Day trader arrested after posting bogus Lucent release
By Reuters
Special to CNET News.com
March 30, 2000, 2:20 p.m. PT
NEW YORK--A securities day trader who allegedly posted a bogus press release on the Internet last week that led to a drop in the price of Lucent Technologies' shares was arrested today and charged with securities fraud, the U.S. attorney's office said.
Fred Moldofsky, 43, was to be presented in federal court in Houston on the charges, which were filed in Manhattan federal court, prosecutors said.
The complaint said that Moldofsky posted the fraudulent press release, which stated that Lucent Technologies expected an earnings shortfall, on a Yahoo message board.
The day after the posting Lucent's stock price fell by as much as 3.6 percent, representing a reduction of more than $7.1 billion in its market capitalization, prosecutors said.
Moldofsky allegedly traded 6,000 shares of Lucent stock the day he issued the bogus press release. The complaint alleged that the press release was modeled after a legitimate release issued by Lucent on Jan. 6 in which the company issued an earnings warning with respect to the first quarter of its fiscal year 2000.
The complaint said law enforcement officers were able to quickly identify Moldofsky despite his efforts to remain anonymous through the use of false names and addresses on the Internet.
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