RNTK was a major scam ,,,,
remember when...?
FOR IMMEDIATE RELEASE 2001-26
SEC SETTLES SECURITIES FRAUD ACTION AGAINST "TOKYO JOE"
INTERNET STOCK PICKER REQUIRED TO GIVE UP ALL ILLEGAL
PROFITS, PAY A PENALTY OF MORE THAN $400,000 AND
CONSENT TO THE ENTRY OF AN ANTI-FRAUD INJUNCTION
Chicago, IL, March 8, 2001 -- The Securities and Exchange
Commission has settled the enforcement action it brought
last year against Yun Soo Oh Park, the Internet stock picker
known as "Tokyo Joe," and the company Park controls, Tokyo
Joe's Societe Anonyme Corp. Under the terms of the
settlement, which was as approved today by the District
Court for the Northern District of Illinois, Park and
Societe Anonyme, without admitting or denying the
allegations made in the Commission's Complaint, consented to
entry of a federal District Court order that permanently
enjoins them from violating the antifraud and other
provisions of the federal securities laws, and orders Park
and Societe Anonyme to pay $324,934 in ill-gotten gains and
$429,696 in civil penalties, for a total monetary payment of
$754,630. Park and Societe Anonyme also agreed to post a
hyperlink to the court order on the home page of the Tokyo
Joe web site for a period of thirty days.
SEC Enforcement Director Richard H. Walker said, "This case
has established 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." Mr. Walker added, "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, "In
requiring Park and Societe Anonyme 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."
In its Complaint, filed in January 2000, the Commission
alleged that Park, a self-proclaimed Internet stock-picking
guru, operated an Internet web site through which investors
who paid a monthly membership fee received stock
recommendations and other investment advice from Park. The
Commission charged that Park defrauded members of his
Societe Anonyme by failing to disclose that, in several
instances, he had already purchased shares of the stock that
he was recommending and that he planned to sell his shares
into the buying flurry and subsequent price rise that
followed his recommendations, an illegal practice known as
"scalping." The Commission also charged that Park touted
one company to members of Societe Anonyme and to the public
without disclosing that he had received shares of stock in
the company in exchange for his recommendation. Finally,
the Commission charged that the past performance results
posted on Park's web site were materially false and
misleading.
Before submitting his settlement offer, Park moved to
dismiss the Commission's Complaint, arguing primarily that,
since he dispensed his stock picks and investment advice
over the Internet, he was not an "investment adviser" within
the meaning of the Investment Advisers Act and that the
antifraud provisions of that Act could not be
constitutionally applied to him. The District Court denied
Park's motion to dismiss in its entirety and held that the
Commission's Complaint sufficiently alleged that Park was an
"investment adviser" under the Advisers Act and that Park
was subject to that Act's antifraud provisions. (SEC v.
Park a/k/a Tokyo Joe, and Tokyo Joe's Societe Anonyme Corp.,
99 F. Supp. 2d 889 (N.D. Ill. 2000).
Under the terms of the settlement, Park and Societe Anonyme
consent to a permanent injunction prohibiting them from
violating the antifraud provisions of the Investment
Advisers Act of 1940 and the Securities Exchange Act of
1934, as well as the anti-touting provision of the
Securities Act of 1933. Park and Societe Anonyme also are
required to pay all of the $279,696 in profits they made
from the thirteen instances of scalping and the one instance
of illegal touting alleged by the Commission, plus $45,238
in prejudgment interest on that amount, for a total
disgorgement payment of $324,934. Park and Societe Anonyme
also are required to pay a civil penalty equal to the amount
of their scalping and illegal touting profits ($279,696)
plus an additional penalty of $150,000 based on Park's
posting of false and misleading past performance results on
the Tokyo Joe web site, for a total penalty payment of
$429,696. Finally, within two days of the entry of the
District Court order, Park and Societe Anonyme must post a
hyperlink to a copy of the Commission's order on the home
page of the Tokyo Joe web site for a period of thirty days.
For further information, call Mary Keefe at (312) 353-9338
or Tom Szromba at (312) 353-7416. |
