Re: 3/8/01 - Reuters: Stock Picker 'Tokyo Joe' Settles SEC Fraud Case; AP: Stock Guru To Pay in SEC Settlement; NewsFactor.com: U.S. Makes Web Stock Scammer Pay Up
Thursday March 8 4:43 PM ET
Stock Picker 'Tokyo Joe' Settles SEC Fraud Case
By Peter Ramjug
WASHINGTON (Reuters) - Stock-picker Yun Soo Oh Park, known on the Internet as ``Tokyo Joe,'' agreed to pay more than $750,000 to settle federal fraud charges, the Securities and Exchange Commission (news - web sites) said on Thursday.
In a complaint filed more than a year ago in U.S. District Court for the Northern District of Illinois, the SEC charged that Park operated an Internet site that fraudulently dispensed stock advice for a fee.
The commission claimed that Park defrauded customers by failing to tell them that he had already bought shares of the stock he was recommending, and that he planned to sell them once the stock price rose, a practice the SEC called ''scalping.''
But Park's attorney, Ira Sorkin, said: ``There were no findings of any wrongdoing. There were no findings of any fraudulent conduct and no findings of any scalping.''
According to the complaint, Park received more than $1.1 million in fees from members by charging them up to $200 a month. Membership in his Societe Anonyme grew to 3,800 from about 200 between July 1998 and May 1999, the complaint said.
Park was accused of including gains in stocks he never bought or sold in his performance results that were listed on the public portion of his Web site designed to lure in new members, according to the SEC.
Between January 1998 and June 1999, ``Park included at least 40 entries for stocks which he actually traded, for which he reported a gain, when he actually suffered a loss, resulting in overstatements up to 100 percent,'' the complaint said.
The SEC also accused Park of promoting a company without disclosing that he had received shares in exchange for his recommendations.
Without admitting or denying the allegations, Park and Societe Anonyme agreed to repay $324,934 in ``ill-gotten'' gains as well as a fine of $429,696, the SEC said.
He has agreed to post a hyperlink of the settlement on his site, tokyojoe.com, for 30 days, the SEC said.
``Mr. Park settled because the SEC originally sought up to $2.25 million ... and it was a settlement that was advantageous to both sides,'' said his attorney, adding ``Mr. Park wants to go on with his life.''
Park, who is about 50 and lives in New York City, tried to have the case dismissed on the grounds that since he gave investment tips over the Internet, he was not an investment adviser in the legal sense, the SEC said.
The court denied the motion and said that the SEC complaint sufficiently alleged that he was an investment adviser.
``This case has established groundbreaking precedent,'' said Richard Walker, the SEC's top cop.
``Those who are in the business of offering investment advice on the Internet may take on the same duties and responsibilities as other investment advisers,'' he said.
Mary Keefe, the top SEC official in Chicago, added: ``In requiring Park and Societe Anonyme Corp. to pay a significant penalty and to give back all of the profits they made from their illegal trading and touting, we are sending a clear message to those in the stock-picking business -- we will pursue you vigorously if you mislead your customers.''
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Thursday March 8 5:43 PM ET
Stock Guru To Pay in SEC Settlement
By MARCY GORDON, AP Business Writer
WASHINGTON (AP) - A flamboyant, self-proclaimed stock expert calling himself Tokyo Joe has agreed to pay $754,630 to settle allegations by federal regulators that he defrauded investors on his Web site, the Securities and Exchange Commission (news - web sites) said Thursday.
Under the settlement, approved by a federal court in Chicago, Yun Soo Oh Park and his company, Tokyo Joe's Societe Anonyme, neither admitted to nor denied the allegations. They also agreed to refrain from future violations of securities laws and to post a hyperlink to the court order approving the settlement on the Tokyo Joe Web site for 30 days.
Park and his company agreed to pay $429,696 in civil penalties and $324,934 in restitution of allegedly ill-gotten gains.
The settlement ``demonstrates that we will not countenance undisclosed conflicts of interest or other fraudulent conduct from those recommending purchases or sales of securities - whether on the Web or elsewhere,'' SEC Enforcement Director Richard Walker said in a statement.
But Ira Sorkin, a former top SEC official who has represented Park in the case, said the court order ``makes it clear that there were no findings'' of fraudulent conduct.
The agency is not requiring Park to register as an investment adviser, Sorkin noted.
The SEC sued Park in January 2000, alleging that he illegally touted a stock to investors without disclosing he had received shares from the company and lied about his trading performance record.
At the time, Park's attorney said he would contest the SEC's allegations in the civil lawsuit, its first enforcement action against a well-known Internet stock guru. The SEC has brought a string of cases in recent years against alleged securities fraud using the Internet, mostly involving lesser-known individuals and companies.
The SEC had alleged that Park, 50, a former restaurant owner and New York City resident, charged members of his investment club up to $200 a month for stock picks and other advice.
Those membership fees amounted to more than $1.1 million from July 1998 through June 1999, the SEC said.
Park, who never registered with the SEC as an investment adviser, operated his Societe Anonyme from his home in New York, the agency alleged in its suit.
It said Park misled members of Societe Anonyme by failing to disclose or lying to them about the fact that he already owned - and was selling - the same stocks he was advising them to buy. Park profited by selling the stocks into the buying flurry he had created by his recommendations, a practice known as scalping, the SEC said.
On some occasions, Park advised members to hold a stock for several days or longer or designated a target stock price while he actually sold the same stock, sometimes below the target price, the SEC said.
In addition, the regulators alleged, Park posted trading performance results on his Web site that were ``materially false and misleading,'' in an effort to recruit new members and get current members to follow his investment recommendations.
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Friday March 09 02:06 PM EST
U.S. Makes Web Stock Scammer Pay Up
By John L. Micek, www.NewsFactor.com
The U.S. Securities and Exchange Commission (SEC) has settled its lawsuit with Web stock-picker "Tokyo Joe," who made more than US$1 million selling stock picks on his Web site.
Joe, whose real name is Yun Soo Oh Park, and his company, Societe Anonyme, agreed to repay $324,934 in ill-gotten gains and $429,696 in civil penalties, for a total monetary payment of $754,630, according to an order entered in the U.S. District Court in Chicago on Thursday.
U.S. regulators first brought charges against Park last year, claiming that the self-proclaimed Internet stock guru made customers pay up to $200 per month for his advice but failed to inform them he had already purchased shares of the stocks he had recommended.
Tainted Advice
SEC officials also said that Park never told his customers that he was planning to sell those stocks into the flurry of buying and selling that followed his advice -- an illegal practice known as "scalping."
Federal regulators said Park had touted one company to his customers and to the public without revealing that he had received shares of stock in the company in exchange for his advice.
SEC officials also said that Park misrepresented the performance of more than 800 of the stocks he advertised on his Web page.
Sending a Message
SEC director of enforcement Richard H. Walker called the settlement with Park a a "groundbreaking precedent."
"Those who are in the business of offering investment advice on the Internet may take on the same duties and responsibilities as other investment advisers," Walker said. "Today's settlement demonstrates that we will not countenance undisclosed conflicts of interest or other fraudulent conduct from those recommending purchases or sales of securities -- whether on the Web or elsewhere."
SEC Midwest regional director Mary E. Keefe said she believes that the Park case will send a message to others in the stock-picking business.
"In requiring Park ... to pay a significant penalty and to give back all of the profits they made from their illegal trading and touting, we are sending a clear message to those in the stock-picking business: We will pursue you vigorously if you mislead your customers," she said.
Web's Not Out-of-Bounds
Before Park submitted his settlement offer, he moved to dismiss the SEC's complaint. Park argued that since he dispensed his stock picks and investment advice over the Internet, he could not be considered an "investment adviser" under the U.S. Investment Advisers Act, and that the act's antifraud laws couldn't be applied to him.
The SEC said the district court denied Park's motion and found that he did meet the definition of an investment adviser under U.S. law, and was consequently subject to the law's antifraud provisions.
U.S. officials ordered Park to repay the $279,696 in profits he made from 13 instances of scalping, plus $45,238 in pre-judgment interest, for a total of $324,934. Park was also required to pay a civil penalty of $279,696 -- plus an additional $150,000 penalty for what the SEC said was Park's posting of misleading advice, for a total of $429,696 in penalties.
Under the terms of the order, Park did not admit or deny guilt in the matter. Federal regulators also gave Park two days to post a hyperlink to the order, and said he must keep the link running for 30 days.
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