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

To: midtownmurphy who wrote (65660)	9/30/2000 4:30:27 PM
From: StocksDATsoar	Read Replies (1) \| Respond to of 150070

I believe on Monday it offically splits. F40:-)

To: midtownmurphy who wrote (65660)	9/30/2000 8:18:19 PM
From: StocksDATsoar	Respond to of 150070

financialweb.com PENNY PINCHING SEC Steps Up Commitment to Stop Microcap Fraud By Lynn D. Duke Mon Sep. 25, 2000 12:16 AM ET The U.S. Securities and Exchange Commission has been earning a lot of front-page ink lately. Within days of busting a Canadian man for alleged stock manipulation, the Commission announced a settlement with a New Jersey teenager who was charged with manipulating stocks to the tune of a $272,826 profit. Tack on interest, and the SEC hopes to recover $285,000. Each case, especially the Jesse Hogan episode out of Canada, reflect the Commission's commitment to stemming securities fraud online through its Internet Enforcement Program. Barely two years old, the program was launched in July 1998 with this blessing from Richard Walker, the SEC's chief enforcement officer: "While the Internet has many benefits, a small group of thieves is trying to hijack unsuspecting investors on the information superhighway." At that time, the SEC had about 30 Internet-related securities fraud cases on its roster. Since then, it has logged more than 180 online securities violations. On September 5, the Commission conducted its fourth Internet sweep, which resulted in charges against 33 individuals and companies in 15 separate cases. The defendants are accused of pumping up the market in more than 70 microcap stocks, before dumping their shares into the market for a profit of at least $10 million. This time, Walker commented on how easy technology has made it for unscrupulous people to prey on unwary investors. "What used to require a network of professional promoters and brokers, banks of telephones and months to accomplish can now be done in minutes by a single person using the Internet and a home computer," Walker said in a press release. "Thinly traded microcap stocks are particularly susceptible to online manipulations. That's why we have made this area one of our highest enforcement priorities. Ultimately, however, the best way for investors to protect themselves against all forms of Internet fraud, including pump-and-dump schemes, is to do their homework and to be highly skeptical of information they receive from strangers on Internet websites, message boards and chat rooms." Which brings us back to Jesse Hogan and Jonathan Lebed, the Cedar Grove, N.J. teen who wasn't even old enough to drive when he was nabbed last February by the SEC. Both allegedly cloaked themselves in various aliases and then used several Internet message boards and sent e-mail to drum up interest in the stocks they wanted to pump. But just as the Internet has brought warp speed to the scam artists, it has provided enforcement folks a boost as well. The SEC won't discuss specifics about its surveillance tactics, but it's a safe bet that the Commission's agents are watching many of the same message boards and are on many of the same mailing lists as investors who get targeted by the scam artists. Personnel involved in the Internet Enforcement Program -- from accountants and attorneys to investigators -- have developed expertise that allows them to work more efficiently and focus more quickly on potential scams. "One advantage specialization has given us, is that we know exactly what we're looking for, as with Internet tracing," said John Sikora, chief of the branch of Internet Enforcement for the SEC's Midwest Regional Office in Chicago. "The hope is that we deter Internet securities fraud, and that people know that the Commission will react quickly and effectively. We also hope that this will improve the information on the Internet and decrease the number of fraudsters online." Sikora's office brought the charges against Hogan, whom Stock Detective readers should be familiar with through Bob Davis's Stock Detective columns. While Lebed's alleged manipulation spanned six months, the SEC caught onto Hogan in a matter of weeks, during which time Hogan is thought to have made $40,000 in profits while costing investors nearly $1 million, according to the SEC. It's unlikely that the SEC will ever be able to match investigators to potential scam artists on a one-to-one ratio. But if the Commission can continue closing the gap between a scam's execution and its detection, as well as forcing the unscrupulous to spend time dreaming up new means of deception, then investors might have a little more time to think before they buy. -------------------------------------------------------------------------------- Lynn N. Duke is the former editor of Stock Detective and a national award-winning journalist. She is currently writing a book about stock market scams. Commentary Archives