For the "PUMP n DUMP" crowd....SEC CRACKDOWN ON INTERNET FRAUD The Securities Exchange Commission today announced a sweeping filing of 23 securities fraud complaints against 44 different entities and individuals. All of the defendants are charged with violations of Section 17b of the 1933 Securities Act. This section requires disclosure of any compensation received in exchange for promotion, or touting. Specifically, section 17b requires disclosure of three things: 1) the fact that compensation has been or will be received; 2) the amount of the compensation; 3) the nature of the compensation (cash, stock, options, etc.). In addition to 17b violations, some of the companies or individuals are also charged with pumping-and-dumping, by issuing false statements about the company, and then selling on the price rise, without disclosure. Prominently featured in the SEC's complaint is "The Future SuperStock" an email newsletter touting service, which SEC Director of Enforcement Richard Walker called "the poster boy" of internet securities fraud. Briefing.com warned readers about the FSS's involvement in the Electro-Optical Systems (EOSC) debacle back in March. For months after the collapse of EOSC, the FSS continued to tout its rise to $7 from $5 after being featured in the FSS, even though EOCS was trading for less than a dollar. (Today it is essentially worthless.) Other well known internet tout services named today include: Stockstowatch, Princeton Research, Global Penny Stocks, Stock-Line.com, Ed Taxin's radio show "Financial Hour" and Taxin.com, Francis Tribble dba Sloan Fitzgerald, and the InvestorsEdge web site. The SEC's complaints are especially wide reaching, with 19 cases of online newsletter violations; 7 cases of spam mail violations; 20 cases of web site violations; 6 cases of material misrepresentation; 5 cases of illegal postings in chat rooms. 235 separate micro-cap companies were touted. The complete list of defendants and charges is listed at www.sec.gov. Some of the complaints have already been settled by the defendants agreeing to cease-and-desist orders, but readers are best advised to remain cautious about any internet-touted stock. The SEC also published an excellent report entitled "How to Avoid Internet Investment Scams" well worth reading. Please note that Briefing.com does not receive, and never has received compensation or consideration of any kind from a company in exchange for coverage of the stock. In addition, Briefing analysts are not permitted to own positions in stocks they cover. From Briefing.com
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