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Posted 15 August 2007 - 07:55 AM
FOR IMMEDIATE RELEASE 2000-135
SEC Brings Fraud Charges in Internet Manipulation Scheme
Settlement Calls for Return of $285,000 in Illegal Gains
Washington, DC, September 20, 2000 - The Securities and Exchange Commission today brought and settled civil fraud charges against Jonathan G. Lebed, age 15, for using the Internet to conduct a stock manipulation scheme that made total profits of $272,826. Without admitting or denying the findings, Mr. Lebed settled with the Commission, agreeing to an administrative cease and desist order and to disgorge his illegal profits of $272,826, together with prejudgment interest of $12,174, for a total of $285,000. This is the first time the Commission has brought charges against a minor.
Ronald C. Long, Administrator of the Philadelphia District Office said, "I implore investors to be highly skeptical of any advice they receive from the Internet. People should do thorough research before making investment decisions and verify all information before acting on it."
The Commission's Order finds that, on eleven separate occasions between August 23, 1999 (when Lebed was 14 years old) and February 4, 2000, Lebed, of Cedar Grove, New Jersey, engaged in a scheme on the Internet in which he purchased, through brokerage accounts, a large block of a thinly-traded microcap stock. Within hours of making the purchase, Lebed sent numerous false and/or misleading unsolicited e-mail messages, or "spam," primarily to various Yahoo! Finance message boards, touting the stock he had just purchased. Lebed then sold all of these shares, usually within 24 hours, profiting from the increase in price his messages had caused. In some instances, Lebed placed a sell limit order before the market closed on the day he purchased the stock to ensure that he would not miss the price increase of the stock while he was in school the next day. Lebed's profits on each trade ranged from more than $11,000 to nearly $74,000.
The Order finds that Lebed used multiple fictitious author names for the hundreds of identical messages he posted during each manipulation. The postings Lebed made to Internet website message boards included baseless price predictions and other false and/or misleading statements. For example, he claimed in one of his messages that a company trading at $2 per share would be trading at more than $20 per share "very soon." Other postings claimed that a stock would be the "next stock to gain 1,000%," and was "the most undervalued stock ever." The posted messages always caused the price and volume of the touted stocks to increase dramatically. On the day that Lebed sold his shares, and realized his profit, the trading volume in the stock reached either record or near-record highs, in some cases reaching a 52-week high for both volume and price.
NOW LEBED IS BACK WITH HIS OWN SITE AND EVEN HAS CUSTOMERS.
All the best
Posted 15 August 2007 - 08:14 AM
Posted 15 August 2007 - 12:23 PM
Posted 16 August 2007 - 06:06 AM
Maybe, my habits keep changing!!
Posted 16 August 2007 - 08:02 AM
Wow. Mind like a steel trap. You can remember someones frivolous quotes even after one year. Impressed