SEC sues over stock market spam scan
A US couple have been charged over an allegation they made $1m via a stock market pump-and-dump scam, promoted using spam emails.
Jeffrey Stone, 42, of Greenwich, Connecticut, and his missus Janette Diller Stone face a civil lawsuit from the Securities and Exchange Commission (SEC) over their alleged use of junk mail tactics to artificially increase the value of stock they held in start-up firm WebSky Inc.
The pair allegedly bought 288m WebSky shares in September 2004 through various front organisations they controlled before selling them weeks later for a profit of $1m.
The SEC alleges spam emails sent by stock promoters on behalf of the Stones falsely stated that WebSky's business in Argentina was bringing in revenues of $40m. In reality, the start-up had little or no revenue from Argentina or anywhere else at the time the spam emails began circulating.
The junk email campaign helped ramp up WebSky's share value by around 300 per cent, according to the SEC.
» The Register - John Leyden - 22-08-2006