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

To: Jeffrey S. Mitchell who wrote (438)	7/12/2000 11:10:06 PM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 12465

Re: 7/7/00 - SEC v. REFAEL SHAOULIAN [pump and dump] UNITED STATES SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 16621 / July 6, 2000 SEC v. REFAEL SHAOULIAN, U.S. District Court for the Central District of California, Civ. Action No. 00-04614 (CBM) (C. D. Cal. May 3, 2000) as amended (July 6, 2000) The Securities and Exchange Commission announced that on May 3, 2000, the U.S. District Court for the Central District of California issued a temporary restraining order against 24 year-old Refael Shaoulian ("Shaoulian") barring him from violations of the antifraud provisions of the federal securities laws. The Court, also on May 3rd, issued an asset freeze against Shaoulin and his father, Samuel Shaoulian. In its original complaint filed on May 3rd ("Original Complaint"), the Commission alleged that Shaoulian used the Internet to manipulate the price of a thinly traded stock by spreading false information to various Internet message boards, allowing him to reap more than $172,000 in trading profits. The Original Complaint, also named Shaoulian's father, Samuel Shaoulian, as a relief defendant based on his receipt of ill-gotten gains from the manipulation. Based upon evidence of additional manipulations by Shaoulian, on July 6, 2000, the Commission filed an amended Complaint ("Amended Complaint") charging that from April 1999 through July 1999, Shaoulian engaged in virtually identical Internet pump and dump schemes involving four additional stocks. With these four additional stock manipulations charged against Shaoulian, the Commission is seeking more than $388,000 in disgorgement from Shaoulian, his father and brother, as well as civil penalties against Shaoulian. The Amended Complaint also names Shaoulian's brother, Rabin Shaoulian of Beverly Hills, as a relief defendant because he received some of the ill-gotten gains from the manipulations. According to the Commission's Original Complaint, in January 2000, Shaoulian manipulated the common stock price of Universal Standard Healthcare, Inc. ("Universal"), a stock traded through the NASD's OTC Bulletin Board system, by posting numerous false messages on Internet message boards. The Complaint alleges that Shaoulian, a 24 year-old Beverly Hills resident and UCLA graduate, obtained more than $172,000 in profits from his Internet pump and dump manipulation of Universal stock. Shaoulian did so by first buying a large block of Universal shares between January 24 and 26, 2000. According to the Complaint, during the weekend of January 29th and 30th, Shaoulian posted hundreds of messages, under multiple pseudonyms, to Internet financial message boards using publicly available computers located on the UCLA campus. These messages falsely stated that Universal was about to be purchased by another company and that Universal was profitable. In fact, Universal had ceased all operations in August 1999, when it filed for Chapter 7 bankruptcy protection. Universal's stock price closed at $0.03 per share on January 21, 2000, and peaked at $1.50 per share within the opening hour of trading on January 31st, before declining precipitously. On January 31 and February 1, 2000, Shaoulian sold all his Universal shares for a $172,690 profit. After Shaoulian's Internet message campaign ended, Universal's price plummeted. Based on this conduct, the Commission in its Complaint sought a temporary restraining order and a preliminary and permanent injunction barring Shaoulian from future violations of the antifraud provisions of the federal securities laws, disgorgement of ill-gotten gains, and civil monetary penalties. On May 11th, the Court, with Shaoulian's consent, entered a preliminary injunction against him and continued the asset freeze. The Amended Complaint alleges that Shaoulian manipulated the stock of: iChargeit, Inc., Worldtradeshow.com, Inc., Casino Pirata.com Ltd. and ETwoMedia.com, Inc. Each of these stocks traded on the OTC Bulletin Board at the time of these manipulations. In each instance, the Commission alleges that Shaoulian purchased a substantial block of shares in these companies, posted hundreds of false messages about each company to various Internet message boards using publicly available computers at the campuses of UCLA and the University of Southern California and then sold his own shares into the buying surge prompted by the false Internet messages. In each instance, Shaoulian obtained substantial profits. In a related action, the Commission today announced civil charges against two other individuals who, it alleged, participated in the manipulations of iChargit, Worldtradeshow.com, Casino Parata.com, ETwoMedia.com and other issuers. See, SEC v. Aziz Golshani, et al., Civ. Action No. 99-13139 (CBM)(AJWx)(C.D. Cal.) Lit. Rel 16620 (July 6, 2000). The Commission thanks the NASD for its assistance in this matter. sec.gov

To: Jeffrey S. Mitchell who wrote (438)	7/14/2000 11:48:31 PM
From: Jeffrey S. Mitchell	Read Replies (1) \| Respond to of 12465

Re: 7/14/00 - First Boston Sues Web Hecklers To Defend an Analyst's Honor July 14, 2000 -------------------------------------------------------------------------------- First Boston Sues Web Hecklers To Defend an Analyst's Honor By AARON ELSTEIN WSJ.COM Credit Suisse First Boston wants you to know: Disagreeing with its research analysts can be hazardous to your wealth. Earlier this week, the big brokerage firm filed a suit seeking $1 million in damages against a New Jersey man and 10 others who posted comments on a Yahoo! Finance message board. Their postings criticized David Maris, the First Boston analyst who follows pharmaceuticals and specifically, an Irish company called Elan Corp. The "false and defamatory" postings, alleges Credit Suisse First Boston, a unit of Zurich's Credit Suisse Group, have caused "actual, incidental and consequential damage to its reputation and professional and other economic interests," according to the suit, filed Tuesday in federal court in Manhattan. Want to receive an e-mail alert when Heard on the Net columns are published? See the E-Mail Setup page for details on how to subscribe. The suit, which names Chuan Chang, Colts Neck, N.J., and 10 unknown posters listed as "John Does," isn't unusual in itself. Many companies have filed suit against message-board posters, alleging their negative comments have defamed management or somehow damaged their business. But First Boston's suit is the first filed against online critics by a major financial institution, says Blake Bell, a New York lawyer who tracks suits involving libel on the Internet. "There have been suits involving brokerages before, but none of this stature," he says. Indeed, M.H. Meyerson & Co., a Jersey City, N.J., securities firm, filed suit in March 1999 after anonymous Yahoo posters accused its chairman and chief executive, Martin H. Meyerson, of market manipulation and said the firm was going bankrupt. Mr. Meyerson, who denied both accusations, says he has identified the anonymous posters and is proceeding with litigation against them. In First Boston's case, it is alleging the posters defamed the firm by attacking Mr. Maris, who joined the firm last November from Bear Stearns Cos., where he had been cited for his stock-picking abilities last fall by Institutional Investor magazine. The posters disagree with Mr. Maris's views on Elan, the Dublin, Ireland, pharmaceuticals maker. The company's American depository receipts closed down $2 to $48.50 Thursday on the New York Stock Exchange, but they have risen some 33% since June 12. Mr. Maris, to the dismay of many posters, rates the stock a "hold." Although he wrote in a February report that the "news flow is likely to be exceptionally positive over the next six months," he prefers a "wait-and-see position on the execution and market potential for upcoming" drugs. An Elan spokesman declined to comment on the suit except to say, "This situation is a Credit Suisse First Boston affair and Elan is not involved." First Boston officials declined to comment. Mr. Chang, a retired materials scientist in his 60s who gives piano lessons over the Internet, says he was stunned to find out he had been sued. "I was part of message-board conversations where the participants would discuss Elan and the analysts who covered it," he says. "The Credit Suisse First Boston analyst was the most bearish on the stock, and we tried to figure out why his views were so different from the others, but it was all part of normal message-board give-and-take." In messages First Boston cited in court documents, Mr. Chang said Mr. Maris was "spinning misleading statements to fool uninformed investors" and was "lying" and "evil even to his customers." Mr. Maris declined to comment. His "hold" rating on the stock is lower than most other Wall Street analysts. First Call, a Boston firm that tracks analyst ratings, says the consensus rating among the 19 analysts who cover the stock is "buy." But Mr. Maris is not alone is his refusal to embrace the stock; three analysts rate it "hold" or "neutral," including Salomon Smith Barney. Still, Elan's stock has had an impressive run in the past month amid a series of positive announcement. In late June, the company said it received an "approvable letter" from the U.S. Food and Drug Administration regarding a pain treatment it is developing. Its stock also rose as investors anticipated that its Alzheimer's vaccine will prove effective. Earlier this week the company said an early-phase trial showed it was "well-tolerated" in 100 patients. But Mr. Maris wasn't impressed. "While this news about the Alzheimer's vaccine is positive and shows progress, we temper our enthusiasm as the compound is still in its very early stages," he said in a report issued Wednesday. In any case, First Boston's suit has outraged people who frequent message boards. David Kaplan, a commercial real-estate broker in Washington who participates on the Yahoo board about Elan but wasn't named in the suit, says he is trying to raise money for a legal-defense fund. "I find this suit very disturbing," he says. "Disagreeing with an analyst isn't against the law. It seems to me that Credit Suisse First Boston is trying to silence people, and that is really troubling." Write to Aaron Elstein at aaron.elstein@wsj.com. interactive.wsj.com