courtney smith busted.
newsday.com
Courtney Smith, a New York-based financial adviser, was arrested yesterday on federal charges that he touted the stock of an Internet marketing company without disclosing that the company paid him $100,000 in cash for the plugs, and also gave him tens of thousands of shares of its stock.
A federal grand jury in Los Angeles indicted Smith on Feb. 3, alleging that he promoted the stock of GenesisIntermedia Inc., a now-defunct marketing and Internet company, on numerous financial programs televised on CNN, CNBC and Bloomberg television. The firm, headquartered in Van Nuys, Calif., was known for devices such as the "Ab Twister" and products related to the book "Men are from Mars, Women are from Venus," which it marketed on cable television, according to the U.S. attorney's office for the Central District of California in Los Angeles.
Smith was arrested at his Manhattan apartment and will be arraigned in Los Angeles. His attorney, George Newhouse, said he expects Smith will plead not guilty to violating federal securities laws. "His arrest took us by complete surprise," Newhouse said in an interview. "My client, who proclaims his innocence, looks forward to going to Los Angeles and to clearing up these erroneous charges."
Smith, 53, is president and chief investment officer of Courtney Smith & Co., headquartered in Greenwich Village. The company's Web site says it provides investment management and research for institutions and individuals with high net worth.
Smith, who the Web site says has been in the investment business for more than 25 years, was editor of the "Wall Street Winners" newsletter.
According to the indictment, Smith promoted GenesisIntermedia as a "very hot speculative pick" with a business that was "exploding in revenues." In reality, the indictment said, the company suffered net losses totaling nearly $161 million from 1999 to the third-quarter of 2001, right before it shut down.
The $100,000 in cash was secretly routed to Smith through a vitamin-importing company in New York that his girlfriend owned at the time, the indictment said. It also alleges that Smith received 72,000 shares of GenesisIntermedia stock, valued at $1.2 million at the time, through that company.
Instead of disclosing the payments for promoting the shares, as required by federal securities laws, Smith attempted to disguise them through a series of "fraudulent transactions," the indictment said.
If convicted of all nine counts in the indictment, Smith faces a maximum possible prison sentence of 45 years. |
