Asensio Exposed!                                                     
       Warning: may contain loud, rattling skeletons


  Asensio Makes Threat in Effort to Shut Us Down!

 NASD Boots Asensio's Brokerage  (click for details)
 Both Now Expelled from Securities Industry
Welcome to Asensio.CoN    Asensio.CoN Part Two  (7/06)                       

   12/28/07  Revised & Updated Asensio FAQ
  03/18/06  The Elgindy Files (new items 2/07/06; 3/19/06; 3/22/06; 07/14/06; 12/18/07)                              
 05/05/04  Appeals Court Upholds Fraud Verdict Against Asensio
   04/04/04  Asensio Charged Again
 01/11/04  Bill Wexler Update
12/24/03  How Asensio Duped Regulators                                                                            

Site Updates
He Tries to Silence Us
RIP Integral Securities
Asensio.CoN Website
Asensio.Con Part 2
"Barred" from Industry
NASD:Unfit to Regulate
Unfit to Regulate Pt 2
NASD Plot Thickens
Is NASD Corrupt?
Is NASD Corrupt Pt 2
How He Duped NASD
1989 Fraud Verdict
2002 Fraud Verdict
Hedge Fund Flack
Hedge Fund Flack Pt 2
Asensio FAQ
Asensio FAQ #2
Who Writes the Script?
Review of Sold Short
His Clients
Long/Short Strategy
Asensio Under Oath
Dissing the Courts
Who is Bill Wexler?
Who is Bill Wexler Pt 2
Bill Wexler Update
His Doctored Record
Reading Room
Contact Regulators
Reader Comments
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Welcome to Asensio.CoN  Part 2

In Part One we presented Manuel Asensio's claim to have severed ties with and Asensio & Company on October 31, 2003.  He says that both businesses are now in the hands of anonymous "new owners" who have no affiliation with him—just the right to use the names of his former companies. 

We say baloney. For more about why, read on. 

Terms that Talk

A bizarre Agreement greets visitors to  They must consent to it in order to enter the site. 

The terms are intriguing.  Consider this: ... seeks as its primary objective before all other goals to ... avoid any government and non-government regulations that may seek jurisdiction over the operation of the site and its content.

Interesting.  Asensio told a NASD panel that he separated his publishing from his brokerage in hopes of freeing the former from regulation.  Is it mere coincidence that's "new owners"  have exactly the same goal?

Then there is this:

Certain rulings have been constructed [sic] to allow shareholders of publicly-traded companies to litigate claims against publishers based on ”Fraud-on-the-Market” legal and economic loss theories.  Cases have been allowed to proceed even under circumstances where the shareholder made no payments to the publisher, the published material was factual and complete, and the publisher had no relationship whatsoever with the shareholder. users are prohibited from making any claims against and/or Asensio & Company, Inc. or its directors, officers, shareholders or agents, or anyone contacted [sic] with publications contained in, based on or in reliance on any “Fraud-on-the Market” or similar legal or economic loss theory.

Very interesting.  Because according to a motion he filed in the South Carolina case, Asensio is the only independent analyst publishing research reports for the public who has been found by a jury to have violated the anti-fraud provisions of the SEC Act.  Is it mere coincidence that the "new owners" are obsessed with preventing a repeat of something that has happened only once?  Where the legal theory presented was likewise fraud on the market?

The references to a case where "the shareholder made no payment to the publisher" and "the publisher had no relationship whatsoever with the shareholder" perfectly describes the South Carolina case. Asensio had no relationship with the investors who sued him and they made no payment to him. Again, mere coincidence that the Agreement seeks to prevent a scenario in which only Asensio has found himself?

Finally, consider this: users hereby further agree that they will not under any circumstances use any technical approach such as stylometry or content or content-independent commonalities analysis to attempt to identify’s real-life author and/or authors. users further agree not to use any method whatsoever, including but not limited to legal arguments, text extraction or segmentation, linguistic forensics, heuristics clues, topic-based or connections analysis, logistic regression, unconscious elements of author style, high frequency words, or pairs of synonymous [sic] to identify’s real-life author and/or authors.

Whew! The "new owners" are not a just little paranoid about being identified. They are totally paranoid.  Could it be that disclosure of who is behind the site would reveal the very sort of fraud the owner prides himself on exposing?        

No Need to Guess

According to the letter announcing Asensio's departure, the original Asensio & Company and ceased operations on October 31, 2003.   The new owners have supposedly been running both since then, while Asensio has been engaged solely in "private equity" work. 

We could point out that, to the contrary, Reuters quoted Asensio on April 7, 2006 in regard to an pick announced only a week earlier.   But who needs circumstantial evidence?  We have direct evidence as to ownership. 

On February 17, 2005—more than 15 months after Asensio supposedly ended his association with both companies—his attorney, Michael Feiler, filed a document with the court on behalf of Asensio & Company.   The address of Asensio & Company shown on the document?   Feiler's law firm. The person executing this 2005 document on behalf of Asensio & Company?  None other than Manuel Asensio. 

Yet that very day, here is what said about the relationship between Asensio and Asensio & Company:

Mr. Asensio is private investor and investment manager. He is not a shareholder, director or employee of or the present day Asensio & Company, Inc.

What's Going On?

Why would a publicity hound like Manuel Asensio go into hiding like this?   Why would he construct a complex story denying ownership of the companies that have borne his name for more than a decade?

It's not a mystery. The wording of the Agreement and the timing of the announcement make the motive clear.    

Asensio's supposed departure was announced less than two weeks after the Fourth Circuit Court of Appeals upheld the fraud verdict returned against his company in 2002. The verdict was unusual; the jury found that his reports defrauded investors, but awarded no damages. That might seem almost a victory for Asensio, but it wasn't.  The verdict has long-term implications that are potentially devastating for him.

During his career as a hedge fund flack, Asensio's litigation had been exclusively with corporate targets (and his lawyers). This time, retail investors filed suit. Asensio may have expected it to fail because, in his mind, there was nothing here "in connection with the sale of securities."  He didn't sell stock to the investors; in fact, he'd never met them.  But the trial court held that his company's reports were activity "in connection with the sale of securities." 

When the Appeals Court upheld the verdict, Asensio no doubt realized that a precedent had been set.  It allows investors in the Fourth Circuit* to sue his companies if they believe they have been defrauded by his reports.**  Although no precedent has been set outside of the Fourth Circuit, the ruling could still influence other courts.  

We suspect this so shook Asensio (and his hedge fund clients, who have far deeper pockets) that he decided to invent a scenario to free himself of potential liability.  It doesn't look like it mattered whether the scenario itself was a "fraud on the market."  Hence the poorly thought out story posted to his website on April 27, 2004 and the ongoing pretense that he is no longer associated with and Asensio & Company.

Apparently it never occurred to Asensio that there is a much better way to avoid legal liability.  It's called cleaning up your act.  Deceptive practices—such as falsifying ownership of a firm that attacks publicly traded companies—often trigger lawsuits.  Fair and honest practices rarely do.

* Maryland, North Carolina, South Carolina, Virginia, West Virginia
**  As we understand the case, the court allowed the lawsuit to proceed only against the corporate defendants.  Therefore, the case does not set a precedent regarding investment websites operated by individuals. 

Page Created 7/12/06