From today's SEC Digest:
JUDGMENT ENTERED AGAINST BROTHERS WHO OPERATED MOMENTUM STOCK PICKING WEBSITE
The Commission announced that on May 25, 2001, the U.S. District Court
in Eugene, Oregon entered judgments against Jared R. Leisek and his
brother, Byron J. Leisek. In its complaint, filed on March 1, 2001, the
Commission alleged that the defendants operated a "momentum" stock
picking website called TnTStock.com (TnT), through which the brothers
issued stock recommendations on the website and via e-mail newsletter to
more than 13,000 TnT subscribers. After the recommendations were
released, the price and trading volume of the profiled stocks rose
dramatically, often more than doubling the pre-recommendation levels.
The complaint alleged that the defendants posted false information on a
Yahoo! Club message board frequented by TnT's subscribers. The
complaint further alleged that the defendants falsely claimed, among
other things, that TnT's representatives held no more than 5,000 shares
of any stocks profiled on the website and that TnT's representatives
would never sell shares until thirty minutes after issuing a
recommendation. In fact, the complaint alleged the defendants usually
held more than 20,000 shares and sold most of their shares within thirty
minutes of the release of the recommendations. The defendants are
alleged to have made $195,994.50 in profits from the scheme.
Without admitting or denying the allegations contained in the complaint,
the defendants consented to the entry of judgments permanently enjoining
them from future violations of the antifraud provisions of Section 10(b)
of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder and
ordering them to pay disgorgement totaling $195,994.50 and prejudgment
interest thereon, but waiving payment of disgorgement and not assessing
civil penalties based upon the defendants' demonstrated inability to
pay. [SEC v. Jared Ray Leisek and Byron John Leisek, Civil Action No.
CV 01-6084, AA, D. Or.] (LR-17053)
sec.gov |
