The shadowy case of two men, reportedly the CEO and CFO of U.S.-based exploration firm Southridge Minerals (PINKSHEETS: SRGE), found dead in a river in Mexico, seems likely to be linked to an elaborate scam, says Duncan Tucker, a British journalist based in the Latin American country.
The reporter contacted local authorities on Tuesday to verify the identity of the bodies found in the Rio Santa Rosa, but all of them denied any knowledge of the incident or said they were unable to confirm the story run by Mexican newspapers El Occidental and El Informador.
According to those news outlets, the authorities in Nayarit were investigating the case and awaiting the results of an autopsy at a morgue in Tepic. However, the Nayarit Attorney General’s Office told Tucker it was not in possession of the bodies and could not ratify any details of the case.
The U.S. Consulate in Guadalajara did not corroborate the story either.
MINING.com tried contacting Southridge Minerals on Tuesday and Wednesday, but has received no response from the telephone numbers or email addresses listed in the company’s web site.
A 2006 article by British newspaper The Guardian revealed that now-defunct subsidiary Southridge Ethanol was essentially a fake company established as part of a “pump and dump” scam.
“Pump and dump” is a form of fraud which involves artificially inflating the price of an owned stock through false and misleading positive statements, in order to sell the cheaply purchased stock at a higher price. Once the operators of the scheme “dump” their overvalued shares, the price falls and investors lose their money.
On Dec. 28, 2012, the U.S. Securities and Exchange Commission (SEC) announced it had “temporarily suspended trading in the securities of Southridge because of questions regarding the accuracy of statements made by Southridge in press releases to investors concerning, among other things, the company’s business operations and arrangements.”
According to several of the InvestorsHub users, nobody has ever met the executives and there is “not enough proof they ever existed.”
A quick search on the SEC’s website reveals only two names related to the company (see image), both Canadian. One is Vancouver-based “Harder Glen David” owning 10% of Southridge and the other one is “Samorroo Vernoon,” as the director and owner of a 10% stake, none of which replied to MINING.com’s attempts to contact them.
(Main image copyright: Barbol)