"Yaa...Rocky wants More......thats what he wants.....MORE"
Edward G Robinson....."Key Largo"
moderntimes.com
Wednesday, Sept. 13, 2000
Organized Crime Targets Small Company Stocks
WASHINGTON (Reuters) - Organized crime is on the rise on
Wall Street, with gangsters dealing in small company stocks as
a lucrative way to fleece U.S. investors, a congressional
hearing was told on Wednesday.
U.S., Eurasian and Eastern European crime gangs are
infiltrating the small-cap stock market, using the Internet and
high-pressure telemarketing operations to sell investors bogus
shares or stock at inflated prices, officials said.
The capos and their cronies target a variety of investors
ranging from senior citizens to small businesses.
``It is a small segment for Wall Street, but the losses for
small investors can be very tragic,'' Bradley Skolnik,
securities commissioner for the state of Indiana told a House
Commerce subcommittee hearing.
It was easier for organized crime to infiltrate and control
small brokerage firms than it was to take control of a much
larger business, Skolnik said.
The stocks they use were not listed on major stock
exchanges, he added.
Thomas Fuentes, chief of the FBI division of organized
crime, said he had seen a significant increase in crime on Wall
Street in the last eight years, during which the U.S. stock
market has enjoyed an impressive bull run.
The FBI has relied on wiretapping, undercover agents and
informants to dismantle criminal operations, most of which were
run by U.S. nationals based here, preying on Wall Street.
But as illegal transactions have migrated to the Internet,
Fuentes said it was much more difficult to monitor activity and
crack down on crooks.
The necessary technology was expensive and so-called ``sting
operations'', involving agents posing as stock buyers, were more
time-consuming, he said.
The Securities and Exchange Commission said it helped
criminal prosecutors in nine operations in the last three
years.
``Over 200 defendants were charged, 30 of which had ties to
organized crime,'' said David Levine, senior advisor to the
director of enforcement of the SEC.
Investor losses related to transactions with defendants
exceeded $200 million, he added.
Fuentes, Skolnik and Securities and Exchange Commission
officials urged investors to be extremely cautious when offered
small company stocks at attractive prices.
``If the scheme sounds too good to be true, chances are it
is too good to be true,'' Fuentes added. |
