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Non-Tech : Auric Goldfinger's Short List -- Ignore unavailable to you. Want to Upgrade?

To: Dale Baker who wrote (6093)	8/31/2000 2:29:11 PM
From: sommovigo	Read Replies (2) \| Respond to of 19428

Looking into it. meanwhile, Criminal Short Seller gets the bracelets: FBI arrests suspect in Emulex hoax By Corey Grice Staff Writer, CNET News.com August 31, 2000, 10:50 a.m. PT update Federal law enforcement authorities today arrested a suspect in the stock manipulation case of technology company Emulex, which saw its stock plunge more than 50 percent last week as investors reacted to a fake news announcement. "We do have someone in custody in the Emulex case," said Laura Bosley, a spokeswoman for the Los Angeles office of the FBI. Bosley would describe the suspect only as being male. According to various media outlets, the suspect is a Southern California-based student. However, the FBI and U.S. attorney's office would not confirm the information. Authorities said the man apparently made about $250,000 from short sales he made in conjunction with allegedly posting a fake news announcement on Internet Wire, an online corporate news service. "The suspect, we believe, realized about a quarter of a million dollars in profits from trades he made around the time of the fake press release," said Thom Mrozek, a spokesman for the U.S. attorney's office in Los Angeles. Stock traders who "sell short" borrow shares from a financial institution in hopes their value will decline. Those shares can be purchased later at lower prices, with the trader making the difference as profit. The fake announcement indicated Emulex would restate its earnings--revising its profits lower--and said the company's chief executive would resign. Emulex said the information was false. The FBI and U.S. attorney's office will jointly hold a press conference in Los Angeles today around noon PT. Authorities are expected to reveal further information about the suspect and his alleged crimes at that time. Emulex's case is one of the most widely watched cases of apparent stock manipulation in recent years. Authorities fear such cases may increase as the Internet plays a greater role in investing. Emulex, which is based in Costa Mesa, Calif., and makes networking and fibre channel technology, lost about $2.5 billion in value Friday before the hoax was discovered. The FBI and other authorities quickly stepped in. "The suspect is not anyone associated with Emulex per se," said Emulex chief executive Paul Folino, addressing whether the suspect was an Emulex employee in a TV interview with cable TV financial news outlet CNBC. Folino said he is "ecstatic" with how quickly authorities arrested a suspect, and he added that the arrest should reassure investors that the Internet, and investing in emerging technologies, is not particularly risky.