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Awesome Penny Stocks Calls it Quits Amid Alleged Probe

NEW YORK  (TheStreet) -- Awesome Penny Stocks, a stock promotion firm that has been implicated in suspected pump-and-dump schemes that have cost investors tens of millions of dollars, appears to be quitting the business as it comes under growing pressure from law enforcement, market regulators and the estranged wife of one of its principals.

"Together, we have had an AWESOME run over the last few years," said a notice that appeared on Awesome Penny Stocks' website last month. "We have seen multiple picks soar dramatically from our initial alerts, and we have seen our members reap the profits. However, there comes a time when all things come to an end. Now is that time."

The notice goes on to say that Awesome Penny Stocks will not be releasing any future stock recommendations, which it has distributed to investors in the past through free e-mail and direct-mail newsletters.

"We have decided to shut our doors and we will not be releasing any future picks nor will we be reopening our doors at any time in the future," the statement said. "We wish our loyal members all the best, and thank you for following us since the beginning."

The apparent shutdown comes after the FBI has opened a probe into Awesome Penny Stocks. Two people with knowledge of Awesome Penny Stocks' dealings have told The Deal that they have been questioned by FBI agents since 2012.

A spokesperson for the FBI in Washington declined to comment, citing the agency's policy of neither confirming nor denying the existence of on-going investigations.

At the same time, the Quebec government's revenue division is trying to collect C$11.5 million (U.S. $11.1 million) in back taxes from John Babikian, Canadian news media reported last month. Babikian's wife linked the 26-year-old Canadian to Awesome Penny Stocks in a divorce filing last month. Babikian has recently relocated to Monaco from Montreal, according to Canadian news reports. He is said to have reported only C$47,677 as his income for 2008 to 2010.

Babikian has established citizenship in Lebanon and Nevis along with his native Canada, his wife claims in a legal filing. Babikian also holds a diplomatic passport from Guatemala and has applied to other countries, the filing claims. It also claims he has a NetJets private jet rental account through a charitable organization he controls called Vertical International Relief Fund, which makes international air travel easier.

Calls and e-mails directed to one of Babikian's lawyers, Michel Gauthier of Montreal, were not returned. Calls to Stanley Morris, an attorney who has represented Awesome Penny Stocks and Babikian in the past, were also not returned. Morris is a principal in the Santa Monica, Calif., law firmCorrigan & Morris LLP.

Meanwhile, theSecurities and Exchange Commissionhas halted trading in the last three stocks that Awesome Penny Stocks promoted: Trading in PacWest Equities Inc. was stopped in September, Pacific Clean Water Technologies was halted on Oct. 11, and Press Ventures Inc.was stopped on Oct. 30.