Forgive me if this is the wrong forum, but could not find a section more appropriate. If mods would like to move this to a better area, please do so. Have a nephew that is stuck in what to me is an obvious stock scam. Of course, he just had to go long in a pinksheet. Live and learn I guess. This situation is a bit unique, however. I need some advice/help, especially since both he (18 yr old) and his mother (my sister) may pursue legal action against the company. According to my superficial research, the characters that surround the situation have been doing this for a while with impunity. It's to a point now that I may even give my sister a stream of cash to get these crooks off the street. Stock scams/deception burn an ember under my ass. Scenario: A Montreal based company trading on the pinksheets merges with what appears to be a legit private California based company. In public record (press release), it is stated that the private CA company is to receive 10-million "restricted" Montreal company shares. CA company effectively becomes a subsidiary of the Montreal company. It is an all-share agreement. The ace: My sister was able to make contact with a disgruntled shareholder from the CA company that sold out of the company before the merger. This person was able to get a hold of the official merger paper (never was made public) and has bravely faxed her the full document. The merger was written/overseen by a LA based law firm. The merger was submitted to the California Secretary and law firm was to act as the share-transfer agent. In the merger, that was effective in Fall 2007, it specifically states that "25"-million "Common" stock shares were to be exchanged as part of the all-share agreement. Hence, a total contradiction to the public record (PR) 10-million restricted shares. To me, this has to be at least one count of security fraud. Not only was the share count completely different, it was common stock which can be sold anytime they want. Before any of this was uncovered, intra-day sold shares that settled after-hours began to show up. Typical pinksheet dilution procedure. Approximately 20-million shares have now been sold with an O/S count that climbs in relative unison to the AH settled shares. To add insult to injury, many of the past press releases have been proven completely inaccurate and exaggerated. Suprise suprise in the pinksheets. My questions: 1. Is it conceivable that the CA based company is selling it's 25-million Common stock? If so, would the O/S rise? I was under impression only restricted/option shares etc would raise the O/S. 2. Does it sound like legal action might have some teeth with this type of evidence at hand? What type of person/entity should be first approached? Thanks for your time. All input appreciated.