SEC Creates Office of Internet Enforcement to Battle Online Securities Fraud
FOR IMMEDIATE RELEASE
98-69
Washington, D.C., July 28, 1998 - The Securities and Exchange Commission today
announced the formation of a new and specialized unit to combat securities fraud
occurring over the Internet. John Reed Stark, the current Special Counsel for Internet
Projects in the SEC Enforcement Division will serve as Chief of a new unit, the Office of
Internet Enforcement, and Jay Perlman, a senior attorney in the Office of the Chief
Counsel, will serve as deputy.
"While the Internet has many benefits, a small group of thieves is trying to hijack
unsuspecting investors on the information superhighway," said Richard H. Walker, the
SEC's Director of the Division of Enforcement. The SEC has already brought more than
30 cases involving Internet-related securities fraud that have involved virtually every type
of investment scam, including phony offerings, market manipulations, affinity frauds
(e.g., frauds that target a particular ethnic or religious group), and pyramid and ponzi
schemes.
The SEC's Enforcement Complaint Center, the SEC's online communications center on
the World Wide Web, now receives more than 120 complaints every day concerning
Internet-related potential securities violations, many of which provide good leads for
investigations or relate to existing investigations.
"Since the first Internet-related case we brought back in 1995, involving a scheme to sell
unregistered securities in a world-wide telephone lottery over the Internet (SEC v.
PleasureTime), to our most recent case involving a $7.2 million ponzi scheme peddled
via the World Wide Web (SEC v. Richmond), we have done our best to keep the Internet
safe for investors. With the launching of this new unit we hope to beef up our Internet
presence and continue the success of our Internet Program," said Mr. Walker.
Mr. Stark joined the SEC Enforcement Division in 1991 after several years practicing
commercial litigation with Arent Fox Kintner Plotkin and Kahn. He was named Special
Counsel for Internet Projects in 1995, after completing a seven-month detail as an
Assistant United States Attorney for the District of Columbia where he prosecuted
criminal cases. Mr. Stark also serves as Adjunct Professor of Law at Georgetown
University Law Center where he teaches a course entitled "Securities Law and the
Internet."
Mr. Perlman began his law career at the SEC in 1991, first in the Division of
Corporation Finance where he was a staff attorney, then in the Enforcement Division's
Office of Chief Counsel where he served as Branch Chief. Mr. Perlman also prosecuted
criminal cases on a detail as an Assistant United States Attorney for the Eastern District
of Virginia. The Office of Internet Enforcement will operate out of SEC headquarters in
Washington, D.C. and will report to Joan McKown, the Chief Counsel of the
Enforcement Division.
sec.gov
Last update: 07/28/98 |
