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Tech Industry

Federal regulators launch latest attack on Net fraud

Cracking down on so-called pump-and-dump schemes that federal regulators say robbed investors of more than $10 million, the Securities and Exchange Commission launches its fourth Internet fraud sweep.

    Cracking down on so-called pump-and-dump schemes that federal regulators say robbed investors of more than $10 million, the Securities and Exchange Commission today launched its fourth Internet fraud sweep, the agency said.

    The commission filed 15 different lawsuits against 33 companies and individuals who it says used the Internet to defraud investors through such schemes, according to a statement issued by the SEC.

    In pump-and-dump schemes, someone pumps up a company's stock by spreading falsely positive information about that company through the Net, then sells, or dumps, the stock to reap a profit.

    Those accused by the SEC allegedly manipulated the stocks of more than 70 small, lightly traded companies, making illegal profits of more than $10 million. The cases include 11 civil actions filed in U.S. District Courts throughout the country and four related administrative proceedings.

    Some of the companies the SEC is taking action against are Thor Equity Group, Chill Tech Industries, Stockpicks1, Canadian Lantern Investments, Lipton Holdings, Beaufort Holdings, Heartsoft, Stockreporter.de, Broadband Wireless International and Broadcomm Wireless Communications.

    Today's actions mark the fourth nationwide Internet fraud sweep conducted by the government. Sweeps in October 1998 and February 1999 addressed the unlawful touting of publicly traded companies via the Internet, while a May 1999 sweep targeted the sale of bogus securities over the Internet.

    The agency said it has filed more than 180 Internet-related cases, more than one-third of them in the past year.