Mostly
<Off Topic>
Here is a article about problems we face here. I thought some
would like to read it.
Man on trial for defrauding
investors through the Web
By Michael Pollick
STAFF WRITER
The Internet as an investment medium went on trial Wednesday as the
former president of NVID International, Robert Bunte, faced federal charges
of defrauding more than 1,000 investors.
In the first day of his federal criminal trial in Tampa, jurors were treated to a
live demonstration of a popular investment World Wide Web site called
Silicon Investor. It was through that site that one witness said he was lured
into buying stock in NVID, a tiny Sarasota company that was touting a
revolutionary new disinfectant product.
Kenneth Moss, a Tennessee retiree, told jurors he first decided to buy stock
in NVID after he saw a news release written by the company on the Silicon
Investor, which he still frequents as he monitors his investment portfolio.
What Moss saw was a string of releases issued by NVID, describing the
new disinfectant product as though it were close to being marketable.
The government charges that a string of bogus claims were made via
releases written by Bunte, and that he sent them to a service called the
Business Wire for dissemination. That process includes not only feeding the
releases electronically to newsrooms and brokers, but also directly to the
public via the Internet.
As a result, at least 1,000 investors purchased stock in the company, which
still exists and is still attempting to develop the disinfectant, now known as
Axen.
The government charges that Bunte and fellow NVID executive Matthew
Klenovic used the investors' money to buy expensive homes for themselves
in Sarasota. They also ran up the price of the stock by issuing cheap
shares to insiders who were in a position to help in the promotional
campaign, according to prosecutors.
The operators of the web sites were not accused of wrongdoing. The new
medium simply became the conduit for bogus information, prosecutors say.
''I saw it with my own eyes that their product went head to head with Lysol.
It was straight from the Business Wire,'' said Moss.
Starting in November 1995, NVID issued a string of releases describing
remarkable test results and prospects for the disinfectant product, then
called Microsafe. One release described the product as having a market
potential of $30 billion. Others said federal approval was expected shortly.
''When a company that size comes up with that kind of a miracle product,
that gets you excited,'' said Moss, who eventually lost $2,300 on his NVID
investment.
While Moss was explaining the investment web sites he frequents, jurors
were given a live demonstration, using Moss' logon and password, to see
how NVID news releases are funneled to millions of potential investors
through sites such as Yahoo Finance, Silicon Investor, and Quote.com.
Bunte's defense attorney, David Horrox, objected repeatedly to the
questions posed to Moss, on the grounds that Moss was being asked to
repeat hearsay.
Judge Richard Lazzara twice overruled Horrox, and instructed jurors
specifically on his reasoning for allowing Moss to tell of his Internet
experience.
''This testimony is not coming before you to prove whether what he heard
was true or not true. It's only to show what motivated him,'' Lazzara
instructed the jury.
A task force that included the FBI and the Florida Office of the Comptroller
raided NVID's former Sarasota headquarters in April 1997, arresting Bunte
and Klenovic on charges of defrauding investors and committing wire and
mail fraud.
Klenovic, who ran afoul of the Securities and Exchange Commission in a
previous stock scandal, pleaded guilty to the NVID charges in August 1997
and has been cooperating with the U.S. Attorney's Office against his former
partner Bunte.
Klenovic is scheduled to be a witness when the trial resumes today.His
sentencing has been postponed until after Bunte's trial is over.
Separately, both men are defendants along with their former company in a
civil trial being pressed by the SEC in Tampa. The SEC seeks restitution of
$3.3 million to investors.
Bunte's trial is expected to take up to 10 days.
Story Filed By The HERALD TRIBUNE, SARASOTA, FLORIDA
NYT-03-04-98 2100EST<
Sarasota Bradenton Venice Manatee Charlotte Longb
OTC:bb stocks can be risky. IMO the longer you are 'in' the stock
the chance you take deminishes as you research the stock
and find out for yourself what you are getting into.
It is much better to do your dd first. I know waiting when a
stock is hot can cause you to lose out on big quick gains.
But it also keeps you from big quick losses!
One thing is for sure. If I found something out that made me
think CSMA was a bad investment. I wouldn't buy any more.
I would cut my losses and move on. IMO CSMA is the complete
opposite of a 'bad' investment. That is why I continue to buy.
BTW I did buy more on Thurs. and Fri. I can't seem to resist
the 'buy' signal I keep getting! <g>
I was really positioned to pick up about double what I already
had 3 weeks ago, but someone put out a press release and foiled
my plans.
KZAP |
