Fortunatly I sold out over a year ago but I come to visit every now and then.
Wasn't Bruss one of the touters of this company? If it was then read on. Best of luck. I no longer buy the dream only track records.
Lee
To: Yuri Aminov (0 )
From: Caroline Wednesday, Oct 28 1998 10:00PM ET
Reply # of 7801
[see original for LINKS to all fraud complaints]
sec.gov
SEC Charges 44 Stock Promoters in First
Internet Securities Fraud Sweep
FOR IMMEDIATE RELEASE
98-117
Purveyors of Fraudulent Spam, Online Newsletters, Message Board
Postings, and Websites Caught
Washington, D.C., October 28, 1998 – Following an
unprecedented nationwide sweep, the Securities and
Exchange Commission today announced the filing of 23
enforcement actions against 44 individuals and companies
across the country for committing fraud over the Internet
and deceiving investors around the world.
The sweep, the first orchestrated coast-to-coast operation
by the SEC to combat Internet fraud, involved actions
filed by SEC offices in Atlanta (1), Boston (1), Chicago
(3), Denver (3), Fort Worth (2), Los Angeles (2), Miami
(2), New York (2), Philadelphia (1), Salt Lake City (1)
and Washington, D.C. (5).
The 23 cases involve a range of Internet conduct including
fraudulent spams (Internet junk mail), online newsletters,
message board postings and 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
Microcap companies, by either: (1) lying about the
companies; (2) lying about their own "independence" from
the companies; and/or (3) failing to disclose adequately the
nature, source and amount of compensation paid by the
companies. The creators of the Internet touts purported to
provide unbiased opinions in their recommendations, but
failed to disclose that they had received in total more than
$6.3 million and nearly two million shares of cheap insider
stock and options in exchange for touting services. In
some instances, the fraudsters sold their stock or exercised
their options immediately following their
recommendations, a deceptive practice commonly referred
to as "scalping."
SEC Director of Enforcement Richard H. Walker said, "In
all of these cases, the Internet promoters gave ostensibly
independent opinions about Microcap companies that in
reality were bought and paid for. 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. Today's sweep demonstrates the SEC's
commitment to cleaning up the Internet, by aggressively
prosecuting securities violations occurring in Cyberspace."
Among the schemes in today's sweep, the SEC alleges a
wide range of Internet-related securities fraud. Below are
a few highlights.
An Internet newsletter called The Future Superstock
("FSS"), written by Jeffrey C. Bruss of West
Chicago, Illinois, recommended to FSS's more than
100,000 subscribers and to visitors to the
newsletter's Web site the purchase of approximately
25 Microcap stocks predicted to double or triple in
the months following dissemination of the
recommendations. In making these
recommendations, FSS: (1) failed to adequately
disclose more than $1.6 million of compensation, in
cash and stock, from profiled issuers; (2) failed to
disclose that it had sold stock in many of the issuers
shortly after dissemination of recommendations
caused the prices of those stocks to rise; (3) said that
it had performed independent research and analysis
in evaluating the issuers profiled by the newsletter
when it had conducted little, if any, research; and (4)
lied about the success of certain prior stock picks.
(SEC v. The Future Superstock, et al.)
An Internet touting service called Stockstowatch
("STW"), and its president, Steven A. King ("King")
ran an Internet stock touting service operated from
King's home in Sarasota, Florida, which claimed at
one time to have more than 200,000 subscribers.
STW and King conducted the scheme from October
1997 until at least July 1998, fraudulently touting the
stocks of at least five publicly-traded Microcap
companies in e-mails sent to STW subscribers and in
profiles posted on STW's Internet Web site. With
respect to almost every stock touted by STW, the
price and/or volume of the profiled company's stock
sharply increased shortly following the STW buy
recommendation, and STW and King took
advantage by selling shares to reap more than a $1
million profit. (SEC v. Steven A. King, et al.)
John Wesley Savage and Princeton Research, Inc.
touted the stocks of seven different companies while
receiving 276,500 shares and 75,000 options from
those companies. Savage and Princeton also lied
about the financial condition of two of the issuers.
Simultaneous with the filing of the complaint, Savage
and Princeton consented, without admitting or
denying the SEC's allegations, to the entry of a
permanent injunction and payment of a civil penalty
of $40,000. (SEC v. John Wesley Savage, et al.)
Francis A. Tribble and his promoting company,
Sloan Fitzgerald, disseminated more than six million
spams touting two Microcap companies and were
the subject of the largest number of complaints
received in the history of the Enforcement
Complaint Center (SEC Enforcement's Online
Complaint Center at www.sec.gov). They also
republished their touts in several other forms
including an online newsletter and a Web site.
Simultaneous with the filing of the complaint,
Tribble and Sloan Fitzgerald consented, without
admitting or denying the SEC's allegations, to the
entry of a permanent injunction and payment of a
civil penalty of $15,000. (SEC v. Tribble)
Illustrating the migration of stock touters from
traditional media to the Internet, a southern
California promoter moved his Microcap touts from
newspaper ads to the "Investors Edge" Web site he
created this year, without disclosing that Microcap
issuers had paid for his touts. At the same time the
promoter and one of his companies were
recommending that investors buy an issuer's stock,
they were engaged in scalping the shares they had
received from the issuer, profiting in excess of
$64,000. Those defendants also were charged with
making false statements in newspaper ads. (SEC v.
Volmer, et al.)
The SEC today also issued an investor alert to help
investors evaluate investments promoted on the Internet.
"Internet Fraud" tells investors how to spot fraud and how
to use the Internet to invest wisely and avoid costly
mistakes.
"Never, ever, make an investment based solely on what
you read in an online newsletter or Internet bulletin board,
especially if the investment involves a small, thinly-traded
company that isn't well known," said Nancy M. Smith,
Director of the SEC's Office of Investor Education and
Assistance. "Assume that the information about these
companies is not trustworthy unless you can prove
otherwise through your own independent research."
"Internet Fraud" is available on the SEC's Web site, at
sec.gov.
Below is a complete list of all sweep SEC actions:
SEC v. Attalienti, et al. (File name: lr15957.txt)
SEC v. Carlisle, et al. (File name: lr15949.txt)
SEC v. The Future Superstock, et al. (File name:
lr15958.txt)
SEC v. Liberty Capital Group, et al. (File name:
lr15953.txt)
SEC v. Ruebel (File name: lr15948.txt)
SEC v. Savage, et al. (File name: lr15954.txt)
SEC v. Schlieben (File name: lr15951.txt)
SEC v. Starwood, et al. (File name: lr15950.txt)
SEC v. Stockstowatch.com, et al. (File name:
lr15956.txt)
SEC v. Taxin, et al. (File name: lr15955.txt)
SEC v. Tribble, et al. (File name: lr15959.txt)
SEC v. Volmer, et al. (File name: lr15952.txt)
In the Matter of Baillargeon, et al.; (File name:
3-9764.txt)
In the Matter of Core Communications, et al. (File
name: 3-9765.txt)
In the Matter of High Growth Publishing Group, et
al. (File name: 3-9762.txt)
In the Matter of IBJ Publications, et al. (File name:
3-9771.txt)
In the Matter of ICS Communications, et al. (File
name: 3-9768.txt)
In the Matter of Investment Hotlines, et al. (File
name: 3-9772.txt)
In the Matter of Klein (File name: 3-9763.txt)
In the Matter of Martineau (File name: 3-9767.txt)
In the Matter of National Investors Council, et al.
(File name: 3-9766.txt)
In the Matter of Smith (File name: 3-9770.txt)
In the Matter of TKO International, et al. (File
name: 3-9769.txt)
sec.gov
Last update: 10/28/98
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