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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: StockDung who wrote (17699)	5/9/2006 6:43:10 PM
From: RockyBalboa	Read Replies (1) \| Respond to of 19428

Today's blunder: AP Escala Shares Plunge Amid Probe in Spain Tuesday May 9, 5:14 pm ET Escala Group Shares Plunge Amid Spanish Probe of Alleged Fraud Involving Collectible Stamps MADRID, Spain (AP) -- Shares of New York auction house Escala Group Inc. lost more than half their value Tuesday after Spanish police raided the offices of Escala, its majority owner and another company in a probe of alleged fraud involving collectible stamps. ADVERTISEMENT Spanish police arrested eight people in connection with the alleged fraud that could affect as many as 200,000 small investors, authorities said Tuesday. Escala's stock plummeted $19.77, or 62 percent, to close at $12.23 on the Nasdaq Stock Market. The stock has traded in a 52-week range of $9 to $35. Escala, which is based in New York, was previously known as Greg Manning Auctions until it changed its name last year. Escala said in a statement that members of its board were being questioned and authorities were collecting documents from its offices in Madrid. "Escala is currently reviewing developments in Madrid, and the company will release relevant details to the market as management can make informed comments," the statement said. National police officers also raided the Madrid headquarters of Forum Filatelico and Afinsa Bienes Tangibles, the majority owner of Escala with a 67 percent stake. The raids were part of a joint investigation launched by Spain's National Court, tax authorities, financial crime prosecutors and the National Police over an alleged pyramid-type scheme based on overpriced stamps and other collectibles. The prosecutor's office said in a statement that Spanish authorities are conducting more than 20 searches at company offices and private residences. The prosecutor's office also said it plans to make "several arrests" as part of a lawsuit against the companies on charges ranging from tax evasion and money laundering to criminal insolvency and falsification of documents. The raids came after Barron's investment magazine extensively reported questionable practices at Afinsa, which operates a "no-lose" stamp-sales program for investors in Spain and Portugal. Many of the investors are retired individuals allocating an average of 150 to 300 euros ($190-$380), according to court officials. Afinsa guarantees a return of 6 percent to 10 percent over a fixed period, with a money-back guarantee when the contracts expire. According to Barron's, some stamp experts have expressed doubts about the value of the stamps, which appear to be worth far less than what Afinsa charges for them. Police did not say who was arrested or how much money the companies are suspected of defrauding from investors. So-called pyramid, or Ponzi, schemes pay high returns to investors by using the money from newly-arrived investors, rather than from revenue generated by any real business. Court officials said since Afinsa is not classified as a financial institution, it had received poor government monitoring. Afinsa and Forum Filatelico officials could not be reached for comment. Afinsa has previously defended the program and denied any wrongdoing.