N.Y. stock promoter pleads guilty to fraud
NEW YORK, Dec 30 (Reuters) - A Long Island stock promoter
pleaded guilty on Tuesday to charges of stock fraud, income tax
evasion and insider trading in Brooklyn Federal Court.
Donald Kessler, 54, of Deer Park, who in addition to
working as a freelance stock promoter was also president of
Comprehensive Environmental Systems Inc., also served as a
consultant for Spectrum Information Technologies SITI.OB.
Kessler is now cooperating with federal prosecutors and
faces up to five years in prison when he is sentenced. He also
agreed to pay back taxes and other fines.
Kessler was frequently quoted by financial reporter Dan
Dorfman in his reports for both CNBC and Money Magazine.
After the investigation into Kessler's dealings first
became public in 1995, Dorfman came under scrutiny from both
his employers. Dorfman denied any wrongdoing, but left Money
Magazine that year. In 1996 he suffered a stroke and never
returned to CNBC, which issued a statement clearing him of any
violations.
Kessler, however, was probed by federal investigators who
uncovered a string of irregularities.
In one scheme, Kessler admitted he disclosed information
illegally about the hiring of John Sculley, a former Apple
official, as Spectrum's new chairman and chief executive
officer.
Kessler's leaks about the hiring pushed the stock value up,
and on one day it was the most actively traded stock on the
NASDAQ exchange. A friend of Kessler's made $600,000 and paid
Kessler $10,000 using the insider information.
In all, court papers said that Kessler and seven others
have pleaded guilty to bilking investors out of $15 million
through CESI stock fraud schemes between 1992 and 1996.
REUTERS
Rtr 20:57 12-30-97
Copyright 1997, Reuters News Service |
