Internet Promoters Enjoined by SEC
The SEC announced on August 25, 2000, another case involving the online touting of securities, and the entry of a permanent injunction against a promoter who failed to follow the anti-touting rules under the Securities Act of 1933.
According to the SEC Release, the defendants, who consented without admitting or denying the Commission’s allegations, were enjoined from violating the anti-touting provisions of the Securities Act of 1933. Each defendant was ordered to pay a civil penalty of $20,000. The Commission alleged that the defendants had violated Section 17(b) of the Securities Act of 1933 by failing to disclose the compensation they had received from approximately 18 issuers whose stocks they had promoted on their website and in more than one million daily e-mail messages disseminated worldwide. It was also alleged that the defendants disseminated daily press releases that compiled and referred to the promotional statements, claiming EquityAlert had provided its subscribers with “proprietary coverage” of these “top momentum” issuers. [SEC v. EquityAlert.Com, Inc. and Harmel S. Rayat, CIV 00-1469 PHX ROS, USDC, District of Ariz.] (LR-16662)
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