Another AMEX Scam Bites the Dust.

On November 2, 2000 Asensio & Company, Inc. wrote the U.S. Securities and Exchange Commission describing an apparent scheme to have a series of questionable companies listed on the American Stock Exchange (“AMEX”) and subsequently included in the Russell Index. The letter described eight then recently AMEX listed companies that were involved in the scheme including two that were controlled by a Vancouver stock promoter and one that was controlled by a convicted bank felon. Rica Foods, Inc., a Costa Rican poultry producer, was one of the companies named in the letter. Click here to view the letter.### On June 30, 2000, when Rica Foods was included in the Russell Index, Rica Foods’ stock was trading at $23.00 per share.

As a result of our work uncovering questionable activity at the AMEX and a subsequent article in BusinessWeek, the U.S. Congress requested an investigation of the AMEX’s listing requirements. The investigation found that the AMEX used its discretionary authority to override its listing guidelines more often than was appropriate and deferred the delisting of companies for “excessive” time periods. The investigation concluded that the potentially negative impact of exchange practices on public confidence warranted continued monitoring of the AMEX listing program.

On January 21, 2003 Rica Foods announced that its filed Form 10-K for 2002 did not include a signed audit report from its auditors Deloitte & Touche. Rica Foods claimed that the Form 10-K “appeared to include a signed audit report from Deloitte & Touche.” On January 22, 2003 Rica Foods’ stock trading was halted by the AMEX for its failure to file a signed audited report with its Form 10K. At the time of the trading halt, Rica Foods’ stock was trading at $0.95 per share. On January 30, 2003, Rica Foods filed a Form 8-K disclosing that Deloitte & Touche resigned as Rica Foods’ independent auditor. The filing also disclosed that Deloitte believes that Rica Foods was aware that Deloitte had not issued an auditors report and that Rica Foods had knowingly included an auditors report purportedly issued and signed by Deloitte. Rica Foods’ stock is still halted from trading.

All of the other seven AMEX listed companies that were subsequently included in the Russell Index and described in our November 2, 2000 letter are either bankrupt or are trading below $1 per share.

Asensio & Company, Inc. is actively engaged in short sell investments and publishes research on securities it believes are overvalued. A complete documented history of Asensio’s published work with short-selling transactions, and the firm’s definition of gross overvaluation, is available on the Internet at John Wiley & Sons, Inc. has published a book about Asensio & Company’s short selling titled “Sold Short: Uncovering Deception in the Markets.” The book can be ordered on the Internet at

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