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

To: scion who wrote (11827)	7/7/2003 1:33:26 PM
From: StockDung	Respond to of 19428

Newspaper: Investors lose almost $1 billion as SEC battles fraud The Associated Press FORT LAUDERDALE, Fla. Investors in the southeastern United States have lost almost $1 billion in the past five years to securities fraud and other schemes, despite efforts by federal regulators to protect them, a newspaper reported Sunday. About a quarter of those who ran the scams had previously been convicted for fraud or economic crime, or cited by regulatory agencies, according to the South Florida Sun-Sentinel's review of the 121 cases filed by the Securities and Exchange Commission's Miami regional office during the past five years. About 80 percent of the cases examined dealt with investment fraud, as opposed to violations such as accounting irregularities or insider trading. Investors' losses totaled at least $928 million. The newspaper analysis of cases involving 262 individuals and 109 companies found: - Only about 20 percent of the cases against violators resulted in criminal prosecutions, even though some involved millions of dollars in investor losses. - Only 16 of the 262 violators have gone to prison. More than two dozen others are awaiting trial or sentencing. - Of the $176 million in fines and penalties that violators were supposed to pay, only about $6.5 million has been collected. Many cases, particularly in South Florida, revolved around boiler rooms, rented offices where aggressive salespeople on banks of phones cold-call potential investors, the newspaper found. Others were "Ponzi schemes," in which money from new investors is used to pay off old ones until the company collapses. David Nelson, who oversees eight states as the SEC's regional director in Miami, said it's tough to prevent fraud. He said his office has been doing "a good job," despite limited resources and an enforcement staff of about 38 attorneys, accountants and others. "We're trying to get in before the scheme is over. The difficulty is finding out about it," Nelson said. "Victims don't always know they've been victimized right away." Alma Carney, 59, was one of the victims found in the review. She put $10,000 in savings in a Miami investment firm after an aunt convinced her that it was safe, and that she would get a 30 percent return each year. Instead, she, her aunt and more than 2,000 other investors in Florida and the Caribbean were bilked out of at least $31 million in an alleged giant fraud scheme, said federal regulators who shut down A.B. Financing and Investments Inc. in December. "We were just suckers," said Carney, a nurse's aide from Fort Lauderdale. "It was all the money I had." Regulators said A.B. Financing was selling unregistered securities, then placing funds in speculative real estate and other investments that lost millions. Company CEO Anthony Blissett agreed in March to a permanent injunction that bars him and his company from committing fraud. He did not admit or deny the allegations, which is common in SEC settlements. In an e-mail statement, his attorney, David R. Chase, said his client is "fully cooperating" to "maximize the return of assets" to investors. The newspaper analysis comes a year and a half after the SEC and U.S. Attorney's Office in Miami said they had set up a task force to crack down on phony investment schemes. The SEC can only file civil lawsuits; criminal cases must be referred to the U.S. Attorney's Office for prosecution. Eric Bustillo, the assistant U.S. attorney who heads the Miami office's economic crimes unit, estimated that the number of SEC-related prosecutions grew from 11 in 2001 to 27 in 2002. Still, he said his staff members have their hands full with other white-collar crime cases, such as identity theft and money laundering. Securities regulators concede that investors are lucky to get a dime or, at most, a quarter back on every dollar they've lost to offenders. "When we find them, we try to stop them as quickly as possible, and grab the money, but they often send it offshore or hide it in other ways," said Joan McKown, chief counsel for the SEC's division of enforcement in Washington. --- Information from: South Florida Sun-Sentinel, Last modified: July 06. 2003 6:31PM

To: scion who wrote (11827)	7/9/2003 12:07:21 AM
From: StockDung	Read Replies (1) \| Respond to of 19428

EBAY FACING MULTIPLE PROBES BY STATE AND FEDERAL REGULATORS By Armando Duke - Axcess Business News According to complaints filed with numerous state insurance commissioners by PayPal users, eBay's subsidiary has been offering a money back guarantee program that may be in violation of state insurance laws. Philip Kress of the Office of the Commissioner of Insurance for the state of Wisconsin, one of the states probing into PayPal's practices, stated in an email to one of the complainants that "a company can guarantee its own products or services but not the products or services of a third party." Mr. Kress' office stated they were pursuing a response from PayPal on the complaint. Wisconsin is not the only state looking into PayPal's practices. According to posts on www.PayPalMayBeTheNextEnron.com, Oklahoma, Florida and Nebraska are also looking into PayPal's online practices. Earlier this week, eBay announced a new buyer protection plan to be offered to its U.S. and Canadian customers before offering it worldwide. The offer may be in response to the numerous probes under way by state insurance commissioners over the company's PayPal Money Back Guarantee, which may be in violation of state insurance laws. PayPal had changed the name of Financial Guaranty Insurance to "Money Back Guarantee Program" which was announced in July 2002. The company began offering it throughout the US in September of that year. eBay said the new guarantee program will initially be available to sellers in the US and Canada and will cover buyers for non-delivery of items and items that are substantially not as described. But the move may have come to late, according Mike Fleming, who has been struggling with the frustration of his money market funds in his PayPal account having being frozen for months. Fleming had been selling goods on eBay when he notified them to transfer those funds to his bank, instead of a transfer from his PayPal Money Market account, which eBay controls, PayPal notified him that his funds were frozen and could not be released. That's when his nightmare began. According to Fleming, PayPal's Terms of Service Agreement leaves him no recourse to recover his funds, which he states were seized by the company over discrepancies in prior sales he'd made online. When he attempted to follow the process outlined in the Terms of Service Agreement PayPal gave him several different answers with no results. Fleming stated that, "PayPal's attorney told me in an email that I had to accept the new Terms of Service Agreement in order to get my funds released, but after being given the run around too many times I've refused. Fleming was already a user of eBay's auction service at the time PayPal's attorney demanded that he agree to the new terms of service. PayPal’s twenty-five page New User Agreement prohibits users from filing suit against PayPal for any dispute under $10,000 and requiring them to agree to arbitration at their own expense in the event of disagreements with the company. PayPal updated their arbitration clause several months after their motion to enforce the arbitration clause was denied by a judge in San Francisco, California on the grounds that it was unfair to consumers. And as they trudge along the path of what might be one of the largest class actions lawsuits of the year, their timing is interesting in that it essentially tricked many of the company‘s customers into giving up that right and affording PayPal the opportunity to limit their potential damages and forcing everyone who may have wanted to perform a financial transaction on PayPal over the past several months into a binding twenty-five page contract. The Securities and Exchange Commission is also probing into eBay's Money Market fund management practices. According to a compliant filed with the SEC, eBay's PayPal Asset Management, Inc. is charging over 1.80% in expenses when its Money Market Fund Prospectus states that those rates are 0.10%. The complaint states that eBay owns PayPal which own PayPal Asset Management, Inc. and that the act of using software to arbitrarily seize funds held in a separate money market account is consumer fraud. According to PayPal Sucks, "PayPal does $16 million per day in transactions. Multiply that by their 'average' of 2.9% (credit card fees) and you see they're making $464,000 A DAY, or about $14 million a month." PayPal Sucks contains a remarkable amount of information, links and helpful suggestions for PayPal users whose funds were frozen like Mike Fleming's. Ken Dreifach, Chief of the Internet Bureau for the New York Attorney General's office said, "We made good use of your site in evaluating complaints we've received about PayPal, so from both a law enforcement and first amendment standpoint, we're very supportive of "gripe sites" (assuming no libel, etc.)." It remains to be seen whether the complaints will lead to more official investigations into the practices of eBay, or its PayPal subsidiary. The new User Agreement's arbitration clause points to the company's awareness of what eBay views as loopholes needing tightening. Even with the new arbitration clause, it appears more an admission of guilt than anything, and may be signs of an impending settlement of the class action suit brought in California. At the very least the changes announced on July 2nd supports an awareness by eBay that their operations are less than perfect and while there may be a growing discontent amongst users, the auction site continues to grow. Shares of eBay closed Thursday, July 3 at $110.13, a new 52 week high, on volume of 6,069,910 shares. Average volume was reported to be 6,513,636 shares. The NASDAQ reported short position on June 13 was 18,132,799 shares. eBay's short position has been slowly falling from a high of 22,956,547 shares on March 14, 2003. eBay was added to Axcess Business News Stock Guide's "worst picks" column on June 13th, which perhaps to the hundreds of disenchanted eBay users was an appropriate date (Friday the 13th). Reprinted with the permission of Axcess Business News. (7/7/2003) stockpatrol.com