2009 has been another banner year for Echo Metrix (EHMI).

• Revenue to date (the first three quarters) is a whopping $25, 680! This should be no big surprise; the company didn’t exceed $100, 000 per year in revenues in the prior 2 years either.

• The company’s accumulated deficit increased to $28, 109, 064 as of September 30, 2009.

• The stock has fallen from a high of $0.28 in 2009 (which was artificially manipulated by market makers) to $0.075 at the end of the year (which is still too high). Hopefully, this is the final reward for the lies and deceit perpetrated by the company.

• The company issued a fraudulent press release in 2008 stating that it had signed a contract with Fox News and was exposed when the AP Press looked into the company for violating children’s rights.

• EPIC (Electronic Privacy and Information Center) filed a complaint with the FTC that the Echo Metrix’s Pulse product is violating children’s rights.

• The company issued a press release that it was shipping products through the Army and Air Force Exchange in October of 2009, but failed to mention anything when it was quickly taken off the list by the Exchange a few weeks later for violating children’s rights.

• The company has hired new (but very aged) management massively increasing the company’s costs. To sell what? The company’s child safety products haven’t proven saleable and the company’s new product Pulse, which is purported to violate children’s rights, is toxic. No legitimate company would be caught dead being associated with this product.

• The company has continued its year after year pattern of purchasing 100 or 200 shares at the end of the day to prop up the price. They achieved the high for the year of $0.28 by purchasing 100 shares at the end of the day!

• Jeffrey Supinsky is still actively pulling the strings behind the scenes most recently attempting to get the Army and Air Force Exchange to keep shipping their child safety products. Supinsky has been pulling the strings behind the scenes since 2005, when he sold $250, 000 in stock in June and October of 2005.
Clearly Echo Metrix has no business fundamentals. Echo Metrix has almost no revenue, no revenue history, massively diluted, debt ridden, over burdened with management and past management payouts, with no saleable product, an impending FTC investigation, bad press for issuing false press releases to the public and hopefully some SEC involvement regarding that. The only breath left in this penny pig is its market support allowing a continuous stream of churns and burn investment. When this chop stock finally looses

support from its broker dealer network, it will cease to exist.

We’ve included some helpful links when considering this stock:

http://www.nasaa.org/Investor_Education/Investor_Alerts___Tips/296.cfm

http://www.sec.gov/answers/pumpdump.htm

According to the Company’s latest 10Q it achieved a whopping $25, 689 in revenue for the first 9 months of 2009!

http://www.sec.gov/Archives/edgar/data/1163573/000114420409059538/v165743_10q.htm

Its stock has fallen from a 2009 high of $0.28 to a current low of $0.075 at the end of the year, which will hopefully dissuade investors for being bilked by this fraudulent scheme as several market makers like Knight Securities, Hudson, and Vfinance push this chop stock.

The insiders have managed to trade tens of millions of shares achieving close to 1, 000, 000 trades in a single day in 2009! Why would a stock with no viable product (we’ll get into that below), with only $25, 683 in sales through September of 2009, have such vigorous trading? Still pulling the strings are William (Billy the Bozman) Bozsnyak and Jeffrey (Stinky) Supinsky, both fraudsters par excellence. Supinsky, a banned NASDAQ trader with mob connections (links below) has been manipulating this penny pig for over 5 years facilitating insider trades and lining his and the Bozman’s pockets while massively diluting investors. Current shares outstanding now exceed 79, 000, 000 and accumulated deficit is now $28, 109, 064.

http://www.businessweek.com/archives/2000/b3667151.arc.htm

http://www.sgrm.com/mobbw1.htm more on Sovereign Equity Management Corp

http://siliconinvestor.advfn.com/readmsg.aspx?msgid=14357603

http://nasd.complinet.com/nasd/display/display.html?rbid=1189&element_id=1159004760

This link below shows Supinsky is actively working with the company negotiating on behalf of the company.

From: Mccoy, Matthew R. [mailto:[email protected]]
Sent: Wednesday, October 14, 2009 10:09AM
To: Kevin Sullivan; Jeffrey Supinsky
Cc: Burton, Chris W.; Trussell II, James E.
Subject: FTC Complaint
Importance: High

I was forwarded the attached complaint submitted to the FTC by EPIC. It is very unfortunate that you did not inform me of this issue. Our customer's privacy and security is very important to us, and we trust our Mall Partners to maintain the security of our customers.

I have removed your site, and it will stay offline until this matter with EPIC and the FTC is resolved.

Matthey McCoy
Manager, Exchange Online Mall
AAFES Direct Marketing
214.312.2880
[email protected]

http://epic.org/privacy/echometrix/Excerpts_from_echometrix_docs_12-1-09.pdf

The breaking point for Echo Metrix, could be Erica Zalbert, the company’s 34 year old (very young and naive) CFO. Echo Metrix pays her $66, 000 per year while her cohorts are making $250, 000 per year and millions of stock options and warrants. Despite the pittance the company is paying her, she will suffer the same repercussions that the president and CEO will face when things go wrong. Not surprisingly, the Echo Metrix ONLY mentions the president, Jeffrey Green and Erica Zalbert on its Management page.

Is it worth the risk Erica? The black marks on your resume for just being the CFO for this fraudulent company may be only the beginning for you. They say it’s good to take your knocks while you’re young, so here’s your chance Erica.

http://people.forbes.com/profile/erica-zalbert/70705

Below is the link to the Bozsnyak, Green, and Sealy employment agreements.

http://www.sec.gov/Archives/edgar/data/1163573/000114420409009021/v139475_8k.htm

Echo Metrix’s new president Jeffrey Greene (age 62), isn’t so clean. Companies that he states on his Linked In page seem to be impossible to find, though he boasts of being president of Pharmacy Fund, he was president when this company went into bankruptcy and resigned shortly thereafter. Is this the shape of things to come for Echo Metrix? Bankruptcy would be a good option for Echo Metrix. Investors and past shareholders will quickly go away, leaving the years of fraud and deceit predicated by the company behind. This seems to be a common thread in the article below.

http://www.sgrm.com/mobbw1.htm

http://www.linkedin.com/pub/jeff-greene/7/336/483

http://findarticles.com/p/articles/mi_m3374/is_1998_Oct_19/ai_53158983/

In 2008 Echo Metrix released this fraudulent press release:

Fox Broadcasting and SearchHelp Announce a Collaboration to Commercialize the Echometrix Technology
11/21/2008

SearchHelp Inc. announced that its Echometrix division has signed an agreement to jointly develop with FOX Broadcasting Company, Inc., wherein they will provide feedback and entertainment industry expertise to customize their unique market sentiment and behavioral analysis product, called the Pulse. The Pulse is due to be released in the first quarter of 2009. 'Echometrix technology is unique in that it understands and analyses digital content in real-time, but more importantly, allows each user to build and customize their own sentiment indices, all from a web-based dashboard. The Company is in talks with other major consumer marketing companies to use the Pulse and the Echometrix technology in an effort to create a set of customizable solutions that could become an industry standard tool for marketing decision makers. Echometrix has currently identified at least 26 consumer product category markets that it plans to pursue, each consisting of more than 1000 marketing decision makers.

In September of 2009, the AP Press released the following article when it investigated Echo Metrix for selling children’s personal information. During this investigation it noted (see below) “Fox told the AP it never used the system, but sat in meetings in which EchoMetrix pitched the product”, thus contradicting the press release above.

API Article published in Forbes 04 Sept 09

http://www.forbes.com/feeds/ap/2009/09/04/technology-broadcasting-amp-entertainment-us-tec-internet-monitoring-kids_6850516.html?partner=alerts
Associated Press
Web-monitoring software gathers data on kid chats
By DEBORAH YAO, 09.04.09, 03:09 PM EDT
Parents who install a leading brand of software to monitor their kids' online activities may be unwittingly allowing the developer to gather marketing data from children as young as 7 - and to sell that information.

Software sold under the Sentry and FamilySafe brands can read private chats conducted through Yahoo ( YHOO - news - people ), MSN, AOL and other services, and send that data back to the company. The information is then offered to businesses seeking ways to tailor their marketing messages to kids.

"This scares me more than anything I have seen using monitoring technology, " said Parry Aftab, a child-safety advocate. "You don't put children's personal information at risk."

The software does not record children's names, addresses or other identifiable information, but it knows how old they are because parents customize the programs to be more or less permissive, depending on age.

Five other makers of parental-control software contacted by The Associated Press, including McAfee ( MFE - news - people ) Inc. and Symantec Corp. ( SYMC - news - people ), said they do not sell chat data to advertisers.

One competitor, CyberPatrol LLC, said it would never consider such an arrangement. "That's pretty much confidential information, " said Barbara Rose, the company's vice president of marketing. "As a parent, I would have a problem with them targeting youngsters."
The software brands in question are developed by EchoMetrix Inc., a company based in Syosset, N.Y.

EchoMetrix CEO Jeff Greene said parents who don't want the company to share their child's information to businesses can check a box to opt out.

But that option can be found only by visiting the company's Web site. It was not in the agreement contained in the program itself as downloaded Thursday by The Associated Press.

According to the agreement, the software passes along data to "trusted partners." Confidentiality agreements prohibit those clients from sharing the information with others.

In recognition of federal privacy laws that restrict the collection of data on kids under 13, the agreement states that the company has "a parent's permission to share the information if the user is a child under age 13."

Tech site CNet ranks the EchoMetrix software as one of the three best for parental control. Sales figures were not available.
The Sentry and FamilySafe brands include parental-control software such as Sentry Total Family Protection, Sentry Basic, Sentry Lite and FamilySafe (SentryPC is made by a different company and has no ties with EchoMetrix).

The Lite version is free. Others range from $20 to download and $10 a year for monitoring, to about $48 a year, divided into monthly payments.

The same company also offers software under the brands of partner entities, such as AmberWatch Lookout. AmberWatch Foundation, which licenses its brand to EchoMetrix, declined to comment.
Practically speaking, few people ever read the fine print before they click on a button to agree to the licensing agreement. "Unless it's upfront in neon letters, parents don't know, " Aftab said.
EchoMetrix, formerly known as SearchHelp ( SHLP.OB - news - people ), said companies buying the chat data have included News Corp. ( NWS - news - people )'s Fox Broadcasting and Dreamworks SKG Inc. Viacom Inc. ( VIA - news - people )'s Paramount Pictures also recently signed on.

None of those companies would comment when contacted by the AP.
EchoMetrix later said only Paramount Pictures agreed to have its affiliation disclosed. The others did not because of competitive reasons. Fox told the AP it never used the system, but sat in meetings in which EchoMetrix pitched the product.

EchoMetrix needs the business. The company has been losing money, and its liabilities exceed its assets by nearly $25 million as of June 30, according to a regulatory filing. The filing said there is "substantial doubt about the company's ability to continue as a going concern."
To get the marketing data, companies put in keywords, such as the name of a new product, and specify a date range. They get a "word cloud" display of the most commonly used words, as well as snippets of actual chats. The EchoMetrix system can slice data by age groups, region and even the instant-messaging program used.
Greene, the EchoMetrix CEO, said the company complies with U.S. privacy laws.

"We never know the name of the kid - it's bobby37 on the house computer, " he said.
What the system will reveal is how "bobby37" and other teens feel about upcoming movies, computer games or clothing trends. Such information can help advertisers craft their marketing messages as buzz builds about a product.

Days before "Harry Potter and the Half-Blood Prince" opened in theaters on July 15, teen chatter about the movie spiked across the Internet with largely positive reactions.

"Cool" popped up as one of the most heavily used words in teen chats, blogs, forums and on Twitter. The upbeat comments foreshadowed a strong opening for the Warner Bros. film.

The system also tracked buzz for Microsoft Corp. ( MSFT - news - people )'s "Natal, " a forthcoming Xbox motion-sensor device that replaces the traditional button-based controller. Microsoft is not a client of Echometrix, but EchoMetrix used "Natal" to illustrate how its data can benefit marketers.

Greene said children's conversations about Natal were focused on its price and availability, which suggested that Microsoft should assure teens that there will be enough stock and that ordering ahead can lock in a price.

Competing data-mining companies such as J.D. Power Web Intelligence, a unit of quality ratings firm J.D. Power and Associates, also trolls the Internet for consumer chats. But Vice President Chase Parker said the company does not read any data that's password-protected, such as the instant message sessions that EchoMetrix collects for advertisers.

Suresh Vittal, principal analyst at Forrester Research ( FORR - news - people ), said EchoMetrix might have to make its disclosures more apparent to parents.

"Are we in the safeguarding-the-children business or are we in the business of selling data to other people?" he said. If it's the latter, "it should all be done transparently and with the knowledge of the customer."

Copyright 2009 Associated Press. All rights reserved. This material may not be published broadcast, rewritten, or redistributed

In a complaint filed with the Federal Trade Commission, the Electronic Privacy Information Center alleges that the company Echo Metrix, is engaging in unfair and deceptive behavior and also violating a federal law that restricts the gathering of data about children under 13.

http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=114428

"Parents are unaware that the company collects information about their children and discloses it to third parties, " the privacy organization alleges. "These business practices create a new risk of harm to children, whose personal information would not be disclosed to third parties but for the availability of these products in the marketplace."

A copy of the complaint from the Electronic Privacy Information Center (EPIC) to the FTC is available here:

http://epic.org/privacy/ftc/Echometrix%20FTC%20Complaint%20final.pdf

The last company that violated children’s rights by selling their information in 2001 went under

http://filteringfacts.org/2009/09/07/sentry%E2%80%99s-echometrix-recalls-n2h2-class-clicks-program-from-2001/

Just how seriously flawed is Echo Metrix’s new Pulse product? This led David Perry of TrendMicro, a major security company listed on the Tokyo Stock Exchange (4704) to state, he isn't aware of any other parental control products that capture this type of information. "This is a severe case of what we used to call spyware, " he said. Perry worries that even though the software may not collect the names of the children, "those names could be included in some of the chat messages

http://news.cnet.com/8301-19518_3-10345848-238.htm
The mystery of Echo Metrix’s continual stream of investments continues.

Rock Island Capital, LLC – Why would a micro fund with only
$62, 000, 000 in funds make a $2, 000, 000 investment in a company with less than $100, 000 in revenue for the last three consecutive years? Rock Island clearly states on their website (www.rockislandcapital.com) that their investment criterion is to invest in companies with $10 - $100 million in revenue.

Echo Metrix has raised capital for the last 5 years generating an accumulated deficit of over $28 million. Why could this steady stream of capital for a company with no business fundamentals can only occur unless there is an assured pipe to liquidity. So who is supplying this pipe? Why can this company have trading days close to 1, 000, 000 shares in a single day? Where do Supinsky and his mob connections fit in? Was Rock Island strong armed into this deal or did they violate all their investment criteria because Echo Metrix is such a spectacular deal?