Re: 8/20/00 - Calif. Wins Against Phony MGM CEO
Calif. Wins Against Phony MGM CEO
Associated Press
Last Updated: Aug. 20, 2000 at 2:10:40 a.m.
LOS ANGELES - A man accused of posing as a former executive of Metro-Goldwyn-Mayer Inc. on an Internet message board has been ordered to post a message on the same board under a new name - ``Retraction.''
The California Department of Corporations, which regulates securities trading, won a settlement Tuesday with Victor Idrovo, a Manhattan Beach investor accused of posting fraudulent messages to influence the stock price of MGM.
The state alleged that Idrovo posted two messages in 1999 in a Yahoo! message board devoted to discussing the stock of MGM. Idrovo used the Internet nickname ``FrankGMancuso,'' leading others to believe he was the former chairman and chief executive officer of MGM. Mancuso is still on the company's board of directors.
One message, posted last April, seemed designed to get investors to buy the stock. It was headlined ``Kirk says $24 a share'' and led investors to believe that ``Mancuso'' had inside information from Kirk Kerkorian, MGM's majority stockholder. At the time the message was posted, MGM stock was trading around $15 per share.
A second message, posted in October, was headed ``Let the selling begin'' at a time when the stock was trading at slightly over $20 per share.
Neither message succeeded in moving MGM stock significantly and state regulators say Idrovo did not profit from the trading he was doing at the time of his postings.
``That's not the point,'' said Marc Crandall, lead counsel of Internet Compliance and Enforcement. ``It caused a lot of problems on the message boards and we don't think it should be tolerated.''
Crandall said Idrovo cooperated in the inquiry, as did Yahoo! and MGM.
MGM issued a brief statement saying it would cooperate with any other state or federal investigations of the matter.
``This successful legal action should send a clear message to others who try to manipulate stock prices, particularly short sellers, by spreading false information,'' the statement read.
Tuesday's settlement does not require Idrovo to admit or deny any wrongdoing. The state won an injunction barring Idrovo from posting any more fraudulent messages. In addition, Idrovo must pay the state $4,500 in fines and costs. He must also post a message on the same Yahoo! chat board under the Internet nickname, ``Retraction.''
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