SEC tackles get-rich-quick Web schemes
The agency announces crackdowns in two separate cases dealing with people who allegedly used the Web to trick others who were looking for easy money.
The agency has stepped up its enforcement against get-rich-quick scams in recent years as the Web has made it easier for scammers to trick people looking for easy money.
In one case, the SEC won a temporary restraining order against Harral Dunbar Jr., operator of the Ghost International Web site. A federal judge for the Middle District of Louisiana ordered Dunbar to stop collecting money from investors, who were promised returns of as much as $100,000 on a $200 investment, the SEC said Thursday.
Although most people delete such e-mail, the agency said Dunbar had convinced 11 investors to part with $7,500 by promising them a future of wealth from "high-yield investments."
In another case, the SEC said it settled charges with a Tennessee man earlier this week who allegedly scammed victims by making them believe they were being copied on personal e-mails between people who had inside information about two stocks.
During the summer of 1999, David Allan Lester allegedly concocted a complex spam campaign to drive up stock prices of two companies he owned, Hayes and ChatCom, the SEC said. At one point, the SEC said, Lester sent an e-mail saying Hayes had landed cable modem contracts with AT&T and Microsoft, causing Hayes' stock price to double.
Lester, who was working as a part-time computer network specialist at the time, allegedly kept the passwords of some America Online accounts he worked on and used the accounts to transmit some of the spam.
Although federal officials believe Internet auction fraud is the most popular Web-related scam, investment schemes remain widespread. Probably the most famous Web stock fraud case involved a student who posted a false and extremely negative press release about Emulex, a stock he had shorted.