A short-lived magazine, a bizarre cartoon that never happened, and a lot of stock in overseas shell companies. Small investors got sold on the Donald’s name… and took a bath.

1. Smoke, if not fire

Inside his reflective black skyscraper on Fifth Avenue, Donald J. Trump mingled with tabloid reporters, an ex-Apprentice contestant, and employees of Trump Mortgage. His daughter Ivanka and son Eric were there, too. The guests assembled in Trump Tower on September 20, 2006, were celebrating the IPO of Premiere Publishing Group, the company that put out Trump Magazine. Premiere had gone public weeks earlier as a penny stock.

Trump was in a jovial mood. The New York Post asked what his porn name would be and he offered “Big,” then “The Trump Tower.” He posed holding a magazine, which featured Ivanka on the cover. Headlines teased stories about Trump Vodka and bikinis.

Related Here are hilarious images from the Trump TV cartoon that never happened

Earlier in the day, Trump had appeared on CNBC. “This started off as a magazine to go to all of my places,” he said, meaning that Trump had been founded to circulate solely at his hotels and golf courses. Premiere’s CEO, Michael Jacobson, had expanded it to newsstands. Then company executives said “let’s take it to the next level” by going public, Trump recounted. “And that’s what they have done. Michael Jacobson has done a great job.”

A year after the IPO party, Premiere went bust, having lost $7 million. During the final months, printers went unpaid, the power was turned off, and paychecks bounced, as a former Trump magazine receptionist recounted in Politico last August. But more intriguing than the disarray in the editorial office was Premiere’s penny stock structure – which has not been explored during Trump’s presidential campaign.

In press releases, the company promised a lucrative Trump cartoon TV show – in which Trump was to run for president and save America – that lifted the stock price but never materialized.

A spokesperson for the Securities and Exchange Commission declined to comment for this story, but three experts reviewed Premiere’s operations at Fusion’s request. Jeremy Hyndman, a Los Angeles lawyer who represents victims of penny stock fraud, examined some of Premiere’s SEC filings. He said the company had hallmarks “of a pretty classic pump-and-dump” scheme, in which insiders inflate a company’s share price and cash in before it crashes. Joseph Borg, the securities commissioner of Alabama – who helped bring down Jordan Belfort, the so-called Wolf of Wall Street – emphasized that he had no first-hand knowledge of Premiere, but called the company’s patterns “very suspicious.”

Jacob S. Frenkel, a former SEC investigator who serves as an expert witness in stock manipulation cases, said Premiere raised “red flags that would’ve caused me to investigate.” But, he added, “Absent an investigation, it is impossible to conclude that there was a manipulation.” And the statute of limitations, he said, has long since passed.

Filings with the SEC show that before its IPO, more than a third of Premiere Publishing’s stock was put into untraceable overseas shell companies. Investors say they were cold-called by brokers and bought stock because of Trump’s involvement. In a newsletter, a promoter hyped Premiere, dangling returns of “500% or even more.” In press releases, the company promised a lucrative Trump cartoon TV show that lifted the stock price but never materialized. (In one episode, Trump was to run for president and save America.) Numerous people associated with Premiere ran into separate trouble with financial regulators.

Partly because shell companies hid some of Premiere’s ownership, and partly because most stock transactions are private, it’s unclear from public records who, if anyone, profited from any inflated stock sales. It’s also unclear to what degree Trump was aware of the company’s corporate maneuvers. Donald Trump’s campaign spokesperson, Hope Hicks, did not respond to detailed questions from Fusion. Neither the candidate nor Premiere has been accused of any wrongdoing in relation to the magazine.

Still, the business operated much like other troubled licensing deals from the 2000s – Trump Network, Trump Institute, Trump Mortgage – that were lent a patina of respectability by Trump’s brand. When it imploded, little guys lost tens of thousands of dollars, while Trump walked away with a small fortune in licensing fees.

2. The beginnings of Trump Magazine

Michael Jacobson told the Village Voice in 2004 that he had envisioned a Trump-themed magazine three years prior, when he was a partner at Lockwood Publications, a Long Island publisher. He had visited the Trump Marina casino in Atlantic City and noticed there was no Trump magazine in his room: “Within a month I was presenting my idea to Donald to do a magazine branded with his name.” Lockwood published two issues of Trump World, in 2002 and 2003.

“He’s the human logo,” Jacobson explained. “He’s a branding king, and the magazine will tie all of those branding opportunities into one.”

At the time, Trump was crawling his way out of financial wreckage. He had splurged on real estate, casinos, an airline and a yacht, and by the early 1990s owed $4 billion to 72 banks. Between 1991 and 2004, four of Trump’s casino-related businesses and his Plaza Hotel declared bankruptcies, leaving creditors and shareholders saddled with losses. The mogul was beginning to turn to licensing deals, a different way of making money. Other people would pay Trump for the use of his name, while they took on the day-to-day risks and responsibilities of the businesses.

Jacobson – who did not respond to phone messages or emails for this article – told the Voice that he had been riding with Trump inside his helicopter when Trump said, “This magazine should really be national.” Jacobson sensed opportunity. “He’s the human logo,” Jacobson explained. “He’s a branding king, and the magazine will tie all of those branding opportunities into one.”

Jacobson told the Voice that he acquired the rights to the magazine from Lockwood. He formed Premiere in Manhattan in 2005, becoming CEO. (The magazine was held by a subsidiary, Sobe Life LLC.) A licensing deal was signed, giving Trump $200,000 for publishing rights, plus $120,000 to $135,000 for each further quarterly issue. Jacobson set about getting the glossy onto newsstands and steering the company toward a public offering, while paying himself a $200,000 annual salary, SEC filings show. Premiere also published a magazine called Poker Life.

Trump World was renamed Trump Magazine in early 2006. It captured Trump’s “opulence and business savvy,” according to Premiere’s marketing materials. Articles profiled his family members and celebrities. Trump posed for cover photos and reportedly signed off on every issue with a Sharpie. In spring 2006, precisely at the height of the housing bubble, a headline blared “Bubble? What Bubble? Real Estate Tips from Trump University.”

The magazine took shape as Trump’s salvation was arriving in the form of a television show. The Apprentice debuted in early 2004 and would ultimately pay him $213 million over 14 seasons, according to financial disclosure forms Trump filed with the Federal Election Commision in 2015 (though the figure has been disputed, and MGM did not respond to an email). Of more consequence than Trump’s compensation was the impression the show conveyed: that Trump was a world-class businessman.

Imagine Bill Gates selling timeshares.

As his fame grew, Trump capitalized on more licensing deals – and did not seem too discerning about his partners. For Trump Institute, seminars launched in 2005 that promised access to his “wealth-creating secrets,” Trump rented his name to a company that also ran infomercials about “free government money,” and had been accused by attorneys general in Texas and Vermont of consumer theft and fraud. At Trump Mortgage, formed in 2006, cold-callers in what employees dubbed “the boiler room” sold subprime mortgages. For Trump Network, Trump flogged a “recession-proof” multilevel marketing business that peddled nutritional supplements and DIY urine tests. For Trump SoHo, a Manhattan skyscraper, his fixer was a Russian immigrant who had been “implicated in a huge stock manipulation scheme involving Mafia figures and Russian criminals,” according to The New York Times.

Any profits from gilding these ventures would have been petty compared to Trump’s claimed multibillion-dollar net worth, and came at a reputational cost. Imagine Bill Gates selling timeshares.

3. How penny stocks work

In theory, penny stock exchanges support well-meaning start-ups that want to raise cash from the public but are too small for NASDAQ or the New York Stock Exchange. In reality, the penny markets – where disgraced traders like Bernie Madoff got their start – are capitalism at its most speculative and treacherous. Trading is thin and volatile. Because penny stocks by definition sell for less than $5 a share, small price increases can double an investment in a day. But just as quickly, steep gains can turn to deep losses. Though some legitimate businesses issue penny stock, loose regulations have allowed the penny markets to become a netherworld full of con artists, where fraud is practiced on an industrial scale.

The penny markets – where disgraced traders like Bernie Madoff got their start – are capitalism at its most speculative and treacherous.

Pump-and-dump schemes frequently unfold on the penny markets like this: A company is formed that may or may not have a basis in reality, like a nickel mine in Nevada or a cancer cure derived from goat’s blood (an actual example). While many of these businesses are fantastical and exist only on paper, Borg, the securities regulator, says others have brick-and-mortar fronts with real products, holdings, or services: “It gives them an air of legitimacy.”

The company issues stock to insiders. Often, their shares are put into into shell companies with the name of a “registered agent” or “nominee” on official paperwork, while the name of the real owner stays hidden. Brokers in “boiler rooms” are paid to cold-call possible “marks” – particularly elderly people – and sell them shares in the company using high-pressure sales tactics. As brokers work the phones, the company pays promoters for “investor relations services,” i.e., for hyping the stock via newsletters, spam emails, social media, and message boards. Likewise, exuberant company press releases create the illusion of a thriving enterprise.

The insiders trade their own shares back and forth, artificially pumping the stock price and generating buzz. Then they sell their shares to newcomers attracted by the hype. As the insiders cash out, the stock collapses. The pump-and-dump cycle may be repeated. At the end, tricked investors are left with worthless rubble.

In so many ways, Premiere fit the pattern.

SEC prospectuses show that a New Jersey businessman named Chris Giordano was given 960,000 shares for helping to form the company. Reached by phone, Giordano explained that he had suggested Premiere enlist the services of Legend Merchant Group, a brokerage that helped in structuring the new company, a filing shows. In return, it received 500,000 shares and about another million warrants (options to buy stock later for a pre-agreed-upon price). And it acquired an additional million shares on its own, though at what price isn’t clear, for a total of about 2.5 million shares.

Legend took on a large responsibility: It would be the underwriter, in charge of rounding up early investors and taking Premiere public on OTC Bulletin Board, a penny stock exchange. For those services, fillings show, it earned as much as $320,000 in fees and commissions.

Wade Cartwright, a 77-year-old doctor in Oakland, Calif., remembers getting a cold call from a “very friendly” broker at Legend. Although the two would never meet in person, Cartwright says he eventually forked over more than $100,000.

“He said he had something that was very good,” Cartwright says, “and he wanted me to take a chance on it.” Premiere “was marketed to me as a Trump company and something he was involved in – and that was supposed to be a good thing.” Cartwright invested $25,000 in Premiere, and $75,000 into other stock, he says. He received 66,666 shares before Premiere’s IPO.

“This sounds like the cast of characters you would assemble to commit some kind of investment fraud. This sounds like a gang of outlaws.”

Meanwhile, authorities in the Netherlands and in England warned that Legend was cold-calling in their countries without regulatory clearance, and urged people to hang up if its brokers called. In the Netherlands, Lars Valkenberg, now 54 and an accountant, didn’t. “My broker came with this ‘golden’ opportunity,” he recounted in an email. Valkenberg invested $200,000 with Premiere. In England, David Nicholls, now 78, likewise stayed on the line as a broker talked up Trump’s involvement. He soon poured $250,000 into Premiere.

“Cold-calling is always a red flag when you’re dealing with penny stocks,” says Borg, the securities regulator. “Legitimate firms do not cold-call on penny stocks.”

Frenkel, the former SEC regulator, was less adamant. “On its face, there is nothing wrong with cold-calling as long as there are proper disclosures,” he said. Brokerages must systematically ensure their clients can afford the high risks of penny stocks.

Filings show that, in total, there were nearly 100 small shareholders ahead of the IPO. Many bought single $25,000 blocks of stock or more. The filings also show that much stock was granted free of charge to various insiders.

Trump and Jacobson were each given 3.675 million shares, roughly 40 percent of the company between them. But more than a third of Premiere stock was handed to shell companies based in Switzerland and Nevis, in exchange for “investor relations services.” In effect, the people behind these shells were being paid in the same stock that they were tasked with promoting to small investors.

“That’s common,” Borg says. “That’s such a red flag.”

According to a June 2006 prospectus, a tiny Swiss firm called Geneva Financial Services controlled 30 percent of Premiere’s stock – 2.1 million shares and 3 million warrants – that was given in exchange for investor relations. These stakes were held through three shell companies: Brenston Enterprises, Gilman Securities, and Lakefield Trading Ltd. These remain mostly untraceable, so it’s impossible to know for sure from public records who ultimately stood to benefit. Reached by phone, Geneva’s owner, Yves Cohen, declined to comment, citing Swiss law. “I’m stuck with the banking secrecy in Switzerland,” he said. “I can’t talk with you.”

Another 6 percent of Premiere stock was given to Lion Advisors LLC for investor relations. Its listed address was a P.O. box on the Caribbean island of Nevis. It was controlled by a Gillian Hobson. In 2004, Canadian authorities had banned Hobson from offering investor relations services, after accusing her of facilitating a $36 million penny-stock fraud. Nevertheless, Premiere gave her 900,000 shares for investor relations services. Hobson did not respond to messages sent via Facebook and through friends. Even cursory due diligence, such as a Google search, would have picked up on her background.

“Penny stocks are kind of the Wild West.”

Why Premiere executives channeled nearly 40 percent of the company’s stock to obscure shell companies is anyone’s guess, since the offshore agents aren’t talking. Hyndman, the lawyer, says the offshore involvement “looks shady.” He suggests, “It’s opaque because it’s intentionally opaque.”

Other early investors in Premiere included Howard Appel, a man once convicted of penny stock fraud. He owned 100,000 shares of Premiere, and a trust tied to him held an additional 300,000. Another pre-IPO stockholder, Chris Janish, with 200,000 shares, would soon be convicted in a pump-and-dump. Public filings do not detail at what price the men got their shares, or whether they ever sold them. Appel did not respond to voicemails. Janish said via email that he “never received” his shares and has “no clue” how much he paid. “I am a victim in this one,” he wrote.

“Penny stocks are kind of the Wild West,” Hyndman says. “And anytime you go into a saloon in the Wild West, you have an interesting assortment of characters. But from what you’re telling me here, this sounds like the cast of characters you would assemble to commit some kind of investment fraud. This sounds like a gang of outlaws.”

4. The pitch

The day of its IPO, August 9, 2006, Premiere Publishing began trading around a dollar a share, giving the company a market capitalization – the total stock value – of roughly $17 million. (For comparison, Apple’s market cap is $630 billion.) By September, the price was half that. In October, James L. Rapholz, a stock promoter in Florida, tried to boost it, devoting an issue of his newsletter, Economic Advice, to the company. Back in 1991, the SEC had banned Rapholz from trading or advising clients for ten years over penny stock manipulation.

“Act now before the word gets out and you could find yourself making an astounding profit of 500% or more in the next 18 months in… TRUMP’S SECRET DEAL.”

“Behind the handcrafted mahogany doors of his gold-accented boardroom,” Rapholz’s newsletter began, “legendary deal maker Donald Trump has taken ACTIVE PARTICIPATION in a very secret venture… Act now before the word gets out and you could find yourself making an astounding profit of 500% or more in the next 18 months in… TRUMP’S SECRET DEAL.”

Rapholz was just getting warmed up. Trump’s involvement was “hands-on,” he wrote. Advertisers were “lusting” after the magazine’s wealthy readers. A Trump Wine was in the works, with potential for blazing synergy. Trump and Premiere, he wrote, had even struck a deal with Disney to produce a “prime-time” cartoon show about Trump.

Rapholz claimed to have written off for more information and received a reply. When a mailman noticed the name of the sender, Rapholz wrote, “his eyes nearly popped out of his head.” “Gee, Mr. Rapholz,” the mailman exclaimed. “I didn’t realize that you knew Donald Trump!” Rapholz predicted that Premiere’s share price could soon hit $5.

In fine print, Rapholz spelled out that Geneva Financial Services – the Swiss firm – had paid “six hundred fifty-six thousand, two hundred fourteen dollars and twenty cents” ($656,214.20) to create and disseminate the newsletter. But Rapholz did not disclose that Geneva controlled shares in Premiere for rendering “investor relations services.” He did not respond to phone messages seeking comment for this article. Hyndman says he’s mystified by such large compensation.

Around the same time, Premiere sent out its own press release heralding a Trump cartoon show. It said that unnamed “major animation houses and television networks” were interested, and that a series would likely be in production by early 2007. (Read Fusion’s full story of the aborted Trump cartoon, and see exclusive images, here.)

The release credited Mitchell J. Schultz with the idea for the cartoon. Reached by phone, Schultz introduced himself as a “space tourism specialist” and “kind of a character.”

Schultz explains that he was an acquaintance of Michael Jacobson, and that after meeting Trump once at a party, he felt inspired to consecrate the mogul in a cartoon. “The way to create immortality for Donald Trump is through the youth of America,” he told Jacobson.

Schultz commissioned Aron Lakin of The Creativity Zone to draft storyboards for a series called Trump Takeover: The Ultimate Power Trip. The drafts, provided to Fusion, show that in one proposed episode, Trump was to uncover “a global financial conspiracy.” He and characters from The Apprentice would seize control of the stock market to “save the world economy from total ruin!” In another episode, called “Politically Corrected,” America would be “in a state of virtual collapse as Trump and his team go to Washington to take over!” An illustration depicted Trump on the steps of the Capitol, running for president.

“Trump was taking over everything and making it better,” Schultz says. “And look where he is now.”

Schultz says Jacobson loved the cartoon so much, he paid Schultz for the rights to develop it. Soon, the claims of a show, along with the effusive newsletter, were prompting questions from The Wall Street Journal.

In a story headlined “Trumpeting the Donald’s Stock,” on Oct. 28, 2006, reporters John R. Emshwiller and Peter Sanders found that there was, in fact, no deal with Disney. CEO Jacobson blamed Rapholz for making up that detail, and clarified that Premiere had merely signed a “letter of intent” with Trump to create a cartoon. Asked about it, however, Trump told the paper he could not recall any such letter.

The Journal noted that the announcement of a cartoon had sent Premiere’s stock soaring by 30 percent, to more than 70 cents a share, though it had slowly fallen back.

Trump told the paper that he had no hand in promoting the stock. Jacobson said that hiring Geneva had been an innocent mistake as Premiere navigated the penny markets. He added that Geneva had resigned and would be disgorging a “big chunk” of its stock. Yet a filing four months later still showed Geneva’s three shell companies with all their holdings.

The Journal said Premiere provided “a cautionary tale about tiny stocks and how they are sometimes marketed.”

5. The cartoon

In December 2006, Trump and his son Donald Jr. attended a charity soiree at FAO Schwarz’s mega toy store in Manhattan, thrown by Premiere. At the start of 2007, a news release promised $2.5 million in ad revenue over the coming year. At the “events division,” there was “50% growth!” The company said there were plans for an Apprentice cruise and, of course, a Trump cartoon.

That February, Jacobson announced that Trump had extended his “letter of intent” for a cartoon to March 31. To produce a pilot, Jacobson hired Elizabeth Koshy, an immigrant from India who ran an animation studio in California that outsourced work to her home country. (She now runs a virtual reality start-up in Silicon Valley.)

“They did not make the payment for almost a year,” she says. “And I’m a small company! They made me run around – umpteen phone calls, umpteen emails for one year. And [Trump] wants to be the president of the country.”

“He came to us because we were giving the competitive pricing that no one else could give,” Koshy remembers. “Because it’s outsourcing.”

Jacobson envisioned an entire series, she says. “They wanted to project Donald Trump as a superhero who does all the right things, and he is saving everyone.”

Koshy remembers that her animators designed a Trump with “a magical halo around him,” and started on the pilot. Then, Koshy says, Jacobson “just disappeared.” She claims she threatened to go to the press, and only then did Jacobson cough up $6,000, two-thirds of what he owed.

“They did not make the payment for almost a year,” she says. “And I’m a small company! They made me run around – umpteen phone calls, umpteen emails for one year. And [Trump] wants to be the president of the country.” She says that neither she nor her Indian colleagues retained copies of the cartoon materials.

(Schultz, the originator of the cartoon idea, today says that Jacobson “left my group high and dry” and “we want another chance” to develop a project with Trump.)

In March 2007, Premiere’s stock price began a steep run-up from about 20 cents a share. A promotional bulletin posted on InvestorsHub, a stock message board, hailed Trump’s stake in the “under the radar” stock and predicted it would be “HUGE HUGE HUGE HUGE!” At the end of March, the stock peaked as high as 50 cents.

6. The whiff

March 31 is the last date on which filings recorded the faraway shell companies holding their giant chunk of Premiere. If they managed to offload the shares around the March high, the three shell companies controlled by the Swiss firm, Geneva, could have reaped nearly a million dollars; and the Nevis shell, close to a half-million. Because the beneficial owners are hidden behind shell companies, it’s not clear from public records who would have pocketed any such profits.

“That’s why penny stock fraud works,” Hyndman says. “It can be hard to catch.”

It’s also not certain they sold. The shells never appeared in later filings – but it’s possible their shares were simply diluted below the SEC’s five-percent reporting threshold when Premiere later issued 28 million new shares of stock. Further complicating matters, there’s reason to be skeptical of Premiere’s filings. The man who audited them, Randall Gruber, was eventually sued by the SEC over rubber-stamping a penny stock and had his license revoked for altering and backdating documents. (He did not respond to phone messages.)

“That’s why penny stock fraud works,” Hyndman says. “It can be hard to catch.” But here, he adds, “you certainly have something opaque, and you certainly have the wrong kinds of people.”

As 2007 progressed, Premiere stock sagged, though more press releases projected an image of a growing business. The company unveiled a “strategic alliance” with Trump Vodka (licensed to another penny stock, Drinks Americas). Jacobson crowed that the spring issue of Trump was on track to be the fastest seller yet. Inside the offices, according to the former receptionist’s account in Politico, Jacobson vanished for long stretches without explanation, payroll was covered with $100 bills from a brown paper bag, and the phones were “ringing off the hook with concerned shareholders.” In July 2007, the first-quarter report, filed late, showed $735 in the bank. The stock price crashed to pennies.

The end came in August 2007. That month, Trump terminated his licensing agreement. The wholly owned subsidiary that ran Trump, Sobe Life LLC, soon was bankrupt. The magazine’s staff was let go.

Hank Gracin, who was Premiere’s lawyer, wrote in an email, “I am not aware of any fraud, and if I knew if there was any fraud, I would have resigned as counsel. As I recall, it was difficult for the company to make a profit under the burden of the high licensing fees.”

Given his initial and per-issue fees, and considering that Premiere published at least seven issues, Donald Trump would have collected a minimum of $855,000 for just the use of his name. The figure could be more than $1 million, if Trump was ever paid the $270,000 owed to him when the licensing agreement ended. Trump’s spokesperson, Hope Hicks, acknowledged receiving an email with questions from Fusion, but did not answer them or respond to subsequent emails.

The next month, September 2007, Trump started a new version of the magazine with Ocean Drive Media Group, a privately owned Florida publisher of luxury titles. Trump’s agreement was reportedly for a staggering $20 million over five years. In 2009 – two years in – the magazine folded. A representative for Ocean Drive declined to answer questions from Fusion.

Dr. Cartwright didn’t fare well. “I lost every cent,” he says. The evaporation of the $100,000 he turned over to the nice broker on the phone made it impossible to retire.

Jacobson became president of another penny stock, IB3 Networks, which was later delisted for failure to file SEC statements. It is unclear from public records whether he ever sold his Premiere shares.

Others involved with Premiere had run-ins with regulators.

Rapholz, the stock promoter, was barred from operating in South Carolina for making outlandish claims about another penny stock.

Legend Merchant Group’s brokerage division was permanently shut down by regulators in 2012 for a long list of unrelated infractions and a failure to pay fines. John Shaw, the head of Legend during the Trump period, did not respond to emails. A filing indicates that Legend offloaded about 1.3 million of its almost 2.5 million Premiere shares between the IPO and March 31, 2007. It’s unclear from public records how much profit Legend might have made, if any. A managing director at Legend, Richard B. Goldstein, said by phone the firm would try to provide a statement to Fusion but never did; he hung up on a follow-up call.

The head of Geneva Financial Services, Cohen, went on to manage a small company called MM Multitrade, which in 2015 was accused of smuggling gold to Switzerland from Burkina Faso, where children routinely work in toxic mines. “I don’t want to be involved in anything like that,” Cohen said when asked about the allegation. He did not respond to subsequent emails. MM was never charged with any wrongdoing.

Chris Giordano, the New Jersey man who’d helped form Premiere, took control of the company. He told Fusion in an email that he did so “on the heels of the disastrous effort of the former CEO who failed miserably to make Trump magazine the next Esquire.”

“You’d have to be pretty dumb, though, to not know what the hell is going on.”

Giordano says he knew of no wrongdoing during Premiere’s Trump heyday, and was unaware of the offshore connections, which, he adds, would have made him suspicious. He says he never sold his shares in Premiere for a profit. When he took over, the company had several million in debt, he says, and he knew it would take years to turn around. He says that in 2009, he noticed a message fraudulently hyping the stock on InvestorsHub – which he called “a septic tank of penny stock promoters posting hyperbole and lies about various companies” – and reported it to the SEC. “That’s how serious I took the idea of pump and dump,” he wrote.

He renamed the company Premiere Opportunities Group and trumpeted diverse new ventures that never panned out: a possible merger with an herbal medicine factory in China; an online entertainment channel; clothing stores in South Korea. Its stock price settled down below a penny a share. Giordano renamed it again – Global Fashion Technologies, then PureTek360. The last quarterly report showed $755 on hand, but Giordano says he has assembled new management and believes the company will rebound with “disruptive technology in the sustainable apparel space.”

7. The aftermath

On July 16, 2015, Donald Trump descended an escalator into Trump Tower’s marble atrium, where he had celebrated Premiere nine years earlier, and announced for the presidency: a live-action fulfillment of Premiere’s failed cartoon. His speech that day sounded like a Rapholz newsletter: A great, great wall! “And I have assets – big accounting firm, one of the most highly respected – 9 billion 240 million dollars.” 500% profits!

Trump had just disclosed his financial holdings, which included a stake in Global Fashion worth between $1,000 and $15,000 – perhaps his original, devalued shares in Premiere. Still, he had walked away with his near-million dollars in licensing fees.

Dr. Cartwright didn’t fare as well. “I lost every cent,” he says. The evaporation of the $100,000 he turned over to the nice broker on the phone made it impossible to retire.

Nicholls, the investor in England, says he sold about 100,000 shares of Premiere at the time of the IPO but held the rest, and he’s out $150,000. He hopes the company will recover under Giordano.

Valkenberg, the Dutch investor, wrote in an email that Premiere “proved to be one of my biggest misinvestments.” He lost $200,000, he says. “It hurt me a lot for some years.” Several other investors reached by phone said they lost large amounts of money with Premiere or Legend.

Borg, the regulator, says it’s possible that operators in pennyland exploited Premiere without its knowledge. “You’d have to be pretty dumb, though, to not know what the hell is going on.”

Hyndman, the Los Angeles lawyer, says it’s clear that Premiere’s employees believed in the company, and he doubts that Trump was directly involved in any stock fraud. But “you have to wonder,” he adds, “if Trump is such a great businessman, why he’s in bed with these people and why he’s in bed with this company.

“He’s given the Trump name and Trump Magazine to folks who are using his name and this magazine to run a pump and dump cycle,” Hyndman says. “And either he is too stupid to realize who he’s in bed with and what’s going on – or he just doesn’t care, because he’s making money.”