SEC Director of Enforcement Richard Walker announced the charges at a
news conference Wednesday.
SEC accuses 44 ‘stock promoters' of Internet securities fraud
Part of online ‘sweep' by federal agency
REUTERS
Washington, D.C. Oct. 28 — The U.S. Securities and Exchange Commission on Wednesday charged 44 individuals and companies with
committing securities fraud over the Internet.
THE AGENCY's 23 enforcement actions filed across the country involve
fraudulent dealings in junk e-mail known as “spam,” online newsletters, message board postings and Web sites, the SEC said. The defendants, in touting the cheaply priced securities of more
than 235 companies known as microcaps, violated federal securities laws either by lying about the companies, lying about their own independence from the companies, and/or failing to reveal adequately how they were compensated by the companies, the SEC said. They allegedly claimed that they were providing their unbiased opinions in their recommendations but failed to disclose that they got more than $6.3 million and nearly two million shares of cheap insider stock and
options in exchange for their promotional efforts. “Not only did they lie about their own independence, some of them lied about the companies they featured, then took advantage of any quick spike in price to sell their shares for a fast and easy profit,” said
Richard Walker, the top enforcement official at the SEC.
At a news conference SEC director of enforcement Richard Walker said
the charges focused on the “dark side of the Internet” and were a result of a “nationwide attack” by SEC staff across the country.
SEC's Richard Walker announces the charges at a news conference Wednesday “Today's sweep demonstrates the SEC's commitment to cleaning up the Internet by aggressively prosecuting securities violations occurring in Cyberspace,” Walker added in a statement.
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