RE SEXI MARKETDIGESTONLINE.COM, and Ted Melcher.
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Market Digest Online - stock market commentary, newsletters, expert advice
click on the link. The Ted Melcher still uses "Whisper Stocks" look in the left hand top corner. The crook is still at it accept running the scam on another new web site marketdigestonline.com
Registrant:
Market Digest Online, Inc. (MARKETDIGESTONLINE-DOM)
1515 Pear Tree Circle
Brentwood, TN 37027
US
Domain Name:
Administrative Contact, Billing Contact:
Melcher, Ted (TM7661) qvl@MINDSPRING.COM
Market Digest Online, Inc.
1515 Pear Tree Circle
Brentwood,, TN 37027
615-256-4747 (FAX) 615-371-1899
Technical Contact:
Guthrie, Craig (CG5473) root@WAYPOINTZERO.COM
waypoint Zero, Inc.
1518 Azalea Dr.
Arlington, TX 76013
888-682-5936
Record last updated on 25-Jul-2000.
Record expires on 14-Jul-2001.
Record created on 14-Jul-1998.
Database last updated on 10-Feb-2001 15:35:57 EST.
Domain servers in listed order:
NS.FAMILYNET.NET 65.194.232.2
NS2.FAMILYNET.NET 65.194.232.3
01/26/99- Updated 07:51 PM ET
usatoday.com
Net newsletter owner sentenced for fraud
WASHINGTON -- The owner of an Internet stock newsletter, who had pleaded guilty to stock fraud, was sentenced to a year in prison and fined $20,000 by a federal judge on Friday.
Theodore R. Melcher Jr., owner and president of SGA Goldstar Research, is one of the figures in an ongoing investigation of an alleged $12 million stock manipulation scheme.
U.S. Attorney Helen Fahey in Alexandria, Va., said the case "should be a clear signal to those who use the remarkable technology of the Internet to snare vulnerable citizens in a worldwide web of deception."
At the Securities and Exchange Commission, Thomas Newkirk, the agency's associate enforcement director, said Melcher's sentence "shows that we and the criminal (law enforcement) authorities take it seriously." The SEC worked on the case with Fahey's office and the Internal Revenue Service.
U.S. District Judge Albert V. Bryan Jr. sentenced Melcher, who pleaded guilty in June to conspiring to violate federal securities and tax laws by engaging in fraud through the purchase and sale of stock in Systems of Excellence. Melcher received shares of the company, a maker of video teleconference equipment, in exchange for publishing favorable reports about it, some of which included false statements.
Melcher, 51, of Brentwood, Tenn., obtained some $515,802 in trading profits from the fraud, according to a statement issued by Fahey on Friday. Most of the money came through an offshore company that Melcher controlled "for the specific purpose of avoiding" personal income taxes, the statement said.
Melcher's attorney, Michael Koblenz, didn't immediately return a telephone call seeking comment.
Charles O. Huttoe, the former Systems of Excellence chairman and chief executive officer, pleaded guilty last November to violating securities laws and engaging in money laundering. He received a 46-month prison sentence in January.
The Securities and Exchange Commission had accused Huttoe of manipulating the market by issuing false, favorable press releases about Systems of Excellence, then selling his shares into an inflated market. He also was accused of secretly distributing millions of the shares to his mother, wife and niece and corporations he controlled.
The SEC also had accused SGA Goldstar, a Nashville, Tenn.-based publisher of an Internet stock newsletter, of writing about Systems of Excellence "on nearly 100 occasions, almost always in a highly promotional tone" in its newsletter, "SGA Goldstar Whisper Stocks."
Melcher and SGA Goldstar's other employee, Shannon B. Terry, received Systems of Excellence stock and then began selling the shares as the price rose due to investor interest sparked by their newsletter, the SEC said. Some of the stock also allegedly was given to two companies controlled by the men, Alpha Securities and Dunbar Holdings.
In addition, the SEC charged that SGA Goldstar received stock from nine other companies and the two executives "sold stock in several of these companies while SGA Goldstar was touting the companies in its newsletter."
Systems of Excellence has offices in McLean, Va., and Coral Gables, Fla.
By The Associated Press
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.
LITIGATION RELEASE NO. 16632 / July 20, 2000
SECURITIES AND EXCHANGE COMMISSION v. CHARLES O. HUTTOE, ET AL., Civil Action No. 96-02543 (GK) (D.D.C.)
FINAL THREE DEFENDANTS IN SYSTEMS OF EXCELLENCE LITIGATION SETTLE AND ORDERED TO PAY MORE THAN $2 MILLION FOR TOUTING AND DISSEMINATING MISLEADING INFORMATION IN INTERNET STOCK NEWSLETTER
The Securities and Exchange Commission ("Commission") announced that on July 7, 2000, Judge Gladys Kessler issued an order implementing a settlement with Theodore R. Melcher, Jr., SGA Goldstar Research, Inc., and Alpha Securities, Ltd. (collectively the "Melcher Defendants"), the remaining three defendants in SEC v. Charles O. Huttoe, et al. The Melcher Defendants agreed, without admitting or denying the Commission's allegations, to consent to permanent injunctions against future violations of the securities laws and to disgorge millions of dollars of unlawful proceeds. Melcher previously pled guilty to criminal charges arising from the same conduct. The settlement with the Melcher Defendants concludes the original civil litigation filed by the Commission in 1996 in response to the massive market manipulation perpetrated by Systems of Excellence, Inc. and others.
It its complaint and amended complaint, the Commission alleged the following as to the Melcher Defendants:
From August 1993 until November 1996, Melcher owned and ran SGA Goldstar Research, Inc., publisher of the SGA Goldstar Whisper Stocks newsletter. That newsletter profiled and made recommendations promoting largely unknown and untested penny stock or small capitalization companies, and was distributed over the internet and otherwise.
Companies paid Melcher and SGA Goldstar in stock in exchange for articles promoting their securities in the Whisper Stocks newsletter.
Charles O. Huttoe, the CEO of Systems of Excellence, Inc. ("SOE"), hired SGA Goldstar to promote SOE in the Whisper Stocks newsletter.
In exchange for recommending SOE securities in the Whisper Stocks newsletter, Huttoe caused SOE to issue unregistered, purportedly free-trading stock to Melcher and Alpha Securities. SGA Goldstar and Melcher failed to disclose that they had been compensated by SOE in exchange for promoting SOE in the Whisper Stocks newsletter.
At the same time that Melcher was recommending the purchase of SOE stock through the Whisper Stocks newsletter, Melcher was selling his unregistered SOE stock into the public market through brokerage accounts in his name and that of Alpha Securities, Melcher's wholly owned Bahamian shell company.
The Melcher Defendants, over a three-year period, engaged in a systematic practice of touting other companies in the Whisper Stocks newsletter in exchange for stock. Neither Melcher nor SGA Goldstar disclosed that they were being compensated for the promotional coverage or that they were selling their shares at the same time that they were recommending to investors that they buy the securities.
Including assets to be disgorged by the Melcher Defendants, the Commission will have recovered approximately $11 million from its enforcement actions related to the Systems of Excellence fraud. The Court-appointed Receiver is holding these funds for distribution to defrauded investors. The Commission and the Receiver hope to file a plan of distribution for the Court's approval within the next several months.
To date, six individuals have pleaded guilty to felony charges stemming from these matters and have been sentenced as follows:
Huttoe received 46 months in prison, with two years of supervised release, and a $10,000 fine, pursuant to a criminal information charging him with one count of securities fraud and one count of money laundering.
Merle Finkel, the auditor for SOE, pleaded guilty to a criminal information charging him with one count of conspiracy to commit securities fraud and bank fraud. Finkel died prior to sentencing.
Melcher received 12 months in prison, followed by two years of supervised release, and a $20,000 fine, pursuant to a criminal information charging him with conspiracy to commit securities fraud.
Barclay Davis, a stock promoter, pleaded guilty to one count of conspiracy to commit securities fraud and bank fraud, and one count of money laundering. Davis is currently awaiting sentencing.
Sheldon Kraft a broker at Commonwealth Associates and then M.H. Meyerson, received three years of probation and six months of home detention pursuant to a two-count criminal information charging him with one count of conspiracy to commit securities fraud and money laundering and one count of failure to file tax returns.
Michelle Sotnikow, a stock promoter, received three years of supervised probation with special conditions of being barred from the securities industry, pursuant to a criminal information charging her with one count of conspiracy to commit securities fraud and defeat the lawful function of the Internal Revenue Service.
In a related matter, on May 30, 2000, the Commission revoked the registration of the common stock of Systems of Excellence, Inc. pursuant to Section 12(j) of the Exchange Act. The Order imposing the deregistration of SOE stock found that SOE failed to comply with Sections 5(a), 5(c), and 17(a) of the Securities Act, Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 13a-1, 13a-11, and 13a-13 thereunder. Deregistration of SOE's securities will prevent further parties from acquiring the now defunct company and using its securities for use in future manipulations.
This enforcement action is part of the Commission's four-pronged approach to minimizing Microcap fraud: enforcement, inspections, investor education, and regulation. For more information about the SEC's response to Microcap fraud, visit the SEC's Microcap Fraud Information Center at sec.gov.
The Commission previously has made several announcements concerning these matters. See Securities Exchange Act Rel. 42616 (April 4, 2000); Lit. Rel. 16343 (October 27, 1999); Lit. Rel. 15996 (December 9, 1998); Securities Exchange Act Rel. 40509 (September 30, 1998); Lit. Rel. 15906 (September 24, 1998); Lit. Rel. 14900 (September 24, 1998); Lit. Rel. 15888 (September 18, 1998); Lit. Rel. 15677 (March 19, 1998); Lit. Rel. 15617 (January 14, 1998); Lit. Rel. 15600 (December 22, 1997); Lit. Rel. 15571 (November 25, 1997); Lit. Rel. 15490 (September 12, 1997); Lit. Rel. 15286 (March 12, 1997); Lit. Rel. 15490 (January 31, 1997); Lit. Rel. 15185 (December 12, 1996); Lit. Rel. 15153 (November 7, 1996); Securities Exchange Act Rel. No. 33791 (October 7, 1996).
sec.gov
Last update: 07/24/2000
THE WALL STREET JOURNAL/MONDAY, SEPTEMBER 15, 1997
securitieslawinstitute.com 91597#2
SGA Goldstar’s President Is Sentenced To Prison, in Internet Stock-Fraud Case
By Michael Schroeder
Staff Reporter of The Wall Street Journal
WASHINGTON - The owner of SGA Goldstar Research Inc. was sentenced to 12 months in prison as part of what authorities say is the first criminal case involving Internet stock fraud.
Federal prosecutors said Theodore R. Melcher Jr., owner and president of the Nashville, Tenn., company, pleaded guilty in June to one count of conspiracy to commit stock fraud. But the plea wasn’t made public because he has been cooperating in an expanded stock-manipulation probe by the Securities and Exchange Commission and federal prosecutors in Virginia and Las Vegas. Friday’s sentencing took place in federal court in Alexandria, Va.
Mr. Melcher, 51 years old, was charged with accepting 250,000 shares of stock in System of Excellence Inc. from its former chairman in January 1996, as a payoff to tout the company. Mr. Melcher promoted the stock through SGA Goldstar Whisper Stocks, a daily newsletter made available through an Internet Web site.
Details of Charge
According to court documents, Mr. Melcher tried to inflate the price of stock, known on Wall Street by its stock trading symbol SEXI, by telling subscribers that it was “a once in a lifetime opportunity” and that it was a rumored takeover candidate. Prosecutors said Mr. Melcher had fabricated the takeover rumor and had done no independent evaluation of Systems of Excellence, a video teleconferencing concern based in McLean, Va. Mr. Melcher was accused of fraudulently failing to inform his subscribers that he was paid by the company and that he was advising investors to buy and hold them. The stock sales produced a gain of $315,802 for the defendant, according to documents filed by the government.
“This important case should be a clear signal to those who use the remarkable technology of the Internet to snare vulnerable citizens n a world-wide web of deception,” said U.S. Attorney Helen F. Fahey.
In a tearful statement to the court Mr. Melcher said he “accepted responsibility.” He added, “I’d like to apologize to my family and friends for the pain and shame that my actions have brought on them.” In addition to the prison term, which begins immediately, he was fined $20,000.
SEC Suit Still Pending
On Nov. 7 1996, the SEC sued Mr. Melcher, his SGA partner, Shannon Terry, and others in federal court in Washington. That suit, charging stock fraud and manipulation, is still pending. A criminal investigation is continuing. S. Lawrence Polk, Mr. Terry’s attorney, says his client “has cooperated fully with all the investigation.”
Prosecutors also are scrutinizing Mr. Melcher’s association with Diversified Corporate Consulting Inc., a New York stock-promoting firm, which received 1.8 million shares of System of Excellence. According to court documents, Mr. Melcher was paid $200,000 by the firm.
The case has resulted in two other guilty pleas. Charles Huttoe, the former chairman of System of Excellence, is serving a 46-month prison term for stock fraud and money laundering. In March, Merle Finkle, an accountant, pleaded guilty to conspiracy to commit stock and bank fraud. Mr. Finkel was charged with supplying bogus audit reports for three companies, including System of Excellence. He hasn’t yet been sentenced.
The SEC said Systems of Excellence is being liquidated. No one at the company was available for comment.
The criminal investigation, which is expected to produce more indictments within weeks, is being handled by Assistant U.S. Attorney Jack Hanly and two SEC attorneys. Chris Bruno and Steve Korotash, who are working as special assistants to the Department of Justice. |
