zeus has also been proven to offer advantages of distraction, and therefore offers operational advantages in such roles as hostage rescue operations. To further enhance Zeus for use in this role, an audible alarm feature will shortly be available on the device.

In conclusion, Zeus lights are adaptable to a wide number of theatres in addition to the primary function in urban warfare roles. Due to the uniquely severe environments in which the devices are likely to be used, the Zeus devices are manufactured to an extremely high level of robustness, and can therefore be used with total confidence in any environment world wide. The devices are extremely simple to operate, a most important consideration in the highly stressful OBUA environment.

Company Information - Croma Group plc
Croma Group plc is a group of companies devoted to the design, development and marketing of high performance surveillance equipment for civil, military and government agency applications.

Croma Defence Systems Limited manufactures and markets a wide range of surveillance and counter surveillance products including Zeus, a remote light source for urban warfare. The Wotan long range lens system, a comprehensive range of thermal reduction suits, covers and nets and the TDI range of superior arms accessories for use by elite army units and special law enforcement agencies. Croma’s range of “Keyghost” keyloggers now includes their new “Radio Keyghost” that can access a target computer from up to 200m.

R&D Design Services Limited designs and manufacturers a range of video enhancement monitors for use in airborne or maritime surveillance applications. R&D’s unique MIST video enhancement system allows targets to be viewed in weather conditions that would otherwise render target identification impossible. The company also gains significant competitive advantage from its ability to develop “black box” solutions for customers that allow various on board systems to talk to each other.The Shawley division of Croma is a renowned manufacturer of robust and reliable CCTV pan & tilt units, external and internal dome units plus a full range of ancillary equipment.Shawley is able to meet customer requirements technically and operationally.

Croma Shawley - Homeland Security

I recently started emailing a group of Tad shareholders to share tips and see if we could find something to make money out of while Tad languishes in the doldrums (Nildes the sailor, have you been there?) and this is one that took my eye and did a bit of research on and shared with them. Here it all is so that you can have a look for yourselves and see what I do before I dip my toe into a company.

Firstly I'll explain how I found this share. I receive emails from a share tip newsletter,(which I used to subscribe to but don't anymore, but they send them anyway) and every now and then they want to sell you 'special information' on 'special tips' via a report of some sort. In this case they wanted £14.99. Thing is they blether on so much about why you should buy this special report that for a googler like me they let slip enough information to find who they are talking about by just doing say 30 minutes digging around in the internet. The bit of info that they gave that eventually found it on google for me was that the company had 185% rise in turnover in the six months to December 2006. Impressive isn't it. They also won government contracts worth over £1million in January this year. So what do they do. They never mentioned the name of the company, but from my research I feel it is Croma Group.

For any of you who read charts they used to be in the 8p region but fell, but recently they have risen over 100% and the reason I bought is that their last drop was a higher low on turning than previously. Here is the info I've found out so far.

I'll paste some of the info in here, but you really should use the links to go and view the web pages yourselves for further info. Please feel free to share this info with anyone you want, it is all readily available on the internet anyway.

The directors have been buying and one has transferred shares to his wife (confident obviously)

There are several company names, hence group.

Croma Shawley Links

• Croma Defence Systems Limited http://www.cromadefence.co.uk/ (site under construction) For Information Telephone 01432 373030
• Croma Photobase - Biometric Access Controls http://www.photobase.co.uk/ http://www.photobase.co.uk/Testimonials_H%20M%20Prison%20Bedford.aspx HM Prison Bedford, West Yorkshire Police and Monarch Airlines have all given this gem of a company ringing applause.
• Croma R&D Design Services - Avionics www.rdds.co.uk
• Croma Vigilant - Asset Management http://www.vigilantsecurityservices.com/http://www.shawley.com/cromagroup.php

Croma is a specialist in the design, development and production of overt and covert surveillance, security and defence related products. Croma Group plc was created as a result of the acquisition by Asquith Motor Carriage Company plc of Croma Optical Equipment Limited in June 2000. Asquith was renamed Croma Group plc.

The Group obtained a trading facility on Ofex in June 2000 and was admitted to the Alternative Investment Market on the 18th December 2003. The Group has VCT and EIS status and is supported by a number of leading institutional investors including Artemis, Calculus Capital, Framlington and Noble Fund Managers

http://www.iii.co.uk/investment/detail?code=cotn:CMG.L&display=news&it=leLONDON (AFX) - Croma Group PLC reported a 185.8 pct increase in its first-half turnover due to an improved performance from core businesses and recent acquisitions, and said it remains confident of the outcome for the year.The AIM-listed surveillance, security and homeland defence specialist posted revenue of 2.597 mln stg for the six months to Dec, 2006 and said it believes there will continue to be a steady increase in terms of turnover.The company also said it has agreed to acquire a "leading privately-owned manufacturer and distributor of CCTV products".Croma will make an initial payment comprising shares at 6.5 pence - a significant premium to the current share price, it added.The company said it expects the acquisition to be completed in February, around the time of the group's interim results, and should strengthen Croma's capabilities and geographic reach in the CCTV marketplace.

newsdesk@afxnews.com tsm/rwCroma Vigilant LimitedCroma Vigilant Limited ("Croma Vigilant") announces that it has secured new contract wins to the total value of #980,000 for the provision of services in relation to asset protection and security in the commercial, industrial and public utilities markets. Of these, the most significant is the contract signed with the Ministry of Defence, worth #530,000.

The Board is also pleased to announce that two further contracts have been won by Croma Vigilant with Homebase and a Scottish Local Authority.

Croma Shawley and Croma Biometrics The Board is pleased to announce wins secured by Croma Shawley and Croma Biometrics totalling #125,000. Croma Shawley, specialists in the design and development of CCTV Products, has received orders from Kuwait, Israel, and a UK Local Authority. Croma Biometrics, developers of biometric access systems, has won a trial contract with Oxleas NHS Trust.

Trading & Strategy The Board expects these contract wins to have a positive impact on the Group's overall trading during the latter part of the current financial year. Today's announcement follows on from the Group's 15 January trading update for the six months up to December 2006 - which reported both an increase in turnover of 185.8% and the signing of a Heads of Agreement. The ongoing policy of the Group will be to continue to accelerate the growth of the current businesses and to seek compatible acquisitions to enable it to further consolidate its position in the sector. John French, Chairman and Chief Executive of Croma, comments: "The Board is delighted to be reporting today's news so soon after the Company's January Trading Update, and is pleased with these new contracts and the continued success of Croma Vigilant and its contribution to the Group as a whole.

"The Management team at Croma Vigilant has created a standard of service for its customers reflecting the highest levels of integrity and discipline much of which comes from the fact that the majority of our operatives are sourced directly from the Armed Forces."The new business for our CCTVDIRECTOR HOLDING The Board of Croma, the AIM listed surveillance security and homeland defence specialist, was informed on 2 February 2007 by Sebastion Morley, a director of the Company, that he transferred 1,500,000 ordinary shares of 5p each in the Company ("Croma Shares") on 2 February 2007 to his wife, Mrs Victoria Morley, for nil consideration. Following this transfer there is no change to Mr Morley's beneficial interest in Croma Shares, being 5,953,846 Croma Shares representing approximately 4.02% of the total issued share capital of the Company.

THE INFO FROM THE EMAIL I RECEIVED IS BELOW.

This one company is now a major player in the FOUR main areas of security:. In March 2004 the group exploded into the avionics industry winning major contracts with leading helicopter and fixed-wing producers. It's now the approved supplier under the UK Home Office Framework Agreement for UK Police Air Support Units.. In the same month the company took over a key player in conventional and wireless CCTV systems for the security of commercial and public sector businesses.

New product developments are just waiting to be released into the market, including wireless technology.. A take over in February 2005 established them in the asset protection market and as a result they've increased turnover by more than 22%... and the unit is continuing to secure additional business from both existing and new customers....

Its next acquisition into biometrics in February 2006 marked the start of the company's domination across the security sector. It designs, installs, services and maintains the systems that detect fingerprints, eye retinas and irises, facial patterns and hand measurements. HM Prison Bedford, West Yorkshire Police and Monarch Airlines have all given this gem of a company ringing applause.

Just imagine if every police force and prison service in the country employed the security solutions this company can offer......