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Pastimes : Can SI Members Really Manipulate Stocks? -- Ignore unavailable to you. Want to Upgrade?

To: Arcane Lore who wrote (452)	10/7/2002 7:31:43 PM
From: Arcane Lore	Read Replies (1) \| Respond to of 461

From the SEC site: SECURITIES AND EXCHANGE COMMISSION Litigation Release No. 17769 / October 7, 2002 SEC v. JESSE HOGAN, U.S. District Court for the Northern District of Illinois, Civ. Action No. 00C 5637 (N.D. Ill. September 14, 2000) The Securities and Exchange Commission ("Commission") announced today that on September 20, 2002, a panel of the British Columbia Securities Commission ("BCSC") ordered Jesse Hogan, a Canadian citizen who resides in British Columbia, to pay an administrative penalty of $25,000 and banned him from trading in or purchasing any security and engaging in investor relations for 10 years. The Order was based on the previous findings of the panel that Hogan violated Canadian securities laws through five Internet "pump and dump" stock price manipulations in July and August of 2000. See Re Jesse J. Hogan 2002 BCSECCOM 811; Re Jesse J. Hogan 2002 BCSECCCOM 537. The panel also authorized the staff of the BCSC to apply to the British Columbia Supreme Court for an order disgorging $41,752 (U.S.) in total profits Hogan derived from the scheme. Previously, on January 15, 2002, the U.S. District Court for the Northern District of Illinois had permanently enjoined Hogan from violating Section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 thereunder as a result of his conduct in the stock price manipulations. According to the Commission's complaint, Hogan used the same technique for each stock manipulation. First, Hogan accumulated a substantial position in the stock of a company quoted on the NASDAQ OTC Bulletin Board. Hogan then, after the close of the market and through the opening of the market the following trading day, used alias screen names to post hundreds of messages about the targeted Bulletin Board company on Internet message boards and sent numerous e-mails with the identical message. The spam postings and e-mails falsely claimed that a well-known "blue chip" company would soon acquire the outstanding stock of the targeted company at a substantial premium over its current market price. The spam postings and e-mails prompted a surge in the price and volume of the targeted company's stock. Hogan then liquidated his position, selling into the buying surge he created. Based on this conduct, the BCSC panel found that: "(1) Hogan, with the intention of effecting trades in the companies' shares, made statements that he knew were misrepresentations, contrary to section 50(1)(d) of the Securities Act, RSBC 1996, c. 418; (2) Hogan manipulated the market by engaging in a series of transactions relating to trades in and acquisition of the companies' shares that he knew would result in artificial prices for the shares, contrary to section 57.1(a) of the Securities Act, RSBC 1996, c. 418; and (3) Hogan's misrepresentations and market manipulations seriously impaired the integrity of the capital markets and were contrary to the public interest." For tips on how to avoid Internet "pump-and-dump" stock manipulation schemes, visit sec.gov. For more information about Internet fraud, visit sec.gov. To report suspicious activity involving possible Internet fraud, visit sec.gov. sec.gov BCSC documents relating to the Hogan case can be found at: bcsc.bc.ca:8080/comdoc.nsf/0/7e5db0fa412540c188256bdf005a20e1/$FILE/2002%20BCSECCOM%20537.pdf bcsc.bc.ca:8080/comdoc.nsf/0/1fef9e1abdb0c4ba88256c3e0051f11d/$FILE/2002%20BCSECCOM%20811.pdf bcsc.bc.ca:8080/comdoc.nsf/comdoc.nsf/webpolicies/1FEF9E1ABDB0C4BA88256C3E0051F11D?OpenDocument bcsc.bc.ca:8080/comdoc.nsf/comdoc.nsf/webpolicies/7E5DB0FA412540C188256BDF005A20E1?OpenDocument