CORRECTED - Man accused in "pump-and-dump" eConnect stock scam
Tue Apr 25 21:27:00 EDT 2000
In LOS ANGELES story headlined "Man accused in
"pump-and-dump" eConnect stock scam" please read in eighth
paragraph "EConnect spokesman Fred Biddle said the company
could not comment on Sayre's case other than to say, "We know
of no connection whatsoever between the SEC's action against
Mr. Sayre, IFR and eConnect." (Corrects name to Fred from Tom,
adds words "the SEC's actions against", adding dropped words).
A corrected repetition follows.
By Michael Miller
LOS ANGELES, April 25 (Reuters) - Criminal charges have
been filed against a tree-trimmer who allegedly boosted an
Internet company, eConnect , on the Web and then sold
his stock in the firm for a profit of $1.4 million, court
statements made public on Tuesday said.
According to the complaint filed in federal court by U.S.
Attorney Alejandro Mayorkas last Friday, Stephen Sayre, 43,
issued "a series of purportedly objective analysts reports,"
through a company he formed called Independent Financial
Reports (IFR), which said that shares of eConnect were
undervalued.
Although the so-called analysts' reports said IFR did not
own any shares of eConnect, a San Pedro, Calif., developer of
secure electronic Internet payment systems, Sayre had secretly
bought and sold eConnect shares through another company he
owned called Silver Screen Industries, amassing a profit of
$1.4 million, according to the charges.
Sayre was sued in a civil case bought in U.S. District
Court in Los Angeles on April 12 by the Securities and Exchange
Commission (SEC), which alleged he had engaged in a classic
"pump-and-dump" stock scheme.
In that case, the SEC said Sayre's real profession was a
tree-trimmer and that he had "masqueraded as a financial
analyst" in an effort to manipulate the price of eConnect.
The SEC complaint alleged that IFR said eConnect shares
were undervalued and they could be worth as much as $135 within
a year. The SEC said the opinions, along with questionable
statements from the company itself, helped the company's share
price skyrocket from $1.39 on Feb. 28 to a high of $21.88 on
March 9.
The SEC halted trading in eConnect on March 13 but allowed
it to resume on March 27.
EConnect spokesman Fred Biddle said the company could not
comment on Sayre's case other than to say, "We know of no
connection whatsoever between the SEC's action against Mr.
Sayre, IFR and eConnect." (Corrects spokesman's first name,
adds dropped words.)
He added that eConnect was still trading actively.
The SEC suit alleged that Sayre, who formed
Independent Financial and was its sole officer and director,
bought and sold 177,000 eConnect shares from late February
through early March.
The SEC suspended trading in eConnect's common stock on
March 13 due to questions concerning the accuracy of its
statements to its shareholders, who are now trying to sue the
company in a class action lawsuit.
A spokesman for Mayorkas said a judge in Tuesday's criminal
case had issued an arrest warrant for Sayre, who was currently
being sought by federal law enforcement agencies.
REUTERS
Rtr 21:27 04-25-00
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