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Strategies & Market Trends : Anthony @ Equity Investigations, Dear Anthony, -- Ignore unavailable to you. Want to Upgrade?

To: olivier asser who wrote (90956)	2/18/2005 8:38:40 PM
From: rrufff	Read Replies (1) \| Respond to of 122087

thanks to kknightmcc for finding this interesting tale 02/18 07:31AM =DJ SEC Sues 3 Fla. Men In Alleged Short-Selling Scheme >IACI By Judith Burns Of DOW JONES NEWSWIRES (This article was originally published Thursday) WASHINGTON (Dow Jones)--The Securities and Exchange Commission sued three Florida brokerage professionals Thursday for allegedly making bogus trades to conceal mounting losses from short sales in Expedia Inc. (IACI), the Web-based travel firm. The SEC charged David Davidson, Lloyd Beirne and Brandon Bush, all of Boca Raton, Fla. Davidson is the former chief executive of D.L. Cromwell Investments, Inc., a defunct Boca Raton brokerage firm. Beirne was the firm's president and Bush was a Cromwell trader. Cromwell's executives sold Expedia short in late October 2002, hoping to profit from a declining stock price and when the shares began rising, they placed about 100 bogus "buy" orders in the stock to hide the problem, said David Horowitz, assistant district administrator in the SEC's Philadelphia office, which brought the civil lawsuit. He said the scheme unraveled in March 2003 when news of a tender offer from Expedia, a wholly owned subsidiary of Interactive Corp., sent the stock price up sharply. Fiserv Securities, the clearing broker for Cromwell, was forced to pay $18 million to cover Cromwell's short position, the SEC said. The SEC's suit seeks to fine the three men, force them to return any ill-gotten gains, including salaries and bonuses, and bar them from the brokerage business. Davidson and Beirne agreed to plead guilty to criminal securities fraud charges in mid-2003 based on stock manipulation of Big City Bagels Inc. and Pallet Management Systems Inc., but have yet to be sentenced. They also face criminal charges filed last year based on the Expedia trading. Horowitz said the National Association of Securities Dealers barred Davidson and Beirne from the securities business based on their criminal pleas and barred Bush after he failed to appear for questioning. Martin Russo, an attorney representing Davidson, declined to comment on the matter. Attorneys for Beirne and Bush weren't immediately available to comment. - By Judith Burns, Dow Jones Newswires, 202-862-6692; Judith.Burns@dowjones.com (END) Dow Jones Newswires 02-18-05 0731ET