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12/16/10

Marin Katusa's Modus Operandi and East West Petroleum (EW.v)

 East West Petroleum (EW.v) 12 month chart: What rhymes with pump, Mr. Rule?

Your humble scribe doesn't pay much attention to the oil & gas world, what with being all fixated and that on hard rock mining, so let's start out by stating clearly that if it weren't for a headsup from reader 'RK' this post wouldn't exist. A few days ago RK wrote in to note that a new O&G exploration company, East West Petroleum (EW.v), was being pumped hard by Marin Katusa, the utter scumbag working at Casey Research who lives to line his own back pocket at the expense of others. 

RK noticed recent articles and also Katusa's blind pumping of this very early stage risky stock on a BNN TV appearance too...and then when he checked out the company website noticed that one of the guys recently taken on board was none other than Marc Bustin.

Why is this significant? Well, as we noted in this post on Katusa's backhanded fun'n'games recently, Katusa and Bustin are already bosom buddies. For one, Bustin also works at Casey Research. For another, Bustin is a main cog in the failed CBM Asia O&G explorer (TCF.v) that Katusa pumped incessantly back in 2009, getting his sheep to buy in on over-pumped expectations only for reality to set in later and the stock to crash hard (it's still crashed today, despite Katusa's insistance a few months ago that it's still a double). And while we're at it, let's check the script Katusa was reading from in September 2009 on that small O&G play:
".....my top pick for an investment for exposure to the Asian gas market is CBM Asia Development Corp. We think that this stock has the potential of being well over $1.00.......CBM Asia is definitely a company your readers will want to look into and think about owning, I own a lot of it, and will be buying a lot more soon"
That remarkably similar to the script now being used for the current Katusa small O&G play EW.v pump, methinks.. Just change the geography, extract CBM and insert oil and bingo. As for the TCF.v stock price since then....

No further comment needed.

But mainly we're interested in the Katusa/Bustin connection due to a little back-office outfit known as KBH Capital Corp, a company run by Marin Katusa, Marc Bustin and another Casey Research employee Joe Hung. These three bosom buddies made themselves rich at the expense of other via KBH Capital by pumping merry hell out of Bayfield Resources (BYV.v) then KBH received very juicy finder's fees when selling a whole bunch of new shares at $1.40 to an unsuspecting crowd (BYV now trades around 40% lower than that figure, though to be fair we need to point out the flow through nature of the $1.40 shares Katusa flogged that come with certain tax advantages).

Anyway, back to East West Petroleum (EW.v). On a quick look at the Katusa pump-job and then a quick check of the EW.v website, your humble scribe's interest was piqued. Yes indeed, with Katusa's pally pal Bustin installed as an officer and then Katusa giving it the full-on promo to anyone who'd listen (including the helpless sheep who are silly enough to buy his 'Casey Energy Report') the scamster's modus operandi was showing. And so a quick check of the deeper filing stuff and......

EAST WEST PETROLEUM CORP. ("EW")
(formerly East West Petroleum Corp. ("EW.H"))
BULLETIN TYPE: Change of Business, Private Placement-Non-Brokered,
Graduation from NEX to TSX Venture, Symbol Change
BULLETIN DATE: September 30, 2010

NEX Company

TSX Venture Exchange has accepted for filing East West Petroleum Corp.'s
(the 'Company') Change of Business (the 'COB') and related transactions, all
as principally described in its filing statement dated September 15, 2010 (the
'Filing Statement'). The COB includes the following matters, all of which have
been accepted by the Exchange.

1. Acquisition of interest in the Carbon Property

Pursuant to an agreement dated September 15, 2010 between the Company and
Sphere Energy Corp. ("Sphere"), the Company will acquire Sphere's interest in
the Carbon Property in Alberta for $1,125,000.
The Carbon Property is located approximately 50 miles northeast of
Calgary, Alberta. Sphere's working interests in the Property range from 4.8%
to 20% in four producing oil wells and thirteen gas wells (eight flowing coal
bed methane gas). The wells are producing from the Horseshoe Canyon, Basal
Belly River, Belly River, Viking, Glauconitic and Ellerslie formations.
The Exchange has been advised that the Company's acquisition of the Carbon
Property has received shareholder approval and has been completed. For
additional information refer to the Filing Statement available under the
Company's profile on SEDAR.

2. Private Placement-Non-Brokered

TSX Venture Exchange has accepted for filing documentation with respect to
a Non-Brokered Private Placement announced August 18, 2010 and September 14,
2010:

Number of Shares: 13,600,000 shares

Purchase Price: $0.25 per share

Warrants: 13,600,000 share purchase warrants to purchase
13,600,000 shares

Warrant Exercise Price: $0.34 for a two year period

Number of Placees: 66 placees

Insider/Pro Group Participation:

Insider equals Y/
Name ProGroup equals P/ No. of Shares

John Tognetti P 800,000
David Lyall P 700,000
Robert Sali P 800,000
Marko Ferenc P 50,000
Janis Parmar P 20,000
Lori Pinkowski P 70,000
David Shepherd P 50,000
David Elliott P 200,000
Wendie Elliott P 100,000
Grant Caudwell P 50,000
Raymond Tsang P 10,000
Andrew Williams P 100,000
Colin Hoodspith P 60,000
Warren Robinson P 100,000
Herb Dhaliwal Y 100,000
David Sidoo Y 40,000
Maureen Leykland
(James Harris) Y 100,000
JLHLC Holdings Inc. Y 20,000

Finders' Fees: KBH Capital Corp. - $115,000 and 460,000
warrants that are exercisable at $0.25 per share for a 36 month period.


Shane Lowry. - $124,000 and 496,000 warrants
that are exercisable at $0.25 per share for a 36
month period.

Global Market Development LLC - $18,750 and
75,000 warrants that are exercisable into common
shares at $0.25 per share for a 36 month period.

3. Graduation from NEX to TSX Venture

The Company has met the requirements to be listed as a TSX Venture Tier 2
Company. Therefore, effective Friday, October 1, 2010, the Company's listing
will transfer from NEX to TSX Venture, the Company's Tier classification will
change from NEX to Tier 2 and the Filing and Service Office will change from
NEX to Vancouver.

The Company is classified as an 'Oil and Gas' company.

Capitalization: Unlimited shares with no par value of which
45,525,306 shares are issued and outstanding
Escrow: 5,616,750 shares, 1,000,000 warrants and
1,850,000 stock options subject to a
36 month staged escrow release

Transfer Agent: Computershare Trust Company of Canada.
Trading Symbol: EW (new)
CUSIP Number: 27580T 10 7 (UNCHANGED)
...yes indeed, it IS the same old story! Back in September, EW.v ran a placement financing to raise $3.4m and OH LOOK AT THAT, KBH CAPITAL MADE THEMSELVES A WHOLE STACK OF MONEY as not only did Katusa, Bustin and Hung pocket $115,000 in cash (that helps pay the lunch bills) but they were also granted 460,000 warrants priced at 25c. So with Katusa pumping away since then and getting the retail saps on board, those warrants are now worth a cool $621,000 and about to come out of escrow, too.

And a very merry Christmas to you too, Marin!

Isn't it funny how lapse and forgetful Marin Katusa is when it comes to the moment to disclose on a recommended company? He does say "he holds shares", but he doesn't mention about the intimate involvement with the company's management team, he forgets his über-close ties with previous rounds of financing, he doesn't tell a soul just how much he wants that stock to go up before his warrants come out of escrow. On other words, just the same old Katusa modus operandi that's schemed to line his own pockets at the expense of others (just ask any holder of TCF.v how they feel about Katusa's pump jobs...or ask those he got into BYV.v at $1.40). So let's recap on this clear pattern, the Katusa M.O:
1) Katusa gets in on CBM Asia (TCF.v), Marc Bustin connected as member of the management team, shares placed, Katusa secures juicy finder's fees, Katusa pumps stock, stock subsequently disappoints and sells off.

2) Katusa gets in on Bayfield Resources (BYV.v), Marc Bustin connected via KBH Capital, shares placed, KBH secures juicy finder's fees, Katusa pumps stock, stock subsequently disappoints and sells off.

3) Katusa gets in on East West Petroleum (EW.v), Marc Bustin on board via KBH Capital and a member of the management team, shares placed, KBH secures juicy finder's fees, Katusa pumps stock..........and have a guess as to what your humble scribe thinks will happen next?

BUT WAIT! THERE'S MORE! Right now (and on the back of all this Katusa-generated hype that's seemingly little but self-service and very murkily disclosed) EW.v is running another, altogether much bigger $26.5m round of share placement financing that supposed to close on December 22nd. What with Katusa pumping away like mad on EW.v,  kinda suspicious given this placement's timing, wouldn't it be an absolutely shocking surprise to find out that KBH Capital, the company that benefits not only Katusa but a member of EW.v's very own management team in a direct manner, has made good yet again on this deal via extra juicy finder's fees and warrants issuances when this latest share placement closes next week?

IKN strongly suggests that you avoid these men if seen walking the streets of Vancouver:

Marin Katusa, Senior Market Strategist, Casey Research.


Marc Bustin, Senior Research, Unconventional Oil and Gas, Casey Research.

Joe Hung, Research Analyst, Casey Research.