By wplog

Published Tuesday, Dec. 11, 2007 | 10:17 a.m.

Updated Thursday, Oct. 30, 2008 | 2:14 p.m.

The January issue of Vanity Fair has a damaging story about Rudy Giuliani detailing his company's unsavory clients and conflicts of interest. (Wait for it...the inevitable Nevada connection is coming.)

One section in particular caught my eye. Giuliani partners took on a penny stock company called Applied DNA Sciences.

Penny stocks are defined as those that trade for fewer than $5 per share, and usually on small, less regulated stock exchanges.

The company's pitch was that it had a Taiwanese scientist who had figured out how to embed the DNA of plants in just about anything. This, you can see, would be a good way to prevent counterfeiting. The problem: they had no mechanism for reading the plant DNA, which would obviously be required in such an anti-counterfeiting device.

Moreover, a key figure was one Richard Langley, Jr., an SEC-disciplined stock swindler who'd run a "pump and dump" scheme in the mid-90s. And they were getting a bunch of financing from a shady bank. See the irony? A security consulting firm like Giuliani Partners doing business with....

Well, on a hunch, I decided to see if Applied DNA Sciences is incorporated in Nevada. Bingo!

Here's the Secretary of State filing.

(Let's be fair: the company told VF they have acquired the necessary DNA reader and are on their way to profitability. Giuliani Partners says vetting the company's bankers and investors wasn't the job of Giuliani Partners. Giuliani himself also said they'd learned their lesson.)

So, why did I suspect the company was incorporated in Nevada?

Well, go read the best story I've written at the Sun, though one few people actually read. It's about how Nevada has become a magnet for these penny stock companies. It's not clear whether it's our laws or just our image, but for some reason, we invite these people in droves.

I should also note: Secretary of State Ross Miller's Web site has been changed so it doesn't have such an alluring tone for penny stock players.

Here's another reasonable question: How did you learn that Nevada is where so many of these penny stocks incorporate?