The Feds are getting tough on penny promoters: (Joel Cohen, the Asst US Attorney in the case, by the way, is one of Anthony's friends)
Four arrested for peddling penny stocks on Web
NEW YORK, Aug 18 Four Long Island brokers were arrested for fraudulently peddling penny stocks through a Web site and E-mails, federal authorities said on Wednesday.
The four brokers, three of whom were barred from working in the securities industry because of prior violations, promoted the stocks through the stockplayer.com Web site from April 1997 through the present, according to a U.S. Attorney of the Eastern District of New York statement. They then sold shares that they received from the companies for their promotional services to unsuspecting investors at inflated prices, it added.
The brokers are charged with manipulating the prices of eight penny stocks the Web site promoted and failing to disclose that these companies gave them hundreds of thousands of shares of their stock.
The brokers were previously employed by Stratton Oakmont Inc., a Lake Success, N.Y., broker that went out of business in 1996.
"It's illegal to promote these stocks without telling the public the full extent of the compensation," said Joel Cohen, the deputy chief of the business and securities fraud division of the U.S. Attorney's Brooklyn office in a telephone interview.
"What (the brokers) were doing was telling people on this Web site: 'We're getting 25,000 shares,'" Cohen said. "But in reality they were getting 500,000 shares."
The brokers, who were arraigned in the U.S. Courthouse in Hauppage, N.Y. on Wednesday and could face sentences ranging up to 20 years, are Vincent Napolitano, Irving Stitsky, Jordan Shamah and Robert Kessler. The first three could not be reached for comment because they have unlisted telephone numbers, and nobody answered calls to Kessler's house.
The stockplayer.com Website often misrepresented the business prospects of these eight companies to entice investors to buy their shares, prosecutors said. The companies themselves have not been charged with any wrongdoing because companies can issue stock to promoters under certain circumstances, Cohen said.
Cohen said "the investigation is continuing."
The companies, most of which traded on Nasdaq's over-the-counter bulletin board of small stocks, were ARXA International Energy Inc. <ARXA.OB>, Iron Holdings Corp., Collision King Inc. <CKNG.OB>, Tilden Associates Inc. <TLDN.OB>, Detour Magazine Inc. <DTRM.OB>, Tricom Technology Group Inc. <TRCM.OB>, Wineco Productions Inc <WCPD.OB>, Fidelity Capital Group Holdings Inc. <FCGH.OB>
ARXA, Tilden, Wineco, Fidelity and Detour officials were not immediately available for comment. Iron Holdings, Collision King and Tricom could not be reached.
In addition to a string of bulletin board companies, the stockplayer.com Web site also lists blue-chip computer maker Compaq Corp. <CPQ.N> as one of the companies it profiled previously.
19:26 08-18-99
And their web sight is still up and running ! |
