Market Overview

More Trouble For Northern Oil And Gas (NOG)


As if the first part was not revealing enough, TheStreetSweeper is ready for round two of its in-depth Northern Oil and Gas, Inc. (NYSE: NOG) analysis.

Most notably, TheStreetSweeper says that in two years, “NOG has managed to overcome its dark history as a dubious penny-stock company to become one of the brightest stars in the entire energy sector.” During that time, the stock rose from $2 to more than $29, “including a 150% jump since last May alone.” The company's market value is now at $1.8 billion.

According to TheStreetSweeper , NOG “proudly showcases” the company's best features – “its exploding revenue, its perfect drilling record, its heavy focus on the oil-soaked Bakken shale” – to lure investors.

“Still,” TheStreetSweeper's Melissa Davis writes, “corporate filings reveal, those blemishes – the tainted company founders, the incestuous business arrangements, the fishy transfer agent, the sanctioned stock promoter, the relentless insider sales (which skyrocketed last week) – lurk just below the surface ready to grab the attention of curious bears or even distracted bulls who suddenly decide to open their eyes and take a careful look.”

Davis believes that just one of those issues (or worse: a combination of them) could leave “permanent scars” on NOG and its “gorgeous stock price.”

In short, Davis points to the company's transfer agent, Standard Registrar & Transfer. The company's president, Ronald P. Harrington, has been sanctioned by the SEC at least two times. Harrington denied the sanctions, so Davis offered to share the evidence that TheStreetSweeper had gathered. Harrington then hung up the phone.

“Years ago, records show, the SEC cracked down on Ronald P. Harrington for allegedly concealing the true ownership of ‘free trading stock' held by insiders in nominee accounts and then sold into the public marketplace,” Davis writes. “Before that, records show, the SEC actually banned Harrington from serving as an accountant for any publicly traded company after he allegedly issued audit reports that violated generally accepted accounting practices.”

Davis said that in that same year, government filings indicate that Harrington “simply abandoned his accounting career and became a transfer agent instead.”

Not surprisingly, Davis is troubled NOG's alliance with Harrington. “For some reason, NOG now trusts Harrington to keep track of its stock – which currently trades, on average, more than 1.5 million shares a day – from the apparent comfort of his Utah home some 1,240 miles away,” she writes.

Further, Davis is alarmed by NOG's non-executive founders.

“The first, Douglas M. Polinsky, previously served as CEO of a gambling-machine company that made headlines years ago because of its suspected ties to the Mob,” Davis writes. Polinsky's father, who was “portrayed as the secret force behind that company,” was later sent to prison for fraud and bribery.

“The second, Joseph A. Geraci II, worked as a broker until the National Association of Securities Dealer slapped him with its harshest sanction possible – a permanent ban from the industry – because of the ‘egregious nature' of his activities and its efforts to ‘protect the public interest' from any future transgressions down the road,” Davis writes.

The questionable behavior goes on from there, with signs of insider sales, corporate conflicts (NOG execs reportedly created another energy company, Voyager Oil and Gas (NYSE: VOG)), and other tales of market manipulation.

Posted-In: Natural Oil and GasLong Ideas News Short Sellers Short Ideas Movers & Shakers Trading Ideas General


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