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SEC LITIGATION RELEASE
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EXTRACTED KEY WORDS
NEIP STOCK SECURITIES PRICE INTERNET MESSAGE EXCHANGE COMMISSION INTERNET MESSAGE BOARDS ARASH AZIZ-GOLSHANI CALIFORNIA CIVIL ACCOUNTS ACQUISITION MANIPULATORS SPREAD FALSE INFORMATION ALLEN DERZAKHARIAN DISTRICT VIOLATIONS ASSETS DALLAS NEI WEBWORLD LOS ANGELES RELIEF ALLEGE ACCUMULATING LGC WIRELESS PURCHASES BOARDS FALSELY STATING OUTSTANDING SHARES PRIVATELY-HELD TELECOMMUNICATIONS |
SECURITIES AND EXCHANGE COMMISSION
Litigation Release No. 16391 / December 15, 1999
SEC AND U.S. ATTORNEY MOVE AGAINST ACCUSED MICROCAP STOCK
MANIPULATORS; THREE SPREAD FALSE INFORMATION THROUGH INTERNET MESSAGE
BOARDS
SECURITIES AND EXCHANGE COMMISSION v. ARASH AZIZ-GOLSHANI, HOOTAN
MELAMED & ALLEN DERZAKHARIAN, U.S. District Court for the Central
District of California, Civ. Action No. 99-13139 (CBM) (AJWX)
(C.D.Cal. December 15, 1999)
The Securities and Exchange Commission today announced that it filed a
civil action against three Southern California defendants -- Arash
Aziz-Golshani, 23, of Beverly Hills, Hootan Melamed, 23, of Pomona and
Allen Derzakharian, 26, of La Crescenta -- alleging that they
participated last month in a scheme to manipulate the price of a stock
by spreading false information on Internet message boards. The
Commission was granted a temporary restraining order against the
defendants' future violations of the antifraud provisions of the
federal securities laws and a freeze on their assets. The defendants'
dissemination of misinformation on the Internet drove the stock of
Dallas, Texas-based NEI Webworld, Inc. (NEIP) from a closing price of
$.13 per share on Friday, November 12 to a peak price of over $15 per
share on Monday, November 15.
In related actions, defendants Aziz-Golshani and Melamed were arrested
by agents from the Federal Bureau of Investigation's Los Angeles field
office and charged with one count each of conspiracy to commit
securities fraud.
The Commission's civil complaint and documents filed in support of
emergency relief allege the following
* From November 9 through 12, 1999, the defendants accumulated large
blocks of stock in NEI Webworld, Inc. (NEIP), for pennies per
share. NEIP, formerly a Dallas, Texas-based commercial printer,
was in bankruptcy liquidation and had no assets or business
operations. During the weeks before the defendants began
accumulating NEIP there was virtually no market activity in the
company's common stock.
* Beginning on the afternoon of Friday, November 12, and continuing
through the weekend, the defendants used public access computers
at a University of California at Los Angeles library to create
numerous accounts with Internet message board services.
* Commencing on Friday evening, shortly following the final
purchases of NEIP stock by each of the defendants, and continuing
throughout the weekend, the defendants used certain of those
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