Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Microcap & Penny Stocks : MDMI - Italian Bakery Extraordinaire! -- Ignore unavailable to you. Want to Upgrade?

To: Rodney Doan who wrote (1216)	10/30/1998 10:43:00 AM
From: paulbk	Respond to of 3584

Rodney, Who is Jeffrey Brommer? I've seen his name around before the SEC stuff went down but I don't remember where. Did he post on SI? Thanks,p.b.

To: Rodney Doan who wrote (1216)	10/30/1998 11:09:00 AM
From: paulbk	Respond to of 3584

Rodney, Answered my own question in the meantime- duh.... I haven't held MDMI that long,later, p.b.

To: Rodney Doan who wrote (1216)	10/30/1998 12:18:00 PM
From: Marc Stager	Read Replies (1) \| Respond to of 3584

But That's Not All, Folks, Jeffrey has company: Busted: SEC nails Internet stock promoters By Larry Barrett ZD Net Interacive October 28, 1998 The Securities and Exchange Commission filed securities fraud charges against 44 individuals and companies Wednesday, charging them with using the Internet to illegally tout small-cap stocks. Some offenders failed to disclose that they were on the companies' payroll while others flat out lied. SEC officials said the unprecedented coast-to-coast sweep resulted in 23 separate cases of illegal conduct including fraudulent spamming, online newsletters, message board posting and individual Web sites. The allegations include violations of the anti-fraud provisions and the anti- touting provisions of the federal securities laws. The authors of the spams, online newsletters, message board postings and Web sites unlawfully touted more than 235 small-cap stocks. SEC officials said the individuals charged would repeatedly lie about particular companies they were recommending as well as hide the fact that they were being paid by these companies to drive up their respective stock prices. While claiming that their stock evaluations were derived independently, those charged received more than $6.3 million in cash and nearly 2 million shares of cheap insider stock and options in return for their touting services. In some cases, the perpetrators sold their stock or exercised their options immediately following their recommendation, a practice commonly referred to as "scalping." "In all of these cases, the Internet promoters gave ostensibly independent opinions about microcap companies that in reality were bought and paid for," said Richard Walker, the SEC's director of enforcement. "Not only did they lie about their own independence, some of them lied about the companies they featured, then took advantage of any quick spike in price to sell their shares for a fast and easy profit." Many legitimate sites, including Inter@ctive Investor, highlight particular stocks to watch on a given trading day. However, reporters and editors are not allowed to own shares of the companies they profile and obviously cannot receive compensation from the companies they follow. Among those charged in Wednesday's bust: The Future Superstock, an Internet newsletter written by Jeffrey Bruss of West Chicago, Ill. Bruss recommended the purchase of 25 small-cap stocks that he predicted would double or triple in within a few months of the recommendation. But Bruss failed to tell the 100,000 people subscribing to his newsletter that he was receiving more than $1.6 million in cash and stock from the companies he recommended. He also didn't mention that he'd sold large blocks of those stocks shortly after making his recommendation. Topping it off, he lied about the success of other stocks he had recommended in the past. Then there's the case of Stockstowatch, an Internet stock touting service run by Steven King from his Sarasota, Fla. home. Not to be confused with the famed novelist, this Steven King created his own horror by touting at least five small-cap stocks between October 1997 and July 1998. King claimed to have more than 200,000 subscribers who were sent emails lauding the prospects of certain small-cap stocks. The SEC claims that almost every stock touted by Stockstowatch suddenly experienced a gain in both price and volume shortly after the its buy recommendation. Not one to miss an opportunity, King quickly sold the shares he touted for a profit of more than $1 million. Finally, there's the case against Francis Tribble and his promoting company Sloan Fitzgerald. Tribble has the distinction of inspiring the largest number of complaints received in the history of the SEC's online complaint center at www.sec.gov. Apparently, Tribble sent out more than 6 million spams touting two small-cap stocks. Rather than fight the SEC, Tribble and Sloan Fitzgerald consented to the entry of a permanent injunction against their activity and agreed to pay a civil fine of $15,000.