Lab Rats

Most Doctors Agree: Use Caution When Mixing Stocks and Drugs

The caller is Cesar Correia, and the transcript suggests he is pretending to be interested in leasing space at Peninsula Corporate Circle but wants first to know whether his competitor, ActiveCore, is close by. At one point, Silberling asks the caller if he's doing "a little corporate espionage."

"Yeah, well, you got to... keep on top of these things...," the transcript quotes the man identified as Correia. "We compete with them up here, so..."

Theodore alleges in the complaint that the transcript was mailed anonymously to him in an effort at intimidation.

The case was dismissed in June based on Theodore's failure to prove that the alleged online defamation took place in Florida.

Was Correia curious about a link between Theodore's new company, University Lab, and his previous one, ActiveCore? The answer comes in one of the more explosive allegations from the mysterious Bryan Swan. He claims that Theodore is playing a shell game, that University Lab was "created, produced, set up, and funded by ActiveCore. This is called misdirecting funds from a public company to a private company, and to the personal benefit of George Theodore." And this, if it is true, constitutes fraud.

There is no doubt that Theodore retains a tight relationship with ActiveCore. He leases the office space in Boca Raton from ActiveCore and remains a paid consultant for the company. But Theodore denies that ActiveCore financed University Lab.

"ActiveCore has made many investments, which have been disclosed in their filings," he says. "You can't make off-the-book investments. That's illegal."

So where did the cash come from?

"My own personal money," Theodore says.

ActiveCore President and CEO Peter Hamilton also said his company had no stake in University Lab, but the denials aren't enough to ease the anxieties of ActiveCore investors.

Over the past year, ActiveCore stock has sunk to its lowest level, at the same time that its former vice president, Theodore, has been using ActiveCore-leased office space and churning out two lines of nutrition supplements.

New Yorker Gregory Sabba bought ActiveCore stock about five years ago, when it was selling at about 1.5 cents per share. "At first, I made a killing," Sabba says. When the stock climbed to 4 cents, he more than doubled his initial investment.

The luckiest investors held onto their ActiveCore stock till it hit the 20-cent mark, in early 2005. The stock has been heading south ever since. In mid-August, it was trading at about a half-cent per share. "Look at the charts," Sabba exclaims. "You couldn't ask an Olympic skier to jump off that!"

Sabba posts on a messageboard for ActiveCore, hosted by, a site for shareholders of small stocks. Black humor has been the only humor on that board this year. The community is largely divided between two camps: the pumpers and the bashers. The pumpers accuse the bashers of being the paid agents of ActiveCore rivals, while the bashers wonder whether the pumpers are insiders trying to inflate the stock so they can sell, cutting their losses.

Sabba wonders who in this climate could still cling to any belief in ActiveCore's future — unless that person was only feigning enthusiasm. "You buy a 20-cent stock that goes to a penny, you're not optimistic anymore," he says. "You want to kill somebody."

"Blacksnake" is the only poster who seems to be enjoying the messageboard. He (or she) seemingly has boundless energy for ridiculing the pumpers and for bilious tirades against ActiveCore officers.

Other posters have speculated that Blacksnake, who didn't respond to a message I posted on the Agoracom board, is Bryan Swan and that they are both Correia.

There's so much paranoia on the board that posters questioned my motives. "I think you're a guy that got fucked over by George Theodore and you're going to write an article to get him back," an investor named Steve Tracy told me.

Investors like Tracy are blue-collar people. When their penny stock hits the skids, it hits them hard.

"I'm a carpenter," says Tracy, speaking on a late July afternoon. "I just got done pounding nails in 95-degree heat. I just want to sell my shares and get out."

From the looks of it, life is a little easier these days for Theodore. He's living in a $2 million home in a tony subdivision on the outskirts of Boca Raton, which he purchased under his real surname, Theodoropoulos. But he can't have much time to enjoy his wealth. Trouble seems to follow him — and it's already struck his new company.

In April, the Canadian province of Saskatchewan issued a cease-trade order for University Lab based on evidence that the company was selling securities to investors without having first registered its stock with the Canadian financial authorities.

That registration process involves the filing of a prospectus that describes the enterprise and gives a detailed history of the company's officers, whose backgrounds are thoroughly investigated. It is an expensive endeavor, costing roughly $100,000 in fees, but in Canada as well as the United States, it's the first sign that the company is accountable and operating in good faith.

The converse may also be true: Companies that try to circumvent the registration process are stigmatized by the possibility they're scams. It's the reason that financial regulators make public their cease-trade orders. "It's a major-league flag," says Scott Boyle, assistant manager of investigations for the Ontario Securities Commission.

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