Jammin Java, Chaired by Bob Marley’s Son, Under SEC Probe Over Stock Price
Stock Chart for Jammin Java Corp (JAMN)
Jammin Java Corp. (JAMN), the gourmet coffee company whose chairman is the son of the reggae star Bob Marley, faces a probe by the Securities and Exchange Commission for possible involvement in a so-called pump-and-dump scheme.
The SEC staff is examining whether online newsletters touting Jammin Java stock through blast faxes and investor message boards contained false and misleading information, according to documents filed Sept. 2 in federal court in Oakland, California. The company said in a May SEC filing that no one at Jammin Java authorized or paid for any stock reports.
The probe was disclosed in a lawsuit by individuals trying to block SEC subpoenas issued in the investigation.
Jammin Java’s share price rose from 17 cents in December to $6.35 on May 12, after which it plunged to less than a $1 a share, the SEC said in the documents.
The jump in the Los Angeles-based coffee wholesaler coincided with the dissemination of newsletters lauding its stock, the SEC said. A formal order of investigation was issued in May directing staff to examine possible securities law violations by Jammin Java, its officers, partners, consultants and “other persons and entities,” according to the documents said. Rohan Marley is the company’s chairman.
“The increase in Jammin Java’s share price occurred notwithstanding the fact that Jammin Java’s public filings during that time period reflected that Jammin Java was a shell company that had generated no revenues and had an accumulated deficit of $511,760,” the SEC said in documents.
A pump-and-dump scheme involves touting shares through false and misleading statements to make profits selling cheap shares after pumping up the stock price, the SEC said.
Stuart Smith, head of investor relations at Jammin Java, declined to comment yesterday on the SEC documents. He cited a company regulatory filing that had warned investors of “unauthorized stock promotion campaigns touting short term investments in the company’s common stock which are paid for third parties” without the company’s knowledge. The company said it “expressly repudiates the promotions.”
Lawsuits filed by “John Doe” plaintiffs who own free e-mail accounts from Google Inc. seek to block subpoenas to the search engine company sent to uncover their identities. The plaintiffs allege the SEC hasn’t demonstrated that they are connected to the Jammin Java investigation and the subpoenas violate their free speech rights to anonymously express opinion on the Internet, according to court filings.
The SEC said in its filing that disclosure of the identities of the e-mail address owners in a legitimate federal investigation into potential fraudulent conduct isn’t outweighed by the free speech rights of the “John Does.”
John Nester, an SEC spokesman, didn’t answer an e-mail seeking comment after regular business hours yesterday.
The cases are John Doe v. SEC, 11-8028 and 11-8029, U.S. District Court, Northern District of California (Oakland).
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