San Luis Obispo man target of federal securities investigation

October 9, 2015

Securties fraud 2By KAREN VELIE

Federal authorities are investigating several companies suspected of involvement in an alleged securities and wire fraud scheme. Some of the companies are owned by a San Luis Obispo man, his wife or his girlfriend, according to public records.

The Securities and Exchange Commission’s investigation focuses on Michael Forster, 50. He is suspected of being a “stock promoter” who through various nominees has participated in a “pump-and-dump” penny stock scheme. Pump and dump is the fraudulent practice of encouraging others to buy shares in a company in order to inflate the price artificially, and then selling shares while the price is high.

According to court papers, the SEC believes Michael Forster has been promoting stocks of several companies without disclosing that those companies paid him to promote the stocks.

In addition, the SEC is investigating allegations that Michael Forster is paying compensation to stock brokers, including Monarch Bay Securities in El Segundo, to trade the stocks he is promoting.

In court records, the SEC says Michael Forster maintains Monarch Bay Securities accounts in the name of Amy Swanson Chaffe, 39, identified in the records as Forster’s girlfriend. Swanson Chaffe told CalCoastNews she does not know Michael Forster.

Michael Forster operates under several alter egos including SLO 3 Holdings LLC and Gidapis LLC, according to court records. Both SLO 3 Holdings and Gidapis are located at 895 Pismo Street in San Luis Obispo. Michael Forster is the agent for process of service for SLO 3 Holdings and Amy Swanson is the agent for process of service for Gidapis, according to the California Secretary of State website.

In February, the U.S. Securities and Exchange Commission issued a subpoena against Michael Forster. The subpoena asked for documentation of bank accounts, security accounts, communications with brokers and off-shore accounts.

In addition, the SEC ordered Michael Forster to preserve documents related to San Luis Obispo-based Power Save Energy Company. In the past, Michael Forster served as the energy company’s chief executive officer and his wife Kathleen Forster, 58, was listed as the company’s chief financial officer, according to the SEC.

On August 6, the SEC announced it had filed a subpoena enforcement action against Michael Forster and that the court had entered an order directing Forster to show cause why he should not be ordered to comply with the subpoena.

Michael and Kathleen Forsters’ San Diego based attorney, Charles Goldberg, has battled against compliance with the subpoena by asserting Michael Forster’s rights against self incrimination because of a related federal criminal probe, according to court records.

On Sept. 18, Assistant U.S. Attorney Christos Georgalis informed Michael Forster he was the subject of a criminal investigation.

“This letter is to inform you that you are the target of a federal investigation into allegations relative to violations of title 18, U.S. Code 1349, conspiracies to commit securities and wire fraud, among other federal violations,” the Sept. 18 letter says.

Also on Sept. 18, the court ordered the SEC to submit a brief supporting their subpoena by Oct. 13. The Forsters will then have three days to respond, according to court records.


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41 Comments

  1. pigscouldfly says:

    The SEC offered to modify the Subpoena as follows. First, with respect to the definitions of “you” and “your,” the SEC stated that it would narrow the definitions to mean “Forster, SLO Holdings 3 LLC, OTC Media LLC, Gidapis LLC, and Kensington Marketing LLC.” Subpoena Modifications at 1. In accordance with these definitions, the SEC wrote, Forster would still “be obligated to produce all responsive documents that (1) he possesses in his personal capacity; and/or (2) he possesses on behalf of the entities SLO 3 Holdings LLC, OTC Media LLC, Gidapis LLC, and/or Kensington Marketing LLC.” Id. Second, the SEC stated that it would strike the paragraph from the Subpoena that called on Forster to identify documents that no longer exist and the date on which they were lost, discarded, or destroyed. Id.

    (1) 1 Total Votes - 1 up - 0 down
    • pigscouldfly says:

      Looks like dear sweet Amy took over when Michael saw the SEC was closing in on him. Kensington is a front for Forster, and his now wife cant testify against him. What about the ex-wife. Does she get jealous of that 15 year newer model getting ridden every day.

      (1) 1 Total Votes - 1 up - 0 down
  2. pigscouldfly says:

    New symbol. VLRX, watch it run like CLOW.

    (1) 1 Total Votes - 1 up - 0 down
    • pigscouldfly says:

      https://www.sec.gov/Archives/edgar/data/1532595/000107878214000806/filename1.htm

      Montrose, Zouvas, Gottbetter. Forster. Symbid. Same setup.

      Looking through the Split off agreement of VLRX. Apparently no one runs down the leads to maker sure the rats are not there ready to make off with the cheese.

      (1) 1 Total Votes - 1 up - 0 down
    • pigscouldfly says:

      WHEREAS, in connection with and, in furtherance of the closing of the transactions contemplated by the Merger Agreement and the Merger, including consummation of the transactions contemplated by this Agreement, the Buyer has entered into that certain Split-Off Escrow Agreement, dated , 2016 (the “ Split-Off Escrow Agreement ) with Montrose Capital Limited, as Buyers’ Representative (as defined in the Split-Off Escrow Agreement) and CKR Law LLP, as the Escrow Agent, and executed and delivered the items required to be delivered thereunder;

      https://www.sec.gov/Archives/edgar/data/1619250/000119312516583971/d180550dex101.htm

      Are you listening, SEC?

      (1) 1 Total Votes - 1 up - 0 down
      • pigscouldfly says:

        after giving effect to the surrender by the Split-Off Purchaser of 40,486,000 shares of Parent Common Stock (the Share Contribution) in connection with the Split-Off and the cancellation thereof, but prior to giving effect to the issuance of the Merger Shares, there will be 1,000,000 shares of Parent Common Stock issued and outstanding.

        1 million shares at $5.00 per share. Watch it go from $5.00 to none soon enough. Montrose is at the heart of this P&D with Forster. Mark my words.

        (1) 1 Total Votes - 1 up - 0 down
        • pigscouldfly says:

          Right in the merger agreement. Leisa, oh I mean Susi Chaffe.

          (1) 1 Total Votes - 1 up - 0 down
    • pigscouldfly says:

      On August 31, 2015, the Company executed an Asset Purchase Agreement with Kensington Marketing, Inc., a Nevada corporation, dated August 28, 2015 (the “Purchase Agreement”), to purchase a certain technology application known as “Stay Hydrated.” In exchange for the technology application, the Company will issue 1,500,000 restricted shares of the Company’s common stock, valued at $150,000. (Michael Forster/ Amy Swanson Chaffe, Stock Promoter)

      .

      (1) 1 Total Votes - 1 up - 0 down
      • pigscouldfly says:

        Why would a company pay Amy Swanson Chaffe $150,000 in stock when her only skill set is looking good, yoga workouts, and being the girlfriend of a known promoter. SEC look into this why don’t you. The 1,500,000 shares came in to that market pretty quick. On top of that did the IRS catch wind of the share issuance.

        (1) 1 Total Votes - 1 up - 0 down
  3. pigscouldfly says:

    http://www.otcmarkets.com/edgar/GetFilingHtml?FilingID=11371897

    Pretty risky for these three prominent financial institutions to be involved with a pump and dump (P&D) conman.

    (1) 1 Total Votes - 1 up - 0 down
    • pigscouldfly says:

      Wedbush Securities, as lead placement agent, and Roth Capital Partners and Katalyst Securities, LLC,

      (1) 1 Total Votes - 1 up - 0 down
  4. pigscouldfly says:

    In connection with the Offering, we agreed to pay Wedbush Securities, as lead placement agent, and Roth Capital Partners and Katalyst Securities, LLC, as co-placement agents, each a U.S. registered broker-dealer (the “Placement Agents”) a cash commission of 8% of the gross proceeds raised from investors in the Offering, and to issue to the Placement Agents warrants to purchase a number of shares of Common Stock equal to 8% of the number of shares of Common Stock sold in the Offering, with a term of five years and an exercise price of $5.00 per share (the “Placement Agent Warrants”); however, only a 1% cash commission was payable and no Placement Agent Warrants were issuable in connection with the sale in the Offering of 4,000,000 shares of Common Stock that were purchased by pre-Merger Valeritas shareholders. Any sub-agent of the Placement Agents that introduced investors to the Offering was entitled to share in the cash fees and warrants attributable to those investors as described above.

    (1) 1 Total Votes - 1 up - 0 down
  5. pigscouldfly says:

    12/21/2015 $0.1000 $0.1000 $0.1000 $0.1000 19,700 $1,970
    12/22/2015 $0.1000 $0.1000 $0.1000 $0.1000 32,800 $3,280
    12/23/2015 $0.1000 $0.1000 $0.0900 $0.0900 15,000 $1,350
    12/28/2015 $0.0900 $0.0900 $0.0900 $0.0900 4,100 $369
    12/29/2015 $0.0900 $0.0900 $0.0900 $0.0900 5,000 $450
    1/4/2016 $0.0807 $0.0807 $0.0700 $0.0700 33,100 $2,317
    1/5/2016 $0.0700 $0.0700 $0.0700 $0.0700 20,000 $1,400
    1/8/2016 $0.0700 $0.0700 $0.0600 $0.0600 29,000 $1,740
    1/20/2016 $0.0600 $0.0600 $0.0600 $0.0600 10,000 $600
    1/26/2016 $0.0800 $0.0800 $0.0800 $0.0800 10,000 $800
    1/28/2016 $0.0720 $0.0720 $0.0720 $0.0720 30,000 $2,160
    1/29/2016 $0.1000 $0.1000 $0.0620 $0.0620 15,000 $930
    2/2/2016 $0.0900 $0.4650 $0.0900 $0.4650 658,349 $306,132
    2/3/2016 $0.4750 $0.5600 $0.2800 $0.3100 2,063,117 $639,566
    2/4/2016 $0.4900 $0.6610 $0.4800 $0.5950 14,821,510 $8,818,798
    2/5/2016 $0.5770 $0.6200 $0.4901 $0.5550 1,997,259 $1,108,479
    2/8/2016 $0.5680 $0.5800 $0.4400 $0.5200 1,376,670 $715,868
    2/9/2016 $0.4850 $0.5340 $0.4550 $0.5264 778,107 $409,596
    2/10/2016 $0.5120 $0.6200 $0.5100 $0.5960 1,204,708 $718,006
    2/11/2016 $0.6030 $0.6100 $0.5220 $0.5490 794,111 $435,967
    2/12/2016 $0.5447 $0.5495 $0.4300 $0.5334 1,354,381 $722,427
    2/16/2016 $0.5403 $0.6230 $0.5050 $0.6015 1,908,720 $1,148,095

    (0) 0 Total Votes - 0 up - 0 down
  6. pigscouldfly says:

    Ridiculous that we pay taxes to an ineffective government. CLOW – Cloudweb was a $16 million pump and dump, which was run previously by Michael Forster’s (now wife) Amy Swanson Chaffe. Google the Knot for news of their wedding. Pictures and all. Do you really think she was smart enough to do this all on her own. She is his straw woman. Now only if the SEC can get their head out of their a$$. CYGMD is or was run by, now wait for it, Michael Forster’s mother-in-law. Leisa Swanson. An older lady with limited business experience. Just watch it now. Another $16 million pump and dump. They call this a ‘shell factory’ setup, and who better to do this than Michael Forster. He will be heading to South America soon to hide his million’s of $’s. Maybe he will take mom-in-law. Maybe he won’t. The sad part is that both of these were ‘tipped’ to the SEC and they did nothing about it. Valeritas Holdings is their next score….SEC….take notice before a 1,000 grandma and grandpa investors getting taken for all of their retirement monies. Dig deeper and you will uncover 10 years or more of scams this guy has done, along with his various professionals. Lawyers and accountants. Birds of feather flock together. And they say pigs can’t fly. CLOW did. Trading at 1% of its highs.

    (2) 2 Total Votes - 2 up - 0 down

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