Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Pastimes : Investment Chat Board Lawsuits -- Ignore unavailable to you. Want to Upgrade?

To: Jeffrey S. Mitchell who wrote (83)	12/2/1999 6:02:00 AM
From: Jeffrey S. Mitchell	Respond to of 12465

Re: SEC settles AOL-Bid.com hoax By Bloomberg News Special to CNET News.com November 18, 1999, 3:50 p.m. PT WASHINGTON--A Chicago man agreed to settle regulators' charges that he posted a bogus Internet announcement last July about a nonexistent strategic alliance between America Online and Canadian online auctioneer Bid.com International. The Securities and Exchange Commission alleged that Leszek Zbierajewski, 25, using the Internet screen name "Jag 98," doctored a legitimate news release involving another company and displayed it on a Yahoo message board. Bid.com's stock rose from about 8.5 to about 9 in the hour after Zbierajewski posted the phony announcement on July 8, the SEC alleged. The shares fell back to around 8.5 by the end of that day. The stock's volume, which had averaged 154,000 shares per hour that morning, surged to more than 1 million shares during one 60-minute period after the fake posting. "This illustrates that the commission will respond aggressively to Internet stock hoaxes," said SEC enforcement lawyer John Sikora in Chicago. The Chicago man, a wholesale tool dealer, retracted the fake announcement about 35 minutes after it was posted, according to the SEC lawsuit, filed in federal court in Chicago. AOL and Bid.com also declared the announcement to be a hoax. Zbierajewski agreed today to be subject to stiffer sanctions if he commits similar violations in the future. A fine was waived because of his inability to pay, the SEC said. He neither admitted nor denied wrongdoing under the settlement. Zbierajewski declined comment today. "I don't really care to explain," Zbierajewski said in an interview. "I think I explained to the SEC. What happened, happened." Shortly after posting the bogus release on July 8, according to the SEC, he retracted it by writing on Yahoo: "Sorry guys about the post, that news was something I hope will happen." Zbierajewski had no special expertise that enabled him to display the fake release, SEC officials said. "You don't need inside access or special equipment to post this type of message," SEC enforcement lawyer Caz Hashemi said. The bogus posting was written to look like a PR Newswire release. Carrying a Toronto dateline, it quoted AOL as saying it signed a four-year, $89 million alliance with Bid.com. The fake release duplicated almost verbatim a Reuters news story about AOL's $89 million strategic alliance with Drkoop.com, an online health information provider. The bulletin board posting substituted Bid.com's name where Drkoop.com had been mentioned in the July 6 news report. The hoax followed an April incident involving former PairGain Technologies engineer Gary Hoke, who pleaded guilty to charges that he posted a fake Internet news story saying PairGain was being acquired by an Israeli rival. He was ordered in August to pay $93,000 and was sentenced to five years' probation, including five months of house arrest, for the hoax, which caused PairGain's stock to soar. Copyright 1999, Bloomberg L.P. All Rights Reserved. news.cnet.com