REGARDING A NEW YORK TIMES ARTICLE WITH LINK AND EXCERPT BELOW:
A Colorado student developed a scheme for buying, promoting
and then selling stocks that his web based stock advisory bulletin had
caused to rise substantially and temporarily in price. Security and
Exchange Commission sanctions for this pump and dump operation are limited
to a promise to abide by securities law in the future as the gains from
stock have been expended in legal costs. The real damage is to the future
career of the student and his mother who is a city politician in Colorado.
Sincerely,
David Dillard
Temple University
(215) 204-4584
jwne@astro.temple.edu
---------------------------------------------------------------------------
Source: New York Times (NYT)
Author: ALEX BERENSON
Title: S.E.C. Reaches Settlement in Web-Based `Pump and Dump' Case
Source Date: March 3, 2000
Resource Type: News Article
Description/Keywords: Stock Market, Stock Advisory Newsletter, E-Zines,
Email Newsletters, Securities Fraud, Stock Price Manipulation,
Sanctions, Impact
URL: Listed Below Article Summary
March 3, 2000
S.E.C. Reaches Settlement in Web-Based
`Pump and Dump' Case
By ALEX BERENSON
Douglas Colt was a second-year law student at Georgetown University
with a head for computers and a passion for politics when he hit upon a
foolproof way to make money from the Internet.
He set up a free Web site promising investors
hot tips on penny stocks. But, according to the
Securities and Exchange Commission, Mr. Colt
bought the stocks in advance of his tips and sold
them at a profit as soon as his followers bid up
the prices. The stocks then plunged back to
earth, causing losses for unwary investors in
what the S.E.C. called an updated version of
the classic market manipulation known as a
pump and dump.
The system netted Mr. Colt, his mother, and
three other Georgetown law students nearly
$350,000 in only a couple of months last year.
Nearly all the money went to Mr. Colt and his
mother, Joanne Colt, a councilwoman in
Colorado Springs.
Under an S.E.C. settlement announced
yesterday, none of the five participants have to
pay a fine.
Nor do they have to pay back their profits.
While not admitting or denying wrongdoing, they merely agreed not to
violate securities laws in the future, a sanction that some experts
characterized as a slap on the wrist.
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Full Story May Be Read At:
http://www.nyt.com/library/tech/00/03/biztech/articles/03securities.html
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