Publisher touts own stocks, SEC says
Barry Flynn
of The Sentinel Staff
Published in The Orlando Sentinel on September 28, 1999.
Federal regulators on Monday accused a Winter Park financial publisher and marketing company and its members of secretly selling stock in companies they were promoting to the public as great investments.
The company, headed by Roberto Veitia, 52, of Winter Park, allegedly made $20 million selling stock in at least 15 "microcap" companies while promoting the companies in its publications.
... The alleged offenses occurred at least from 1994 through 1996, the suit said.
The suit also said some members of the group bribed stockbrokers to sell the stocks.
Also named in the suit were James W. Spratt III, 44, a former Stratcomm employee from Longwood; James A. Skalko, 42, a principal of a Stratcomm subsidiary, of Lake Mary; and Jack R. Rodriguez, 38, a former stockbroker who left Stratcomm in 1996, of Casselberry.
In a statement issued by a public-relations firm, Veitia said: "This litigation will not impact our day-to-day operations."
"Since we first became aware of this situation, we have provided thousands of pages of documents to the SEC."
The statement also said the company in 1997 adopted new policies for disclosing compensation from companies it represents, a crucial issue in the SEC complaint.
"We applied the SEC's ongoing efforts to clean up the seamier side of the investor-relations industry; however, in this case, we believe they are aimed at the wrong target," the statement said.
Carl Schoeppl, a lawyer representing Spratt, said his client "vigorously denies that he knowingly committed any violation of the federal securities laws." Schoeppl also said Spratt was a former employee but never an officer, director or shareholder of Corporate Relations Group Inc., which along with Gulf Atlantic Publishing Inc. were two Stratcomm subsidiaries named in the suit.
Stratcomm Media, of which Veitia is chief executive, publishes a wide range of tip sheets and stock-market analyses in various formats, including MoneyWorld magazine, Financial Sentinel newspaper and newsletters.
... Others allegedly involved are two Costa Rican companies that the SEC said circumvented U.S. securities laws by taking advantage of an exemption for foreigners. ...
orlandosentinel.com
The following from a Wall St. Journal article by Judith Burns may also be of interest:
The SEC said the defendants failed to disclose receiving stock as compensation for promoting it, in violation of federal securities laws. The agency also said CRG, and Messrs. Veitia, Spratt and Skalko secretly sold the stocks they recommended others buy, a practice known as scalping.
"Not only were they selling, but they were short selling, which is done generally when you think the stock is going down," Mr. Isenberg said. Short selling involves selling borrowed shares in hopes of making a profit by buying an equal number of shares later at a lower price to replace the borrowed stock.
Mr. Spratt, the SEC alleged, was shortselling through an account at a Chicago broker-dealer, which concealed CRG's ownership, in exchange for a share of "substantial illegal profits" from the sales.
interactive.wsj.com
See also:
quote.bloomberg.com
biz.yahoo.com |
