SNNM: . . . THIS is why we don't play Vancouver based OTC or gaming stocks. . .looks like a good candidate for the 2nd Annual Scammy Awards coming this February.
Starnet Communications Shares Fall After Police Raid
Vancouver, Aug. 20 (Bloomberg) -- Starnet Communications International Inc. officials said Canadian police raided their homes and the company headquarters today as part of an illegal betting investigation, sending shares down as much as 70 percent.
Starnet Treasurer Chris Zacharias said Royal Canadian Mounted Police raided his home and those of several other officers of the company at 6:30 a.m. local time. Police, who were still at his home examining files at 10:40 a.m., confiscated ''some Starnet-related records,'' he said.
Police also raided Starnet offices, he said.
''I can say it's in relation to the bookie laws,'' Zacharias said, adding he was ''not aware'' of any other offenses being investigated by the police. He also declined to say which
company officers' homes had been raided, though he said no one associated with the company was arrested.
Vancouver-based Starnet, which recently shifted its main focus from Internet pornography to online gambling, fell 8 15/16 to 4 3/16 in midafternoon trading of 5.8 million, more than 10 times the three-month daily average. Shares earlier touched 4.
CKNW/98 radio in Vancouver said the company had been under investigation for 18 months regarding illegal gambling and distribution of pornography over the Internet, the station said.
Royal Canadian Mounted Police declined to comment. A Vancouver police spokeswoman couldn't be reached.
Internet Gambling
Starnet's shares rose 52-fold, from 1/2 in November to 26 in early July, as the company began to shift from online pornography to Internet gambling.
Its stock gained despite laws against gambling on the Internet in the U.S. and Canada that have prompted the company to set up its gambling unit in the West Indies, out of the reach of U.S. legal authorities.
Chief Executive Mark Dohlen has said he'll sell Starnet's pornographic Internet sites. Online gambling, unlike pornography, will someday be viewed as a legitimate business that big institutions will invest in, he's said.
Most buyers of Starnet shares so far have been small investors, Dohlen has said. Analysts for the big Wall Street brokerages have mostly ignored Starnet and other U.S. online gambling companies because of questions about the legality of their business.
Dohlen has said that even excluding the U.S. and Canada, millions of people around the world will gamble on Starnet's websites and on other Internet sites that license its online gambling software.
Zacharias said that the local press has linked Starnet's troubles to that of British Columbia Premier Glen Clark, whose home was searched in March, and today a judge ordered the release of the search warrant's contents. ''They are linking us to the
premier,'' Zacharias said. ''That's absolutely incorrect.''
Aug/20/1999 14:18 |
