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

To: The Philosopher who wrote (3457)	7/24/2002 11:42:15 PM
From: Jeffrey S. Mitchell	Read Replies (2) \| Respond to of 12465

From the "stock-touting spam" doesn't pay file... First, a little background. It all started when spammer for hire, Rodona Garst, hijacked the AOL e-mail account of a computer techie. He somehow determined Rodona had a remote access program running on her PC, so he accessed it and pretty much downloaded her entire hard drive. He then created a web site to showcase AIM files of her bragging about her spamming on behalf of stock tout Mark Rice. He even found and posted nude pictures of her. Looks like the SEC took notice of both Garst and Rice. We discussed all this on SI on the HITT thread back in June of 2000 (see: siliconinvestor.com. If your curiosity is piqued, the web site in question is still active at belps.freewebsites.com. ===== ORDER INSTITUTING CEASE-AND-DESIST PROCEEDING AGAINST RODONA GARST On July 24, the Commission instituted cease-and-desist proceedings against Rodona Garst. In the Order Instituting Proceedings, the Division of Enforcement alleges, among other things, that between September 1999 and May 2000, Garst disseminated a large number of unsolicited "spam" e-mail messages touting four issuers. The Division further alleges that Garst was retained by Mark E. Rice (Rice), who has since been sued by the Commission and enjoined by a U.S. District Court. Moreover, the Division alleges that the spams contained false and misleading statements concerning the product, revenue sources and business relationships of one of the touted issuers, as well as Rice's stock-picking track record and the trading intentions of the persons responsible for the e-mail messages. According to the Division, Garst knew, or was reckless in not knowing, that these statements were false. Finally, the spams did not disclose cash compensation paid to Garst by Rice, who was acting as a statutory underwriter. As a result, the Division alleges that Garst was a cause of Rice's violations of Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder, and violated Section 17(b) of the Securities Act of 1933 (Securities Act). The Division requests that Garst pay disgorgement plus reasonable interest. The proceedings were instituted under Section 8A of the Securities Act and Section 21C of the Exchange Act. A hearing will be scheduled before an administrative law judge to determine whether the allegations contained in the Order are true, to provide Garst an opportunity to dispute these allegations, and to determine what sanctions, if any, are appropriate. (Rels. 33-8113; 34- 46246; File No. 3-10843) sec.gov