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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
DEFENDANTS EXCHANGE SHARES SECURITIES RECOMMENDATIONS LEISEK STOCK EXCHANGE COMMISSION CIVIL ACTION WEBSITE EXCHANGE ACT BYRON AGE BROTHER SUBSCRIBERS PRICE REPRESENTATIVES SELL SCHEME THEREUNDER FRAUD CONNECTION PURCHASE SALE PERMANENT INJUNCTIONS DISGORGEMENT PREJUDGMENT CIVIL PENALTIES RELIEF |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release. No. 16921 / March 1, 2001
SECURITIES AND EXCHANGE COMMISSION V. JARED RAY LEISEK AND BYRON JOHN
LEISEK, Civil Action No. CV 01-6084 (AA) (D. Or.)
The Securities and Exchange Commission filed a civil action in federal
district court in Eugene, Oregon against Jared R. Leisek, age 25, and
his brother Byron J. Leisek, age 22. The Complaint alleges that the
defendants operated a "momentum" stock picking website called
TnTStock.com ("TnT"), through which the brothers issued stock
recommendations on the website and via e-mail newsletter to more than
13,000 TnT subscribers. After the recommendations were released, the
price and trading volume of the profiled stocks rose dramatically,
often more than doubling the pre-recommendation levels. The Complaint
alleges that the defendants posted false information on a Yahoo! Club
message board frequented by TnT's subscribers. The Complaint further
alleges that the defendants falsely claimed, among other things, that
TnT's representatives held no more than 5,000 shares of any stocks
profiled on the website and that TnT's representatives would never
sell shares until thirty minutes after issuing a recommendation. In
fact, the Complaint alleges the defendants usually held more than
20,000 shares and sold most of their shares within thirty minutes of
the release of the recommendations.
The Complaint alleges that the defendants would typically buy shares
in the profiled companies, place limit orders to sell the shares at
progressively higher than then-current market prices, and only then
issue the recommendations. The defendants are alleged to have made
$195,994.50 in profits from the scheme. The Complaint alleges that the
defendants' conduct violated Section 10(b) of the Securities Exchange
Act of 1934 ("Exchange Act") and Rule 10b-5 thereunder. Section 10(b)
of the Exchange Act and Rule 10b-5 prohibit fraud in connection with
the purchase or sale of securities. The Complaint seeks permanent
injunctions, disgorgement, prejudgment interest, civil penalties, and
other relief.
_________________________________________________________________
Modified 03/12/2001
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