Here is the press article on "H2SteveO" and his alledged touting of DCH
Found this on Motley Fool
WEB OF DECEIT: Who's That Touter On
The Message Boards?
By NICOLE RIDGWAY
NEW YORK -- Many people would be reluctant to go on a blind date with
someone they met in cyberspace. But a surprising number are willing to heed the investment advice of anonymous stock pickers on online message boards and chat rooms without a second thought.
An odd dichotomy, but true. Taking stock tips from these online forums is just like a blind date - a person rarely knows with whom they are dealing and where the relationship will lead.
Message boards and chat rooms do offer a wealth of ideas and opinions. But they also host a lot of hypesters, preying on investors who wander into these forums looking for free investment advice and a legitimate get-rich-quick stock pick. With the anonymity that the Internet affords people, it's hard to tell who's biased and
who's not.
Consider Steve Oshinsky. He operates a private equity fund and regularly boosts a small company named DCH Technology Inc. (DCHT) in postings to online message boards.
Oshinsky says he doesn't get paid to promote DCH. However, information gleaned from his user profile on the message boards leads to a different conclusion.
A Web site Oshinsky runs contains research reports on DCH and discloses he received 100,000 free-trading shares and $5,000 in February 1999 and December 1998 for "services rendered earlier in the year"- services he said included setting up a business deal between DCH and another publicly-traded company.
Whether Oshinsky is a paid stock tout or an informed source, it should make no difference to investors. John Reed Stark, the chief of the Securities and Exchange Commission's Office of Internet Enforcement, said that's because people should never act on investment advice from the Web - period.
Since 1996, the SEC Internet enforcement division has coordinated two roundups of online stock touters that led to 25 separate enforcement actions against more than 50 individuals and companies.
But there are more touters loose in cyberspace, and it's going to get a lot worse, said Norman Willox, the founder and chief executive of the National Fraud Center in Horsham, Pa. Willox said the typical stock touting scenario entails a hypester who goes to message boards and requests information on a company as a means of initiating a dialogue with a prospective investor.
Once the touter gains the investor's confidence, he or she starts hyping the shares. "Next thing you know, they're offering them what they believe to be inside information about a stock and getting them to invest in it ... and then starting to run it up," Willox explained.
Payment For Services Rendered
Ever since the SEC began cracking down on online stock touts, Oshinsky said he's been dotting his i's and crossing his t's - that means disclosing his identity and his relationship with DCH.
Under the moniker "H2SteveO," Oshinsky posted a message in early December projecting that DCH's shares (which currently linger at close to $2) will climb to $10 each by the fall of 2000. Since then, he has trimmed his price target to $8 by December of next year.
Through his private equity fund, RAM Capital Management, Oshinsky has written two of what he calls "investor opinion reports" on DCH bearing disclaimers that he was twice paid fees by the company. Those fees, he said, were for services related to his role in putting together a partnership between DCH and a wearable computer
maker named Xybernaut Corp. (XYBR).
And he claims he didn't own any of the free-trading shares paid by the company at the time he issued the reports, just restricted ones he purchased in a private placement.
Oshinsky says his disclaimers eliminate any doubts about whether or not he is an illegal stock tout in the SEC's eyes. According to the rules outlined by the SEC, he's right.
Proving that a person is a paid stock promoter on message boards is difficult because it's hard to ascertain the impact of touting on a stock's price and the motivations behind it, said Bill McDonald, assistant commissioner for enforcement with the California Department of Corporations.
The increasing use of disclaimers by stock promoters, while meeting SEC requirements, clouds the issue even more, he said. "Their defense is that they're going to tell you that they're doing it," he said.
But do investors know where to look for these tucked-away disclosure statements
before jumping into a stock that its promoters promise will be the next big thing?
No, said Lynn Duke, an investigative reporter for cyber-sleuthing Web site StockDetective.com. "There are a lot of people coming online and putting their money out there and they really don't know any better," she said.
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