SECURITIES AND EXCHANGE COMMISSION v. GEORGE SCHLIEBEN, Civil Action No. 98CV-5689 (E.D. Pa.) LITIGATION RELEASE NO. 15951 / October 27, 1998 The Securities and Exchange Commission announced that, on October 27, 1998, it filed a complaint in the United States District Court for the Eastern District of Pennsylvania against George Schlieben, of Yardley, Pennsylvania. The complaint alleges that Schlieben, the sole editor and publisher of an online newsletter called Global Penny Stocks ("GPS"), failed to disclose the amount of compensation he received from issuers, either directly or indirectly, for recommending their stocks, in violation of Section 17(b) of the Securities Act of 1933 ("Securities Act"), the anti-touting provision. Based on these violations, the Commission seeks a permanent injunction and civil penalties against Schlieben. The complaint alleges that since approximately September 1996, Schlieben has posted at least 29 editions of the GPS newsletter, each containing a self- described "Special Research Report" ("Report"). Each of these Reports, which are nothing more than paid advertisements, are available for free on Schlieben's website located at www.pennystock.com. In each of the Reports, Schlieben writes favorably about a particular penny stock company and recommends the purchase of the stock. As compensation for these favorable reports and recommendations, Schlieben is paid a fee directly from the issuer or from an investment relations company acting on behalf of the issuer. In each of the Reports, Schlieben discloses in small type that he receives a fee from the issuer or investor relations firm to write the Report. However, although Schlieben charges from $2,250 to $5,150 for each Report, and has received to date total compensation of approximately $105,500, he failed to disclose in his newsletters the amount of compensation paid to him by or on behalf of the issuers whose stock he recommended, as required by Section 17(b) of the Securities Act.