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

To: Anthony@Pacific who wrote (23160)	3/22/1999 3:36:00 PM
From: StockDung	Read Replies (1) \| Respond to of 122087

U.S. SEC May Not Have Staff to Stop Internet Fraud, GAO Says Washington, March 22 (Bloomberg) -- Securities regulators may be ill-equipped to stop the increasing number of fraudulent investment scams that use the Internet to lure unsophisticated investors, government auditors said. The U.S. Securities and Exchange Commission has seen a rise in Internet fraud complaints and the agency could reach a point where it won't have enough investigators to look into all credible allegations, the General Accounting Office told a U.S. Senate panel today. ''The potential exists that the rapid growth in reported Internet securities frauds could ultimately place a significant burden on the regulators' limited investigative staff resources and thereby limit the agencies' capacity to respond effectively to credible fraud allegations,'' said Richard J. Hillman, GAO associate director for market issues, in prepared testimony. The Senate Government Affairs Committee's investigations subcommittee is hosting two days of hearings to review SEC and state regulatory efforts to protect consumers from unscrupulous fraudulent investment schemes peddled over the Internet through on-line bulletin boards, chat rooms, newsletters and mass e- mailings called ''spam.'' ''While the Internet offers investors increased information and easier access to securities markets, it also makes it easier for inexperienced investors to get in over their heads and for criminals to use a new medium to cheaply and quickly perpetrate frauds,'' said Sen. Carl Levin of Michigan, who is ranking Democrat on the panel. Victims of illegal securities sales that used the Internet suffered financial losses ranging from $18,000 to more than $100 million, said the GAO, the investigative arm of Congress that analyzed current regulatory efforts aimed at addressing Internet securities fraud. The SEC's 935-person enforcement staff includes 3 full-time people and about 125 volunteer staff who work part-time to check for Internet fraud-related activities, according to the GAO and the SEC. While the SEC set up a special unit earlier this year to scour Internet sites for bogus promotion schemes, the SEC faces a Herculean task given that recent industry counts indicate an estimated 37 million web sites exist -- and technology makes it easy for anyone to add more. The SEC is further hamstrung by the loss of a significant number of enforcement attorneys to the higher-paying private sector, the GAO said. Auditors said the SEC's New York office, which lost 54 percent of its 137 enforcement staff between 1996 and 1998, and the SEC San Francisco branch, which lost 40 percent of its 25 enforcement staff, have been hardest hit. In its request for funding for the fiscal year that starts Oct. 1, the SEC has asked Congress for money to hire 25 people to target the increase in Internet and small stock fraud. Civil Penalties The SEC has brought 66 Internet-related securities cases since 1995 and about half of those have been settled, with violators being assessed civil penalties of between $5,000 and $4.4 million in 21 of the cases, the GAO review shows. In one case recently filed, the SEC alleged the president of Interactive MultiMedia Publishers Inc. and a stockbroker schemed to pump up the company's share price by paying publications to tout the stock on the Internet. When Interactive's price rose, the manipulators sold their shares at a profit in a classic ''pump and dump'' market manipulation scheme, the SEC alleged. Interactive's stock subsequently collapsed and the company ceased operation, according to the commission. In addition to scam artists using the Internet to engage in traditional investment schemes, the Internet provides opportunities for new fraudulent schemes. For example, an online brokerage said its web site was illegally coped and information such as the company's address and phone numbers were altered, the GAO said. The company CEO told the GAO that the perpetrator used the copied web site for 10 months ''to dupe foreign investors into sending funds to addresses listed.'' The GAO said SEC officials reported that the agency doesn't have the resources to pursue every credible allegation of securities law violations, including Internet frauds. Instead, SEC officials from the San Francisco district said investigations often focus on ''message cases that have a high degree of public notoriety.'' The cases are supposed to deter other potential violations, the GAO said. The SEC and state securities regulators have seen an increase in the number of e-mail complaints they receive, which the GAO said is a rough indicator of the growth in Internet securities fraud. The SEC now receives about 200 to 300 e-mail complaints a day, up from about 10 to 15 such complaints in 1996, the GAO said. State regulators generally told the GAO that they have few staff allocated to investigate Internet fraud cases, although about half of the states said they have set up specific Internet securities fraud programs in the past several years. Officials from some of the smaller states said they don't have the resources to control securities fraud on the Internet and think federal regulators are best positioned for this responsibility, the GAO said. States have filed about 194 enforcement actions nationwide that allege securities law violations through use of the Internet, the GAO reported. ''SEC and state regulatory programs to combat Internet securities fraud are new and face significant challenges that could limit their long-term effectiveness,'' the GAO review concluded. 13:45:19 03/22/1999

To: Anthony@Pacific who wrote (23160)	3/22/1999 3:39:00 PM
From: Druss	Read Replies (3) \| Respond to of 122087

To all: NUGT is up big on no news. A mining exploration company (BB stock). They recently bought two diagnostic imaging companies??? One the plus side they do file with the SEC. All the Best Druss

To: Anthony@Pacific who wrote (23160)	3/22/1999 4:56:00 PM
From: R Fish	Read Replies (1) \| Respond to of 122087

Anthony and thread, Want to bring to your attention OTEX. Up $3.00 today. Company has 885k shares of MiningCo.com IPO (due out any time). Float is 9.9 mill. 20,187,000 shares outstanding. Revenues of 65.9 million, loss of .73/ share (-14.7 million). What interests me is that since 2/23 insiders have filed to sell over 445K worth of shares. Sounds like these guys are looking for the IPO run-up as well. Would appreciate your thoughts. Fish