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SEC targets radio, Internet tout Ed Taxin
Cancall Cellular Communications Inc CLE
Shares issued 12,080,027 1998-08-11 close $0.1
Wednesday Oct 28 1998
See Envoy Communications Group Inc (ECG) Street Wire
PENNY STOCK PROMOTERS PRESENTED AS WALL STREET NOTABLES
by Brent Mudry
Ed Taxin, a New York-based radio stock tout who promoted Envoy Communications and Sungold Gaming under contract, is among 44 penny stock promoters targeted by the United States Securities and Exchange Commission in a massive crackdown on Internet stock promotions revealed Wednesday. Mr. Taxin also served a two-year stint as director of Cancall Cellular Communications, ending last year. In what it calls an "unprecedented nationwide sweep," the SEC filed 23 enforcement actions for "committing fraud over the Internet and deceiving investors around the world." Following the path blazed by its previous prosecutions of Florida Internet tipster George Chelekis and New York radio tout Sonny Bloch, the SEC notes its investigators targeted "purveyors of fraudulent spam, online newsletters, message board postings and web sites."
The SEC claims the Internet tipsters unlawfully touted more than 235 "microcap" companies by either lying about the companies, lying about their own "independence" from the companies, and/or failing to properly disclose the nature, source and amount of compensation paid by the companies. "The sweep, the first orchestrated coast-to-coast operation by the SEC to combat Internet fraud, involved actions filed by SEC offices in Atlanta, Boston, Chicago, Denver, Fort Worth, Los Angeles, Miami, New York, Philadelphia, Salt Lake City and Washington, D.C.," stated SEC enforcement director Richard Walker at a press conference in Washington.
Mr. Taxin is one of two New York targets in the sweep of touts. The SEC notes that in addition to hosting a radio infomercial show, Mr. Taxin also publishes an investment newsletter on his web site. His radio show, "The Financial Hour," airs on six stations across the U.S., including New York, broadcast from his home in Shrewsbury, New Jersey. The SEC charges Mr. Taxin and the Taxin Network with promoting stocks on the radio show and his newsletter, Investors Chronicle, without properly disclosing he is a paid tout. The commission notes that the network, owned by Mr. Taxin's wife, Joanne Pagano, has agreements with numerous small-cap companies, including Envoy Communications and Sungold Gaming. The SEC claims the companies and their agents have paid the network at least $200,000 (U.S.) in cash or stock for promotional services, including exposures on the radio show and touts in the newsletter.
"On the Financial Hour, Taxin introduces a series of guests, including promoters from investor-relations firms and officers of the companies. Taxin joins with his guests in their rosy predictions for the companies they represent, mixing in Wall Street patter to convey the impression of objective financial reporting," states the SEC. The agency notes that Mr. Taxin introduces the penny stock promoters as Wall Street notables and stock-pickers, disguising their relationship with the companies they represent.
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