U.S. SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16662 / August 24, 2000
S.E.C. v. EquityAlert.Com, Inc., and Harmel S. Rayat, CIV 00-1469 PHX
ROS (USDC Ariz.)
On August 8 the Honorable Roslyn Silver, U.S. District Judge, District
of Arizona, issued final judgments of permanent injunction against
EquityAlert.com, Inc. and Harmel S. Rayat. The defendants, who
consented to the orders without admitting or denying the Commission's
allegations, were enjoined from violating Section 17(b) of the
Securities Act of 1933. Each defendant was ordered to pay a civil
penalty of $20,000.
EquityAlert operates a website which offers a free subscription
program which disseminates over one million daily e-mail messages to
its subscribers, updating information on specific companies. Those
updates included short promotional statements regarding approximately
18 issuers that had paid EquityAlert for publishing the statements.
The complaint alleges that until May 30, 2000, there was no indication
in the e-mails or on the website that the promotional statements had
been paid for by the issuers. It is also alleged that from January 1,
2000, through February 15, 2000, EquityAlert disseminated daily press
releases which compiled and referred to the promotional statements,
claiming EquityAlert had provided its subscribers with "proprietary
coverage" of these "top momentum" issuers. It is alleged that, like
the website and e-mails, these releases failed to disclose the
compensation EquityAlert received from the issuers whose securities
were being described. This compensation, which amounted to more than
$450,000, was EquityAlert's only source of revenue.
_________________________________________________________________
Modified 08/28/2000
SNIPPETS:
On August 8 the Honorable Roslyn Silver, U.S. District Judge, District of Arizona, issued
The defendants, who consented to the orders without admitting or denying the Commission's
Each defendant was ordered to pay a civil penalty of $20,000.
EquityAlert operates a website which offers a free subscription program which disseminates
Those updates included short promotional statements regarding approximately 18 issuers that
The complaint alleges that until May 30, 2000, there was no indication in the e-mails or on
It is also alleged that from January 1, 2000, through February 15, 2000, EquityAlert
It is alleged that, like the website and e-mails, these releases failed to disclose the
This compensation, which amounted to more than $450,000, was EquityAlert's only source of
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