F G's secret to success
Colt even posted a "blueprint" for how to manipulate stock prices on the Internet in one message, which did not mention Fast-Trades, according to the SEC. In it, he suggests, "Look for (a stock) with a … low … volume; … pull together information from optimistic press releases; throw in some bull*** about the company being an Internet wonder; buy a bunch of this garbage stock; tell your idiot subscribers how great the stock is; dump the shares you bought; laugh all the way to the bank," the agency stated.
March 2, 2000, 6:27 PM PST
If a Stock Seems Too Good to be True ...
The SEC has charged 4 people, including the creator of Fast-Trade.com, with securities fraud via the Internet.
By Elinor Abreu
The Securities and Exchange Commission brought charges Thursday against four people accused of making money off a Web site that manipulated stock prices.
The SEC said Douglas Colt created the site, Fast-Trades.com, early last year to recommend low-priced, thinly traded stocks to drive up their short-term prices by as much as 700 percent in some cases. Colt, his mother and several friends then allegedly made more than $345,000 in profits by buying the stocks before they were recommended on the Web site and then selling them after Fast-Trades subscribers bought shares. The Web site had as many as 9,000 subscribers.
Colt and his friends promoted the Web site on Internet message boards, including those on Yahoo and Raging Bull, as well as a false "track record" on Fast-Trades' site, the SEC says.
Colt even posted a "blueprint" for how to manipulate stock prices on the Internet in one message, which did not mention Fast-Trades, according to the SEC. In it, he suggests, "Look for (a stock) with a … low … volume; … pull together information from optimistic press releases; throw in some bull*** about the company being an Internet wonder; buy a bunch of this garbage stock; tell your idiot subscribers how great the stock is; dump the shares you bought; laugh all the way to the bank," the agency stated.
"The Internet has replaced the boiler room as the stock-manipulator's tool of choice," Richard H. Walker, director of the SEC's enforcement division, said in a statement. "Its low cost and ease of use has attracted a new breed of persons seeking to profit at the expense of innocent investors. Ridding the Internet of securities fraud is a top priority of the SEC."
Colt, a former Washington-area law student, has been charged in federal court with committing securities fraud. Administrative proceedings have been brought against three of his law school classmates, Kenneth Terrell, Jason Wyckoff and Adam Altma, as well as Colt's mother, Joanne Colt, a city councilwoman in Colorado Springs, the SEC said. Colt and the others have consented, without admitting or denying guilt, to permanent injunctions and cease-and-desist orders. None of them could be reached for comment.
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