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Microcap & Penny Stocks : TGL WHAAAAAAAT! Alerts, thoughts, discussion. -- Ignore unavailable to you. Want to Upgrade?

To: lindao who wrote (62072)	9/6/2000 2:29:11 PM
From: StocksDATsoar	Respond to of 150070

cbs.marketwatch.com SEC brings charges in fraud sweep By Matt Andrejczak & Stephanie O'Brien, CBS.MarketWatch.com Last Update: 2:07 PM ET Sep 6, 2000 NewsWatch Latest headlines NEW YORK (CBS.MW) -- The Securities and Exchange Commission on Wednesday accused 33 companies and individuals of fraud, charging they used the Internet to manipulate microcap stocks. In the agency's fourth nationwide sweep over the past two years, the SEC is bringing 15 enforcement actions against the alleged manipulators, charging that they inflated the total market capitalization of the stocks involved by more than $1.7 billion, in so-called pump-and-dump schemes. The actions involve the stocks of more than 70 microcap companies and illegal profits of more than $10 million. The Internet sweep took about six months to complete, the SEC said. Today on CBS MarketWatch Dow leaps with financial sector speculation Citigroup to buy Associates First Capital for $31 billion Chip weakness persists amid downgrade of Micron Tech Recording industry, Yahoo in online-music pact Mover & Shakers: Amazon, Litton, Novadigm and more! More top stories... CBS MarketWatch Columns Updated: 9/6/2000 12:54:10 PM ET "It [stock manipulation] has become a common evil on the Internet," SEC Director of Enforcement Richard Walker told reporters in a news briefing. "This is our area of greatest concern." Unlike the boiler room days, when notorious brokerage houses such as the now-defunct Stratton Oakmont would spend months to promote penny-stocks, and later dump them, stock manipulators can affect the markets almost instantaneously via the Web. And moreover, with the increasing popularity of the Internet, it doesn't take a sophisticated investor to carry out a pump-and-dump scheme. The SEC said it latest crackdown involved a school bus mechanic, a car service driver, and a college student among others. "Any number of people can get into this game," said Walker, noting that many of the cases involve members of Generation X. "In 15 seconds, they can send an e-mail from their living room that can reach a million people." The Internet, for example, recently played a high-profile role in another stock-manipulation scheme. Last month, shares of Emulex plunged about 60 percent after a fake news release that warned of an earnings shortfall and impending investigation of the company's accounting practices was disseminated over an Internet newswire. At the news briefing, Walker said the SEC has largely pursued Internet stock fraud through in-house surveillance. The agency receives between 200 to 300 complaints per day and also monitors the Internet itself for manipulators, who often send spam e-mails touting certain stocks. In one case involving Broadband Wireless International (BBAN: news, msgs), shares rose 10,000 percent from 12 cents a share in late 1999 to more than $12 a share in February before falling back. See press release. The SEC vowed to vigorously pursue fraudulent stock behavior via the Internet and hopes that this latest crackdown will deter future activity. "We hopes that this sends a strong message," said Walker. "We are going to be vigilant on these activities." Previous SEC Internet sweeps were conducted in October 1998 and February and May of last year. Those cases dealt with bogus securities sales and unlawful touting of publicly-traded companies on the Web. -------------------------------------------------------------------------------- Matt Andrejczak is a reporter for CBS.MarketWatch.com. Stephanie O'Brien is a reporter for CBS.MarketWatch.com.