Wednesday, January 26, 2005

SEC Responds To Complaint On Dow Jones Story Distribution

The Securities Exchange Commission has initiated an investigation and is contacting E*Trade and possibly other brokers to determine why a substantial story on ERHC was not promptly distributed to all its customers, the SEC told ERHC On The Move.

The story was still not on E*Trade's portfolio news area for its ordinary customers, although it did get posted three days after its initial release on Power E*Trade's premium Dow Jones Newswire, and is now linked in searches for ExxonMobil, ChevronTexaco, Pioneer Natural Resources, Noble Drilling, Devon Energy and other oil companies.

ERHC On The Move on Sunday threatened to relocate its account from E*Trade to a full-service broker if the news story by DJNS writer Norval Scott was not posted. The site ran the Dow Jones feed of it at 12:51am EST Monday morning.

The story first moved out of London on Friday morning, New York time, at 10:28am, but was so poorly distributed that even by Tuesday night, the only site that could be linked to was the private Schlumberger oil services firm Website (see link in an earlier post).

That occasioned our complaint that only a few investors were getting word of the article - many of them through the ERHC On The Move story about its posting on Raging Bull's ERHC message board, also at 10:48am EST - while others at Yahoo Finance,, TD Waterhouse, E*Trade, Scott Trade and other online brokerages did not inform their customers.

Here is the SEC's response:

Dear Mr. Shea:

Thank you for your email complaining about the problem you've been experiencing with your brokerage firm.

Your complaint is important to the SEC because investor complaints alert the SEC to possible securities fraud and abuse and are often the first indicators of wrongdoing. The SEC keeps a database of information about the complaints we receive. This database allows us to track whether a troubling situation may be developing about a particular issue, company, broker, stock, or other securities product. The information you have provided will be reflected in our database.

In an effort to assist you, we have sent your complaint to the firm's compliance department and have directed the firm to provide a written response to our office and to you. It usually takes the firm four to eight weeks to prepare and send a written response.


Once again, thank you for your email. If you have any questions, please contact me.


U.S. Securities and Exchange Commission

Meanwhile, investors continue to wait for the Dow Jones News Service to correct several glaring errors - albeit of minor import - regarding the ownership of ERHC, its assets in the EEZ, and one of its competitors for Block 4, ECL International, a Nigerian indigenous firm associated with the owner of Conoil, another bidder, Nigerian businessman Mike Adenuga.

Director of Corporate Communications Robert Christie told ERHC On The Move on Monday that his office was preparing a response to our request for corrections, but emailed us Monday night to say the rersponse was delayed because the story originated in London. There was no further communication from him on Tuesday.

The most significant of the errors was that a claim that Sir Emeka Offor owns 50.3 percent of the stock. He currently owns 36.48 percent of ERHC.

The story failed to mention that 9.6 percent is owned by the First Atlantic Bank of Nigeria, whose board if directors include a competing bidder for Blocks 2 through 5 of the Nigeria-Sao Tomes and Principe Joint Development Zone, Engineer E.O. Fobi of Fobi Engineering.


Anonymous said...

Thank you for the move. I appreciate. You do a lot of things which I cannot do well.

Anonymous said...

4 to 8 weeks to respond!!! it will be all over by then :). good job Shea

Anonymous said...

Last poster you said "it will be all over by then."
What are you referring to? What exactly will be over?
Thanks much...this answer will be insightful I'm sure.