InterOil: A (unreported) family affair?

May 5, 2010 by  

Not long ago, actor Shia LaBeouf, star of the upcoming “Wall Street II,” delved into the world of advising investors, as he had these kind words to say about InterOil:

“IOC’s momentum is major, and it will surprise to the upside,” texted LeBeouf to a GQ writer.

For LeBeouf, the advice seemed natural, as he had been being prepped for his role at John Thomas Financial, where InterOil is their “favorite energy stock.”

Of course, one could also wonder if maybe LeBeouf is related to someone at InterOil. Because, according to William Lobdell at iBusiness Reporting, InterOil apparently has a fondness for working with relatives of the company’s independent Director Gaylen Byker – and then not disclosing those deals in its SEC filings:

iBusiness Reporting has found four InterOil Corp. (NYSE: IOC) transactions involving relatives of the company’s independent Director Gaylen Byker, who is also president of Calvin College in Grand Rapids, Mich. that have gone undisclosed.

And iBusiness Reporting has uncovered a fifth deal from a Barbados entity, which listed the same mailing address as InterOil and whose trustee was an attorney used by InterOil CEO Phil Mulacek. If it was a related-party deal, InterOil didn’t disclosed it.

In chronological order, here are some of InterOil’s undisclosed dealings with relatives …

Click here to read more about InterOil keeping it in the family. Because it seems you won’t hear about it from InterOil itself.

Click here to read more allegations of fraudulent behavior at IOC.



One Response to “InterOil: A (unreported) family affair?”

  1. Michael on May 5th, 2010 8:39 am

    InterOil reeks. If you compare the entire stock price history (easiest navigation is here: with the entire stock history for other oil/natural gas companies (e.g., Sandridge [SD], Chesapeake [CHK], and Devon [DVN]), you can see that this recent boost is just a fluke.

    With all these oil/natural gas exploration and development companies, they can inflate their stock prices by starting whisper campaigns like this one. While it’s inflating, yes, you can make a lot of money. But you have to get out almost as soon as you got in. The prices fluctuate wildly. And if you’re still in when it goes back down to what it should be (usually 5-15% of it’s all-time high), you’re screwed. Keep in mind also, IOC doesn’t pay dividends. Your return on your investment is all based on the value of the stock. If the company’s history (compared with similar companies) is any predictor, they’ll be back down to normal within a few months. And then nobody will be talking about them.

    Unless, of course, you are a relative of one of the top executives. In which case, you’ll be trying to start another whisper campaign so you can break even on your failed investment.

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