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Strategies & Market Trends : Mr. Pink's Picks: selected event-driven value investments -- Ignore unavailable to you. Want to Upgrade?

To: Peter V who wrote (12402)	1/5/2000 11:57:00 PM
From: Mad2	Respond to of 18998

Here's a bit of the detail on the SEC's action against TJ Mad2 Copyright 2000 Associated Press AP Online January 5, 2000; Wednesday 18:03 Eastern Time SECTION: Financial pages LENGTH: 580 words HEADLINE: 'Tokyo Joe' Sued for Alleged Fraud DATELINE: WASHINGTON BODY: Federal regulators on Wednesday sued a man who calls himself Tokyo Joe for allegedly defrauding investors on his Web site by failing to tell them he was selling the same stocks he was advising them to buy. The man's attorney said he will contest the allegations in court. Tokyo Joe, described as a self-proclaimed expert in day trading, charged members of his investment club up to $200 a month for stock picks and other advice, the Securities and Exchange Commission said. Those membership fees amounted to more than $1.1 million from July 1998 through June 1999, the SEC said in its civil lawsuit filed in federal court in Chicago. The agency also alleged that Tokyo Joe, 50, a New York City resident whose real name is Yun Soo Oh Park, illegally touted a stock to investors without disclosing he had received shares from the company and lied about his trading performance record. In its suit, the SEC is seeking injunctions against Park and his company, Tokyo Joe's Societe Anonyme, as well as unspecified fines and restitution to investors. Park's attorney, Ira Lee Sorkin, a former top SEC official, said his client will contest the suit. ''We intend to defend against the action,'' Sorkin said. ''I would have hoped that the SEC would have dealt with these issues ... (such as use of the Internet and day trading) through regulation as opposed to litigation. There are some very murky issues.'' The SEC's suit was the latest in a string of enforcement actions in recent years against alleged securities fraud using the Internet. Federal and state securities regulators say this new form of fraud has been proliferating in Internet junk mail, online newsletters, electronic ''chat rooms'' and Web sites. Because the Internet is everywhere, unscrupulous stock promoters anywhere in the world can cloak themselves in anonymity and lure investors across the country, who have lost millions in such schemes, the regulators say. ''The Internet has witnessed the rapid growth of Web sites run by self-proclaimed investment gurus,'' said SEC Enforcement Director Richard Walker. ''Today's action makes clear that we will not tolerate fraudulent conduct or undisclosed conflicts of interest by those peddling investment advice on the Internet.'' Park, who never registered with the SEC as an investment adviser, operated his Societe Anonyme from his home in New York, the agency said in its suit. It alleged that Park misled members of Societe Anonyme by failing to disclose or lying to them about the fact that he already owned and was selling the same stocks he was advising them to buy. Park profited by selling the stocks into the buying flurry he had created by his recommendations, a practice known as scalping, the SEC said. On some occasions, Park advised members to hold a stock for several days or longer or designated a target stock price while he actually sold the same stock, sometimes below the target price, the SEC said. In addition, the regulators alleged, Park posted trading performance results on his Web site that were ''materially false and misleading,'' in an effort to recruit new members and get current members to follow his investment recommendations. ___ EDITOR'S NOTE: The SEC advises people to think twice before investing their money in stocks or other investments they learn about through the Internet. The agency has issued a brochure on Internet fraud on its Web site at www.sec.gov/consumer/cyberfr.htm LANGUAGE: ENGLISH LOAD-DATE: January 5, 2000