Penny-manipulating crooks being PROSECUTED!! good.
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"Firstwave Technologies, Inc.
37. The common stock of Firstwave Technologies, Inc. ("Firstwave"), a Georgia corporation based in Atlanta, Georgia, is publicly traded on the Nasdaq Capital Market under the ticker symbol FSTW. The Defendants manipulated the market for Firstwave stock on multiple occakions between January 2005 and November 2005 for a total profit of $79,326.
38. For example, on January 28,2005, Zafar and Thawani purchased a total of 27,700 shares of Firstwave stock at average prices of $1.88 and $1.65 per share, respectively.
39. Also on January 28, shortly after the above purchases, Zafar posted three messages in quick succession falsely stating that Sun Microsystems, Sirius and Taser International were separately going to enter into strategic alliances with Firstwave and that each alliance "would be announced next week." These messages were posted on Yahoo message boards devoted to Sun Microsystems, Sirius and Taser International. -.
40. The statements in the messages described above in paragraph 39 were all materially false and misleading because, among other reasons, Firstwave has never entered into, or ever taken any steps to enter into, an alliance or other business combination with Sun Microsystems, Sirius, or Taser International, and neither Firstwave nor any of those other companies has ever made or planned to make any such announcement.
41. The price and volume increased dramatically after the false messages described above in paragraph 39 were posted, and Zafar and Thawani sold all their shares on January 28, 2005, at average prices of $2.02 and $2.08 per share, respectively, netting a profit of $4,473. The stock had closed at $1.56 per share on the day before the manipulation began (January 27) and climbed as high as $2.50 per share, a 60% increase, on January 28. Trading volume on January 28 increased by 5,376% fiom the previous trading day. After the Defendants' sales, the stock price dropped to $1.86 at the close of trading on January 28,2005."
42. The Defendants manipulated Firstwave stock again in November 2005, generating profits of $72,397.
43. On November 17 and November 18,2005, Zafar and Thawani purchased a total of 45,107 shares of Firstwave stock at average prices of $1.84 and $1.86 per share, respectively.
44. Shortly after the market closed on November 18, the Defendants posted three messages in rapid succession on three different Y*oo message boards falsely stating that a new contract for Firstwave "is going to cause HUGEjump in earnings, according to Wall Street analysts." The latter two of these messages added that "Wall Street is projecting $6.00 by end of November." The Defendants posted additional messages on the next trading day (November 21) claiming that Firstwave's share price was going to climb to $5.50 or $6.00 per share.
45. The statements in the messages described above in paragraph 44 were all materially false and misleading because, among other reasons, (i) Firstwave has never been covered by any securities analysts; and (ii) no securities analyst or other financial professional publicly projected a price target for Firstwave stock in or about November 2005, much less a price target of $6.00.
46. The price and volume increased dramatically after the false messages described above in paragraph 44 were posted, and Zafar and Thawani sold all their shares on November 21, 2005 at average prices of $3.40 and $3.67 per share, respectively, netting a profit of $72,397. The stock had closed at $2.17 on November 18 and climbed as high as $4.36 per share on November 21, a 101 % increase. Trading volume increased on November 2 1 by 2,055% from the previous trading day. After the Defendants' sales, the stock price dropped to $2.45 at the close
of trading on November 21,2005.
47. The Defendants also made $2,457 manipulating Firstwave stock in February
48. On February 18,2005, Zafar and Thawani purchased 23,100 shares of Firstwave stock at average prices of $1.78 and $1.7 1 per share, respectively. Zafar then posted two messages on a Yahoo message board falsely stating that Google was giving $240 million to Firstwave and was working with the company on a "contract worth over $240 million . . . to build a consortium." The first such message was posted on the afternoon of February 18, and the second message was posted on the morning of February 22, which was the next trading day.
49. The statements described above in paragraph 48 were materially false and misleading because, among other reasons, (i) Google has never invested or otherwise given any money at all, much less $240 million, to Firstwave or ever entered into a contract or other business relationship of any kind with Firstwave or taken any steps to do so; and (ii) Firstwave is a small business software company with annual revenue of $7.4 million.
50. Over the course of February 18 and February 22, Zafar and Thawani sold all of their shares at average prices of $1.90 and $1.87 per share, respectively, netting a profit of $2,457. After false messages on February 18 and 22 were posted, the price of Firstwave stock rose as high as $2.10 on February 18 and $2.09 on February 22, a 33% and 32% increase, respectively, from the closing price on February 17. Trading volume increased by 2107% on February 18 over the prior day and by another 262% on February 22. |
